Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Inequality and the City High Housing Prices Restrict Urban Areas to the Affluent

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Inequality and the City High Housing Prices Restrict Urban Areas to the Affluent

Article excerpt

New York, New York, a helluva town. The rents are up, but the crime rate is down. The food is better than ever, and the cultural scene is vibrant. Truly, it's a golden age for the town I recently moved to - if you can afford the housing. But more and more people can't.

And it's not just New York. The days when dystopian images of urban decline were pervasive in popular culture - remember the movie "Escape from New York"? - are long past. The story for many of our iconic cities is, instead, one of gentrification, a process that's obvious to the naked eye, and increasingly visible in the data.

Specifically, urban America reached an inflection point around 15 years ago: after decades of decline, central cities began getting richer, more educated, and, yes, whiter. Today our urban cores are providing ever more amenities, but largely to a very affluent minority.

But why is this happening? And is there any way to spread the benefits of our urban renaissance more widely?

Let's start by admitting that one important factor has surely been the dramatic decline in crime rates. For those of us who remember the 1970s, New York in 2015 is so safe it's surreal. And the truth is that nobody really knows why that happened.

But there have been other drivers of the change: above all, the national-level surge in inequality.

It's a familiar fact (even if the usual suspects still deny it) that the concentration of income in the hands of a small minority has soared over the past 35 years. This concentration is even higher in big metropolitan areas like New York, because those areas are both where high-skill, high-pay industries tend to locate, and where the very affluent often want to live. In general, this high-income elite gets what it wants, and what it has wanted, since 2000, has been to live near the center of big cities.

Still, why do high-income Americans now want to live in inner cities, as opposed to in sprawling suburban estates? Here we need to pay attention to the changing lives of the affluent - in particular, their work habits.

To get a sense of how it used to be, let me quote from a classic 1955 Fortune article titled "How Top Executives Live." According to that article, the typical executive "gets up early - about 7 a.m.. - eats a large breakfast, and rushes to his office by train or auto. It is not unusual for him, after spending from 9 a.m. until 6 p.m. in his office, to hurry home, eat dinner, and crawl into bed with a briefcase full of homework. …

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