Sunday, August 3rd, 2008

The Great Inversion

The New Republic is carrying a lengthy article by Alan Ehrenhalt on the demographic inversion of many American cities. What they mean by this is largely the re-population of the central city by affluent whites while blacks and other minorities are pushed to the periphery or inner ring suburbs. Their poster child for this is Chicago, where vast tracts of formerly ethnic and working class neighborhoods have become gentrified into homes for yuppies.

This is something that has been noted for some time now. I’ve written about it myself before (here and here, for example) and it has been covered elsewhere extensively. Think of it as the “Europeanization” of American cities. Americans are used to thinking of a still thriving but dull after dark small downtown, surrounded by miles of blighted “inner city” areas, surrounded by prosperous suburbs, largely racially segregated. What you see in Europe is a historic core populated by the economic and intellectual elite (which American tourists visit), surrounded by inner rings of soulless housing blocks (which they pass through in their cabs on the way in from the airport), surrounded by the middle classes in europrawl developments (which tourists rarely see). American cities, at least some of them, are starting to take on this cast, as downtown becomes a 24×7 live/work/play environment and surrounding areas become home to the new creative class. There’s no place for minorities or poor people (or often even middle class people) in this new geography, so those groups are forced to the inner rings suburban areas.

The TNR article provides some interesting facts. Here is their take on NYC:

Before September 11, 2001, the number of people living in Manhattan south of the World Trade Center was estimated at about 25,000. Today, it is approaching 50,000. Close to one-quarter of these people are couples (nearly always wealthy couples) with children. The average household size is actually larger in lower Manhattan than in the city as a whole. It is not mere fantasy to imagine that in, say, 2020, the southern tip of Manhattan will be a residential neighborhood with a modest residual presence of financial corporations and financial services jobs.

Incredible as it seems, even Manhattan is getting converted into a strollerville. What has been driving this? The article posits a number of potential reasons. Among these, de-industrialization eliminated much of the noise, dirt, and other pollution that drove people out of the city in the first place; horrible traffic and high gas prices are driving people back to the center; urban crime is largely confined to gang warefare that bypasses the elite; and Generation X and Y have a very different living preference than Baby Boomers did.

The places this is happening may surprise you. If there’s a poster child for the back to the city movement, it actually isn’t Chicago, it’s Atlanta. Altanta is on is way to becoming a majority white city in short order, something that seemed inconceivable just a few short years ago and which is causing consternation among black leaders. Atlanta had added 67,000 people to its population base since 2000, or 16% in just seven years, without annexation. By constrast, despite its gigantic condo boom (it is adding about 14,000 housing units per year in the city alone), Chicago has actually lost 56,000 since 2000, though obviously on a far larger base.

But what is clear to me, and which the article implicitly illustrates, is that this trend is most noticeably in the largest cities, especially those with “world city” aspirations. I would argue that the trend of globalization and the resulting “spiky world” is driving convergence across world cities, whether they be in Europe, the US, South America, or Asia. Increasingly we see the same demographic patterns, the same cultural attitudes, the same type of built environments, etc. I believe it is part of the expression of the development of a homogenous transnational elite that while nominally diverse when it comes to things like race and sexual orientation is in fact pretty much alike in all the things that matter. I have been fortunate enough to get to travel to various cities around the world and while there is always some degree of local flavor (tango in Buenos Aires, bullfighting in Madrid, for example), and some sort of a unique vibe to a place, I often notice just how similar so much of the feel is, particularly among people in the intellectual, creative, and business fields. You see this illustrated very clearly when you pick up something like the Wallpaper city guides and see pretty much semi-identical international hipster jet set elite places touted for every city. The only thing distinguishing most of these guides is the city name on the cover. I argue that this is leading to the creation of a dangerous “urban monoculture” that is weaking the intellectual and creative core of the city and leaving it vulnerable to unexpected shocks. This is related to the “big sort” phenomenon, and there will be a forthcoming posting on this soon.

Also, as we’ve seen white upper class families become predominant in city neighborhoods, they are importing their values along with their strollers. This has led to the ever increasing suburbanization of the city. This includes everything from rows of semi-indentical production housing (witness the thousands of cheaply constructed by highly priced cinder block condo buildings in Chicago), ever more big box chains with “lifestyle center” type architecture in the city, and the demise of gritty, artsy independent businesses in favor of the boutique of the week. The city often sides with these new residents in forcing out clubs and other non-kid friendly venues. In effect, the real creative class is getting squeezed out as the wealthy accessories such as financiers, lawyers, and such move in. Mayor Daley of Chicago has actively tried to make that city more kid friendly, spending millions on Navy Pier as a family attraction, cracking down on traditionally rowdy festivals, harrassing music clubs with ridiculous licensing requirements, and even trying to cram a children’s museum into Grant Park where there is only supposed to be open space.

