The New Republic - May 23, 2005

Urban Legends 

Cities Aren't Doing As Well As You Think

sually journalists get accused of overemphasizing bad news. Yet in the case of America's cities, the media has often made things appear rosier than they really are. The idea that American cities, indeed cities worldwide, are experiencing a renaissance has been widely, and often uncritically, accepted since the late 1990s. This new optimism rests largely on the impact of globalization and the worldwide shift from a manufacturing to an information economy. "Neither western civilization, nor western cities," historian Peter Hall has argued, "show any sign of decay." Books like Cities Back from the Edge, by Roberta Brandes Gratz, have asserted that many Americans are ready to give up their suburban dreams for dense, compact cities modeled on places like Prague. Then there are the popular works of Richard Florida, who seems to offer a simple formula for urban revitalization: Get hip and gay. Hip cities like San Francisco, Portland, Seattle, and Boston are the new role models, Florida has argued; and non-hip locales are duly forewarned, as a headline in The Washington Monthly put it, that cities "without gays and rock bands are losing the economic race."

In some respects, of course, the last ten or so years have been a good time for American cities. Most urban areas, particularly New York, became safer and cleaner than they were in the '80s. And, certainly, we are no longer living in the dark days of the '70s--an era symbolized by the 1981 cult classic Escape from New York. These trends have made urban life more attractive to some and thereby stimulated residential construction as well as slowed--and in some cases reversed--the flight from cities of jobs.

But these developments notwithstanding, the renaissance of American cities has been greatly overstated--and this unwarranted optimism is doing a disservice to cities themselves. Urban politics has become self-satisfied and triumphalist, content to see cities promote the appearance of thriving while failing to serve the very people--families, immigrants, often minorities--who most need cities to be decent, livable places. The myths that have grown up surrounding the urban renaissance are now often treated as fact. As an urban historian who lives in a major city, I believe that recognizing these myths for what they are is a critical first step towards the redemption of urban America.

Last week voters chose a mayor in Los Angeles. In six months, voters in New York will do the same. We are therefore in a period when the question of how to fix American cities is--or at least should be--receiving more attention than usual. But to fix something, you first have to concede that it is broken. And economically, demographically, and politically, many American cities are broken in key respects. Below, a guide to the most popular urban myths, how they are taking urban policy in a wrongheaded direction, and what cities should be focusing on instead:

Myth No. 1: Cities are again gaining people. The late '90s saw population growth in some cities--particularly supposedly hip havens like Boston, San Francisco, Seattle, and Portland. Many less favored cities, including perennial losers like Philadelphia and Cleveland, experienced much hyped upticks in downtown populations. "'Downtown is back' seemed to be a common observation throughout the 1990s," observed a 2001 report from the Fannie Mae Foundation and the Brookings Institution. Since then, a flood of new condos and loft projects in urban centers has convinced many that this observation is in fact a reality. Jonathan Fanton, president of the MacArthur Foundation, has heralded these developments as "signs of hope" for a new "urban renaissance."

But these assessments fly in the face of demographic realities. New York, Seattle, and Portland continue to gain population, but at a markedly slower rate than in the '90s. Most other cities--including Boston, San Francisco, Chicago, and Minneapolis--are once again losing residents. During the '90s, for example, Chicago's population grew by 4 percent, leading to a chorus of hosannas. Since 2000, however, the city has lost roughly one percent of its people. San Francisco--which Richard Florida has celebrated as a success story--grew by an impressive 7 percent during the '90s, but since 2000, it has lost over 3 percent of its residents. Boston, whose population increased by some 2.6 percent in the '90s, had given up half those gains already by 2003. And highly urbanized Massachusetts, one of the locales lionized by the new urbanists, was the only state last year to lose people.

What's more, these population setbacks for cities are taking place at a time when the growth of suburbs, exurbs, and more rural communities has continued. Even during the late '90s, a relative boom time for cities, five people moved out of central cities for every three who came in. The imbalance crossed every single age group, from the elderly to those between the ages of 15 and 24. It even applied to the demographic that is supposedly helping to spark urban renewal--the 25 to 34 year old set.

Cities, meanwhile, are becoming ever smaller parts of their metro areas. Minneapolis is a prime example. In the '90s the Midwestern city's population grew roughly four percent. Since 2000 it has shrunk by 2.5 percent, losing some 10,000 people; in contrast the surrounding suburban region grew by over 100,000.

