A metropolitan economy, if it is working well, is constantly transforming many poor people into middle-class people, many illiterates into skilled people, many greenhorns into competent citizens. . . . Cities don’t lure the middle class. They create it.
Perhaps no song has been belted out more often than the one that claims that America is moving “back to the city.” Newspapers, notably the New York Times, devote enormous space to this notion. It gained even more currency when the Obama administration secretary of Housing and Urban Development, Shaun Donovan, proclaimed that the suburbs were “over” as people were “voting with their feet” and moving to dense, transit-oriented urban centers.
This celebration perhaps reached its crescendo when Amazon initially announced its move to Crystal City, Virginia, and Queens, New York. “Big cities won Amazon and everything else,” Neil Irwin of the Times predictably enthused. “We’re living in a world where a small number of superstar companies choose to locate in a handful of superstar cities where they have the best chance of recruiting superstar employees.”
In fact, however, these views are more aspirational, or even delusional, than reflective of reality. Overall, data suggests that we are not seeing a great “return to the city” but, with few exceptions, a continued movement out to the suburbs and less dense cities, notably in the sunbelt. The spurt of urban core growth that occurred immediately after the housing bust turned out to be remarkably short lived, with the preponderance of metropolitan growth—roughly 80 percent—returning, as has been the case since at least the late 1940s, to the suburbs and exurbs. Indeed, at no point did Census Bureau estimates show net domestic migration from suburbs to core cities, only a reduced rate of migration in the opposite direction.
Even the country’s most influential urbanist, scholar Richard Florida, now suggests that the great urban revival is “over.” Rather than the usual belief that density leads to productivity and innovation, a new Harvard study demonstrates that, between 1970 and 2010, suburban areas have overall steadily increased their economic advantages: the share of suburbs making up the top ranks of all urban and suburban neighborhoods (measured as the top quartile) went from roughly two-thirds in 1970 to almost three-quarters by 2010.
Exaggerating the Urban Renaissance
Even at the peak of the urban “renaissance,” most of the population and job growth continued to occur in the suburban periphery. Cities achieved some parity in growth rates in the period between 2009 and 2011, as presidents Bush and Obama provided “a covert bailout” to banks, universities, and government bureaucracies concentrated heavily in and around urban cores.
Yet as the rest of the economy improved, and urban land prices rose, population movement again shifted away from the dense inner city to less compact, more affordable locales. Analysis of census data by demographer Wendell Cox found that the core counties of the metropolitan areas with populations of more than one million, after losing only ten thousand net domestic migrants in 2012, experienced an outflow of nearly 440,000 by 2017.
This has occurred even in the most exemplary “creative class” cities. In New York, a city coterminous with five counties, the net domestic migration loss has been 1.1 million since 2010; and much of this is to surrounding suburbs, which account for five of the top seven destination counties in the nation for fleeing Gothamites. New York’s borough of Brooklyn, the acclaimed epicenter of early twenty-first-century urban dynamism, lost population in 2017 and 2018. In fact, in 2018, New York, Los Angeles, and Chicago all lost residents to the rest of the country. Net domestic migration has also plummeted in San Francisco by 80 percent since the early 2010s. The key here has been surging housing prices, which eat up much of the big-city wage premium that many boosters focus on.
Critically, this trend has taken hold among the generation that many predicted would sustain the urban “renaissance”: millennials. In fact, as a new Brookings study shows, millennials are not moving en masse to large, dense cities but away from them. According to demographer Bill Frey, the 2013–17 American Community Survey shows that New York now suffers the largest net annual outmigration of postcollege millennials (ages 25–34) of any metro area—some 38,000 annually—followed by Los Angeles, Chicago, and San Diego. New York’s losses are 75 percent higher than during the previous five-year period.
By contrast, the biggest winner is Houston, a region many planners and urban theorists regard with contempt. The Bayou City gained nearly 15,000 millennials (net) last year, while other big gainers included Dallas–Fort Worth and Austin, which gained 12,700 and 9,000, respectively. The other top metros for millennials included Charlotte, Phoenix, and Nashville, as well as four relatively expensive areas: Seattle, Denver, Portland, and Riverside–San Bernardino. The top twenty magnets include midwestern locales such as Minneapolis–St. Paul, Columbus, and Kansas City, all areas where average house prices, adjusted for incomes, are at least 50 percent lower than in California, and at least one-third less than in New York.
