The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class—and What We Can Do About It, by Richard Florida (Basic Books, 294 pp. $28)
Urbanist Richard Florida made a splash in 2002 with his book The Rise of the Creative Class, which described the emergence of a new category of super-powered urban-dweller: “knowledge workers, techies, artists and other cultural creatives.” This group, Florida argued, was driving the economic revival in cities; struggling cities should try to attract this new elite by becoming more tolerant, inclusive, and hip—because that’s what these folks valued. Mayors desperate for new ideas rushed to adopt Florida’s prescriptions for attracting trendy knowledge workers—including such unusual policy ideas as installing bike lanes, holding rock music festivals, and establishing “celebrations of diversity.” As Florida-style “cool cities” programs flourished around the country, Florida himself became the equivalent of a rock star in urban affairs. Wooed by various prestigious institutions, he chose to head up a new institute on urban prosperity at the University of Toronto, because to him that city was “a bastion of the very best of progressive urbanism.”
And then, in 2010, Toronto elected perhaps the apotheosis of uncool, Rob Ford, as mayor. The ascent of the volatile former high school football coach—who railed against big government, disparaged establishment politicians, and denounced bike lanes as a “war on cars”—seems to have represented a moment of astonishment for Florida. In his latest book, The New Urban Crisis, Florida calls Ford’s rise—powered by suburban voters in districts that had been amalgamated into Toronto—“the product of the city’s burgeoning class divide,” and he writes that he became convinced that if it could happen in Toronto, it could happen anywhere. And then, as if to prove his point, along came Donald Trump. “It was time to speak up. The urban revival that I had long celebrated had given birth to a New Urban Crisis,” Florida writes. “The central idea is that the very same clustering force that drives economic and social progress also causes the divides that separate us and holds us back.”
It’s not as if Florida’s many critics hadn’t already suggested as much. Well before Toronto’s Rob Ford moment, the left-leaning American Prospect wrote that Florida was part of the tradition of “charismatic economic-development troubadours,” whose ideas amounted to “breezy prescriptions” that implicitly—and sometimes explicitly—endorsed leaving “uncool” sections of the country behind. Academic social-justice warriors argued that economic development centered on the creative class would worsen inequality. More to the right, critics like Joel Kotkin suggested that America’s fastest growing cities were not in coastal “cool” areas but in the heartland, and that the suburbs were capturing more new development in giant metro areas than Florida was willing to admit. By focusing so much attention on the concerns of young, hip, knowledge workers, Kotkin pointed out, Florida largely ignored the core unit of civil society—the family.
Up to a point, Florida now concurs with his critics about the limits of an economic strategy that revolves around the creative class. “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,” he observes. “Seemingly overnight, the much hoped-for urban revival has turned into a new kind of urban crisis.” Such observations make The New Urban Crisis a different kind of book than the best-selling Creative Class. Whereas the tone of the earlier book was optimistic and exuberant, The New Urban Crisis is sober and apprehensive. And while Creative Class offered policy ideas well outside the bounds of conventional thinking about economic development, Florida’s latest recommendations place him in more customary territory—tax policy, regulatory reform, school funding, and other traditional areas of municipal government. I suspect that this approach is less likely to stir today’s mayors than Florida’s earlier work, for the simple reason that his previous recommendations seemed too good to ignore. Rather than struggle to figure out how to drive down crime, or push to reform schools in the face of special interests like the local teachers’ union, or find money to invest in infrastructure without driving taxes to job-killing levels, mayors could do the far easier work of reaching out to prosperous creative-class communities like gay professionals, installing bourgeois-bohemian amenities like hiking trails, and holding cultural festivals, and then watch the transformative crowds of newcomers pour in. Now, by contrast, it’s back to basics.
Florida spends much of his new book analyzing the latest crisis. Unlike the urban woes of the 1960s and 1970s, characterized by the abandonment of cities, our newest problems spring from what Florida describes as “winner-take-all-urbanism,” where a handful of super-cities attract disproportionate wealth, and much of the gains they register accrue to a narrow slice of elite knowledge workers, with little left over for the unskilled or semi-skilled. This “crisis of success” sends prices on everything from housing to basic services skyrocketing, widening the gap between the rich and everyone else. One result is that we’re exporting some measure of poverty from reviving cities, creating new pockets of decline in lower-cost suburbs. Meantime, in the developing world, the once-reliable connection between urbanization and economic growth seems to be breaking down, so that the simple movement of people to cities, Florida argues, no longer automatically signifies economic progress.
