Cities for Everyone

Paul Krugman
Remember when Ted Cruz tried to take Donald Trump down by
accusing him of having New York values? It didnt work, of course,
mainly because it addressed the wrong form of hatred. Mr. Cruz was
trying to associate his rival with social liberalism but among
Republican voters distaste for, say, gay marriage runs a distant
second to racial enmity, which the Trump campaign is catering to
quite nicely, thank you.
But there was another reason associating Mr. Trump with New York
was ineffective: Old-fashioned anti-urban rants dont fit with the
realities of modern American urbanism. Time was when big cities
could be portrayed as arenas of dystopian social collapse, of
rampant crime and drug addiction. These days, however, were
experiencing an urban renaissance. New York, in particular, has
arguably never been a more desirable place to live if you can
afford it.
Unfortunately, ever fewer people can. Thats the bad news. The
good news is that New Yorks government is trying to do something
about it.
So, about affordability: In the first quarter of this year, the average
apartment sold in Manhattan cost more than $2 million. That
number will come down a bit. In fact, the buying frenzy has already
cooled off. Still, such numbers are an indicator of a housing market
that has moved out of the reach of ordinary working families. True,
prices slumped during the national housing bust of 2006-2009, but
then they began rising again, far outpacing gains in family income.
And similar stories have been unfolding in many of our major cities.
The result, predictably, is that the urban renaissance is very much a
class-based story. Upper-income Americans are moving into highdensity areas, where they can benefit from city amenities; lowerincome families are moving out of such areas, presumably because
they cant afford the real estate.
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You may be tempted to say, so what else is new? Urban life has
become desirable again, urban dwellings are in limited supply, so
wouldnt you expect the affluent to outbid the rest and move in?
Why arent urban apartments like beachfront lots, which also tend to
be occupied by the rich?

But living in the city isnt like living on the beach, because the
shortage of urban dwellings is mainly artificial. Our big cities, even
New York, could comfortably hold quite a few more families than
they do. The reason they dont is that rules and regulations block
construction. Limits on building height, in particular, prevent us from
making more use of the most efficient public transit system yet
invented the elevator.
Now, Im not calling for an end to urban zoning. Cities are rife with
spillovers, positive and negative. My tall building may cut off your
sunlight; on the other hand, it may help sustain the density needed
to support local stores, or for that matter a whole citys economic
base. Theres no reason to believe that completely unregulated
building would get the balance right.
But building policies in our major cities, especially on the coasts, are
almost surely too restrictive. And that restrictiveness brings major
economic costs. At a national level, workers are on average moving,
not to regions that offer higher wages, but to low-wage areas that
also have cheap housing. That makes America as a whole poorer
than it would be if workers moved freely to their most productive
locations, with some estimates of the lost income running as high as
10 percent.
Furthermore, within metropolitan areas, restrictions on new housing
push workers away from the center, forcing them to engage in
longer commutes and creating more traffic congestion.
So theres a very strong case for allowing more building in our big
cities. The question is, how can higher density be sold politically?
The answer, surely, is to package a loosening of building restrictions
with other measures. Which is why whats happening in New York is
so interesting.
In brief, Mayor Bill de Blasio has pushed through a program that
would selectively loosen rules on density, height, and parking as
long as developers include affordable and senior housing. The idea
is, in effect, to accommodate the rising demand of affluent families
for an urban lifestyle, but to harness that demand on behalf of
making the city affordable for lower-income families too.
Not everyone likes this plan. Sure enough, there were noisy protests
at the City Council meeting that approved the measure. And it will
be years before we know how well it has worked. But its a smart
attempt to address the issue, in a way that could, among other
things, at least slightly mitigate inequality.

And may I say how refreshing it is, in this ghastly year, to see a
politician trying to offer real solutions to real problems? If this is an
example of New York values in action, we need more of them.