Editor's Choice

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class—and What We Can Do About It

April 14, 2017


Richard Florida's new book deepens his thoughts on the economic power of urbanism, detailing its negative consequences as well as its continued promise.

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, 336 pages, Hardcover, April 2017, ISBN 9780465079742 

Richard Florida has long been synonymous with urban optimism. His idea, in The Rise of the Creative Class, that the cultural creativity and liberal values of cities went hand-in-hand—that with economic innovation, that the former, in fact, helped produce the latter by attracting the creative people necessary to power a knowledge economy, got the ear of mayors and cultural leaders over a decade ago and turned him into an academic rock star. It helped change the view of what incentives, and whom they should be offered to, were needed to spur economic growth. His basic idea was that cities should focus more on luring creative individuals by supporting diversity and a rich cultural life, rather than luring corporations with tax breaks and incentives. 

His ideas have never been free of controversy, and he has drawn criticism from the right and the left—the former for the idea that the creative class drives economic growth more effectively than corporations, the latter blaming him for the gentrification of cities that has accompanied re-urbanization, and for cities’ lackluster and often inept investments in “placemaking.” His ideas on the creative class powering economic growth seem to have been born out, as has the criticism that it has led to increasing gentrification. But even that focus misses a much larger crisis in their midst:


Ultimately, the media’s obsession with gentrification deflects attention from the far more serious problem of chronic and concentrated urban poverty.


Though it changes the nature of those neighborhoods, gentrification does increase the property values of those that own homes there, and statistics show that social mobility is greater in those areas than persistently poor neighborhoods. Of course, it’s easier and more compelling to focus on conflict—emotional and economic—rather than on nuanced policy on how to counteract chronic and concentrated poverty, and that focus is compounded by the fact that one in five reporting jobs are based in New York, Washington D.C., and Los Angeles, cities where gentrification is a very present problem. Florida does explore the history of that gentrification, though, and he doesn’t shy away from the thorny issues of race that are connected to it. Writing of a study done in one rapidly gentrifying area of South Philly, and how different residents perceived the changes, he writes:


The white residents typically believed the minority portion of the neighborhood was a high-crime zone, when in fact it had lower crime rates than the whiter, more affluent part they lived in. Race was the key factor in the different ways the residents saw and described what was happening to their neighborhood: the difference in how the white and black residents defined the neighborhood held regardless of income level or the number of years the respondents had lived there.


He also tackles the rise of inequality, along with income, occupational, and educational segregation, also tied to issues of race in America, at great length over the course of the book. Because, while class has traditionally been tied to the work we do, it is also an identity formed by where we live, and all of this determines the class characteristics of our cities, which is what Florida has always concerned himself with. These issues were actually present to a lesser extent in The Rise of the Creative Class over a decade ago, but it is the primary focus of this book. His chapter on the “Patchwork Metropolis” of today contains detailed maps of the class divisions in various cities throughout the country—divisions that now spread into the suburbs, which are experiencing their own crisis of concentrated poverty tied to the cities they surround. In fact, “The stagnations and decline of older suburbs,” Florida writes, “is one of the biggest forces shaping America today.” The New Urban Crisis, in other words, is increasingly suburban. And it is also global, as the chapter of “The Crisis of Global Urbanization” addresses. And it’s not just inequality within cities, but between cities:


The gap between these superstar cities and other cities around the world—from the older, stagnating industrial cities of the United States and Europe to the impoverished and economically disconnected cities of the Global South—is enormous, and it is growing.


(For a bit of hope on the “stagnating industrial cities of the United States and Europe,” read The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation by Antoine van Agtmael and Fred Bakker.)

A lot of people will see this as a corrective lens for Florida’s previous vision. Some will likely say “too little, too late—the damage is done.” But to put the responsibility on a popular scholar who happened to have the ears of civic leaders and mayors is to absolve those very leaders, and those at the national level, who have steadily dismantled the social safety net, undermined or at least failed to uphold affordable housing policies, and ignored the needs of their own citizens. In their efforts to attract new individuals, these leaders ignored their existing communities’ needs. In attempting to attract so-called creative talent to their cities, they took their eye off creating and nurturing the talent of the people already there through education and employment initiatives. Part of the backlash against Florida has certainly been because he so unabashedly championed urbanism, and it always puts you in a more precarious position to champion something rather than lampoon its alternative (as Thomas Frank did in What's the Matter with Kansas?). It’s always easier to be pessimistic about something and be able to say “I told you so” than to be overtly optimistic, as Forida has been on the positive effects of urbanism, and have to answer for its inevitable downsides and shortcomings.

