Search

Tuesday, November 19th, 2013

Is Economic Development Dead? by Sam Hersh

[ This week's guest post is from Sam Hersh. I'll hopefully have more of my own perspectives on the de Blasio phenomenon in the future. In the meantime, here's his take - Aaron. ]

When Bill De Blasio won New York’s mayoral election a few weeks ago, it came as no surprise to anyone. His impassioned analogies to New York’s “Tale of Two Cities” and his call for a city that provided not just for the wealthiest one or two percent, but for all, appealed to the growing sense that New York is an increasingly unfair and unequal place.

The angst felt by New Yorkers is not contained only to that city. In Chicago, real estate companies have poured investment into the Loop and a handful of adjacent residential and mixed-use neighborhoods. Yet, whole swaths of the city’s south and southwest side have remained in a state that would rival war-zones and have earned the city a reputation as America’s murder and gang capital du jour. San Francisco’s recent transit strikes, and the ensuing scandal that followed a Silicon Valley tycoon’s less than empathetic statements on Facebook have highlighted that city’s class tensions.

Saskia Sassen pointed out in her 1991 book The Global City that globalization and modern technologies should push wealth and geopolitical power to a small number of globally connected and powerful metropolises. And in many ways, this thesis has born itself out as financial centers in New York and, to a lesser extent, Chicago and Boston as well as technology in San Francisco and “Eds and Meds” in Philadelphia, Pittsburgh and Boston have all “revitalized” these legacy cities that only thirty years ago would have been widely assumed to be dead. Meanwhile, smaller, less connected legacy cities have shrunk in global importance.

Left out of many people’s analysis of Sassen’s writings – an analysis that equates geopolitical power with urban success – is the simple fact that a geopolitically powerful city does not always mean a city of evenly distributed wealth or equality. The urban poor in New York, Chicago, or Philadelphia are not necessarily better off than those in Buffalo, St. Louis, or Detroit. In some ways, the low cost of living in “unsuccessful” legacy cities means that quality of life is in many cases better than in those cities widely regarded as a success.

Given our assumptions about urban success – that it should involve a thriving private sector, a critical mass of wealthy taxpayers, and a sustainable level of investment (as an aside, I know few people who would describe investment in New York as “sustainable” at this point) – it should come as no surprise that the method most commonly employed to realize these goals, economic development, would fail so spectacularly to deliver positive changes in the lives of the urban poor.

While a thriving private sector, a critical mass of wealthy taxpayers, and a sustainable level of investment certainly register among the necessary descriptions of a successful city, urban economic development too often equates better cities with attracting better people at the cost of dealing with the populations already residing within a city. While the last few decades have seen the resurgence of once decrepit metropolises through TIFs and BIDs and tax breaks aimed at capturing employers of what Richard Florida would describe as “the creative class” – engineers, lawyers, artists, and bankers – De Blasio’s win, along with political movements like Occupy Wall Street augur a shift in focus from the technocratic priorities of Giuliani or Daley to a De Blasio-style redistributive view of urban justice.

So far I have ignored a bit of nuance between Bloomberg’s market-oriented (some might say neoliberal) focus on growth in “creative class” (high skill and high pay) sectors, and his classically progressive restraints in other initiatives (smoking, trans fat) and the degree to which other mayors have followed New York’s lead in this type of leadership. While I tend to hope that a market-oriented solution to urban problems can be found, the vehicle for urban revitalization seems almost irrelevant when we consider the degree to which it has benefitted the urban wealthy at the exclusion, and occasionally cost, of the urban poor.

Obviously, inequities in quality of life have been most pronounced in New York where wealth is profligate and new construction has been tightly regulated, pushing cost of living ever upward. Yet, the De Blasio election means less for New York’s poor than it does for the country as a whole. Whether the Rahm Emanuels and Michael Nutters of America’s cities are replaced by De Blasio democrats in the next election will mean a lot for the priorities of development in our cities.

It’s easy to dismiss the De Blasio win as an event isolated to the confines of New York as the logical end to both Bloomberg’s overreaching policies and “quality of life” initiatives which arguably placed a premium on attracting and retaining the wealthy. But, we should not ignore the very real possibility that De Blasio’s win, and the disdain growing for economic development-focused politicians, may lead to a spiral of urban disinvestment wherein wealthier taxpayers leave cities, making cities ever less attractive places to live, thereby further escalating the effects repelling the middle and upper classes from urban cores. The reason we should not ignore this possibility, though it may seem inflammatory at first consideration, is simple: we are still recovering from its effects throughout the last half of the previous century.

