Over the last half-decade or so, a distressingly similar story has been heard from many cities around the world. Newly popular city cores are drawing more people, pushing up prices, and driving out small businesses and lower-income residents. City leaders, alarmed at the trends, try to build their way out of the problems, on the theory that more supply will better match demand, and result in lower rents and home prices. But the efforts don’t seem to work—and even seem to exacerbate the problems.
That’s because, as we’ve seen, cities aren’t simple machines, in which we can plug in one thing (say, a higher quantity of housing units) and automatically get out something else (say, lower housing costs). Instead, cities are “dynamical systems,” prone to unintended consequences and unexpected feedback effects. By building more units, we might create “induced demand,” meaning that more people are attracted to move to our city from other places—and housing prices don’t go down, they go up.
Unfortunately, we have been treating cities too much like machines, and for an obvious reason. In an industrial age, that has been a profitable approach for those at the top, and in past decades, it seemed to fuel the middle class too. More recently, the results have been destructive, creating cities of winners and losers, and large areas of urban (and rural) decline. Even government programs meant to address the problems have seemed at times like a game of “whack-a-mole”—build some social housing here, see more affordability problems pop up over there.
In the years after World War II, and especially in the United States, the largest areas of decline were often in the inner cities, leaving the “losers” of the economy behind, while the “winners” (often wealthier whites) fled to the suburbs. But more recently it has been the cores of large cities that have become newly prosperous, attracting the winners of the “knowledge economy.”
Meanwhile, the inner-tier suburban belts and the smaller industrial cities have suffered marked decline, with a predictable political backlash from the “white working class.” Lower-income and minority populations have been relegated to even more peripheral locations, with limited opportunities for economic development. This gap in opportunity means a gap in the lower-end “rungs of the ladder” that are so essential for immigrants and others to advance.
This more recent pattern of core gentrification and geographic inequality has also been an unintended result of conscious policies. This time we aimed to achieve not suburban expansion, but the urban benefits of knowledge-economy cities, and their capacities as creative engines of economic development. In the United States, authors like Ed Glaeser and Richard Florida have come to prominence by promoting the economic power of city cores. Florida’s “creative class” ranks alongside concepts like “innovation districts” to promote a critical mass of talent and interaction. Glaeser’s “triumph of the city” points to the environmental efficiencies of compact living, as well as the economic benefits.
These and other authors have cited as inspiration the urban economics of Jane Jacobs, who did indeed champion the capacities of cities as creative engines of human development. But Jacobs warned against the kind of “silver bullet” thinking that imagines an innovation district or a downtown creative class is going to generate benefits that will automatically trickle down to the rest of the city. On the contrary, she pointed to the dangers of any form of “monoculture”—including the monoculture of an innovation district or of a creative class.
Instead, Jacobs argued for a more diverse kind of city—diverse in population, diverse in kinds of activities, and diverse in geographic distribution too. Hers was a “polycentric” city, with lots of affordable pockets full of old buildings and opportunities waiting to be targeted.
This is a point that Ed Glaeser, Richard Florida and the other fans of “innovation districts” might not yet comprehend. Glaeser for one has been harsh in criticizing Jacobs’ defense of old buildings—for example, in Greenwich Village—which he sees as a sentimental preservation instinct that only feeds gentrification. His formula has been to demolish and build new high rises.
But Glaeser and other critics seem to miss Jacobs’ point. For Jacobs, the answer to gentrification and affordability is not an over-concentration of new (often even more expensive) houses in the core. Rather, we need to diversify geographically as well as in other ways. If Greenwich Village is over-gentrifying, it’s probably time to re-focus on Brooklyn, and provide more jobs and opportunities for its more depressed neighborhoods. If those start to overheat, it’s time to focus on the Bronx, or Queens. Or Cleveland, Detroit, Baltimore, New Orleans…
There is no end of good urban fabric, in the U.S. and in other countries, that is ready for some positive gentrification, the kind that increases diversity and opportunities for human development (as we also offer targeted protections for existing residents). It is not wise to over-concentrate on the existing cores, in the belief that this “voodoo urbanism” will magically benefit all of the city’s residents.
A second, related issue is the scale of urban plots or lots. Here too we need diversity at the smaller scales, just as we need geographic diversity at the largest scales of the city. Just as old buildings tend to be more affordable, accommodating smaller businesses and startups, so too, small plots and lots tend to be more affordable for those same users.