 Of course, his urban optimism has been, as he says, “tempered,” and its downsides and shortcomings are what this book now addresses. But he still believes deeply in urbanism itself. It comes down to the choices we make, and he believes the solution is doubling down on urbanism, not abandoning it:


[I]f the crisis we face is urban, so is its solution. For all of the challenges and tensions they generate, cities are still the most powerful economic engines the world has ever seen. The way out of the New Urban crisis is more, not less, urbanism.


The first urban crisis was spawned by a flight to the suburbs; the new one by a return to the city. To address it, the urban environment needs to move away from its current winner-take-all form and toward an urbanism for all. To do that requires an investment in the infrastructure of our cities on par with the investment America put into the suburbs, in “the system of highways and housing that undergirded the rise of suburbia” after Word War II. 

Part of the reason that may not happen, why land prices and rents are rising so drastically and the economic engine of cities may start sputtering if not addressed, is that entrenched owners have an interest in rising prices.


Today urban rentiers have more to gain from increasing the scarcity of usable land than from maximizing its productive and economically beneficial uses. The end result is what The Economist’s Ryan Avent has dubbed “the parasitic city,” in which wealthy homeowners and landlords capture a disproportionate share of economic output and wealth. As one economist scathingly put it, “it’s landlords, not corporate overlords, who are sucking up the wealth in the economy.”


The behavior of those who succumb to this temptation isn’t just selfish; it’s destructive.


He calls them "New Urban Luddites," which is slightly ironic because the original luddites were the biggest losers in that era of industrial capitalist development, while these landlords have been capitalism’s biggest winners. And now the super rich are buying up apartments of which they’re essentially absentee owner, furthering the financial feedback loop of wealth concentration while making those very areas less productive economically. “In just a three-block stretch of the Upper East Side," Florida notes “57 percent of the apartments were vacant ten months a year.”


They aren’t looking for places to raise their families or to do productive work. Instead, they’re looking for safe places to park their money.


This is an issue greater than gentrification, as well, “morphing,” in Florida’s view, “into a new phase of plutocratization or ‘oligarchification.’” And while that wealth doesn’t trickle down, the rise in housing costs does—to those in poorer neighborhoods who can’t afford it.

I have had conversations for years with friends about how much longer creative cultural talent can continue to cluster in such “superstar” cities. When does a city’s economic success become its cultural undoing, pushing out the forces that attracted people to it in the first place? And it isn’t theoretical to me. I know many artists and academic friends, extremely intelligent and talented people I’ve known since high school, who have fled the rising costs of living and working in New York City in the past decade. The publishing industry I work in is almost entirely based in New York City, yet I don’t even follow the job boards there for new opportunities because I can’t even fathom moving my young family of four from our affordable home in Milwaukee to such a “superstar” city with its limited space and associated costs. But, so far at least, Florida tells us, “the death of urban creativity is largely a myth.” While it may have made it harder for younger, struggling artists to find a home there, the overall creative economy and creative class in places like New York, Los Angeles, and San Francisco has done just fine so far, and fared better than other cities. 

In fact, it was working artists and a creative economy that grew by 13 percent between 2003 and 2013—in fashion, film and television, print and media, and other creative industries—that helped sustain New York City and power its comeback after the worldwide financial crisis created in its financial center. Florida would have us focus on the larger, present issue:


The real nub of the New Urban Crisis is not the conflicts among different factions of the new urban elite, but the increased isolation and insecurity of the less advantages residents.


The economic anxiety and inequality in the country is very real, and the vital economic role of our cities needs to be brought to bear on addressing it. That requires strategic investment in the basic infrastructure and resources of cities, in how they connect to the suburbs that surround them, in how they connect to each other physically in the nations’ “mega-regions” of clustered cities, and economically across the globe. It requires reforming local tax regimes to promote productive use of that infrastructure and land, rather than encouraging financial squatting. It even requires a reconsideration of the “American Dream” of homeownership versus renting—something Florida has been writing about for some time, and that Bethany McLean advocated for in her book on Fannie May, Freddie Mac, and home ownership finance, Shaky Ground—and how federal housing subsidies are directed to promote it. Florida also proposes turning low-wage service jobs into middle-class jobs in the same way we did with low-paying manufacturing jobs at the turn of the 20th century, and gets behind the idea of a universal minimum income, which is increasingly popular on both sides of the political spectrum.

In short, we need a new urban policy. America has always been a country of expansion, of outward economic growth, but that kind of growth has reached its limit. We must now look back to our city centers and inner suburbs. As Florida says:


We must become a more fully and fairly urbanized nation.


His scholarship is, as always, impeccable. If it has been incomplete in the past, focusing more on the sunny side of urbanism and re-urbanization, he remedies that here. The New Urban Crisis isn't just an abstract or cultural problem, it is as Florida defines it, “the central crisis of capitalism today.” I hope he still has the ear of mayors and other leaders across the country, and that we can begin addressing it.

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