Yet, De Blasio is probably not as leftist as right-leaning pundits have bombastically proclaimed in the wake of his election. Hopefully, De Blasio and the growing urban left can pull off a type of development that prioritizes development for all, not just for the wealthiest residents, without falling into the traps of the union-entrenched Democrat machines that oversaw the urban perdition of the last half century. The death of urban economic development may well be upon us, but hopefully if it is, something that provides for the development of the whole city will emerge.

Sam Hersh is currently a student of urban studies at Haverford College in Pennsylvania hoping to use the worlds’ cities to more effectively catalyze human opportunity when he graduates. He can be reached at shershey1@gmail.com.

12 Comments
Topics: Economic Development, Public Policy

12 Responses to “Is Economic Development Dead? by Sam Hersh”

  1. Nathanael says:

    “But, we should not ignore the very real possibility that De Blasio’s win, and the disdain growing for economic development-focused politicians, may lead to a spiral of urban disinvestment wherein wealthier taxpayers leave cities, making cities ever less attractive places to live, thereby further escalating the effects repelling the middle and upper classes from urban cores. ”

    We should ignore this possibility because it’s completely unreal and fantastic. You have gotten very confused because you have failed to understand the current dynamic.

    If you’d been paying any attention to New York City, you’d realize that the problem which has happened there — the one which Bill de Blasio is referring to — is that there is a giant gulf between the very rich (the 0.1%) and the middle classes. Meanwhile, there isn’t much of a gap between the middle classes and the poor.

    Driving out the plutocrats while benefiting the middle classes — which is a real possibility — is an entirely different scenario than driving out the middle classes (the scenario from the past which you fear, which will not happen), and shouldn’t be compared to it.

    If you wish to analyze the scenario which is actually politically possible, I suggest you do so. Be aware that losing Tom Golisano seems to have done us no harm whatsoever, and possibly some good.

  2. pete-rock says:

    Interesting piece. I definitely think we are at a watershed moment in terms of urban economic development, and I wrote as much just recently on my own blog (http://cornersideyard.blogspot.com/2013/11/the-smart-cities-fallacy-revisited.html)

    I think it’s a little premature to say that urban economic development is dead; the elite and the creative class are entrenched in cities in ways they surely were not 30 years ago, and they’ll fight to maintain and build on their position. If they feel threatened by the election of the Bill de Blasios of the world, their first inclination will likely be to insulate themselves, and move only if conditions worsen. Remember, most cities — including Chicago — are seeing crime at historic lows.

  3. pete-rock says:

    I didn’t finish my thought. We’re at a watershed moment because it’s becoming clear that the elite/global/creative class model of urban economic development has at a minimum reached an inflection point. What concerns me is how proponents of the model are not considering how its implementation can benefit more people within a given metro area, but how it compares to similar scenes in other metro areas. Anything that forces a shift in this perspective, like the election of a Bill de Blasio, is fine with me.

  4. Jon Seisa says:

    Where did this silly, naive and unrealistic notion come from that everyone on the face of the earth is supposed to be financially and economically equal, despite demonstrative individualism, different levels of personal fortitude, ambition and know-how novelty, both efficient and deficient; unique attributes, different intelligence calibers, varying IQs, distinct and separate ingenuity proficiency, and so on? Karl Marx’s Manifesto vaguely comes to mind. Humans are not replicated out of a Xerox machine (hence, that is the beauty of the Human Race, rich diversity, yet there is this bizarre modern push to make all the same). Therefore, there will be various economic classes of people based off personal skills and ability. Though in a constitutional republic like the U.S. all people are given the opportunity and freedom to pursue their dreams and desires, it is not a ‘right’ to have economic equity, because this goes completely against what the Framers of the Constitution intended for a functioning and free society. The antipodal would strip away the rich diversity of Humankind, rooted in individualism and simultaneously destroy innovation and competition, the driving forces and engines of a free enterprise system, consequently producing inert economic stagnation, if not ruin, the fruit of “communalism” as all are relegated to a dehumanized common denominator without personal distinction or ambitious drive in their blood.

  5. Alon Levy says:

    One of the lynchpin paragraphs seems wrong to me:

    The urban poor in New York, Chicago, or Philadelphia are not necessarily better off than those in Buffalo, St. Louis, or Detroit. In some ways, the low cost of living in “unsuccessful” legacy cities means that quality of life is in many cases better than in those cities widely regarded as a success.

    First, the cost of living for poor people in New York is quite low. Rents are cheap because of rent stabilization, public housing, and low-rent ethnic neighborhood networks, and then because cars aren’t required the cost of living goes down. Just because New York’s expensive for people who want to live like the stereotypical middle-class Real American or who buy apartments as an investment doesn’t mean it’s expensive for everyone else.

    Second, these cities have enough tax base to pay for a decent police department and decent schools. This is less true of Chicago and Philadelphia, where average incomes are lower, but New York and Boston both have good public schools by US inner city standards. And of the three cities named as less expensive, only Buffalo has the murder rate of Philadelphia and Chicago (which are themselves more dangerous than Washington, Boston, San Francisco, Los Angeles, and New York); St. Louis and Detroit are far more dangerous.

