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DECEMBER 7, 2015 //     

Top Challenges for Cities Faced With Rapid Technology Growth


richard
Seattle DJC
 

With so much economic expansion, it's easy to become immersed in the excitement that companies like Amazon, Google, Twitter and others bring to our cities. They're responsible for tens of thousands of new, well-paying jobs that help support both business and life. The meteoric growth of these companies impacts the broader areas of our communities. But does economic prosperity always equate to better quality of life?


That question was raised at a recent keynote presentation by Dr. Enrico Moretti, at the University of Washington's Runstad Center for Real Estate Studies. Moretti is a professor of at the University of California-Berkley, and one of the country's leading authorities on urban economic trends. Moretti, a noted economics researcher and author of The New Geography of Jobs, drew stark comparisons between technology-rich cities like Seattle, San Francisco, Boston and Durham, N.C., and former manufacturing hubs across the Midwest and beyond. He described it as a “tale of three Americas,” with creative-based economies on one end and rust-belt cities with rapid commercial and residential loss on the other. The rest of America, according to Moretti, could go either way.

The tech boom comes with measurable costs, and following are some common issues faced by innovation-based employment centers:

Higher-paying jobs mean greater demand for single- and multi-family housing. It's not uncommon for median home prices to exceed $600,000 in cities like Seattle and $1 million in San Francisco. Teachers, first-responders, nurses and other hard-working Americans are being priced out, and real estate developers can't build apartments fast enough to keep up with demand.


As everyday workers are forced further from their jobs in a quest for housing that meets their budget, infrastructure becomes stressed to accommodate more cars on the roads. More time commuting creates greater stress and diminished productivity. It also means less time with families, friends and loved ones, which erodes overall quality of life.


Rapid in-migration also creates problems in school systems, as cities try to keep pace with population growth with the creation of new schools. Student-to-teacher ratios at public schools decline and private schools become more expensive as the number of residents increases in neighborhoods. Public universities also struggle to expand fast enough to accommodate the qualified students who apply for admission.

In summary, growth stemming from technology is good. It creates new jobs and higher wages for existing positions, and infuses investment into our urban areas that benefits a wide range of stakeholders. But there's a counter effect that necessitates better foresight and planning on behalf of our communities. The cities that employ and manage strong policies for housing, education and transportation will be the best prepared for the long run.

Richard Kendall is general manager of Allison+Partners' Pacific Northwest offices and has 20 years of experience working with real estate developers, owners, architects, brokers and other industry leaders

 

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