In this context, even cities' much ballyhooed downtown revival does not really account for much more than a symbolic victory, population-wise. Overall, the back to downtown movement has constituted, as the Brookings-Fannie Mae report described it, "more of a trickle than a rush." If you combine the projected population growth for the downtowns of 15 of the nation's largest cities between 1998 and 2010, the total growth reaches roughly 125,000 people. By contrast the increase in one suburban region alone, San Bernardino-Riverside, during the same period is expected to be well over 1.2 million.

Even the great hopes of cities--immigrants--seem to be heading out of town, particularly once they start to climb the ladder towards the American dream. By 2000 more immigrants in metropolitan areas lived in suburbs, according to Brookings demographer Audrey Singer, than in cities. And this suburban immigrant population is growing faster than the urban immigrant population.

Then there are the empty nesters who, we are frequently told, are moving in droves back to inner cities. And yet the most recent census shows this trend to be more myth than reality. Retirees in the first bloc of boomers, according to Sandi Rosenbloom, a professor of urban planning and gerontology at the University of Arizona, appear to be sticking pretty close to the suburbs, where roughly three of four now reside. Those that do migrate, her studies suggests, tend to head further into the suburban periphery, not back downtown. "Everybody in this business wants to talk about the odd person who moves downtown, but it's basically a 'man bites dog story,'" Rosenbloom observes. "Most people retire in place. When they move, they don't move downtown, they move to the fringes."

Myth No. 2: Cities are where the successful people are. Apologists for the urban status quo frequently insist that it's quality, not quantity, of people that counts. Academics have made a bit of a cult of this notion of the Darwinian superiority of cities. Places like New York, London, and Tokyo, argued theorist Saskia Sassen, occupy "new geographies of centrality" that provide "the strategic sites for management of the global economy." Behind these giants she identified a secondary list of global centers, including Los Angeles, Chicago, Frankfurt, Toronto, Sydney, Paris, Miami, and Hong Kong. As for the lesser cities, much less the periphery, they are simply too far removed from what Lenin called "the commanding heights" of the capitalist economy.

Historically, such arrogance--and its appeal to the most talented parts of the population--was somewhat justified, particularly in the great cities. After all, if you wanted to run a global business, you had to be in New York, Chicago, or one of the nation's other commercial centers.

Yet today, many educated people come to the cities for a relatively brief period of their lives, notably their twenties, only to return to their hometowns, smaller cities, or suburbs as they reach their thirties. And with improvements in telecommunications technology, increasingly they find they can compete just as well from outside cities as from inside them.

Some of this, suggests demographer Bill Frey, has to do with the growth of the economies and amenities in suburbs and smaller towns. You can now, for example, get a passable Indian, Vietnamese, or Italian meal, buy a good cup of coffee, and hear reasonable music in places like Fargo, North Dakota. "These places now have more to offer," Frey says. "After all, the Starbucks culture is now coast-to-coast." (Disclosure: I've done federally funded consulting over the last few years in Fargo and North Dakota; but I've also done consulting in plenty of major cities.)

Of course, educated people have other reasons to migrate besides the growing availability of lattes. First, there is the issue of affordability: Housing costs in the most desirable cities--New York, San Francisco, Los Angeles, Washington, Boston, Seattle--have now reached stratospheric levels. The second reason lies with schools and children. Babies might look cute in strollers in Soho, but when they get bigger, middle class parents start to seek out places where a kindergarten education doesn't run as high as $20,000 a year. Paying for college is bad enough; but getting someone to teach the ABCs should not cost a parent, who is already paying for public schools, as much as six months of mortgage payments.

As a result, cities are not the places getting smartest fastest. Sixteen of the country's top twenty counties in terms of percentage of college educated people are now suburban; only three, Manhattan (New York County), San Francisco, and Washington, D.C., are cities. During the '90s, the biggest net gainers of college educated people were such unfashionable, and largely suburban, metropolitan regions as Las Vegas, Phoenix, and Charlotte. The number-one destination, in terms of net migration gains of young, single, educated people as a percentage of the total population? Naples, Florida.

Myth No. 3: Cool cities attract the best jobs; uncool cities don't. Another highly appealing urban legend holds that high-end jobs gravitate toward those places that are considered cool or hip. At the top of this alleged hierarchy are San Francisco, Boston, Austin, Seattle, and Portland, cities also identified as those with large bohemian and gay populations. The chief apostle of this point of view, Richard Florida, has said, "Take the guy with the tattoos seriously."