    And third, those global cities tend to have more income mobility. The elite institutions tend to sponsor things for the local poor but not for poor people in West Virginia. For example, see here about how elite college recruitment of low-income high school seniors focuses on the local area, which means the low-income residents of New York, Boston, Providence, and New Haven have more opportunity to use education to become upwardly mobile than those of Detroit and Buffalo.

  6. Alon, you shouldn’t be telling that to Sam, you should be telling it to de Blasio. Example: Bloomberg raised per pupil expenditures by 73%. I strongly doubt de Blasio will do anything like that.

  7. Alon Levy says:

    I know. Honestly New York probably can’t raise per student expenditures by 73% again – it’s already almost reached parity with its suburbs, which haven’t had much spending growth because their property taxes have raised living expenses to the point that people are moving elsewhere.

    My reading of de Blasio is that he understands this enough to avoid following reduce-living-costs-by-reducing-wages policies. He seems to be proposing the following program: tax the very rich to fund social programs, but use some market-rate housing liberalization to reduce the very rich’s living expenses as mitigation. At the risk of superimposing my views on him, I think he really does think in terms of providing better services to low-income city residents.

  8. AIM says:

    If your poor and are stuck in Detroit proper, you’re at the mercy of a completely dysfunctional transit system in a metro area where most of the employment opportunities have decamped to the suburbs. Not only do the working poor in NYC have alternatives to a car, there are many more employment opportunities they can access use public transit. Not so in Detroit.

  9. Frymaster says:

    Amazing to me that this conversation has no mention of Burlington, VT. Obviously, the point is not about global-scale cities, but the future of economic development. If you’re unfamiliar, BVT is one of the most progressive cities in the country and was the launching pad for Senator Bernie Sanders. The Progressive Party is the dominant force in politics.

    When Sanders became the mayor (as a socialist, btw), he created the Community and Economic Development Office. In the 30 years of its existence, the CEDO has made Burlington one of the healthiest cities in the nation, physically, environmentally and, most important here, financially. They don’t go on ‘buffalo hunts’ as company-specific attraction is called in the econ dev trade. Rather, they focus on lots and lots of small assistive efforts focused on existing businesses and new ventures by current residents. There’s a strong environmental and social equity component as well.

    Long story short: old-school, buffalo-hunting economic development is definitely on its way out and that ain’t a bad thing. I’m sure you’ve all heard it said: another world is possible.

    http://www.burlingtonvt.gov/CEDO/

  10. Vin says:

    Here’s the ironic thing about DeBlasio: He’s typecast as some kind of communist by conservatives, but he’s really just a liberal Park Slope yuppie. The secret to his election was that costs have risen to such an extent in New York that the city’s middle and upper-middle classes have begun to identify more with the poor than with the rich – those are the people who drove his victory. DeBlasio is not the candidate of the urban poor, he’s the candidate of people who read Gothamist.

    There’s nothing inherently wrong with this, BTW, it’s just that I think the forces that propelled DeBlasio to the mayoralty are often misunderstood.

  11. Alon Levy says:

    The urban poor voted for de Blasio, same as the urban middle class. There isn’t some mass of undiscovered salt-of-the-earth Real New Yorkers pining for someone who will stick it to the rich by cutting taxes and government regulations or by continuing the police practice of treating people of the wrong skin color like they’re all criminals.

  12. Sean S. says:

    What do you want? Years of real income stagnation on top of ever rising housing costs have created a situation where it is difficult for most people to maintain any semblance of the kind of middle class that they envisioned was waiting for them. Part of that admittedly was naivete, but it was also what was and has been consistently sold to them as the end result of doing the right thing, working hard at a job, putting in the hours etc. Except that’s not what is happening and it is clear with “creative destruction” (read: layoffs by suits who don’t care about you) that it is unlikely to happen.

    Honestly I hope the de Blasio election does indicate a juke away from technocrats and development orientation towards a more genuine meat and potatoes of city governance and delivery of goods and social services in a competent way. You don’t need to attract the “creative class”; you need to unlock the potential of your neighbors by not nickeling and diming them to death and providing decent services so they can raise a family without going bankrupt. Stop raising consumption taxes because you don’t want to offend a bunch of assholes in condos by taxing them more for their property. Don’t build a new boondoggle opera house (Miami I am looking at you) while kids risk tetanus at the local tee ball park.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

Telestrian Data Terminal

about

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

about

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

Please email before connecting with me on LinkedIn if we don't already know each other.

 

Copyright © 2006-2014 Urbanophile, LLC, All Rights Reserved - Copyright Information