On the flip side, some suburbs have radically improved themselves. This is not your father’s Naperville with nary a coffee shop to be found and where the best dining alternative was Chili’s. Instead we’re seeing the top suburbs up their game with better shopping, better architecture, better dining options, their own real downtowns, etc. While some inner ring suburbs suffer in poverty, there is less of a gap between the best suburbs and an ever more suburbanized inner city. Again, as with the urban monoculture, we’ll see the long term effect this has.

What’s more, I’m troubled that the new inversion appears to be less than fully market driven. It has been helped along by city governments eager to cater to the moneyed classes and with writers like Richard Florida providing the intellectual justification for doing so. I noted previously that I strongly speculate that Chicago deliberately ran many of is former CHA residents out of town when it demolished the projects. I’m convinced there’s a Pulitzer out there for the reporter who can dig into where the former residents ended up and how they got there, and blow the lid off this.

So stay tuned to see what happens here. What will the long term bring for Chicago, Atlanta, etc? Will this trend really fully make it to the smaller cities like Indianapolis? (It is interesting to note that in Indy Center Township appears to have stablized in population and has even slightly increased in the last couple of years. Is this an inflection point in the making?) I don’t think anyone knows, but this is clearly a trend to keep tabs of and to figure out how to respond to. While the renaissance of city living as been almost universally praised by progressives, it is not without its downsides.

Topics: Demographic Analysis

14 Responses to “The Great Inversion”

  1. thundermutt says:

    A “transnational” Big Sort?

    Is the phenomenon a worldwide one rather than just a US “Red Zipcode-Blue Zipcode” divide?

  2. adam says:

    I have an interesting idea, no real hard proof behind it, just a hunch.

    People like new, people like change, people want diffrent than they had growing up. People with money can afford to do this. During the early 1900s most people lived in cities regardless of race. Then when the baby boomers came along they wanted diffrent than they had growing up, so they moved out of the city to new forming suburbs. Now kids are growing up and don’t want to live in the dull suburbs, they want the excitement of the city. All through this time those who did not have the money to move stayed behind. Because of segregation this group was largely blacks. I don’t think this is intended to be segregation, it is simply left over from earlier times. On top of that, young blacks who earn some money associate the suburbs with prosperity and success and move there as soon as they can. But I think as the cost of commuting goes up and as the generation of people who knew nothing of segregation comes of age we will see most people of all race and economic status living in cities again. There will still be segregated within the city by wealth but that’s unavoidable.

    As for all cities “seeming” the same. Every city has its own touch but in the end people want a “city” and thats what developers will build.

    I think making cities family friendly is not a bad thing, just as long as they don’t take priority over other residents, as was the case in Chicago. The city of the future needs to find a way of maintaining a good balance. I don’t have all the answers, if I did I would run for mayor.

  3. The Urbanophile says:

    thunder, I hadn’t intended to send that message, but I think you’re onto something. What’s the relationship between the domestic “big sort” and the emergence of a homogenized transnational elite? Perhaps there are common forces such as generally increased mobility that are driving both.

    adam, there’s something to that, I think. I grew up on a country road in rural Southern Indiana, but now am, of course, a committed urbanophile.

  4. Radarman says:

    Since it is not what you or anyone would call a world class city, Cincinnati is busy bending over backward to see that there are plenty of subsidized housing units – probably more than are warranted – in the close in areas enjoying a slow and cautious revival. And the Hope VI development that replaced the the large projects adjacent to downtown are a scrupuous – again possibly over scrupulous – mix of subsidized and unsubsidized rental units and condominiums.

  5. thundermutt says:

    I don’t think it’s mobility per se (a full generation ago, I lived in five different US states growing up and I knew other boomers whose fathers were also corporate men doing the same thing).

    I think rather it’s the technological ability of information workers to work from anywhere (as pointed out by your recent poster who lives in San Miguel, Mexico). That’s new since the dawn of high-speed wireless internet connections.

  6. Economics of Contempt says:

    I argue that this is leading to the creation of a dangerous “urban monoculture” that is weaking the intellectual and creative core of the city and leaving it vulnerable to unexpected shocks.

    Yes, because no creativity has ever come from concentrating wealthy, intellectual, and highly educated people in urban cores! The idea that investment bankers or lawyers are all uncreative robots, or that concentrating them in an urban core would somehow stifle creativity, is truly silly. Many investment bankers spend 12 hours a day evaluating innovative businesses to determine whether they’re worth financing. They practically study creativity. That’s like people who say that pollsters — who spend their lives studying public opinion — somehow don’t truly understand “ordinary Americans.”

    (Also, since when is concentrating the most highly educated people in central cities “weakening the intellectual . . . core of the city”?)

    And what are these “unexpected shocks” that these cities are so vulnerable to? Surely you don’t mean economic shocks — unless you think cities with wealthier citizens who are employed in the most historically stable industries (financiers still collect multi-million dollar bonus checks during recessions) are somehow more vulnerable to economic shocks.

