How will we grow? Looking at America to 2050 Presentation by Joel Kotkin, Chapman University, to NCREIF Chicago September, 19, 2013.

How will we grow? Looking at America to 2050

Presentation by Joel Kotkin, Chapman University, to NCREIFChicago September, 19, 2013

Long Term FundamentalsLong Term Fundamentals• U.S. only advanced

country with large, growing population

• Huge resource base• Economic system

most resilient among advanced countries

• Affordable housing attracts key demographic groups

• Dispersion and decentralization is the future

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

1960 1970 1980 1990 2000 2010 2030 2050

More Crowding to Come: US Population Growth 1960-2050

More Crowding to Come: US Population Growth 1960-2050

Source: Bureau of the Census, CensusScope

Labor Force Growth

U.S. Census Bureau, International Database

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050-45%

-35%

-25%

-15%

-5%

5%

15%

25%

35%

45%

United States; 37%

Korea; -30%

Europe; -21%

China; -10%

Japan; -39%

Growth in Age 15-64

China Europe Japan Singapore United States0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

0.12

0.26

0.36

0.09

0.19

0.45

0.53

0.82

0.37 0.34

20102050

65 &

Ove

r Per

sons

per

Und

er 1

5Ratio of Elderly to Working Age Population

65 & OVER PERSONS PER 15-64 YEARS

Calculated fromUN Population Prospects:

2010 Revision

Future Drivers of Growth

• Resurgence of Basic Industry• Rise of Growth Corridors

• Role of Immigration• Millennials, Seniors and the role of families drive

dispersion

Ag Exports Increasing

Driven by solid worldwide demand, increased productivity, and strong commodity prices, America’s ag sector has seen overall export levels steadily increase over the past decade.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201140.0

60.0

80.0

100.0

120.0

140.0

US Ag Exports, 2000-2011

Billi

ons

of D

olla

rs

Source: USDA Economic Research Service

Leading in Gas Production

United StatesRussia

European UnionCanada

IranQatar

NorwayChina

NetherlandsAlgeria

Saudi ArabiaIndonesia

611,000,000,000

588,900,000,000

182,300,000,000

152,300,000,000

138,500,000,000

116,700,000,000

106,300,000,000

96,800,000,000

85,170,000,000

85,140,000,000

83,940,000,000

82,800,000,000

Natural Gas Production, Billions of Cu M

CIA World Factbook

Shale Oil and Gas- Not Just the Bakken

TexasOklahoma

ColoradoCaliforniaLouisiana

PennsylvaniaKansasFlorida

New MexicoNorth Dakota

OhioWyomingArkansas

West VirginiaIllinois

MichiganMississippi

AlaskaUtah

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

Oil and Gas Extraction Job Growth, 2001-2011

Source: EMSI Complete Employment, 2011.4

0%

1%

2%

3%

4%

5%

6%

1.7

4.7

5.2

Real GDP Industrial Production: Manufacturing 2011 2011 Feb. 2011 to Feb. 2012

Growth Rates: Real GDP vs. Manuafacturing

A High Economic MultiplierActivity Generated by $1 of Sector GDP

Seattle-Tacoma-Bellevue, WA

Houston-Sugar Land-Baytown, TX

Austin-Round Rock-San Marcos, TX

San Diego-Carlsbad-San Marcos, CA

Dallas-Fort Worth-Arlington, TX

San Francisco-Oakland-Fremont, CA

Nation

Boston-Cambridge-Quincy, MA-NH

San Jose-Sunnyvale-Santa Clara, CA

Los Angeles-Long Beach-Santa Ana, CA

25.5%

20.5%

16.8%

11.7%

11.5%

11.0%

7.5%

5.7%

4.1%

-1.5%

STEM Occupation Growth, 2002-2012

Source: EMSI Class of Worker Employment, 2012.2

MAP by Forbes Magazine

2013-2023 JOB GROWTH % CHANGE Research by EMSI, Inc.