Perhaps even more significant has been the geographic shift within metro areas. The media has frequently exaggerated millennial growth in the urban cores. In reality, nearly 80 percent of millennial population growth since 2010 has been in the suburbs. Even in the Bay Area, the tech industry’s global epicenter, suburban Silicon Valley has continued to grow its STEM base rapidly, while San Francisco has recently seen a rapid slowdown in tech jobs. Perhaps density, massive homelessness, and filthy and disorderly streets, not to mention unaffordable living costs, lose their appeal as couples contemplate childbearing.
Dense, high-priced cities still attract young people straight from college, but many don’t stay long. The average resident in the downtown areas so popular with postcollege millennials has lived in the same house for approximately 2.4 years, compared with seven or more years in the suburbs and exurbs. As economist Jed Kolko has observed, the perceived “historic” shift back to the inner city has turned out to be a relatively brief phenomenon. Since 2012, suburbs and exurbs, which have seven times as many people, are again growing faster than core cities. Suburbs are also seeing a strong net movement among educated people, those earning over $75,000, and especially those between the ages of 30 and 44.
Progressive Politics, Regressive Economics
During the last decade, several urban cores—notably New York, Boston, Seattle, Denver, and San Francisco—have enjoyed significant growth. Yet at the same time, as Florida notes in his New Urban Crisis (2017), this process has served to enlarge “deepening economic segregation between a prominent elite and stubborn poverty, as well as a shrinking middle class.”
In the past, the traditional urbanist notion, advanced by the late Jane Jacobs, maintained that cities grew best not by “luring” talent but by “creating” a middle class from its existing residents. Yet now, according to two recent Oregon studies, lower-income people in cities experience less upward mobility than people from rural areas. Indeed, according to Pew research, the largest gaps between the bottom and top quintiles can be found in some of the most progressive metropolitan areas, such as (in order from largest to smallest divides) San Francisco, New York, San Jose, Los Angeles, and Boston. In all these “superstar” cities, the middle-class family is rapidly disappearing, even as poverty remains stubbornly high.
This reflects national phenomena. Research by urban analysts Joe Cortright and Dillon Mahmoudi shows that the number of high-poverty (more than 30 percent below the poverty line) neighborhoods in the United States has tripled in the last half century, from 1,100 in 1970 to 3,100 in 2010. Despite some steady growth of poverty in suburbs, the ratio of the impoverished, according to the American community survey, is still two-thirds higher in urban cores than in the suburbs. Thus recent growth in the cores seems to have done little to address poverty or inequality.
A new study by the Center for Opportunity Urbanism found that, in most cities, unbalanced urban growth has exacerbated class divisions, while doing little to address the decline of middle-class households. Philadelphia’s central core, for example, rebounded between 2000 and 2014, but for every one district that gained in income, two suffered income declines. In 1970, half of Chicago was middle class; today, according to a new University of Illinois study, that number is down to 16 percent. Meanwhile, the percentage of poor people has risen from 42 to 62 percent. Urban analyst Pete Saunders describes the city today as “one-third San Francisco and two-thirds Detroit.”
Even more prosperous core cities—San Francisco, Portland, and Seattle—are increasingly plagued by social dissolution and rising homelessness. Richard Florida’s most recent research suggests that “urban crisis” conditions—wage inequality, income inequality, economic segregation, and unaffordable housing—are most pronounced in “superstar” cities, such as Los Angeles, New York, San Francisco, San Diego, and Chicago.
Allan Mallach, in On the Edge: America’s Middle Neighborhoods (2016), points out that many of the middle- and working-class neighborhoods that long have served as the ballast and supplied the workforce for a diverse urban economy are systematically being undermined. Teachers, firemen, and police officers struggle to afford homes in many American cities, according to a study from Trulia. This pricing-out also applies to many skilled blue-collar professions like technicians, construction workers, and mechanics. Inclusive economic growth is now all too rarely found in American metropolitan areas, and virtually never in the most elite.
The New Urban Politics
The shifting demographics of cities have fostered a new political reality that could further hamper urban growth. When the urban revival first began to gain steam in the 1990s, many cities were governed by moderate, pro-business Democrats or even Republicans: Giuliani and Bloomberg in New York, Richard Riordan in Los Angeles, Bob Lanier and Bill White in Houston, even Frank Jordan in San Francisco and, later, Rahm Emmanuel in Chicago. These mayors were largely elected by middle- and working-class families, the traditional bastions of the city economy, and with the support of the local business community.