This assertion may be true in some cases, but overall, it's not supported by the facts. Employment growth in new economy fields such as business and financial services since 2000 has proved more robust in the suburbs and smaller cities than in the big towns. Some of this has to do with technology. As Harvard's Edward Glaeser notes, technology has long tended to concentrate not in dense urban settings but in more suburbanized ones, with large campus-like office parks, less crime, lower taxes, and, most critically, access to educated workers. Perhaps nerds, in contrast to the late '90s legend, don't tend to be pierced bohemian mega-consumers of culture but instead prefer areas with suburban track homes, good public schools, and even thriving churches.

Certainly the areas that have experienced growth in new-economy jobs--such as business and financial services--have not been the pillars of cool. In fact, since 2000 these jobs have been leaving the likes of Boston and San Francisco, while accumulating in church-going, conservative areas like Boise, Phoenix, Reno, Salt Lake City, and southwest Florida.

It may surprise creative class acolytes that these decidedly uncool places have done better in producing high-end jobs than elite cities. In fact, a recent UCLA study found that Sacramento and San Bernardino-Riverside led California in the production of jobs paying over $55,000 a year between 1995 and 2004. Sacramento saw these higher-end jobs increase by 2.8 percent while the Inland Empire--the suburban periphery east of Los Angeles--saw such jobs expand by 3.3 percent. San Francisco? It saw a .5 percent drop in such positions.

Even the large firms that have been identified with major urban centers since the nineteenth century are heading away from dense traditional cities. In 1969, only 11 percent of America's largest companies were headquartered in the suburbs; a quarter century later roughly half were in the periphery.

The prevailing shift in the locations of large firms' headquarters, according to a recent Chicago Fed report, has been to southern and smaller towns, not to large cities. As a result, cities can no longer assume they control the commanding heights of the economy. Just twenty years ago San Francisco was home to the world's largest bank and an established global center for high-end financial services. But in 1998, Bank of America, an institution deeply enmeshed in the city's history, moved its headquarters to Charlotte, North Carolina after merging with NationsBank, which was based there. Since the dot-com bust, things have gotten worse. Between 2001 and 2004, San Francisco lost nearly 17 percent of its business service jobs--lawyers, accountants, management consultants--and 9 percent of its financial sector positions.

The same phenomenon can be seen in New York. Since 1981, the city's share of the nation's securities industry jobs has dropped from 37 to 23 percent. Wall Street may still be the world's leading financial center, but it employs fewer and fewer New Yorkers. Financial service employment has been declustering rapidly, out to the surrounding suburbs, to other regions of the country, and, in some cases, abroad.

Much the same can be said about retail, once a New York specialty. By 2002 not one of the nation's top twenty retailers was headquartered in Gotham. And the dominant player in global merchandising, Wal-Mart, operates out of the cool metropolis of Bentonville, Arkansas.

These myths are particularly problematic when they become the basis for policy. And in many cities, that is exactly what is happening. Policies based on these myths aren't just a waste of time and resources. They are also distracting cities from the real work of securing their future. After all, if you are being told that you are coming back--riding the wave of demographics and intelligence to an inevitably positive outcome--why deal with the hard issues like public education, job training, promoting small companies, and transportation?

What is being done. Many mayors and governors seem to be relying on a "bread and circuses" strategy for revitalizing their cities. According to this logic, if cities can only put on a better show--in terms of arts, sports, conventions, and other amusements--they will become irresistible not only to tourists but also to educated workers and the companies that employ them. How else to explain the ridiculous idea that spending billions on a West Side stadium is crucial at a time when New York's subway system is becoming ever more obsolescent and a wall that lines the Henry Hudson Parkway is (literally) crumbling? What else could justify proposed public expenditures, in cities ranging from Phoenix to Los Angeles to Boston, on shiny expansions of convention center complexes at a time when the convention business is by most accounts shrinking?

Then there is the notion of building a cool town to lure the creative class--in Michigan, Governor Jennifer Granholm actually has an initiative called "Cool Cities." This justifies the public financing of arts and entertainment centers. There's nothing wrong inherently, of course, with arts and entertainment centers; but one has to wonder whether a $300 million performing arts center will really lure the creative class to Kansas City, as opposed to New York or Los Angeles. Even old industrial hubs like Cleveland and Philadelphia have tried to lure the creative class by developing hip downtowns. So far, both have improved their central cores, while the rest of the city continues to lose jobs and residents at an alarming rate.