Florida spends much less time in his new book on an agenda for reform, which is part of the problem with The New Urban Crisis. He’s advocating some big, transformative ideas—most of which have been proposed before—but these have gotten little traction in the past, in part because they involve enormous change and risk. Sometimes derided as a slick salesman for his ideas, Florida needs to do a better job of selling his latest proposals. He spends significant time exploring rising prices in flourishing cities and the consequences of gentrification. While he’s generally sensible about the idea that revival will inevitably bring with it some measure of higher costs, his big idea to spur more efficient use of limited land in prospering cities is uninspiring: governments should switch from taxing the value of property to taxing the value of land.
In theory, a land tax—endorsed by everyone from early nineteenth-century economist David Ricardo to, more recently, such ideologically diverse proponents as Milton Friedman and Joseph Stiglitz—encourages better decisions by owners on what to create on their property because the levy doesn’t penalize the investments they make. The problem: the tax is more popular in theory than in practice. Those who value fiscal stability in municipal budgets wonder whether such a shift would create financial chaos instead of more prosperity. The Economist summed up the problem two years ago, observing, “Until a modern economy takes the plunge and introduces a land tax—and keeps it—it is hard to know if performance will match promise.” Perhaps Florida should use his considerable influence among mayors to encourage someone to take the plunge.
Florida also proposes to fund new rounds of affordable-housing construction by eliminating the tax deduction on home mortgages—the value of which, he correctly points out, tends to be enjoyed by higher-income households—and using the extra money to build subsidized housing. Eliminating that tax deduction is something that garners bipartisan support—including here at City Journal—but politicians of both parties run from the idea because homeownership remains sacrosanct among a large portion of the voting public.
Florida also calls for a new era of investment in infrastructure, which he admits is the “topic du jour among liberal-leaning politicians and economists.” His argument is that rather than a random assortment of “shovel-ready” projects to spur temporary employment, governments need a strategic commitment to investments that will boost urbanization, because density helps drive growth. His big (and dubious) idea here is high-speed rail. I much prefer hopping on an Acela train from New York to Washington to flying there via New York’s execrable airports, but high-speed rail has yet to flourish anywhere except in the very dense Northeast. If the experience of California, where the high-speed rail linkup between Los Angeles and San Francisco is now estimated to cost nearly $70 billion (or about double the original projections) is any indication, it’s going to be tough sledding elsewhere. One bidder for a portion of the California construction contracts wrote in its assessment of the project: “More than likely, the California high speed rail will require large government subsidies for years to come.” Florida opines that many American metro areas could support high-speed rail, but if it can’t make it in the Los Angeles to San Francisco corridor without huge subsidies, is it realistic to expect success elsewhere?
Some of Florida’s other proposals are less bold—and run counter to the vast bulk of research. He advocates for a higher minimum wage to increase the value of low-skilled service jobs and reduce inequality, outcomes he’s confident about, even though the world’s leading expert on government wage laws, University of California economist David Neumark, recently observed: “Economists have written scores of papers on the topic dating back 100 years, and the vast majority of these studies point to job losses for the least-skilled.” Similarly, Florida says that the key to better results in our urban schools is more money. The real problem is that many of our urban schools, which are robustly funded these days, have seen little payoff from all the extra cash. Thanks to aggressive court rulings in New Jersey dating back to the 1990s, for instance, Newark schools receive more than $22,000 per student, yet achieve some of the worst outcomes in the nation. Camden’s schools get $25,000 per student, and Trenton’s $23,000, with similarly dismal results. New York produces uneven educational outcomes despite spending more than $23,000 per student, while Washington D.C.’s schools spend $29,000 per student and Philadelphia’s spend $20,000, with reliably poor outcomes in both cases. Florida wants more money for preschool, but here again is a well-studied subject where the results run against his views. The data consistently show little payback for these efforts, including in reducing inequality, as Kay Hymowitz has written.
Still, quibbling with Florida over topics like minimum wage and school funding is almost beside the point. The urbanist gained a following touting a series of new, highly speculative economic-development strategies. Florida always seemed quick to leap from his data to prescriptive nostrums—for example, if prosperous cities have larger than average gay populations, that must mean that other cities should be as gay-friendly as possible. Some politicians were eager to leap aboard the Florida express because many of his ideas could be implemented at low cost and with little downside risk if they didn’t pan out. But with his new book, Florida stands on more traditional ground—arguing over issues that have bedeviled policymakers for years. Welcome to the struggle.
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