Lack of Housing Diversity Hurts Elite Cities
One of the notable clickbait narratives of the last ten years or so has been the renewal of America’s urban areas. Old industrial hubs like Chicago, Philadelphia, and Baltimore reversed half a century of population decline from 2000 to 2010.
Some neighborhoods in particular have changed dramatically. Drugs dealers and squatters have been replaced by all the staples of hipsterdom: coffee shops, breweries, converted loft apartments, artisanal mayonnaise. The narrative has been that culture-seeking millennials are rejecting the consumerist stagnancy and outdated ideals of suburban life and clustering in classic old cities with their walkable neighborhoods and cosmopolitan feel. This new creative class is purportedly producing the movers, shakers, and innovators of tomorrow.
I wanted to be part of this movement. Since I was a kid, I have always felt the call of the lights and energy of the Big City. In 2015, I moved from a sleepy Maryland suburb dominated by a tacky casino to Pigtown, Baltimore, a five minute’s walk from the city’s vibrant downtown. I never looked back at the leafy suburb I came from. And while I would consider retiring back into the remote rural towns I grew up in, I don’t think I’ll ever go back to the stagnant acres of McMansions, townhouses, and HOAs I left behind in Baltimore’s southern suburbs.
And America’s old cities still seem to be experiencing widespread transformation. But since 2010, when “hipster” was evolving into the universal pejorative it is today, a lot has changed.
First, racial tensions and police resentment rose and culminated with a summer of riots in 2015. The Baltimore police force has experienced tremendous problems in the last three years, not the least of which is its international exposure as being appallingly corrupt. Crime skyrocketed, erasing reductions in the previous years and driving Baltimore’s ascent to most violent city in America in 2017. Chicago also experienced a dramatic spike in crime. In fact, the U.S. as a whole experience a significant spike in violent crime in 2016. (Was this a direct consequence of the anti-police riots in 2015? I’m no statistician, but it’s an awfully uncanny coincidence.)
Second, the rise in urban population led to a spike in gentrification in the last twenty years (but only in a select few cities and neighborhoods). The national median rent in the U.S. rose 26% from 2010 to 2017.
Third, the glamorous alpha cities have turned into ideological islands. Cities have always leaned left, but the extremity of the difference was highlighted in the last presidential election.
In many ways, I’m an ideological liberal. I think marijuana should be decriminalized, and I embrace globalization and multiculturalism. But there are lots of things in the modern leftist narratives that I question: I’m skeptical of Coate’s claim that America was founded primarily on white supremacy, and I think Keynesian economics is a fairy tale. To the folks back home, this all probably sounds pretty reasonable; even if we disagree, we can discuss the particulars. But by believing those things, I’m questioning two of the most fundamental assumptions of modern progressive narratives: That white America as it’s currently structured is incurably racist, and economic experts can understand the complexities of economics well enough to take control of national markets.
To the average New Yorker, my opinions might sound intolerant, or at least out of touch. To the a San Franciscan, my ideas might sound vaguely bigoted. And a UC Berkley student might think I need to be strung up and bludgeoned with a bike lock.
Not only are elite cities ideological bubbles, but their restrictive bubbles are suppressing growth and innovation because everyone’s afraid to state polarizing truths. Peter Thiel, a cofounder of Paypal and one of Facebook’s board members, made waves recently when he declared that Silicon Valley had lost its competitive edge, due in large part to its stifling ideological echo chamber. He’s since moved permanently to Los Angeles and is in the process of moving the bulk of his business ventures there as well.
Think about that: Peter Thiel, one of the most intelligent and successful men alive, believes Los Angeles has a better intellectual climate than Silicon Valley.
Mainstream media sources are picking up, at least a bit, on the disillusionment tech titans have with what they perceive as an intellectually stifling leftist hegemony. The New York Times quoted tech investor Patrick Mckenna: “Every single person in San Francisco is talking about the same things, whether it’s ‘I hate Trump’ or ‘I’m going to do blockchain and Bitcoin.” The same article quoted another powerful Silicon Valley investor saying the region has become “slow and spoiled by its success,” and fixations on politics and Marxian identity hierarchies were choking innovation. The article also shared some telling statistics: 49% of Bay Area residents were considering moving away.
I wonder how the problem of ideological conformity is impacting innovation in powerhouse cities like New York, Chicago, Seattle and Portland. Not only does the threat of ideological conformity drive people away, it prevents ambitious young people whose worldviews fall outside a certain narrow window of fashion from even considering cities like San Francisco and New York in the first place.
Of course, the top complaint of average residents in elite cities is certainly the high costs of living. Young people who know how to do math are going to think twice about moving to cities like New York and San Francisco. Rent control and over-regulation has wreaked havoc on New York’s housing market, choking the supply and driving up rents for the entire city. And Nimbyism has made it absurdly difficult to develop new housing in San Francisco, making the housing shortages much worse than they need to be.
People who already own property have a vested interest in choking housing supplies through legislation, often in the name of environmental sustainability. Unfortunately, most millennials don’t own property. And when they compare the median rent of a city like Atlanta ($1,700 for 2 beds in 2017) to New York ($3,230) and San Francisco ($3,253), they’re going to look past the glamor, prestige, and picturesque resumes earned from living in those places. Even with higher median salaries, they’re going to find it hard to justify taking on the hostile cost of living.
From 2016 to 2017, the entire Atlanta metro added 89,013 people. The New York metro added just 45,697 with a growth rate below the national average. The Dallas-Ft. Worth metro added an incredible 146,238. Even Tampa added 54,874 people. Think about that: more people would rather live next to Florida Man than next to a New Yorker.
The advantages elite cities have aren’t going to disappear overnight.
New York and San Francisco are still economic and intellectual powerhouses, and major magnets for talent. They will continue to dominate for years to come, barring some unforeseen catastrophe.
But as cities like Atlanta, Dallas, and Houston continue to thrive, and if their ideological climates and low cost of living continue, they will draw more and more innovators, and it will become harder and harder for residents of elite cities to dismiss them as second and third tier cities. As long as trends continue, today’s midsize cities will continue to grow into more and more serious rivals, challenging the legacies of the old guard.
Further Reading:
“New Yorkers Paying the Price as Scales Tip Against Development”
