Several weeks ago, the National Endowment for the Arts presented 3 new reports that detail metrics and qualifiers which focus on;
1) which populations are engaging with what types of arts and the impacts arts engagement have on our lives
2) why people choose or do not choose to participate
3) revised estimates measuring the total dollar amount that arts contribute to the economy, written in conjunction with the Department of Commerce-Bureau of Economic Analysis.
So, how does any of this data inform our local housing and commercial economies? How does an examination of social behavior guide our planning?
Starting with the third report, there are interesting discoveries regarding the percentage impacts on the GDP and GDP percentages of the Arts and Culture market. If we look at the NEA/DOC statistics from 2012, the last year for which reliable estimates are available, we see that the production of arts and cultural goods contributed $698 billion to the US economy amounting to 4.32% of the overall GDP. Breaking this down and spotlighting a few of the industries, the broadcasting and motion picture and video industries contributed a total of $121 and $95 billion respectively and the performing arts and independent artists contributed another $35 billion. The design service industry (interior, graphic, architectural, landscape architecture, etc.) added $11.6 billion to our economy.
Now looking at the Real Estate industry, we see that the housing sector alone contributes 15.24% to the GDP. New Commercial Real Estate construction, contributes another 2.7%. If we were to take the NEA/DOC arts contribution report by itself without the findings of the other two reports, we likely would not see any particular correlation between the real estate and arts and cultural sectors. However, adding the findings of why people choose or not to participate in the arts and culture and the impact or converse lack of impact the engagement has on their lives, we begin to see quite a different relationship.
Arts and culture organizations and engagement impact the overall economy in ways unlike almost any other industry. These activities induce large amounts of related spending by their audiences and participants. For example, a family goes to a concert, eats at a nearby restaurant prior, perhaps gets ice cream after and often will stay the night in an area hotel. Or perhaps, a child begins dance lessons. His parents buy his tap shoes at a local store, his dancewear at another, his performance costumes at another. He might need to have music composed or arranged. His performances may require travel or, at very least, would cause others to travel to see them.
One might argue that the same correlative examples could be made for sports and you would get no rebuttal from me. I happen to include “sports” under the umbrella of “culture.” Many arts and culture purists might rail against this inclusion, but I would hasten to answer that the above simple examples tell only part of the story.
Robert Lynch, President of Americans for the Arts, says this about the economic impact and value of the arts and culture: “They foster beauty, creativity, originality, and vitality. The arts inspire us, sooth us, provoke us, involve us, and connect us. But they also create jobs and contribute to the economy.”
In the field of Creative Placemaking, we talk about the “ripple effect” that arts and culture spending have on the overall economy. It boosts both commodities and jobs. For example, for every 100 jobs created from new demand for the arts, 62 additional jobs are also created. And demand for arts and culture include shifts in government spending on museums, parks, and libraries; the construction of new performing arts centers; and changes in exports of arts and cultural services.
The same can be said about the shift in private spending. “Having an abundance of unique arts and events means more revenue for local businesses and makes our communities more attractive to young, talented professionals—whose decisions on where to start a career or business are increasingly driven by quality of life and the availability of cultural amenities” according to Bart Peterson, President, National League of Cities.
Herein lies one basis for the correlation between the Arts and Cultural industry and the Real Estate industry. But when we look at the “ripple effect” through the lens of social outcomes for those who participate in arts and cultural activities, we find an entirely new set of compelling positive indicators. There is a great deal of focus these days on the “cultural ecology” — taking a holistic viewpoint and looking at the interconnectedness of community, social and economic development indicators and outcomes.
The NEA reports indicate that 73% of people who attend the arts go to socialize. 63% go to learn and 62% go to experience. Many sociology studies have found that residential stability also strengthens social ties with neighbors. A higher overall quality of life among homeowners is believed to contribute to the well-being of both homeowners and their children. Studies indicate that young children of homeowners tend to have higher levels of achievement in math and reading and fewer behavioral problems.
The research done by the National Association of Realtors that compares social outcomes between renters and homeowners is stark in contrasts. Homeowners move far less frequently than renters, and hence are embedded into the same neighborhood and community for a longer period. While 4.7 % of owner-occupied residents moved from 2010 to 2011, 26 % of renters changed residential location.
Academic achievement in reading and math performance of children ages three to twelve is significantly impacted by home environment, neighborhood quality and residential stability. Research by Thomas P.Boehm and Alan Schlottmann, for Harvard’s Joint Center for Housing Studies, shows that the average child of homeowners is significantly more likely to achieve a higher level of education and, thereby, a higher level of earnings. The authors further find the housing tenure of parents plays a primary role in determining whether or not the child becomes a homeowner.
The NEA reports support the conventional wisdom that education and income are widely recognized as key predictors of adult arts attendance. 6% of individuals holding bachelor’s or higher degrees reported having attended at least one art exhibit or performance in the past year, and 45% attended at least one of each. By contrast, only 23% of individuals with no high school diploma or GED certificate attended arts of any type.
In addition, numerous studies show that parents with bachelor’s or higher degrees are more likely to ensure access to formal arts education, to take their children to arts events, and to encourage their children’s participation in arts activities. Not surprisingly, social isolation, poor health and lack of access are reported as barriers to arts attendance and participation.
The NAR report further indicates that homeowners tend to be more involved in their communities than renters. For example, homeowners were found to be more politically active than renters. Homeowners participate in elections much more frequently than renters. The study found that simply owning a home increases the number of hours volunteered with no variance between low value and high-value homeowners.
The authors argue that homeowners have a stake in the community given that home is a unique investment where the asset is tied to a fixed geographical location. Consequently the value of the property is determined by the condition of the neighborhood in which it is located and the social institutions that serve its residents. Many sociology studies have found that residential stability strengthens social ties with neighbors. Findings reveal that individuals select the people with whom they form social relationships within a social space that facilitates routine interaction with others. This kind of thinking is a cornerstone of Creative Placemaking planning.
In a recent Huffington Post interview, noted economist, Jeremy Rifken, said: “…we are beginning to see that a mass surge of employment is migrating out of the market and into the social economy, the not-for-profit economy, where human social capital counts more than economic capital. Machines are subsidiary in this sector because they can’t care for children or the elderly for example….The social economy is the fastest growing employment sector in the world right now.”
All around us there is mounting evidence that the “top-down” approach to decision-making is falling short of meeting our basic human needs and desires for social engagement. The data is compelling and thought leadership and practice is beginning to reflect the community, social and economic value derived from deliberative interdependent planning. Developers, planners, and cultural leaders are finding that success lies in creating live/work/play spaces.
What do arts and culture have to do with real estate? Examined together, they can walk hand-in-hand to inform decision-makers on how to create communities of vibrancy, resiliency, and socially-engaged citizens–places where people actually want to live their lives.