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Manhattan Institute

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Gentrification and Its Discontents

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Gentrification and Its Discontents

The Wall Street Journal May 6, 2017
Urban PolicyHousingInfrastructure & Transportation

Cities attract the rich with amenities and the poor with services. But they are failing the middle class. Edward Glaeser reviews “The New Urban Crisis” by Richard Florida.

In today’s San Francisco there is hardly any room for the middle class. Soon-to-be tech millionaires leave the city each morning on the Google Bus, headed to company headquarters in Silicon Valley, while the homeless and the permanently poor watch them pass. The Bay Area is home to more than 71 billionaires (second in the world only to the New York metro area) while about 14,000 (or 13%) of San Francisco’s children live in poverty. The very success of the information economy has caused the area-wide median sales price of existing single family homes to soar to more than $800,000 in 2016, beyond the reach of most of those in the middle. There is something very wrong with this picture.

Fifteen years ago, Richard Florida’s book “The Rise of the Creative Class” correctly argued that in the 21st century urban success would stem from skills and innovation, not smoke stacks and heavy industry. Now he has issued a wake-up call about a new crisis that threatens the future vitality of our cities. Unlike the urban crisis of the 1970s, he writes, this one does not primarily reflect “economic abandonment of cities and their loss of economic function” but rather the agonies that can accompany their success.

Quite often, urban success generates positive “spillovers,” through which the wealth of one person improves the lot of her neighbors by reducing the risk of crime or increasing the demand for their labor. But sometimes, especially when urban growth is restricted, success creates negative spillovers. Most obviously, the flourishing of a single urban industry....

Read the entire piece here at The Wall Street Journal

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Edward L. Glaeser is the Glimp professor of economics at Harvard University, a senior fellow at the Manhattan Institute, and contributing editor at City Journal.

Photo by Justin Sullivan / Getty
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