Fundamentals of Urban Investing
Why Invest in Urban Communities?
Canyon Johnson is bullish on investing in Urban America for several reasons:
- Sustained U.S. population growth
- The U.S. population will grow by over 120 million
people by 2050,with disproportionate increases in minority and immigrant populations- Minorities and immigrants will account for 90% of the overall U.S. population growth between 2000 and 2050.
- By 2050, 50% of the U.S. population will be minorities and immigrants, up from 31% in 2000
- Hispanic and Asian populations are expected to triple in size.
- The African American population is expected to grow at nearly 1.5 times the rate of the overall population.
- Over 1 million immigrants migrate to the U.S. per year.
- The expansion of the immigrant, minority and echo-boomer
populations will drive significant growth in gateway urban centers.- From 1990-2000, the 10 largest metropolitan areas
accounted for over 47% of the minority population growth in the top 91 MSAs nationally- Immigrants continue to demonstrate a higher propensity to reside in port-of-entry urban communities, with 46% of the immigrant population concentrated in the traditional 11 gateway cities.
- A rising tide of echo-boomers will be drawn to urban areas because of proximity to employers and the appeal of the urban lifestyle.
- From 1990-2000, the 10 largest metropolitan areas
- The U.S. population will grow by over 120 million
- Rising consumer preferences for urban living opportunities
- Urban living is becoming more desirable due to a number of factors, including (a) long term rise in gas prices, (b) increasing commute times and congestion, (c) the vibrancy, cultural amenities, and lifestyle of urban neighborhoods, and (d) proximity to public transportation services
- Suburban households spend an average of 25% of their budgets on transportation, while those living in transit rich neighborhoods spend 9%. The number of households desiring to be within ½ mile of urban rail transit is expected to double to 14.8 million by 2025.
- Echo-boomers are 50% more likely to live in urban areas than other residents. Studies indicate that as more talented, educated young people gravitate toward cities, their likelihood of living in urban centers will increase.
- Consumer preferences for urban, transit-oriented living are growing: 65% say that rising gas prices make them more likely to use mass transit, 80% prefer redeveloping older neighborhoods to developing on the suburban fringe, and 64% prefer highly interconnected community lifestyles, a shift from preferences in the l980's and l990's
- Smart growth and global warming policies will drive demand into urban areas
- Rapidly rising concerns about global warming, coupled with growing objections to sprawl and a shift in infrastructure investment from suburban to urban areas, will increasingly constrain development on the suburban fringe.
- Vehicles account for upwards of 1⁄3 of greenhouse gas emissions
- Vehicle miles traveled are expected to rise 59% by 2030
- Given current land use patterns, this will result in vehicle emissions that are 40% above 1990 levels
- These emission levels are entirely off track from the 60-80% reductions needed for climate protection.
- Vehicle miles traveled are expected to rise 59% by 2030
- More compact, transit-oriented growth would reduce vehicle miles traveled by up to 40%, reducing emissions by 85 million tons of CO2 annually by 2030.
- 471 U.S. cities have signed on as Cities for Climate Protection, committing to reduce emissions through a variety of programs including supporting transit-oriented, in-fill development. More than 956 U.S. Mayors have signed the Mayor's Climate Protection Agreement, pledging to meet or exceed the goals of the Kyoto Protocol.
- New regulations to curb sprawl are favored by 78% of Americans. Voters have approved hundreds of ballot measures to impose urban growth boundaries, to buy open space for preservation, or to put the brakes on sprawl. California is now requiring that environmental documents quantify and propose mitigation for global warming impacts of development.
- Urban areas are the engine of U.S. economic growth
- The top 100 MSAs account for 68% of the nation's jobs and 75% of the U.S. GDP despite representing only 12% of the nation's land mass.
- The top 10 MSAs account for 34% of the U.S. GDP despite representing only 2% of the nation's land mass. They are also home to 27% of the nation's research universities and 33% of all U.S. "knowledge jobs."