Great L

akes

Inland West

Great P

lains

Left Coast

Northeast

SoCal

South

east

Third Coast

Miami

New York-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2013-2023 % change

2003-2013 % change

Population trends

2012 Population2001-2012

Growth2013-2023 Projection

Great Lakes 58,204,741 3% 1%

Plains 40,198,802 14% 6%

Inland West 31,937,817 21% 7%

Left Coast 18,754,371 10% 5%

NE 41,377,960 6% 3%

SoCal 20,738,971 10% 5%

SE 60,684,462 14% 5%

Third Coast 16,421,390 16% 7%

Miami 5,729,000 12% 6%

NY 19,109,549 3% 3%

NY

CA

IL

MI

OH

PA

GA

NC

TX

FL

-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5

Millions: Net Domestic Migration

Domestic Migration by State: 2000-200910 LARGEST STATES

Data fromCensus Bueau

Gaining States

Declustering: The New DemographyDeclustering: The New Demography

• Nationwide people heading to smaller towns and cities

• Shift to opportunity regions

• Social trends strongly pro-suburban

• US Population growth will increase interest “flyover country”

Over 10M 5M-10M 2.5M-5M 1M-2.5M Other

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

-11.3%

-2.5%

1.4%

3.7%

0.6%

Shar

e of

200

0 Po

pula

tion

Net Domestic Migration by PopulationMAJOR METROPOLITAN AREAS: 2000-09, 2010-12

From CensusBureau Data

PROJECTED CHANGE IN HOUSEHOLDS 2012-2017 Research by Pitney Bowes Corp.

Houston, T

X

Atlanta,

GA

Wash

ington D.C.

Dallas,

TX

New York, NY

Phoenix, AZ

Riversi

de, CA

San Anto

nio, TX

Austin, T

X

Forth

Worth

, TX

Los A

ngeles, C

A

Chicago

, IL

Oaklan

d, CA

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Salt Lake CitySeattleDetroit

PhoenixRiverside-San Bernardino

San FranciscoBostonAtlantaMiami

WashingtonPhiladelphia

HoustonDallas-Fort Worth

ChicagoLos Angeles

New YorkU.S. Average

0 1 2 3 4 5 6 7 8 93.7

4.81.5

33.7

7.85.2

24.5

4.13.8

32.9

3.26.26.2

3.1

Housing Affordability: 15 Largest MSAs

Median Multiple

Detached80%

Attached7%

Multi-Unit8%

Other5%

Housing Preferences: Realtors Survey2011 COMMUNITY PREFERENCE SURVEY

Figure 25

0-2 Miles2-5 Miles

5-10 Miles10-15 Miles

15-20 Miles20+ Miles-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

206,000

-272,000

1,105,000

3,473,000 2,989,000

8,566,000

Popu

latio

n G

row

thPopulation Growth by Distance from Core

US MAJOR METROPOLITAN AREAS: 2000-2010

Figure 26

Data fromCensus Bureau

Osceola, FL

Prince William, VA

Montgomery, TN

Forsyth, GA

Midland, TX

Fort Bend, TX

Orleans, LA

Hays, TX

Loudon, VA

Williamson, TX

0% 1% 2% 3% 4% 5% 6% 7% 8%

6.97%

7.04%

7.04%

7.07%

7.14%

7.16%

7.39%

7.56%

7.87%

7.94%

Fastest Growing Counties Over 100,0002010-2012

Data fromCensus Bureau

Groups Shaping our Future DemographyGroups Shaping our Future Demography

–

• Key demographic groups: Immigrants, Millennials, Aging Boomers --- mostly in suburbs

• Millennials start to grow up

• Shift in geography of family: key to long-term growth

1960 2010 2020 Projection0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Figure 30

White-Non-Hispanic Share of PopulationUS: 1960-2050

Source: Bureau of the Census

1970-1980 1980-1990 1990-2000 2000-20100%

10%

20%

30%

40%

50%

60%

70%

Total

Owner

Source: Myers & Pitkin

Foreign Born Share of New HouseholdsUS: 1970-2010

Figure 31

PhiladelphiaDetroit

RiversideSeattleBostonAtlantaChicagoPhoenix

WashingtonHouston

DallasNew York

San FranciscoLos Angeles

Miami

2.1

2.5

3.3

4.1

4.6

4.8

5.2

5.8

6.0

6.5

6.5

7.4

7.5

8.0

10.1

Immigration Rates Top 15 RegionsAnnual Average, 2001-2008

Areas are MSA U.S. Census Population Estimates

Nashville-Davidson--Murfreesboro--Franklin, TNCharlotte-Gastonia-Rock Hill, NC-SC