To be sure, city dwellers have historically voted more liberally than their rural or suburban cousins, but demographic trends are exacerbating the leftward impulse. Simply put, the cities that could elect a Giuliani or a Riordan no longer exist. As the middle and working classes have shrunk, urban politics has moved steadily to the Left.
Contrary to the narratives presented in the media, however, this is hardly a revolt of the masses. Indeed, the leftward shift has occurred amidst declining public participation. In fifteen of the thirty most populous cities in the United States, voter turnout in mayoral elections is below 20 percent. One-party rule, as one might expect, does not galvanize voters. In Los Angeles, the 2013 turnout that elected progressive Eric Garcetti was roughly one-third of that in the city’s 1970 mayoral election. Garcetti’s 2017 reelection boasted a similarly small turnout.
What this shift most accurately reflects is the superior organization and motivation of relatively small bands of progressive voters. For example, Alexandria Ocasio-Cortez’s primary victory came as the result of some 16,000 votes out of a total Democratic registration of almost 215,000.
Ocasio-Cortez’s victory reflected the new urban demography. She won not by sweeping the proletarian masses, or the Latino or African-American areas, but districts dominated by white, wealthier, and better-educated hipsters. This class is gradually replacing working- and middle-class voters in many cities, whose numbers in inner-city areas have declined, according to Brookings, to 23 percent of the central city population—half the level in 1970.
The new urban politics, notes the University of Chicago’s Terry Nichols Clark, revolves around different issues than those that motivated the traditional middle class. Largely single and childless, many current residents are not directly afflicted by the poor state of city schools, relieving progressives from having to confront politically powerful and usually left-leaning teachers’ unions. The new coin of the realm, besides the incessant virtue-signaling, tends to be good restaurants, shops, and festivals, not child-friendly parks and family-oriented stores. Sometimes even crazy notions—such as allowing people to walk through the streets of San Francisco naked—are tolerated in a way that no child-centric suburb would allow.
These demographic trends are creating an increasingly homogeneous political culture. In 1984, for example, Ronald Reagan took 31 percent of the vote in San Francisco, and 37 percent in New York. He carried Los Angeles. By 2012, a Republican with a more moderate history could not muster 20 percent of the vote in San Francisco. And Mitt Romney lost Los Angeles by more than a two-to-one margin, while garnering barely 20 percent in all New York boroughs except less dense Staten Island. In 2016, Trump did just as badly and in some places worse.
This creates a new challenge. Promoters of the inner-city renaissance expected a happy marriage between progressive politics and big business. But tensions between the two are rising. Even before being booted out of New York, Amazon tangled with Seattle’s city council, which demanded that Amazon and other tech giants pay to alleviate homelessness and housing shortages. In Seattle, Amazon CEO Jeff Bezos, responsible for nearly 20 percent of the city’s office space, fought back by using his employer leverage in America’s largest “company town.” When push came to shove, he could threaten to undermine the core city’s entire economy in ways reminiscent of a mill-town company boss in the early industrial revolution.
As it is, perhaps wary of the new political environment, Amazon is choosing not to fill a new downtown high-rise under construction and will reportedly focus its growth in the edge city suburb of Bellevue. Other large tech announcements, such as Apple’s creation of its second-largest employment center with more than six thousand employees—roughly half the size of the company’s spaceship headquarters in Cupertino—is in less costly suburban Williamson County outside Austin. Significantly, the Texas office houses the critical hardware engineering division.
Radical politics could accelerate this process. Oligarchs may have sought to position themselves as loyal followers of the Left’s party line on issues of racial diversity, trans-awareness, and feminism, but all this virtue-signaling is unlikely to placate socialists like Ocasio-Cortez, whose political cachet rests on her commitment to the view that “a system that allows billionaires to exist alongside extreme poverty is immoral.” The Green New Deal may sound consistent with the rhetoric of many prominent billionaires, but one must wonder what the impact of ever higher wealth taxes and ultra-expensive energy on electricity-consuming tech will be. On the other hand, as prices rise and economies struggle, those in poverty, especially minorities, often pay the highest price. There’s not much room for either the swashbuckling capitalist or the aspirational poor in the envisioned socialist ecotopian commonwealth.
The Limits of Gentrification
The rise of progressive urban politics also reflects tangible economic realities. Chicago’s Rahm Emmanuel characterizes the high rents and costs associated with gentrification as a “tsunami” spinning out of control, dampening enthusiasm for continued economic development among his likely successors. Critics of gentrification are particularly concerned by the impact of outside investment and tax breaks for large companies and developers, along with targeted policy interventions, such as tax-increment financing, subsidized arts districts, sports stadiums, or urban-renewal projects, as in Portland, which typically depend on the exercise of eminent domain.
