Wednesday, March 25, 2009

Inequality is creating unaffordable cities

NYC is looked as the model to emulate in regards to a vibrant and successful city. Yet, recent reports are pointing to an income gap that continues to grow larger and larger in the Big Apple. Once seen as the place to go to make it big on Broadway, Wall Street, or just in general, lately it seems to have become a city of glaring opposites: the rich and the poor.

This Forbes article is a follow up to a study that claimed the middle class is leaving and will no longer cease to exist in the Big Apple. Can NYC survive with less diversity, especially in regards to income? Here is an excerpt from the article:
Worst of all, the rise of inequality in these high-cost blue cities seems to be connected to policy decisions. High taxes and strict regulations have expelled relatively well-paying blue collar jobs in manufacturing and warehousing from expensive urban areas. Without them, an extremely bifurcated economy and society forms because no traditional ladders for upward mobility remain; they are critical to a successful urbanity.

Back in the 1960s, Jane Jacobs predicted that Latino immigrants to New York, mainly from Puerto Rico, would inevitably make "a fine middle class." Yet four decades later, in the Bronx, the city's most heavily Latino county, roughly one in three households lives in poverty--the highest rate of any urban county in the nation.
At the other extreme, in Manhattan, where the rich are concentrated, the disparities between socioeconomic classes have been rising steadily. In 1980, the borough ranked 17th among the nation's counties for social inequality; today it ranks first, with the top fifth of wage earners earning 52 times that of the lowest fifth, a disparity roughly comparable to that of Namibia.

To an old-fashioned Truman Democrat like me, this is bad news. But some modern-day "progressives," like Richard Florida, celebrate the concentration of rich people. They see them as guarantors that places like New York will be the winners of the post-crash economy. The losers? Goods-producing regions of the Great Plains, the industrial Midwest and, of course, those unenlightened, suburban middle-class people.

Is it time we rethink our current models and come up with new approaches to how we create vibrant and livable cities. I believe quality of life seems to be at the core of many issues, yes, Richard Florida is right that economics plays a key role. While I don't buy the creative class argument, the clustering of the rich will slowly work to deteriorate our cities and leave them as playgrounds for the well to do.


CityLights said...

I see the New York metropolitan area as three concentric circles: the relatively well-off center surrounded by the old "rust belt" suburbs (Sunset Park, Perth Amboy, Yonkers), in turn surrounded by the rich newer suburbs. The rust belt is rather poor, and its real estate is rather cheap, but manufacturing is not in a hurry to return there. Why?

I agree that policy has to do with the city being the way it is. Rent control laws force the mixing of the very poor and very rich; developers are not interested in middle class housing, because they won't make money on middle class apartments after fulfilling affordable housing requirements. So they only build luxury buildings.

Also, the suburbs are independent political units; they get job benefits from the city while the city gets no tax income from them (at least ever since the commuter tax was removed by Sheldon Silver). If the suburbs were part of the city, there could've been a more effective plan for relocating manufacturing (from center to outskirts) as well as more tax income to subsidize poor and middle class residents.

A reason for the high cost of living in New York in general is an obsession with suburban principles in a place much too urban for them. Minimum parking requirements, refusal to upzone neighborhoods to allow people to obtain reasonably priced apartments instead of obscenely expensive single family homes, and an obsession with cars all increase the middle class's expenses more than those of either the rich or the poor.

Anonymous said...

I think it's more like four rings.

1st ring: Manhattan (the urban core)
2nd ring: Outer Borough NYC
3rd ring: inner suburbs (Yonkers, Jersey City, Stamford, Hempstead, etc)
4th ring: outer suburbs (Suffolk County NY, Putnam County NY, New Haven County, CT)

The 2nd and 3rd rings are more alike in a lot of ways than the 1st and 2nd rings. Manhattan is it's own super transit-rich animal, while very large swaths of the outer boroughs don't have great transit at all. Multifamily housing prices in the boroughs are also similar to those in the inner suburbs.

The outer areas of the metro are far cheaper in cost of living than the core, but there is basically no transit to speak of, save for regional rail into Manhattan. The cheaper transportation costs are a temporary phenomenon that will become a crushing burden once fuel prices inevitably spike back up.