When I was in college and first became politically aware, so to speak, was in the ’80s when Ronald Reagan was president. Many people from that era remember that perhaps the principal economic theory driving his election in 1980 was the theory of supply side economcs, or that lower barriers on regulations would lead to more goods and services available to consumers, at a lower price. Related to supply side economics was the so-called “trickle-down” theory, meaning that lower taxes on the wealthy would have a stimulative effect on the economy — job creators would create more jobs, greater corporate profits would result in higher worker wages. Back then, I didn’t buy it because I thought the world’s corporate titans would keep the profits for themselves and invest in the business, rather than people. In my opinion, that’s pretty much proven to be correct.
When Richard Florida arrived on the scene some fifteen years ago with his book “The Rise of the Creative Class”, he seemed to be proposing something very similar to supply-side or trickle-down economic theory. His thesis was that the cities that were thriving were doing so because of the success of those in the creative economy — talented and educated professionals who worked in knowledge-based industries like business and finance, technology, healthcare and medicine, law, and education. He argued that cities that employed the creative class strategy, reorganizing their built environment to accommodate the needs and desires of creative class types, would find themselves stronger and more prosperous than they’d ever been, because the impact would trickle down to all sectors of the urban economy. I initially bought that idea, because after decades of people — and money — flowing away from cities, I believed cities needed the infusion of capital for revitalization.
How far we’ve all come since then.
Florida has now come out with a newly published book, The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, And Failing The Middle Class — And What We Can Do About It. It details his intellectual shift on cities, as one can see in this book excerpt at CityLab:
“I have lived in and around cities and observed them closely my entire life, and I have been an academic urbanist for more than three decades. I have seen cities decline and die, and I have seen them come back to life. But none of that prepared me for what we face today. Just when it seemed that our cities were really turning a corner, when people and jobs were moving back to them, a host of new urban challenges—from rising inequality to increasingly unaffordable housing and more—started to come to the fore. Seemingly overnight, the much-hoped-for urban revival has turned into a new kind of urban crisis.”
And then there’s this nugget:
“Gentrification and inequality are the direct outgrowths of the re-colonization of the city by the affluent and the advantaged.”
I haven’t yet read Florida’s new book, but I have been an avid reader of his earlier books and his work at CityLab, and I’ve sensed this transition through his writings. He’s rightfully frustrated with the lack of widespread economic benefit within cities, especially since collectively they’ve witnessed investment over the last 25 years that far outpaces the investment over the previous 50. Florida is spot on in his CityLab excerpt. A New Yorker transported from 1975 to today would recognize the landmarks, but see a city transformed. That New Yorker would probably wonder exactly how the old factories and warehouses got replaced with condo and office towers, and be fascinated at the outward expressions of affluence in neighborhoods that, in his or her era, were desperately poor. They were places people moved from, not to.
We all know that New York is far from alone. San Francisco and Washington, DC are among the cities most completely transformed over the last 20-25 years, fueled by the tech economy and the expansion of the federal government, respectively. Seattle, Denver, Atlanta and Boston have seen similar transformations, and have the high housing costs to prove it. Despite what urban optimists say, cities like Chicago, Philadelphia, Baltimore, Cleveland, St. Louis and even Detroit have been touched by the transformation as well. Any problems evident in any of these cities is evidence supporting the transformation, not against it.
Yet there are still cities and metro areas that remain steadfastly suburban in orientation. Houston, Dallas, Charlotte and Phoenix stand out as cities that don’t have as much of the early 20th century built environment, rich with amenities, that attracts creative class types. Right now they’re able to avoid much of the bifurcation we see in other cities. But perhaps they should look at their peers so they can anticipate — and prepare for — their likely future.
And bifurcation is indeed what is happening in cities. I took quite a bit of flak from Chicago urban optimists when I characterized the city as “one-third San Francisco, two-thirds Detroit” three years ago, and pulled up data to show it. I haven’t done a similar analysis on other cities, but Florida has seen enough data to support my view:
“The urban optimists focus on the stunning revival of cities and the power of urbanization to improve the human condition. For these thinkers (myself among them, not too long ago), cities are richer, safer, cleaner, and healthier than they have ever been, and urbanization is an unalloyed source of betterment. The world, they say, would be a better place if nation-states had less power, and cities and their mayors had more.
In stark contrast, the urban pessimists see modern cities as being carved into gilded and virtually gated areas for conspicuous consumption by the super-rich with vast stretches of poverty and disadvantage for the masses nearby. Urban revitalization, in the pessimists’ view, is driven by rapacious capitalists who profit by rebuilding some neighborhoods and running others down. Global urbanization is being foisted on the world by an unrelenting neoliberal capitalist order, and its defining feature is not progress and economic development, but slums, along with an economic, humanitarian, and ecological crisis of staggering proportions.”
I should note that I don’t view what’s happening in American cities as starting in the ’90s and continuing through to today. This is a feature of American society. We are a restless nation full of people who want to settle the next frontier. First we left the thirteen colonies for the American interior; we left the interior for the West; we left rural areas for the cities; we left cities for the suburbs. In this context, cities, which were largely emptied out following World War II and continuing until the 1980’s, became the low-cost frontier that the others had been for previous generations.
My frustration, and I suspect Florida’s too, is that I imagined that the flow back to cities represented an opportunity for affluent integration, rather than succession. I once posed the idea that, using tactics similar to those used in successful racial integration efforts in the ’60s and ’70s, perhaps a gentrification management program could work. Not only would it potentially address immediate affordable housing concerns, but it would temper displacement/succession concerns, and set in place a framework for the kinds of social networks that could reduce economic inequality. The initial response was underwhelming. YIMBYs who believe the most critical issue is MORE MORE MORE HOUSING to create affordability seem to lose the economic inequality issue. More neo-libertarian types suggest that other groups had their chance at remaking the city; now, it’s our time and don’t get in our way.
In retrospect, I, and we, should have seen this coming. With supply-side/trickle-down economics, lower taxes and higher corporate profits didn’t translate into higher wages for workers. It resulted in a threatened and eroding middle class, and ultimately to a more bifurcated society. The influx of the creative class in our cities has also threatened and eroded our middle class, and created more bifurcated cities. Some cities have enough creative class power to temporarily mask the bifurcation symptoms — tech in the Bay Area, finance and international investment in New York, the federal government in DC, even education in Boston. But eventually the symptoms show.
I’m interested in seeing what Florida’s proposed solutions would be to our new urban crisis. I imagine that it would include zoning reform that makes it easier for cities to build affordable housing, and for making low-paying service economy jobs into middle-income jobs. But more than anything, I would argue that creative class types — maybe the top 30% of American workers, not the reviled “1%” — need to display more empathy. Their success wrests on the shoulders of the working class more than they would like to believe. Treat them with care.