Daily Archives: August 27, 2016

Who Are Cities For?

Cities are for everyone.

That sounds simple enough, but unfortunately, it gets lost in the conversation sometimes. There’s been a lot of talk lately about allowing more development in cities like New York and San Francisco to allow more growth in industries like Silicon Valley. Others have pushed back, noting that San Francisco’s loss will be Portland’s and Atlanta’s gain, and questioning the benefits of and need for allowing more growth of the tech industry in top-tier cities.

On the merits, this is really a pretty silly debate. It seems pretty obvious that there’s nothing magical about San Francisco or New York. Human ingenuity can, and does, flourish all over the world in many different types of communities. Many kinds of business can be conducted by e-mail, phone calls, and video conferences. On the other hand, it’s abundantly clear that agglomeration effects are real, from both economic research and the simple observation that cities continue to exist and grow. There is naturally a constant back-and-forth between the desire to improve efficiency by centralizing business activities in high-cost locations and the desire to save money by decentralizing to low-cost locations. It is not apparent, at least to this observer, why the government should tilt the scales towards decentralization through punishingly high housing costs in some cities.

However, the focus on professionals in high-income industries like tech is detrimental to the discussion on cities for several reasons:

For one, it causes people come up with regressive policy ideas, like getting high-income industries to move to second-tier cities through high housing costs that constitute regressive wealth transfers in top-tier cities. The buffoons behind LA’s Neighborhood Integrity Initiative have suggested that “massive tax subsidies” should be provided to people who work from home, a demographic that is hugely skewed towards high-income professionals who already benefit from not having to spend time or money commuting.

For another, it creates a false hope that a city’s problems can be “fixed” by waiting for things to get so expensive elsewhere that higher-income industry and people are forced to locate there. This is practically the same logic and policy that generates enormous real estate booms and busts in places like the Inland Empire, which are “fixed” during every upswing by very high housing costs in LA & OC only to be eviscerated by the following downswing. Cities need, and residents deserve, an economy beyond being the next one into a first-in-first-out party.

But more than anything, focusing on high-income industries with relatively mobile production ignores the needs of many, many people – often the people who need the city the most.

The people who work at fast food restaurants and are fighting for $15/hr can’t move their jobs to a cheaper city. The janitors, landscapers, construction workers, health care givers, and housekeepers can’t move their jobs to another city or telecommute. The actors, artists, set designers, gaffers, and millions of other people who make LA what it is can’t all leave or telecommute. Every city is always going to have many low-income and service jobs that by their nature can’t be moved elsewhere. The people who work those jobs don’t deserve to have their wages and quality of life eroded by needlessly high housing costs. Being pro-housing in top-tier cities isn’t about people who have a choice to live elsewhere; it’s about everyone’s right to have choice to live here.

Businesses will always be making choices about where to locate, and different cities will experience growth and contraction at different times. The role of policy should be to help people take advantage of opportunities wherever they arise, not punish them with high housing costs for trying to do so. Everybody and anybody should have the right to the city.