Rather than experiencing a landscape of opportunity, young progressives in major urban areas are seeing their incomes drained by rising rents and house prices. Since 2010, a study of the New York market shows that rents have risen at twice the rate of incomes. Overall, according to Zillow, for workers between twenty-two and thirty-four, rent costs claim upwards of 45 percent of income in Los Angeles, San Francisco, New York, and Miami, compared to less than 30 percent of income in metropolitan areas like Dallas–Fort Worth and Houston. The costs of purchasing a house are even more lopsided: in Los Angeles and the Bay Area, a monthly mortgage takes, on average, close to 40 percent of income, compared to 15 percent nationally.
Like medieval serfs in preindustrial Europe, America’s new generation, particularly in some of the superstar cities, seems increasingly destined to spend their lives paying off their overlords, while saving little for their own futures. This explains much of the socialist rage that is au courant even among the very people—like coders in San Francisco and Seattle or fledgling New York professionals—who would seem natural beneficiaries of capitalist excess.
No Place for the Working Class
The bitter resentment felt by the working class and poor may prove even more destabilizing. Urban analyst Aaron Renn suggests that many pro-gentrification policies implicitly promote “driving blacks out” in favor of more affluent, better educated, primarily white and Asian residents. Some cities with the fastest gentrification rates, according to Realtor.com, have undergone dramatic displacement of their poor and minority populations. Washington, D.C., long celebrated as Chocolate City, has seen its African-American population share drop substantially. In Portland, 10,000 of the 38,000 residents of the historic African-American section, Albina, have been “pushed” elsewhere.
The economic focus in many cities—centered on high-tech jobs or “executive headquarters” that employ only elite workers—seem unlikely to create opportunities for poor or working-class residents. One can appreciate the economic benefits that firms like Uber, Lyft, Salesforce, and others have brought to San Francisco and other tech-oriented cities. But this also has engendered a neo-Dickensian reality: sky-high housing prices, widespread homelessness, displaced minorities, and a rapidly shrinking middle class.
Consider that there are now more drug addicts in the city of San Francisco than high school students, and there is so much feces on the street that one website has created a “poop map.” Rising rents have obliterated that city’s cherished bohemian culture and hastened a rapid decline in the minority population, both in the city and across the tech-dominated Bay Area. In 1970, 96,000 African Americans lived in the city of San Francisco; today, 46,000 make their homes there, constituting less than 5 percent of the city’s population. At the same time, the city’s population has increased by nearly 175,000. More than half of the Bay Area’s lower-income communities, according to a recent UC Berkeley study, are in danger of mass displacement.
These same conditions apply in the far more proletarian city of Los Angeles, my home for over forty years. A lavish New York Times article recently lauded the growth of downtown Los Angeles without any reference to the area’s high vacancy rate and poor long-term market conditions. The savvy Chinese real estate website Mingtiandi predicts that downtown LA is heading for “an imminent glut of luxury condos.” The same Times piece makes only passing reference to the massive homeless population now spreading to many surrounding areas. It also neglected the fact that the downtown area is now overrun with rats and suffers an outbreak of typhus, including, appropriately enough, at City Hall, where a growing number of officials are being investigated for corruption.
In truth, despite a much praised art scene and often gushing media treatment, downtown LA’s revival has done little to improve the overall region. The LA basin has been losing jobs that pay more than $75,000 annually for a decade and now suffers among the highest levels of housing overcrowding and poverty, the least affordable housing, the lowest homeownership rates, and the second-largest concentration of homeless in the nation.
Given these realities, it’s not surprising that would-be gentrifiers face increasing and even violent opposition. In Los Angeles, gentrification efforts have sparked grassroots rebellions in the historically African American Crenshaw district, Chinatown, South Los Angeles, and, most especially, East Los Angeles. In 2015, a real estate firm littered LA’s Arts District with a “Why Rent Downtown When You Could Own in Boyle Heights?” flyer. Realtors promoted a bike tour through the “charming, historic, walkable and bikeable neighborhood.” After the realtor received messages like “Stay outta my hood” and “I hope your 60-minute bike ride is a total disaster,” the event was canceled.
