May 13, 2009


The Luxury City vs. the Middle Class (Joel Kotkin, May 13, 2009 , The American)

A demographic analysis conducted by my colleagues at the Praxis Strategy Group over the past decade found that New York and other top cities—including Chicago, Los Angeles, San Francisco, and Boston—have been suffering the largest net out-migration of residents of virtually all places in the country, albeit the pattern has slowed with the recession.

It’s astonishing that, even with the many improvements over the past decade in New York, for example, more residents left its five boroughs for other locales in 2006 than in 1993, when the city was in demonstrably far worse shape. In 2006, the city had a net loss of 153,828 residents through domestic out-migration, compared to a decline of 141,047 in 1993, with every borough except Brooklyn experiencing a higher number of out-migrants in 2006.

Since the 1990s virtually all the gains made in the New York economy have accrued to the highest income earners. Overall, New York has the smallest share of middle-income families in the nation, according to a recent Brookings Institution study; its proportion of middle-income neighborhoods was smaller than any metropolitan area, except for Los Angeles.

Much the same pattern can be seen in what has become widely touted as America’s “model city,” President Obama’s adopted hometown of Chicago. The city has also experienced a rapid loss of its largely white middle class at a rate roughly 40 percent faster than the rest of the country.

Although there has been a considerable gentrification in some pockets around Lake Michigan, Chicago remains America’s most segregated big city. In contrast to the president’s well-integrated cadre of upper-class African Americans, Chicago’s black population remains among the poorest, and most isolated, of any ethnic population in America.

And like other American cities, Chicago now has a growing glut of “luxury” condos, a pattern that became evident as early as 2006 and has now, as Chicago magazine put it, “stalled” as a result of a “perfect storm” of toughened mortgage standards, overbuilding, job losses, and rising crime. [...]

In doing scores of interviews recently for a report on New York’s middle class, my coauthor Jonathan Bowles of the Center for an Urban Future and I ran into many people who were considering moving out of the city or had friends who had recently left. This seems particularly true in the remaining middle-class enclaves in the outer boroughs.

“Almost all the friends I grew up with have moved to Mahopac or Yorktown [in the Hudson Valley],” says Jimmy Vacca, a member of the City Council who represents communities in the Northeast Bronx such as Throgs Neck and Pelham Parkway. “There’s a flight out of many middle-class people because of the schools. A couple gets married and by the time their children gets to age five, they move.”

Costs, particularly relating to child-raising, are killing the urban middle class. Urban residents generally pay higher taxes and more for utilities, insurance, trash, and sewer than those living elsewhere. Manhattan is by far the most expensive urban area in the United States, with an average of cost of living that is more than twice as much as the national average; San Francisco, another city that has seen large-scale middle-class flight ranks second. The Washington, D.C. area, Los Angeles, and Boston also suffer extremely high living costs.

These costs are most onerous on the middle class, particularly those with children. This can be seen in the rapidly declining numbers of students in most urban school districts, including such hyped success stories as Chicago, Seattle, Portland, Washington, and San Francisco. Over the past seven years, for example, Chicago’s school system, which was run by new Education Secretary Arne Duncan, has declined by 41,000 students.

America’s core cities—including the borough of Manhattan in New York—boast among the lowest percentage of children under 17 in the nation. Although Manhattan had a much discussed “baby boomlet” (the borough’s number of toddlers under the age of 4 grew 26 percent between 2000 and 2004), once children over 5 are taken into account, Manhattan’s under-age population is well under the national average. This indicates there may be a process of exhaustion—both mental and financial—as the costs of raising children drain family resources.

The real issue for the urban middle class is not having babies but being able to sustain their families as the children age and as families expand. One reason: many middle class urbanites spend tens of thousands of dollars a year in additional expenses that those in other cities as well as surrounding suburbs often avoid. For instance, since most middle-class families in big cities today need to have two working parents just to get by, child care becomes a necessity for those without grandparents or other relatives to look after young children. In places like Chicago, Washington, Boston, San Francisco, New York, or Los Angeles these costs typically run from $13,000 to $25,000 per child annually.

Later many of these same families, if they choose to stay, must then contemplate shelling out considerable sums to send their children to private schools, particularly after the elementary level. This can add from a few thousand dollars to $30,000 a year to their annual costs—and with no tax benefit. [...]

The University of Chicago’s Terry Nichols, one of the most articulate advocates for this new urban pattern, says cities should focus not so much as being vehicles for class mobility, but as an “entertainment machine” for the privileged. For these elite residents, the lures are not economic opportunity, but rather “bicycle paths, beaches and softball fields,” and “up-to-the-date consumption opportunities in the hip restaurants, bars, shops, and boutiques abundant in restructured urban neighborhoods.”

In this formulation cities become the domicile primarily of the young, the rich (and their servants), as well as those members of the underclass who persist in hanging around. What emerges, in the end, is a city largely without children, particularly of school-age, and with a diminishing middle class. Ironically, these are places that, despite celebrating diversity, actually could end up as hip, dense versions of the most constipated suburb imaginable.

The future of cities is this Magic Kingdom model. You take mass transportation into the park, where vehicles are prohibited, and though it employs many people they leave the grounds at night.

Posted by Orrin Judd at May 13, 2009 1:39 PM
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