Headlines – Week of May 15, 2011
May 24, 2011
Dropping Prices and Rising Rents Boost Affordability
According to the web site Trulia, it is cheaper to buy a home than to rent one in 39 of the nation’s 50 largest cities.
Trulia’s rent vs. buy index compared the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of April 1, 2011, in the 50 most populous cities in the U.S. While 72 percent of the cities favored buying in the previous quarter’s report, 78 percent favored buying in this latest report.
The Ins and Outs of the Suburbs
According to data from the 2010 Census, almost 85 percent of the nation’s 308.7 million people live in metropolitan areas, and more than half are in ever-expanding suburban rings that encircle major cities.
The data shows a new pattern emerging this century in which most of the growth is happening on opposite ends of the suburban expanse – in older communities closest to the city and in the newer ones that are the farthest out.
The data was analyzed by Robert Lang, an urban sociologist at the University of Nevada-Las Vegas.
Close-in suburbs in the 50 largest metropolitan areas added 6 million people from 2000 to 2010, an 11.3 percent increase. The nation grew 9.7 percent in the same period.
At the same time, less populated suburbs on the outer edge grew even faster. They gained 6.7 million, a 24.5 percent increase.
The numbers show that a resurgence in urban lifestyles spilled over from cities into their nearby suburbs,
America’s suburban landscape has four distinct rings, Lang’s research shows:
Inner suburbs. Many developed in the 1920s and 1930s along streetcar lines. Because they’re close to cities and usually have extensive public transportation, they have gained in appeal as gas prices have soared. They’re most attractive to the young, the childless and immigrant families.
Key examples are Arlington and Alexandria, Va., suburbs of Washington, D.C., and sections of Tampa’s Hillsborough County and San Antonio’s Bexar County – all double-digit gainers since 2000.
Mature suburbs. The next ring out from inner suburbs, these communities began their growth in the 1970s and 1980s and are filling out: Jefferson County in the Denver metropolitan area or Chicago’s DuPage. On the whole, these suburbs grew the slowest from 2000 to 2010, adding 3.5 million people, a 7.8 percent increase.
Emerging suburbs and exurbs. Despite the housing bust and foreclosures that hit new subdivisions the hardest, these communities along the outer ring of suburbia ended the decade with phenomenal growth.
St. Croix, Wisconsin’s fastest-growing county, has become a bedroom community to the Minneapolis-St. Paul metropolitan area in neighboring Minnesota.
The county gained more than 21,000 residents in the past decade, a 34 percent increase to 84,345.
How the suburban landscape will transform this decade is up for debate. Wendell Cox, a principal at Demographia, a public policy and demographic firm in the St. Louis area calls the return-to-the-city movement “a false alarm” and believes that suburbanization will continue.
Others say the outer suburbs will never see a return to the growth seen in ‘07 and ’08. “Do people really want to live that far away?”
Six States with the Highest Startup Rates
According to a recent report from the Kauffman Foundation, Americans launched businesses at the highest rate in 15 years in 2009 and 2010. The record pace was sparked by widespread layoffs, government incentives, or just a plain can-do spirit.
Here are six states with the highest startup rates.
1. Nevada (tie with Georgia)
Startup Rate: 510 per 100,000 adults*
Nevada is one of the best places to start and run a business as the state passed some of the most aggressive pro-business legislation in the country. Startup fees are low and Nevada has no personal or business income tax.
Nevada’s weak labor market with the U.S.’s highest unemployment rate has also helped spur a spate of startups, since being out of work often encourages people to become more entrepreneurial.
New entrepreneurs are able to take advantage of cheap office space created during Nevada’s construction boom in 2000 to 2007.
2. Georgia (tie with Nevada)
Startup Rate: 510 per 100,000 adults*
Georgia ties with Nevada for No. 1, thanks to large numbers of young innovators who stayed or moved to the business-friendly Peach State.
Each year, Georgia Tech, the University of Georgia, Emory University and other schools produce droves of entrepreneurial-minded graduates. Other bright minds come from Harvard University’s Business School, which has one of its largest alumni chapters in Atlanta.
Georgia’s universities do a good job supporting its students and professors in their new ventures as the state’s universities offer courses on entrepreneurship, have business incubators, and help students connect with investors and successful business owners.
A modest cost of doing business, aggressive laws that protect entrepreneurs and a robust venture capital community also have helped create a vibrant startup community.
Startup Rate: 470 per 100,000 adults*
California boasts a culture of innovation, many college and business school graduates, and the second highest unemployment rate in the country.
Some of the most successful technology companies in the world (Apple, Google and Facebook) got their start in the Los Angeles and San Francisco areas.
California also has a significant number of immigrants, who were more than two times as likely as Americans to start businesses. Immigrants, especially those who came to the U.S. for economic reasons tend to be more risk-taking, a key component to entrepreneurism. And because of language and credential barriers, it’s often easier for them to start a business than find a job.
Startup Rate: 460 per 100,000 adults*
A bright spot from the devastation of Hurricane Katrina is the high entrepreneurial activity it sparked in Louisiana. After the hurricane hit, causing billions of dollars worth of damage, the state and federal government began offering an array of economic incentives to clean up and rebuild.
The federal Gulf Opportunity Zone Act of 2005, also known as the GO Zone Act, offered tax incentives, while the Small Business Administration provided loans. Louisiana launched a multimillion grant program for small businesses.
Buildings had to be rebuilt, levies reconstructed and areas cleaned up. That demand, along with a swell of startup initiatives, launched a lot of new businesses.
The state’s tax incentives for the film and television industry have also played a role. Today, Louisiana is considered a top location for movie-making, which has brought more production companies to the region, and in turn supported new catering and trucking ventures. A strengthening economy also encouraged people to start companies.
5. Colorado (tie with Vermont)
Startup Rate: 450 per 100,000 adults*
Colorado’s “independent-minded, can-do culture” is one reason for the state’s high rate of entrepreneurship.
The region has fewer multinational corporations than other states which means less competition and more opportunity for startups.
The state is also giving new business owners a hand with a range of economic incentives.
Colorado’s high unemployment rate of 9.3% may have fueled some of the state’s startup activity, since high unemployment often prompts people to start new businesses.
6. Vermont (tie with Colorado)
Startup Rate: 450 per 100,000 adults*
Vermont ties with Colorado for fifth place among states with the highest startup rates.
The Green Mountain State is home to everything from village shops to home businesses, artists, adventurers, writers, philosophers and passionate people of all trades.
Vermonters tend to be entrepreneurial and fueling that entrepreneurialism is a stagnant economy that doesn’t breed many new jobs.
Posted by Scott R. Lodde