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| Which Part of the Bell Curve Is Best for the Success of a Market? |
| Written by Jonathan Smoke | |
| 06.06.2007 | |
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Discuss this article on the forums. (0 posts) A fascinating article appeared in yesterday’s Houston Business Journal, “Study names Houston a city to foster solid growth,” which summarized a recently released report entitled, “Opportunity Urbanism: An Emerging Paradigm For the 21st Century.” The study by Joel Kotkin and the Barbara Jordan-Mickey Leland Institute at Texas Southern University and California's La Jolla Institute argues that a strategy for growth and development that ensures broad opportunities for all stakeholders in an economy will ensure greater long-term success. From the Business Journal article: “A region's ability to create jobs, offer affordable housing and present entrepreneurial openings to a growing and highly diverse population is the surest sign of urban vibrancy and viability," said Joel Kotkin, the study's primary author.”
So the basic argument is that optimal long-term success for a market is to focus on the heart of the bell curve, and not necessarily just the elite tail. “Kotkin said that although some cities -- notably Boston and San Francisco as well as parts of New York and Los Angeles -- may prosper with such an elite-oriented approach, most America's cities would do better by focusing on creating opportunities for broad ranks of their residents.
He added that one of the primary historic roles of cities has been to nurture and grow a middle class in order to be an engine of upward social mobility. Kotkin said the metropolitan regions of Houston, Phoenix, Dallas, Atlanta and Charlotte best typify this approach, and predicted they are likely to be the kind of places that can accommodate the estimated 100 million new Americans expected over the next 40 years.”  This is an interesting argument worth significant consideration. To corrupt a phrase from the father of economics, Adam Smith, what exactly does drive the long-term wealth of cities? We know that growth in households, growth in employment, and growth in income indicate health and wealth, and in turn these metrics generally point to a vibrant housing market.But does success or overall wealth of a city or market area equate to housing health and wealth for those who invest wisely in it? The geeks here at HousingIntelligence are seeking this answer or at least some more clues to doing better at predicting future success. Will Houston, Phoenix, Dallas, Atlanta, and Charlotte prove to be the best bet for the next 10+ years? Will investments there outperform those in so called elite cities like New York, San Francisco, and Boston? Stay tuned. If we figure out it, we’ll share it with our friends. 
We're always looking for feedback from our readers.
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