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Opening Up Our "Gated Cities"

Posted by Josh Rothman  September 7, 2011 03:30 PM

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What would you rather own -- a 600-square-foot apartment in Beacon Hill, or a 2,500-square foot house, with swimming pool, in Phoenix, AZ? As housing prices in America's biggest cities rise, people around the country are opting to move elsewhere. In The Gated City, Ryan Avent, the economics correspondent for The Economist, argues that this migration away from big cities has real costs for the country as a whole. The bigger and denser cities get, the more innovative and productive they become; fewer people in America's big cities will lead, he warns, to less economic growth for the nation overall.

Phoenix has big, affordable houses, but its businesses and labs are too spread out.

The fact that big-city living is expensive isn't too surprising: Living in the city is fun, and space is at a premium. What is surprising, Avent writes, is just how much more expensive it is to live in big cities like San Francisco, Boston, and New York. That difference is mostly attributable to a shortage of new homes -- a shortage that exists, Avent writes, mainly because city-dwellers actively oppose their construction, seeking to preserve views and neighborhood atmosphere.

In 2005, for example, Phoenix issued permits for 62,000 new homes, while San Francisco, a hotbed of innovation and a magnet for talented strivers, issued permits for just 15,000. Lots of smart people want to move to the big city, because that's where the best jobs in the best industries are located. Faced with outrageous housing prices, though, they conclude that it's "better to take the lower-paying job in the less innovative industry in the place where big homes are easily affordable."

As more and more talented people are driven out of our ever-more-expensive cities, Avent notes, the cities themselves lose out on the potential to become more innovative and vibrant -- and it's all because of a "not in my backyard," or NIMBY, attitude which prizes pristine streets and quaint urban 'character' over economic growth. "Our thriving cities fall short of their potential," Avent writes, "because we constantly rein them in, and we rein them in because we worry that urban growth will be unpleasant." Cities are work zones, not theme parks, and it's good for them to be crowded, bustling, and overrun by newcomers. It's time to start letting our big cities grow again, Avent argues, because when they grow, America will grow, too.

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