Much of the concern is tied to changes in local zoning ordinances, notes Koreatown attorney Grace Yoo, all favoring developers who built swanky housing out of reach for local residents. Nor is this policy helping to retain LA’s beleaguered middle class. Nearly one in five LA census tracts have seen drops in homeownership since 2010, and Los Angeles County continues to suffer mounting outmigration. Nice restaurants, entertainment, and sports venues may be considered “cool,” and win the plaudits of urban tastemakers, but they can’t substitute for affordable housing, higher-wage jobs, and better schools, the proven ways of making life better for residents.
Whither the Urban Future?
The present situation is not sustainable. History shows us repeatedly that huge income gaps and a sense of diminished opportunity can lead to disorder, alienation, and a breakdown of the civic culture. Substantial underemployment and economic insecurity can undermine social stability. Ancient Rome, industrial-era London, Manchester, St. Petersburg, and Shanghai, for example, all experienced revolts and, in some cases, revolutions led by the neglected classes bereft of hope.
More than a century ago, Lincoln Steffens chronicled in The Shame of the Cities the rampant corruption of the Gilded Age’s political machines, a “record of shame” that undermined the basic tenets of good governance and democracy. Today, the smoke-filled room and bags of cash may be less evident, but our cities remain shameful in how they fail their residents, and the basic values of democracy. There is clearly a need for a serious reassessment of governance in places like San Francisco, Washington, and New York, which all stand among the worst-run cities in the country.
The situation remains far from hopeless, however. Contrary to the claim that our cities are “built out,” they contain large tracks of undeveloped land. The South Dallas neighborhood has an estimated 160 thousand acres, larger than the land mass of Manhattan, of undeveloped land. Similarly, there are vast areas of vacant (non-beach) and potentially buildable land in Los Angeles and Orange County, according to the regional planning agency database. Large tracts of underutilized land—7,559 acres of vacant land, or 11.8 square miles, 4.3 percent—can also be found in the city of Chicago.
These areas could provide the locale for new middle-class neighborhoods and businesses. Our cities do not need more luxury, high-density housing, such as the “pencil” high rises in Manhattan, appealing to the ultra-rich and to foreign investors, who often don’t even occupy their units. Nationwide, as much as 80 to 90 percent of new housing product is luxury-oriented; what is really needed is more affordable mid- and low-density housing preferred by families. Current national data suggests that single-family houses are at least one-third less costly to construct than multifamily units.
New approaches to transportation also are needed. Bus service, critical to poor and working-class residents, has often been reduced, even as rail service, which seeks to serve more affluent riders, expands. (Some cities have invested in passenger rail lines in an effort to reduce auto use, but transit market share has either stagnated or declined, a fact that rarely gets mentioned in reportage.) Public infrastructure spending on rail or implementation of urban-containment policies does succeed in driving up the price of land, increasing economic pressure on lower-income residents who were better served by the plebeian bus.
A renewed working- and middle-class orientation should also extend to jobs. Rather than focus exclusively on the high-end professions, and the subsequent, largely low-wage service sector they require, economic development needs to be aimed at creating middle‑skill, good-paying jobs, including those provided by local entrepreneurs. For example, manufacturing, artisanal production, and customer support provide good opportunities for families. There also needs to be a thoroughgoing reform of licensing practices, which serve to keep working-class people away from opportunities in many service and light industrial fields.
Of course, getting inner-city residents ready for these jobs requires changes in the education system as well. Too many cities, like Los Angeles and Chicago, boast first-class higher education resources, and even some excellent public schools. But in South LA, more than fifty schools ranked among the state’s lowest 5 percent in 2015. Many of these students, perhaps unsuited for college, could be trained for middle-skilled jobs, and could escape a school environment where nearly 90 percent have had someone killed within walking distance.
Cities need to shift from their exclusive current focus on tourism, media, and tech, which creates many high- and low-end jobs but few in the middle. The imperative is not to increase subsidies for favored companies, as New York tried to do with Amazon, but to address the basic conditions—taxes, public safety, schools, housing—that ultimately determine economic competitiveness. No amount of subsidy can make up for these failings. The road to enhanced growth lies instead in addressing the very issues most urban politicians like to avoid.
For most of the twentieth century, America’s cities incubated opportunity and produced upward mobility. The fundamental appeal of cities and their ability to attract diverse workforces has not disappeared. It’s time to forge an urban renaissance that transcends hype and embraces the interests of not only high-paid knowledge workers but middle- and working-class residents as well. We need to restore Descartes’s notion of cities providing “an inventory of the possible,” places that propel residents not outwards or downward but towards the achievement of their aspirations.