The City Of The Future: Walkable, Mid-Sized And Built For Flexible Work
We all too often discuss the marketability of a business, of an industry but rarely that of cities themselves. In 2008 we saw cities that leaned hard into technology, startups and entrepreneurship bounce back faster from a recession. But that was just an economic shift. As we hopefully turn the corner on the pandemic, this recovery may show real and permanent changes to where people want to work, massive changes in what an ideal city looks like and unexpected power players in the attraction of talent.
The 15-Minute City
This urban planning idea is getting a lot of buzz from Bloomberg, BBC, Fast Company and more. It comes from Paris’ Sorbonne University and every major city is considering it. In its simplest form the 15-minute city is designed to make everything someone needs accessible in 15 minutes or less. If you de-emphasize the need for highway travel and long commutes there are both mental health and environmental benefits. It’s shifting emphasis from mobility (getting to long distances as fast as possible) to access for all to jobs, food, healthcare, entertainment and more.
Running parallel to this idea has been a year-long migration of people from the largest cities back to mid-sized cities and familiar home bases. It’s too early to tell if that shift is permanent. Although many large businesses have learned that they can function just as well with remote teams.
Expect many enterprises to wiggle out of large real-estate leases and continue this trend. Then, if people are continually able to work from anywhere will they choose the largest cities? Or will they opt for places that still give them what they want but with less traffic and less expense.
That’s where we can see an interesting migration over this decade. The cities that are in the best position to attract people, talent and resources will be mid-sized. These cities will have large college populations so there is a familiarity with or tie to the area, a cost of living and real estate market that creates a benefit, good food and entertainment and most importantly the ability to be a 15-minute city with less effort.
See, it’s going to be hard for Atlanta, Boston or Los Angeles to be a 15-minute city. Any large city that is highly dependent on highway commutes and suburbs and is known for traffic jams will be hardest to change. Even Phoenix, minus the Scottsdale area will have challenges because of its sprawl.
So, the cities with the most potential for growth are the ones that have grown but haven’t grown too much in the last ten years. Charlotte, Austin and Denver are still great destinations but they have outgrown their urban cores and become traffic jams themselves.
There are a few paths that tend to work in city growth.
The Anchor Company
Microsoft in Seattle, Dell in Austin, plenty of cities have anchor companies and success stories, those are the prerequisites to growing a city. Those cities weren’t always considered hubs. It took time.
Shipt, is a major local success story in Birmingham, Alabama, having sold to Target for $550 million in 2017 but more importantly it continues to stay in Birmingham employing 1,200 people and driving the city’s urban growth with an initiative, Birmingham Bound, that works to attract top-level tech entrepreneurs to the city. There is also a home grown pipeline with Alabama, Auburn, UAB and more all in close proximity churning out over 50,000 graduates a year.
It has grabbed the attention of Boulder-based VCs for investment, seeing it on a similar trajectory, with the same elements necessary for growth. Chris Moody from Thrive Capital came to Birmingham during a Rise of the Rest tour in 2018 and was blown away by the city’s progress and emerging tech scene. Birmingham has seen $2.4 billion invested in the redevelopment of Birmingham’s Central Business District and is already able to position itself as a 15-minute city and a place to attract the talent it already creates.
Its cost of living is one of the best in the country — 93.1 percent of the national average, and consistently ranked the most affordable by Niche, SmartAsset, and Zillow.
Data is showing that people have been moving out of the largest cities during the pandemic. WIth remote work on the rise this trend could continue. This is pulling people back to university hubs, mid-sized cities and places still within proximity to larger hubs that are more affordable.
Birmingham fits this trend but it isn’t the only city that does.. Richmond ranks as one of the best places in the country for remote workers and start-up Phlow just won a $350 million advanced manufacturing contract to produce essential medicines including those fighting COVID-19.
Combine that with its proximity to a major hub in D.C. and you might start to see the rise of the proximite, mid-sized city like Richmond that creates opportunities, is still close to major action but gives people a reprieve from high costs and big crowds.
The Laser Focus
Plenty of cities, whether intentional or not, become known for one thing or one industry over time. Tampa Bay is doing this with cybersecurity. It started with Reliaquest, their anchor company and keeps expanding. The Tampa Bay Times recently announced that large cybersecurtiy firm OPSWAT will be relocating from Silicon Valley for Tampa.
This adds to a growing trend as Oracle is leaving for Austin. Florida and Texas, over the next ten years, will have similar cases in attracting companies. Both have no state income taxes and similar incentives.
Redfin data shows Tampa is a Top 10 place to move and Business Insider has been making a strong case for Florida and Texas being the next hubs, in contrast to Silicon Valley and New York. Tampa is not Miami, it is a different vibe and more affordable right now especially in comparison to current hubs. Cybersecurity is a growing and stable industry. The key to attracting talent to an area is having multiple job options in one field. This is where Silicon Valley and Boston have succeeded so well to date. This is especially true when growing in your career usually requires moving to a few companies for promotions rather than staying somewhere for 30 years.
This is why having a laser focus in one industry, for one specific type of talent can accelerate the growth trajectory of a city.
The Main Attraction
It’s not just mid-sized cities that are taking big swings at growth. Houston, quickly becoming the third largest city in the country, is revamping an entire part of its downtown to create the most ambitious downtown innovation corridor in the country. The Ion, opening later this year, will be nearly 300,000 square feet of space for startups and create a living and retail corridor in line with the 15 minute city, being just outside of the downtown.
Doing this in a pandemic is not ideal timing to say the least but they are betting on having an offering no one else in the country has. Everyone has accelerators and places to launch startups. Theirs will have the backing and expertise of NASA and the world’s largest energy companies. Houston is using their assets and sharing that expertise to attract more development. The secondary intent is to become less of a high-traffic metro and more walkable by connecting this development to downtown.
Variables
Nothing is certain. We have certainly seen that over the past 14 months. There has never been one set way to grow a city. Sometimes the best efforts can fail and sometimes growth can happen even with the wrong plan and some good luck.
What we saw last decade, in general, was that if a city made real investments in startup growth they grew with that investment. This decade the growth may be more dependent on fitting in to a walkable, remote-working lifestyle. Or, we might fully put this pandemic behind us and long for more crowds, more traffic as a sense of belonging and feeling like life is back to normal. The largest cities, which were trending toward people leaving, might now have new excitement.
Variables are impossible to predict. In general we can see that remote working should sustain and even grow because it’s less expensive for the business and more appealing for the worker. If that’s the case, mid-sized hubs will thrive and a few cities will emerge to be much larger and more appealing this decade. No matter the variables, some cities will grow faster this decade and we will look back at them in 2030, like we do with Charlotte and Denver right now and it will seem like a no-brainer.
Future Focused
Don’t bet against cities to continue to grow. The future for them looks more walkable and more flexible. The lasting impact of the pandemic will be in building for the unpredictable but the trends prior still remain the same. In the 2010s cities grew because of the job or startup opportunities they created coming out of a recession. With opportunities being more flexible this changes. The growth city of the future will still have opportunities but grow more so because of the quality of life it creates. Streets without cars are here to stay. The 2020s will be about finding balance.