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Buried in CS Monitor's Downtown Piece, Some Interesting Numbers

By Eric Richardson
Published: Friday, October 10, 2008, at 01:07PM
Times in Trees Eric Richardson [Flickr]

Despite the revitalization of Downtown, has the neighborhood lost 200,000 jobs since 1999 and seen condo prices drop seventy percent? Those are the numbers running in a piece on Downtown published in this week's Christian Science Monitor.

The story, titled "Los Angeles finds its heart" is mostly about Grand Avenue and Downtown's cultural institutions. It runs in the Arts & Entertainment section of the Monitor's site, so perhaps accurate economic data isn't considered as important. Still, the second half of the piece includes these two eyebrow-raising paragraphs:

Other longtime L.A. watchers say the so-called cultural heart must be seen in the larger context of downtown. Ms. Borda points to a "renaissance" that has flowed from the recent arrival of other catalytic buildings such as the new Cathedral of Our Lady of the Angels and the nearby Staples Center arena. According to the Los Angeles Economic Development Corporation (LAEDC), 13,000 residential units have moved into the downtown area since 1999.

However, points out Mr. [Joel] Kotkin, some 200,000 jobs left downtown during roughly the same period. Also, according to the LAEDC, housing values have plummeted due to lack of buyers. Condos priced at nearly $1 million just two years ago have fallen below $300,000.

So Joel Kotkin says that Downtown has lost 200,000 jobs since 1999, and the paper decides that data must be good enough to print.

Update (2:40pm): Kotkin emailed me to clarify where his numbers came from. See an explanation below.

The LAEDC, quoted in the first paragraph, tells a different story. The agency's 2004 Downtown Economic Report (PDF) says that Downtown had a workforce of 397,000 in 1999. In 2004, the report forcasted Downtown to have 502,300 jobs. That's a positive trend of over 100,000 jobs.

In that same time, Downtown's office vacancy rate has actually lessened, as firms were attracted to Downtown's new life.

Certainly the market has its fluctuations, and may well have moved around since 2004, but to claim that it has lost half of its jobs from 1999 is absurd.

The claim on condo numbers is similarly hard to swallow. Certainly, the condo market is down. But is the market down more than 70% as the statistic would have you believe? Absolutely not. Could there be a couple cases where a unit has had that sort of precipitous fall? I don't know of them, but I could believe it. Has the market as a whole done anything like that? Absolutely not.

As a bottom line, there are a couple of important take-aways here: First, just because it's in the paper doesn't mean it's true (especially when it's in the Arts & Entertainment section). Secondly, when Joel Kotkin is giving statistics about Downtown, they're quite likely to be tailored to his take on urbanism. That papers continue to print his quotes will never cease to amaze me.

Update (2:40pm): It was unfair of me to insinuate that Kotkin made his job numbers up. He emailed to source the data, pointing to this LA Times article from last year. It includes this statement:

The study found that the number of jobs downtown continues to lag – a holdover from an era when government jobs downsized and corporate headquarters left the city center. Downtown payroll numbers for 2005, the last year available, show a total of 418,000 – down from a high of 605,000 in 1995.

Those numbers come from the Downtown Center BID's demographics study, which in turn sources its employment data from the LAEDC. That 1995 high was an aberration, not a benchmark. The LAEDC 2004 report that I linked above says this:

"Total" employment in Downtown hit a high of 612,000 in 1995, due to a big jump in the government sector, a response to the 1994 earthquake. Employment then slipped down to a low of 367,500 in 1998. The trend was positive through 2001, when the average was 506,200 jobs. Total employment in Downtown slipped down to 493,700 jobs in 2003, reflecting both the recession and more recently the loss of government jobs, the fall-out from the state's budget debacle. The 2004 forecast calls for a rebound to an annual average of 502,300 jobs, despite continued job losses in the government sector.

Before the Northridge quake, the numbers had been 419k in 1991, 484k in 1992, 476k in 1993. That spiked to 609k in 1994.

In the case of this story, yes one could point to a 200,000 job decline in the specific data set of 1995 to present, but choosing any year outside of 1994 or 1995 as your starting point would paint a very different picture.


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