Creative Class on the Move

Old friend Richard Florida, who introduced the “creative class” concept that’s now overused and overexposed, has a new spin on his theory that cities and regions can improve their economic fortunes by attracting and retaining people who work in creative jobs and appreciate diversity, authenticity and the arts. Apparently now the creative class also drives up real estate values.

In the article “Where the Brains Are” in the current issue of Atlantic Monthly, Florida discusses a demographic realignment he says might be the most significant the U.S. has ever seen — the concentration of college-educated people into fewer and fewer areas, mostly the “hot” cities we’re all sick of hearing about.

There are two amazing maps featured in this article, one from 1970 and the other from 2000, comparing how each U.S. county stacks up in terms of college graduates vs. the national average. In 1970, college grads were spread fairly evenly across the U.S., with most counties having about as many grads as the national average. Nationally, 11 percent of the population over 25 years of age had a college degree, and about 11 percent of the population of most U.S. counties had a degree.

In 2000, the map is drastically different. The vast majority of U.S. counties (particularly in the Midwest and the South) now have significantly fewer college grads than the national average — which, by the way, is now above 25 percent. The counties with way more than the national average tend to be the big cities.

Florida then ties in this trend with the “hot” cities’ real estate values, pointing out that as college-educated people congregate in certain cities to fill highly paid jobs, they bid up the value of homes and condos — a simple case of increased demand driving higher prices. He offers a chart in the article that includes Cincinnati to show how the growth of college-educated residents has mirrored a growth in housing values.

San Jose, for instance, saw its percentage of college-educated residents grow from 9 points above the national average in 1970 to 16 points above in 2000. Its mean housing value grew 513 percent between 1950 and 2000.

Cincinnati’s percentage of college-educated residents dropped a bit, from 4 points above the national average in 1970 to 2 points above in 2000. Our mean housing value grew 67 percent, placing us 11th out of 14 cities included in the chart. (San Jose is first and Buffalo last.)

Here are my takeaways from Florida’s article: On the positive side, Cincinnati’s share of college graduates has increased since 1970 (based on information in the chart) — from about 15 percent of the population to about 27 percent of the population these days. That’s nothing to sneeze at, but since the entire country accomplished the same thing it’s nothing to get excited about either.

Our housing values remain a good value for those looking to buy, adding to the sense that Cincinnati is an affordable city. That’s one of the main positives heard when “creative class” types talk about why they choose to live here.

On the other hand, rising home values help a city in lots of ways, from increasing the tax base to providing a buzz that the area is getting popular. It’s not a straight line cause-and-effect situation, but it’s not difficult to see that more “creative class” people in Cincinnati = higher housing values = increased property tax revenues = better schools = a more attractive city for people to want to live in, which feeds the cycle all over again.

As CityBeat has been saying from our very first article on Richard Florida in 2002 up through numerous editorials and cover stories, Cincinnati needs to take the “creative class” seriously. These people aren’t the magic bullet that will suddenly stem the dramatic population loss the city and Hamilton County are experiencing, but they are part of a long-term answer.

Once again we can thank Florida for pointing that out.

— John Fox

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