The Future of Housing, Part 3: Emerging Megaregions
In the second post in this series, I explored the history of America’s infrastructure and housing growth. Today, I’ll continue on this theme.
Megaregions
From the outset, growth has been anything but evenly distributed across the US. If we look at the map of the United States today, not as a set of state boundaries but, instead, as a nation defined by where we live, we begin to learn some important facts.
You see, the US Census Bureau tells us that our population has, for nearly a hundred years, been increasingly leaving farms and migrating into cities — such that today, 80.7% of our 323 million people live in or adjacent to a city.
But the economic reality of this vast movement of people is best seen in a much larger construct. You see, our nation actually has been recasting itself into a series of vast, regionally-defined areas stretching hundreds of miles up and down our coasts and through some of the interior corridors of our nation. These are the Megaregions that will shape the future of American politics, economics, and infrastructure.
In fact, when you strip away the political boundaries that tell each of us which state, city and town we live and vote in, the reality is that most Americans live in clusters of cities known as megaregions, the largest being the Great Lakes Megalopolis followed by the Northeast Megalopolis which contains more than 50 million people beginning in Boston and running through New York to Philadelphia and on to Washington, D.C. Proposed plans for a high-speed rail network will tie this region even more tightly together.
From Vancouver, at the head of the Cascadia Corridor that stretches south across the US border to Seattle, we see how the connectivity of the technology-driven growth of Silicon Valley has migrated down thru San Francisco and Oakland south to the sprawl of Los Angeles and extending to San Diego, across the Mexican border to Tijuana. San Diego and Tijuana now share an airport terminal where you can exit into either country. Eventually, a new high-speed rail network will connect citizens across the entire Pacific spine.
Similarly, regions extend from Tampa, Florida through New Orleans on to Houston, Dallas and Fort Worth. None of these regions can successfully grow without a commitment to invest hundreds of billions of dollars in infrastructure for the development of rail lines, airports, power grids and water lines.
The connective tissue uniting all of this growth across megaregions and nations will come from advancements in technology, many of which are still in their infancy.
And, most importantly for you in this room today, we can be certain that entirely new megaregions will be sprouting up within the next decade — regions where millions of the nearly 100 million new citizens we will be adding — will require, not only new roads and schools and airports, but technology linking their homes and businesses to a global chain of productivity.
In short, the housing industry of tomorrow will introduce a technically advanced home of tomorrow — at all price levels — that will become an essential element of the connectivity of our nation. It is this connectivity that will ensure the growth of our rising population into new — previously undeveloped — sections of the nation.
For those who harbor doubts about this rush to regional connectivity, you need merely to understand that the major tech companies such as Google and Facebook and Amazon are committing billions of dollars to prepare for levels of connectivity unimaginable to us in 2016.
But to truly understand where the growth of our population and the manifest destiny of our founders is truly leading us, I need you to see our nation from the vantage of outer space:
This video, taken by a NASA satellite, provides us a unique view of how our nation looks from outer space at night. When we view the United States from afar. we are struck by a visual of a nation that shows how much room we have to grow.
New Megaregions growing out of Old Problems
What the NASA video above reveals is that large parts of our nation west of the Mississippi to the borders of California are largely undeveloped.
This is precisely where demographers tell us the greatest growth in terms of new megaregions and housing will be expanding.
If, as some historians say, “geography is history,” then the demographic DNA of our nation’s future is right here for each of us to see.
Over the past forty years, major migration has brought millions of people from the North and Northeast to live in the South and Southwest portions of our country. This strong trend will continue as evidenced by the fact that, in 2015, Texas, alone, added nearly a half million new residents.
New cities will not emerge in already dense areas, but rather in those darkened areas in the NASA video above—areas empty enough and free enough from existing infrastructure limitations to handle explosive population growth.
As these new population centers grow, our aging housing stock must be replaced where it exists today. A 2011 AHS study found that homes built from 2000 to 2009 account for only 15% of the owner-occupied housing stock. Nearly half of existing housing stock is at least 45 years old; nearly 75% of housing stock is at least 35 years old.
A 2004 Brookings Institute report speaks to the need to rebuild our existing building stock: By 2030, they report our nation will need to rebuild over half of the 427 billion sq. ft. of existing buildings in our nation.
Most of the space built between 2000 and 2030 will be residential space—over 100 billion square feet of it.
This level of construction will trigger a $35 trillion construction boom that is already under way. In 2016, our nation will well exceed the $1.2 trillion spent on construction in 2007, the last boom year before the recession.
It is clear to me that early development by enlightened companies in the under-developed areas of the US will differentiate the successful housing companies of the next few decades from those who get left behind.
In short, we stand on the precipice of an enormous and greatly welcome period of growth. Growth not only of our population, but of construction activity, of innovative design and manufacture techniques, and of new cultural and economic centers across the US.
But it’s not all roses. The construction industry will face significant challenges in adapting to these new opportunities.
In the next and final post in this series, I’ll explore these challenges and opportunities, and how we can best embrace them.
This blog post is adapted from a speech I gave at the 2016 Housing Leadership Summit in Laguna Niguel, CA.