The idea that Cleveland and Oklahoma City, much less Detroit and Kalamazoo, can out-compete New York, San Francisco, London, or Paris on a hipness scale is simply bizarre. These cities will never win the battle for the dollars or affections of the young, the nomadic rich, and tourists. As a Michigan talk show host once pointed out to me, "If you have to mount a campaign to prove you're hip and cool, you're not."

I recently debated Richard Florida in Denver, and even he admitted that his ideas about the creative economy were being misinterpreted to justify often absurd policy prescriptions. Arguably, bohemianism as urban policy makes some sense in places like San Francisco that retain natural appeal for the wealthy and perennially hip. As they lose their historic roles as centers of economic and political power, these cities may well morph into what might be considered "ephemeral cities," playing out the role that H.G. Wells envisioned for urban downtowns as a "bazaar, a great gallery of shops and places of concourse and rendezvous." That is, great places to visit, not to live.

There is also the popular idea that attracting gay residents will save cities. Spokane and Oakland, for instance, have considered projects to lure gays. It's true that gay populations have helped to gentrify areas of some cities, for instance in New York, in Washington, and even around downtown Phoenix. But the idea that gay residents will continue to save cities flies in the face of trends in American gay life. As domestic partnership laws and, eventually, marriage rights make it easier for gays to form nuclear families, there is every reason to believe that their social patterns and needs will become more similar to those of average Americans--and that the factors that have driven straight families out of cities will do the same for gay families. Among other things, gay parents will want good public schools for their children, something that most cities no longer offer. And even if they don't have children, gay people still have jobs--and good jobs are increasingly moving to the suburbs.

What needs to be done instead. Cities are not doomed, far from it; this is one point on which Richard Florida and I agree. But two major things need to happen in order for cities to be saved. First, they must undertake a CAT scan of sorts, which would reveal, underneath the glossy exterior of arts centers and arenas and hip downtowns, the reality of lost jobs, dysfunctional schools, and crumbling infrastructure. Second, they need to acquire the political will to attack these issues head-on despite the inevitable roadblocks.

What is needed is for cities to craft their own New Deal. Given their shrinking political power, they will not be able to extract resources from Washington or most state capitals. They will have to get smart about how they are run and focus their resources on basic issues, like schools, infrastructure, boosting small business, and creating jobs--rather than promoting bread, circuses, and tattoo parlors.

This will mean making choices. New York needs to decide that fixing its subways represents a more important use of its bonding authority than a stadium for the Jets. Los Angeles needs to decide its biggest priority lies in preventing the region's port complex, its largest generator of private sector jobs, from becoming hopelessly congested and obsolescent. Cleveland, Detroit, Philadelphia, and the other hard luck cases need to focus on trying to fix their schools, transportation systems, and economies. Phoenix needs to concern itself with generating jobs and opportunities for its soaring immigrant population. Let the glitzy restaurants and rock clubs take care of themselves.

Steps like these will require a new political consensus. Much of the current progressive agenda--with its anti-growth economic bias--does little to boost the competitive status of urban centers. Cities must return to a progressive focus on fixing their real problems--that is, the problems of the majority of the people who live there--not serving the interests of artists, hipsters, and their wealthy patrons. Right now school reform is often hostage to the power of teachers' unions. City budgets, which could be applied to improving economic infrastructure, are frequently bloated by, among other things, excessive public sector employment and overgenerous pensions. In the contest for the remaining public funds, the knitted interests of downtown property holders, arts foundations, sports promoters, and nightclub owners often overwhelm those of more conventional small businesses and family-oriented neighborhoods that could serve as havens for the middle class.

Ultimately, a new urban progressivism must challenge this power axis. It would force local governments to focus on the most important historical work of cities: the transformation of newcomers to America into successful, middle-class citizens. This has underlain the emergence of all great modern cities, from fifteenth-century Venice to seventeenth-century Amsterdam to twentieth-century New York. The American metropolis can be more than a way station for the wealthy young and part-time destination for the nomadic rich. It can be a place where average people live, thrive, and build communities across lines of race and class. Now that would be a cool city.

 

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