The Jane Jacobs conundrum (Part 1): 3 urban trends driving economic inequality

In 1961, when others predicted urban doom, Jane Jacobs published The Death and Life of Great American Cities and predicted a very different future: the joys found along urban streets would draw people—young and old, rich and poor, every race—back to cities. These streets would make downtowns and urban neighborhoods what suburbia had failed to be: America’s long-promised melting pot.

Jacobs got urban resurgence right. And if we lived in a society still shaped by the demographics and economy that held sway from the 1950s to the 1990s, she might have gotten the melting-pot part right, too. But neither she—nor anyone else—could foresee three trends that are turning walkable, amenity-rich urban streets into engines for a full-blown equity crisis.

First, the average American household has shrunk by roughly 40% since 1961. After decades in which families with kids dominated housing markets, today singles and couples drive household growth—and shape housing markets. Single women are a larger force in the market than traditional two-parent families with kids. So pronounced is this reversal that urban demographer Chris Nelson suggests the US will need more than 50 million additional “urban” housing units between 2010 and 2030—and virtually no more suburban single-family houses. Many cities can’t meet this demand for urban housing, and as a direct consequence many have watched housing costs rise more than twice as fast as costs in the suburbs.

Second, America’s economy shifted from a dependence on natural to human resources. For decades workers followed jobs as they moved from cities to suburbs. Today, knowledge-based businesses follow college-educated workers, and by more than two to one these workers choose walkable, amenity-rich cities to live and work in. But the real story is that America is educating too few of these knowledge workers, and by 2030 we will likely be educating less than 60% of the number our economy will need. This scarcity has already set off an “arms race” in which regions compete for knowledge workers by making the cores of their central cities ever more walkable and amenity-rich.

Third, two decades after Death and Life appeared, rising productivity stopped translating into rising incomes for much of the U.S. workforce, and economic inequality began rising to levels not seen since the 1920s. People with college degrees and incomes in the top 40% have moved into dense urban cores. Many of the rest have been forced out by circumstance, not choice, and this exchange has had dramatic social impacts. For the first time in American history more households below the poverty line live in suburbs than in cities. In the last census the number of low-income families more than doubled in 16 of America’s largest metros.