“Human capital is the bedrock for municipal success,” Edward Glaeser, professor of economics at Harvard University and a ULI trustee, said in his keynote at ULI Netherlands’ Annual Conference in Amsterdam in May. His discussion focused on the key challenges and opportunities cities face, and how those affect regeneration. The author of Triumph of the City and a senior fellow at the Manhattan Institute, Glaeser’s work has centered on the determinants of city growth and the role of cities as centers of idea transmission.
The housing crisis in the United States illustrated the country’s extreme heterogeneity—some cities boomed in the 2000s, some went bust, and some areas’ housing prices were basically unaffected. One outlier was Detroit, which missed the boom but still got the bust, said Glaeser. Phoenix and Las Vegas were negative outliers that should have never had booms, considering their nearly unrestricted supply of land.
Much of the recent growth has been centered in dense areas on the East and West coasts. Within those metro areas, the places closest to the city center, which seemed in crisis in the 1970s, are now the most in-demand and most expensive. The pattern of rising density is universal. By definition, “Cities are the absence of physical space among people. It’s closeness,” Glaeser says.
Technology has acted as both as a centripetal and a centrifugal force over humanity’s history with cities, both drawing people toward cities and pushing them away from them. One centripetal force: aqueducts. The promise of clean water helped people gather in close quarters. Also skyscrapers: adding more square footage of usable space to a single plot of land drove growth in cities in the late 19th and early 20th centuries.
But the 20th century as a whole was centrifugal. Radios and televisions spread us out, since we did not have to rely on being close to sources of information. Cars and highways killed urban industry, making it possible for manufacturing to relocate to cheaper land, trusting the workforce would follow the jobs.
“So why didn’t computers kill cities?” Glaeser asks. It’s a fair question: remote working has never been more possible, and productivity has never been higher. So why are more people flocking to urban areas than ever? “Cities are about exchanging ideas,” he says. The proximity of people to other people sparks ideas in a way that is impossible in remote areas.
The difference between how quickly New York City and Pittsburgh bounced back from their declines in traditional employment—respectively, the garment industry and the steel industry—can be attributed to the small-scale entrepreneurs who emerged from the garment industry. Steel workers were not as likely to reinvent their careers.
Seattle rose from the ashes with entrepreneurship that turned into giant corporations: Amazon, Starbucks, Microsoft. But Glaeser warns that chasing Amazon’s new headquarters is not a guarantee of future municipal health. “At the start of the 21st century, like the start of the 19th, success is built by smart people, small firms, and connections to the outside world,” he says.
But the rise of cities is heightening inequalities between metropolitan and nonmetropolitan areas. Where unemployment rates were approximately the same across major metro, secondary metro, and nonmetro areas in 1980, Glaeser said there is now a 6-point difference in unemployment between major metro and nonmetro areas in the United States.
“Cities attract both rich people and poor people,” he says. “But cities don’t make room for new people. That’s the dilemma the urban resurgence has created.” The housing shortage is apparent in many already dense metro areas where building is expensive. We now need to think about where to place tall buildings that people actually want to live in. “Building up is not the enemy. It’s a friend to the environment,” he says.