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The New York Sun


A Breathtaking Vision For the Future of the City

December 13, 2006

By Edward L. Glaeser

In a world of civic tortoises who huddle in their shells fearing any change, the mayor — with his vision that the city must build housing and infrastructure so that the metropolis can accommodate more than 9 million residents in 25 years — is a lion embracing the unpredictable but optimistic path of urban expansion.

The mayor’s vision of a growing New York is the right one. A bigger New York can be an economic engine for the nation. A bigger New York is a boon for the environment: Every apartment built in Midtown means that one fewer ranch house needs to be built on the edge of Las Vegas. New York’s growth means that more immigrants from throughout the world can benefit from America’s economic strength and political freedom.

Mayor Bloomberg’s outline treats the city’s growth as a given and asks how to accommodate that growth, but that is being too complacent about the future. New York City’s population has grown by less than 3% during the last half century. How can we be certain that it will grow by 15% over 25 years? The right question for New York’s government is: How can housing and infrastructure transform growth into a reality from a possibility?

Over the past 40 years, New York has reinvented itself — the erstwhile industrial hub of textiles and light manufacturing is now a city that produces ideas. The density that once reduced shipping costs now speeds the flow of knowledge. Finance is the city’s premier industry, and Manhattan’s financial achievements during the past four decades are dazzling.

The interaction of New Yorkers in this dense island has created industry-changing innovations in high-yield debt, leveraged buyouts, mortgage-backed securities, and hedge funds. These innovations have led the city’s rebirth.

But those innovations have left the city dependent on finance. In 2004, one industry — securities, commodity contracts, and other financial investments and related activities — accounted for more than a quarter of the city’s payroll while employing fewer than 10% of its workers. While the New York of 1950 was enormously diversified, the New York of 2006 is increasingly a one-industry town.

Such concentration means that the city is exposed to risks — like the continuing suburbanization of finance or the rebirth of London — that threaten Mr. Bloomberg’s vision.

In the short run, the future of the city depends on finance. In the long run, the city depends on smart people exchanging ideas, innovating, and producing the new, new thing. The most important thing that the mayor can do for the city’s economic future is to make sure that smart people continue to want to work in the city and to eliminate barriers to innovation. The mayor should be at least as concerned with eliminating taxes and regulation as he is with building subway extensions.

Even if the economy of the city remains robust, New York will grow only if people actually want to live in the five boroughs. This means that the mayor’s projects need to be judged by their ability to increase quality of life. Speedier commutes are a big plus, but so are better schools and safer streets.

Is the mayor sure that the expensive projects suggested yesterday are the best way to attract innovative people to live in the city? Every dollar spent on subways is a dollar that could be spent on preschools. More cost-benefit analysis will be needed before accepting this infrastructure-heavy vision of the city’s future.

But any quibbles I have with the mayor disappear like trans fat on a griddle when it comes to housing. The mayor gets it. The city will not grow without new housing units. It doesn’t matter how hot the economy gets or how pleasant New York becomes: If the city doesn’t build more units, then population will stagnate because the number of people in a place is proportional to the number of homes. To house another 1.5 million New Yorkers, there must be at least another 600,000 more units, and probably much more.

The mayor and his office have fought to build more units over the past two years. Without their leadership, the forces of preservation and the enemies of growth will ensure that few units are built, housing prices will rise, and the city will stagnate. Only by fighting for new construction can the mayor help New York continue to lead the country.

Forty years ago, as Sunbelt suburbanization changed America, New York looked like a dying anachronism. Today, the mayor’s vision makes a growing New York look plausible — if the mayor can keep to his vision and do a better job of targeting new spending on projects that will be sure to attract producers of ideas. Not all infrastructure is good, and it all costs a great deal. In some cases, low taxes make more sense than more spending.

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