I really enjoyed Triumph of the City by Edward Glaeser (2011). Much like Jane Jacobs, he makes the case in favor of cities – for love, for profit, for a greener planet. But, where Jacobs seemingly spent a great deal of her time trying to maintain the character of her city, the low-lying Greenwich Village in New York, Glaeser is strongly in favor of density and newer high-rises to bring people together.
Some of his points:
-Innovation is borne of personal interaction and proximity to other smart people, where ideas can be debated, tested and perfected. Cities, clearly, offer such a setting. Particularly those with an educated populace that may be there in the first place because of strong academic institutions.
-Cities are greener than suburban sprawl because of the greater walking and use of public transportation. If the green movement is serious in its cause, it should be acting to promote the redevelopment and growth of cities to create the supply that will make it more affordable for all. If for no other reason, though, then to provide a precedent for the billions in India and China that are slowly moving towards a middle class existence and will have a far larger carbon footprint than the US.
-While maintaining the character of a city is compelling, all that is done through restriction of building is to make it more expensive (and thereby less accessible), stymieing the agglomeration elements that make cities dynamic.
-Like Jacobs, he sees that industrial/company towns (like Detroit) kill the innovative spirit that density engenders, making it harder for the city to reinvent itself when the golden goose has run its course.
-The presence of poor people and slums can be an indication of success. Many of those folks are there because of the greater opportunity that cities provide.
-The push for home ownership by the Federal government is a blow to the growth of cities, and thus a blow to economic growth.
As far as investment implications, nothing too novel or outlandish. In today’s environment, that which will ultimately help the economy to find its footing will likely find its origins in a city. So, if you’re looking to allocate dollars in real estate, it probably doesn’t make sense to stray too far from that action.