    I agree that Richard Florida is an idiot, but the idea that we’re witnessing the creation of an “urban monoculture,” and that this is per se bad, is just as naive as Florida’s “creative class.”

  7. The Urbanophile says:

    econ, I’ll let you judge the urban monoculture concept more fully when I post my article on that topic. For now I’ll just note that our current financial crisis was brought to you by many of those people you just praised. Seems they were of a herd mentality and vulnerable to unexpected shocks.

  8. thundermutt says:

    To extend Urbanophile’s comment: there is nothing creative about over-leveraging the same bet seven different ways. Just ask the former million-dollar bonus babies at Bear Stearns.

    While the defaulting borrowers in the mortgage crisis may live on Main Street, the people who packaged, securitized, funded, insured, stripped, tranched, repo’d and leveraged those mortgages and related securities were on Wall Street.

    Each succeeding level of derivative increased risk, and those risks were so poorly understood that investment bankers didn’t realize they were “doubling down” their bets rather than hedging them.

    But they did make big fees and fat bonuses at every step…right up to the end.

    I think this is the “herd mentality” Urbanophile refers to.

  9. Jason says:

    Very interesting take. I live in Philadelphia and am part of this city’s affluent middle class families. I’m not sure if the appropriate descriptor of the inmigration of such families constitutes “suburbanization” per se. We have to live somewhere and we choose an urban lifestyle. By virtue of being in the city, we are also supporting the independent retailers, restaurants, farmers markets, artists and venues. In fact, most of us would not be caught dead walking into an Applebees in center city Philadelphia. The nationals primarily cater to the suburbanites that come into the city.

    Ultimately, families either move to what was once productive farmland, or back into the city. Gentrification and displacement are not necessarily good or bad. Reintegrating residential and commercial land use benefits everyone including existing urban dwellers that presumably would have greater access to jobs should they follow the migration of people back to the city.

  10. The Urbanophile says:

    Thanks for the update from Philly, Jason. I’d be interested to know what development looks like there. In places like Chicago, there very much has been a huge infusion of national chains like Costco, Best Buy, Target, etc. And many of the independent businesses that are in these neighborhoods now are basically identical to the many cutesy boutiques in every upscale suburban downtown. Of course there are still great stores, hole in the wall restaurants, etc. But these are increasingly being driven out of the places where upscale families are moving in.

  11. Economics of Contempt says:


    Okay, I’ll withhold judgment on the “urban monoculture” — both its existence and its alleged effects — until you write your post.

    But in your shot at investment bankers, you improperly conflate “successful” with “creative.” Wall Street investment bankers have been fantastically, catastrophically wrong (and I’m still good friends with some of those Wall Streeters). They deserve as much blame for the financial crisis as anyone, if not more. But I never said that investment bankers are unusually successful. All I said was that some investment bankers (the financial intermediaries) practically study creativity 12 hours a day. Unsuccessful ≠ uncreative. Proving that investment bankers have been hugely unsuccessful says nothing about their creativity.

    Your suggestion that investment bankers are vulnerable to unexpected shocks because they created the current financial crisis is, umm, seriously misguided. Can you name another profession that receives government bailouts every time it screws up? Are you honestly claiming that the only profession in the world with an implicit government guarantee for its biggest firms is uniquely vulnerably to unexpected shocks? Investment bankers are the least vulnerable to unexpected shocks, because the government has to ride to their rescue if they fail on a large enough scale.

    Moreover, investment bankers always continue to collect multi-million dollar bonuses even during recessions (i.e., the “unexpected shocks” you think will cripple them). So how, pray tell, would concentrating investment bankers — with their own private government guarantees and their compensation packages that are immune to economic circumstances — in urban cores leave the cities “vulnerable to unexpected shocks”?

  12. Economics of Contempt says:


    “To extend Urbanophile’s comment: there is nothing creative about over-leveraging the same bet seven different ways. Just ask the former million-dollar bonus babies at Bear Stearns.”

    Surely you jest. You’ve obviously never seen a financial house’s books (or, for that matter, a CDO).

    Seriously, you’re suggesting that there’s no creativity in structured finance? I almost don’t know how to respond to that. Finance is much closer to an art than a science (as anyone who has ever worked on Wall Street will tell you). The current financial crisis has been brought to you courtesy of the much-hyped “financial innovation.”

    You can find incredibly creative ways to achieve less-than-desirable ends. So saying that financiers are extremely creative isn’t the same as praising the results of their creativity.

  13. Anonymous says:

    Here, here!

    It would be a wonderful thing to expose the Wall St investment bankers for what they are…Crooks!

    It takes more than Indy to do it however. If ‘flyover’ country could band together they could at least provide a counter balance to the snake oil that comes out of Wall St.

  14. Anonymous says:

    I think the disturbing thing about this article is that it never mentions that whites were ethnically cleansed from the cities due to minority crime and social decay. Whites are not gentrifying the city. They are merely reclaiming it. This article is visciously racist.

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