The price of “transactional cities”

Joel Kotkin:

Overall, these cities tend to have some of the worst inequality of any location, an urban model very different to the Jane Jacobs conception of a city that does not “lure the middle class” but creates one. Indeed, as the transactional city reached its apogee, the opportunity horizon for working- and middle-class families dimmed. In 1970, half of the city of Chicago was middle income; today, according to a 2019 University of Illinoisstudy, that number is down to 16 percent. Meanwhile, the percentage of poor people has risen from 42 to 62 percent.

San Francisco, the urban center that gained most from the technological revolution, epitomizes the final stages of the transactional city. It is now the country’s costliest city and anchors a region with the smallest middle class among the 52 Metropolitan Statistical Areas with over a million people. Inequality grew most rapidly there over the last decade, reports the Brookings Institution, as techies moved into tough urban areas like the Tenderloin. A city of enormous wealth has become bifurcated, plagued by mass homelessness and petty crime, while the middle-class family heads toward extinction. San Francisco has lost 31,000 home-owning families in the last decade, a trend that accelerated during the pandemic.

The current crop of urban leaders has only made things worse. In recent years, some city officials seem to have become tolerant of—and even willing to embrace—disorder. At the height of the 2020 urban riots, even the planning community favored “defunding” the police. Efforts to reduce policing have, unsurprisingly, been accompanied by rising crime in places like Chicago, Washington, DC, Minneapolis, New York, Seattle, and Los Angeles. Perhaps most remarkable has been the deterioration of tech-rich San Francisco, where tolerance of deviant behavior has helped to create a city with more drug addicts than high school students, and so much feces on the street that one website has created a “poop map.” Homeless encampments can also be found throughout Los Angeles, with a particular concentration along the beach, in inner city parks, and most famously in the downtown “skid row” area, the conditions of which a UN official last year compared to those of Syrian refugee camps.

Demographer Wendell Cox estimates that the percentage of households with children between the ages of five and 17 was nearly three times higher in suburbs or exurbs than in or near the urban core. Urban school districts are imploding as the number of young people growing up in core cities has declined.San Francisco, for example, is home to more dogs than children under 19, while Seattle boasts more households with cats than two-legged offspring.

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