But as the cores experience hypertrophic growth, often the pressure to build very large buildings on very large sites also becomes irresistible. A mix of small and large plots can help to tamp down this tendency. At the same time, other tools can manage overheating of the core, and steer growth into new locations. For example, as Jacobs recommended, new public projects in new locations can serve as catalytic “chess pieces” to redirect growth into more benign forms.
These are examples of Jacobs’ “toolkit” approach—one that is badly needed today to cope with the dynamic challenges of rapid city growth around the world.
What are the tools available? In a recent conference on urbanization, affordability and displacement in Los Angeles, speakers brought up the following tools and approaches:
Taxation, including land value tax. Patrick Condon, professor at the University of British Columbia in Vancouver, described the “Vienna Model”—new projects are taxed heavily, which depresses land cost without raising costs for market-rate housing. The taxes go to affordable projects, and to buying more land—which is then less expensive. Other cities tax the land value directly, using so-called “Georgist” tax policies. Similar tools can help to conserve resources (like land) and reward good development. As I will discuss in the last section, such policies can help to “monetize externality costs” (like sprawl).
Financial tools to damp down speculative real estate bubbles. Housing is a human need, not an interchangeable investor commodity—yet current policy is rewarding a dangerous new wave of speculation. The last time this happened, 2008, the world found itself in a global financial crisis. We need better tools, including local regulations, that control excessive speculation. We need less childlike faith in the magic of unfettered markets.
Better tools to unlock under-utilized sites. There are enormous reserves of wasted land, empty lots, parking lots and other suitable sites in many cities — but there is a shortage of imagination and tools to access them. In the U.S., the National Trust for Historic Preservation recently cited a 2014 survey that found that in just a part of New York City, nearly 2,500 vacant lots and more than 3,500 empty buildings had enough capacity to house 200,000 people.
Tools for “gentle densification”. These include accessory dwellings, duplexes or rental conversions, pocket neighborhoods, “tiny houses,” and other innovative forms of compatible, human-scale housing, as alternatives to “jamming it in.”
“Beauty In My Back Yard”. Many cities are full of beautiful, neighborhood-compatible typologies, including rich traditions of human-scaled apartments. Where sites are available, such positive alternatives should be developed through “win-win” consultations with residents.
Targeted protections for existing renters and owners, and aggressive help for the homeless. There can be no excuse for letting people suffer, particularly when proven alternatives have been demonstrated by other cities. Salt Lake City in the U.S., for example, has demonstrated one positive approach to ending chronic homelessness; there are others. Some cities have developed policies that legally disincentivize increases in rents above inflation (including property tax re-assessments based on higher incomes).
Above all, stop scapegoating NIMBYs (that is, those who respond to projects with “not in my back yard”). It is popular today to blame NIMBYs for everything from gentrification to loss of affordable housing. Nonsense. These are complex phenomena, and they are no more amenable to stripping the rights of NIMBYs than they are to other simplistic “silver bullet” solutions. Furthermore, most people agree that those who live in a community should have the right to participate in land use planning that affects their public realm, with a voice in decision-making. As Jane Jacobs said, sometimes NIMBYs are right: although a project type may be needed, “things should be done differently.”
The political environment in many countries is ugly enough without fomenting more needless divisions within communities that have been allies in the past, including the historic preservation community, and the community of neighborhood activists who are best placed to help improve their own neighborhoods. There is more than enough blame to go around, and more to the point, there is more than enough opportunity for citizens to work together on better “win-win” approaches that address the broader needs of cities.
As Jacobs reminds us, we need to become wiser stewards of urban diversity, in both scale and location, so that we can counteract the effects of overheated urban growth. By doing so, we can support a more even and equitable growth of smaller businesses, and viable employment for lower and middle classes. Out of that creative exchange, we will continue to get unimaginable marvels of innovation, and we might also get the next new world-famous startup. But we will also get many thousands of other healthy and creative businesses, forming the real backbone of great cities.
And instead of monocultures of the rich, and of society’s winners, we will get the economic diversity on which the continued growth and vitality of cities actually depends.
Michael Mehaffy is an urban designer, consultant, and senior researcher at the Ax:son Johnson Foundation in Stockholm. He is also director of the Portland-based think tank Sustasis Foundation.