Questions about urbanization and inequality are long-standing. Some people move to the city searching for new job opportunities to earn more money, while others leave because they cannot afford the cost of living. This mirrors the invisible wall between the urban rich and urban poor which has quelled many concerns and debates on the urbanization process.
In his book, the New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class and What We Can Do About It, Richard Florida, a prominent urban theorist, argues that urbanization is the engine of both economic growth and inequality. The book focuses on North American cities, although he devotes a chapter to the matter in developing countries.
The author presents five dimensions of the New Urban Crisis, namely the inequality between the superstar cities and the rest; plutocratization; the disappearing middle class; the suburban crisis; and the failure of urbanization in developing countries..
Superstar cities like London, New York, and Los Angeles are the main beneficiaries of globalization, as highly skilled people and the most innovative and high value-added industries are clustered therein. London, for instance, accounts for almost 30% of the UK’s entire economic output (p. 19). While these mega-cities squeeze in more affluent and knowledgeable residents, they simultaneously drive up the demand for real estates and housing outstripping the available supply. For example, as of 2015, the value of the real estate in Los Angeles was roughly $2.8 trillion, equal to the size of France’s economy (p. 25). A spike in real estate exacerbates the economic equality between rich and poor.
Moreover, Florida is a cheerleader of gentrification policy. He contends that gentrification does not directly displace the worse-off families, as is widely believed or portrayed in the news media. A 2015 study in Philadelphia found that gentrification there had enhanced the household income by 42% between 2002 and 2014, compared to a 20% decline in non-gentrified areas (p81). The author contends that poor neighbourhoods, without gentrification, will be affected by concentrated poverty and isolation.
He then spotlights the exorbitant housing prices that cause the locational divide between the haves and have nots, deepening the economic segregation. Some areas are walled off as the gated luxury communities. The small groups of relatively well-off people live in the best neighbourhoods, with access to the most economic opportunities, the best schools and other superior amenities. The once-thriving middle-class residents are priced out of the urban core, and shunted into the disadvantaged areas filled with crime and insecurity. They also have grimmer prospects of achieving upward mobility.
More troublingly, economic and racial segregation are mounting in the regions of suburban sprawl where deliveries of local services, such as water and energy, cost 2.5 times more than in the urban core (p. 173). Long commutes, lower-paying jobs and other social costs also need to be factored in. In his view, these economically distressed suburbs played an essential role in Trump’s unpredicted and shocking victory in the 2016 United States presidential election (p.178).
Florida then touches upon urbanization in the developing world where many people see little improvement in their standard of living. Inflated property prices cause many people streaming into the city to live in the slums where basic services such as clean water, sanitation, and electricity are insufficient (p. 186). Such cities are facing seemingly intractable poverty.
These five features of the new urban crisis capture some of the trends of growing inequality between the superstar cities and other smaller centres, as well as the inequality within each city. However, there is quite a bit of repetition between some chapters.
As the old saying goes, the devil is in the details. Florida’s urban led growth perspective does not discuss what might be lost if the government and the public see the growth only through this lens. The author views urbanization as back to the city movement; although some are pushed out of the urban core to live in poor neighbourhoods, they continue to reside in the city. He fails to capture the whole picture of migration dynamics, for example, seasonal immigration.
Moreover, his argument on gentrification, as the logic goes, helps urban poor move up the social ladder because it enhances their economic opportunities, citing the case of Philadelphia. Following a lengthy discussion of cities in North America, this cannot be generalized into a wider region due to different contexts and political and economic structures. The gentrification policy is usually supported by private real estate development, but Florida fails to reveal the backroom manoeuvring of the property lobbying activities, which remains the barrier to building more affordable housing. The grim cycle of insufficient supply and costly housing perpetuated by vested interests is not discussed.
Most importantly, the New Urban Crisis is most flawed when it comes to his policy recommendation calling for ‘urbanism for all’. The seven strategies include rezoning, reforming tax policies to cluster the workforce, investing in infrastructure, increasing the supply of rental housing, boosting income, joining the global effort to help the emerging countries, and empowering communities. These recommendations are not wrong, but they are only on the surface. For example, his rezoning recommendation is not backed by any evidence and does not take into account any potential unintended consequences. The suggestions are merely a wish list of well-intentioned ideas.