The millennials are an economic growth priority
Across the country state and local leaders have made retaining and attracting young college graduates an economic development priority. Not in Michigan. Here, by and large, state and local policy makers and economic developers are missing in action. So are the major business organizations. Some pay lip service to the importance of retaining and attracting talent, and then do nothing. Many are dismissive of the importance of talent to the economy.
This is counterbalanced somewhat by individual business leaders like Dan Gilbert, the Ilitch family and Peter Karmanos and by foundations, most notably in Detroit, the Hudson-Webber Foundation and the Kresge Foundation who are “all in” in doing everything they can and then some to make sure that Detroit becomes a talent magnet. But they can’t do it alone.
A recent Governing article provides a good overview of why attracting millennials is vitally important to economic success and what communities around the country are doing to attract highly mobile young professionals. The article’s author William Fulton writes: “Here are the facts most people know: For the foreseeable future, the so-called millennials (currently ages 18-30) will drive both the housing market and the fast-growing innovation economy. It’s a huge cohort of about 70 million people. And as I mentioned above, they are gravitating toward a select group of metros and small cities.But there are a couple of other facts that we don’t usually think about. Most people settle down by age 35, and usually don’t move from one metro area to another after that. And the demographic group behind the millennials is a lot smaller. Just like baby boomers, the preferences of the millennials will drive our society for two generations. They’re making location decisions based on their idea of quality of life. And they’re going to make all those decisions in the next few years — by the time they’re 35.” (Emphasis added.)
Fulton continues: “So if you’re not one of the hip places today, you have only a few years — the length of one real estate cycle and the time horizon for planning an infrastructure project — to become hip enough to keep your kids and attract others. This might seem like a daunting, if not insurmountable, challenge, but frankly I’m encouraged by what I see. Over the last six months I’ve been to many second-tier cities — Omaha, Neb.; Oklahoma City; Richmond, Va.; Syracuse, Buffalo and Rochester, N.Y.; and Manchester, N.H., among them — that would not to be good candidates for a hip urban core. Yet they’re all developing one.”
What do these cities and many others across the country––many of them in red states––understand that we in Michigan don’t?
- That in an increasingly knowledge-based economy the asset that matters most to economic growth is human capital/talent.
- The places with concentrated talent are far more likely to be the most prosperous places today and even more so in the future.
- That talent is increasingly mobile and that young talent are the most mobile.
- And young professionals decide where to live after college based in large part on quality of place attributes and for many of them that means a vibrant central city neighborhood.
There is no reason Detroit, Grand Rapids and Lansing can’t compete with Fulton’s list of cities. And they need to. If those regions are going to be prosperous in the future they need to get in the game big time. And all of us in Michigan have a big stake in those cities becomming talent magnets. Because the states with the highest per capita incomes, by and large, are those with an even more prosperous big metro anchored by a vibrant central city.
In a previous post we laid out an urban agenda. Its elements are the core of what government (state and local) need to do to create the quality of place that millennials are looking for. The agenda is:
- Public safety matters most. People aren’t safe and/or don’t feel safe they will leave and potential newcomers will not come/stay. This is police, but more. Lighting, clean, code enforcement, etc. matter too.
- Transportation is the lever that can best steer development. For decades we have had––and still do––policies that favor roads and suburban and rural communities. We need a change in transportation funding and policy that makes transit––in metro Detroit that needs to include light rail at least on Woodward––biking, walking etc. a higher priority and steers funding towards big metros and their central cities.
- Development incentives. Quite simply the historic preservation and brownfield tax credits need to be restored. They worked. And there still is a gap between what the market will bear in terms of price and what it costs to redevelop.
- Who provides the services doesn’t matter, the quality does. So if the city government is incapable of providing quality services, fund or create an entity that can. City government incompetence shouldn’t be used as an excuse not to provide funding.
- Something needs to replace the decade of cuts to revenue sharing to cities. The state has historically helped fund the provision of local services. The combination of stricter and stricter limits on local government’s taxing power and revenue sharing and transportation funding cuts results in even the best managed cities unable to provide the basic services and amenities needed to retain and attract talent.
- If the state will not reinvest in cities, then there needs to be some new system of municipal finance put in place. Best done at the regional level. The current system––particularly in a place like Detroit––leaves cities without the tax base to fund the services that are needed.
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