The New Urban Crisis by Richard Florida, 2017

Review by: Dewitt M. Peart, President & CEO of Downtown Austin Alliance

June 2017

In The Rise of the Creative Class (2002), Richard Florida argued that the key to urban success was to attract and retain talent, not just companies. (Incidentally, talent recruitment and retention is a top issue facing urban districts.) It was a break from the prior thinking that was based on the belief that companies and jobs drew people. Since then, economic development assumes that employers are attracted to the places where talent clusters. The most successful urban areas, according to his thinking, would be those with the 3 Ts of economic development: technology, talent and tolerance.

In this book, The New Urban Crisis, Florida observes that the metro areas with the most dynamic and successful creative economies are also the ones characterized by the highest levels of income (wage) inequality. In his words, the ‘back to the city’ movement has conferred a “disproportionate share of its benefits to a small group of places and people.” He refers to this trend as the “New Urban Crisis.”

Two core features of the New Urban Crisis are:

  1. Rising Inequality (and the decline of the middle class)
  2. Rising Cost of Housing

These, in turn, are linked to economic and racial/ethnic segregation.

Florida continues to be an advocate for urbanism, citing, for example, research showing that with each doubling of population, a city’s residents become, on average, 15% more innovative, 15% more productive, and 15% wealthier. He continues to advocate for the importance of the active presence of artists and creative talent, referencing David Cameron: “the moment a city starts to lose its artists, things can fall apart and the city might lose its edge.” He warns of the impact of rapidly soaring real estate prices: “…superstar cities are being turned into gilded enclaves for a global plutocracy of largely absentee owners… they aren’t looking for places to raise their families or to do productive work. Instead, they’re looking for safe places to park their money.”

Florida argues that it is not coincidental that great cities are innovative and creative across the board: “My research shows empirically that artistic and cultural creativity acts alongside the high-tech industry and business and finance to power economic growth.”

College towns epitomize these dynamics in that “knowledge-based places don’t just reflect inequality, they help create it.” The emphasis of this book is that the very clustering force that drives economic growth can also be a driver of inequality.

“The New Urban Crisis is a fundamental feature of larger, denser, richer, more liberal, more educated, more high-tech, and more creative-class metro areas.” The solution is not to resist urban growth, according to Florida. Indeed, he states, “ultimately, the only way forward for our economy and society is more, not less, urbanism.” Instead, he recommends acknowledging the inequities of economic growth and urbanism and addressing the New Urban Crisis in a variety of ways that could mitigate inequities. He states, “One thing is certain: if we do nothing, today’s urban crisis will only worsen and deepen.”

He identifies these seven key pillars in support of “urbanism for all.”

  1. Reform zoning and building codes, as well as tax policies, to ensure that the clustering force works to the benefit of all.
  2. Invest in the infrastructure needed to spur density and clustering and limit costly and inefficient sprawl.
  3. Build more affordable rental housing in central locations.
  4. Expand the middle class by turning low-­‐wage service jobs into family-­‐supporting work.
  5. Tackle concentrated poverty head-­‐on by investing in people and places.
  6. Engage in a global effort to build stronger, more prosperous cities in rapidly urbanizing parts of the emerging world.
  7. Empower communities and enable local leaders to strengthen their own economies and cope with the challenges of the New Urban Crisis.

For those of us in urban place management, this book serves as a timely reminder about the greater trends affecting some of the issues facing our urban places and some key pillars to keep in mind to move toward urbanism for all.