Memphis, TN-MS-ARKansas City, MO-KS

Atlanta-Sandy Springs-Marietta, GAOklahoma City, OK

Tampa-St. Petersburg-Clearwater, FLHouston-Sugar Land-Baytown, TX

Dallas-Fort Worth-Arlington, TXSalt Lake City, UT

Denver-Aurora-Broomfield, COUnited States

Boston-Cambridge-Quincy, MA-NHMiami-Fort Lauderdale-Pompano Beach, FL

Chicago-Joliet-Naperville, IL-IN-WINew York-Northern New Jersey-Long Island, NY-NJ-PA

Los Angeles-Long Beach-Santa Ana, CA

118.3%100.4%

73.0%68.4%67.5%

64.9%50.3%

48.7%46.0%

39.0%34.4%

29.8%28.1%

23.4%15.4%

13.8%2.6%

Growth in Foreign Born Population, 2000-2011

U.S. Census 2000 and American Community Survey

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

90000000

2008, 38.69 Million

2030, 72.09 Million

2050, 88.55 MillionNumber of 65 - 100 year olds in United States

Source: Praxis Strategy Group Analysis of U.S. Census Population Projections, Released 2008NewGeography.com

Major Metro Core Cities

Major Metro Suburbs

Smaller Areas

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

Chan

ge in

Sha

re o

f Coh

ort

Empty Nesters: To Less Dense AreasMAJOR METROPOLITAN & SMALLER AREAS

65-74 Population in 2010Compared to 55-64 in 2000Source: US Census Data

90% of people over fifty would rather stay put than move

- AARP

“They don’t want to move to Florida, and they want to stay close to the kids. What they are looking for is a funky suburban development – funky but safe.”

- Washington-area developer Jeff Lee.

Photo: Vlastula

Millennials (Age 12 - 30) Gen X (Age 31 - 44) Boomers (Age 45 - 64)

81,571,364.0

57,344,709.0

80,979,577.0

Population in Millions

Millennials rival Boomers

U.S. Census Population Projections, 2008

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

90000000

2010, 66.14 Million

2025, 74.73 Million

2050, 88.09 MillionNumber of 30 - 45 year olds in United States

Source: Praxis Strategy Group Analysis of U.S. Census Population Projections, Released 2008

Relationship w

ith fa

mily

Relationship w

ith pare

nts

Your neighborh

ood

Your relig

ious or s

piritu

al life

Your sch

ool

Your job

76 72

53 5243

35

Sources of Happiness of 13-24 year olds

Millennials and the Family

85% plan to get married

77% probably or definitelywant children

Associated Press/MTV Survey, 2007

Country

Small City

Suburb

Big City

Country

Small City

Suburb

Big City

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MillenialsOlder Generations

Source:Frank N. Magid

Associates

Millennial Life Style ChoicesCOMPARED TO OLDER GENERATIONS

Figure 40

Curre

ntRe

siden

ceId

eal P

lace

to L

ive

Under 3.0 3.0-4.0 4.0-5.0 5.0-6.0 6.0-8.0 Over 80%

1%

2%

3%

4%

5%

6%

Median House Price/Median Household Income: 2007

Chan

ge in

Col

lege

Gra

duat

es: 2

007-

2009

Absolute Change: College GraduatesHOUSING AFFORDABILITY: MAJOR METRO AREAS: 2007-9

52 Metropolitan Areas over Million Population 2007

Raleigh

Las Vegas

Austin

Charlotte

Phoen

ixAtlan

ta

Dallas-Fort W

orth

Orlando

Houston

AVERAGE

New York

Los Angeles

Buffalo

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Change

Change in 5-17 Population: 2000-2010MAJOR METROPOLITAN AREA EXAMPLES

Source:Census Data

No matter how many communes anybody invents, the family always creeps back.

Margaret Mead

JOELKOTKIN.COM

A vivid snapshot of America in 2050 focusing on the evolution of the more intimate units of American society—families, towns, neighborhoods, industries.

It is upon the success or failure of these communities that the American future rests.

Questions and CommentQuestions and Comment