Cities on a Hill: The Coming Urban Future

Lost in the overall dreariness of Donald Trump’s victory on election night was the decent amount of better news on more local levels. The decriminalization of marijuana continued its forward progress passing on eight of the nine public referendums on which that some version of issue appeared. Though perhaps the most intriguing news came out of Los Angeles where voters overwhelmingly passed a referendum that will fund a public transportation system that the city has been haltingly working towards for decades. Known as Measure M, the approved law adds a countywide half-cent increase to the sales tax (increasing to one cent in 2039), worth $860 million a year. In addition up to eight percent of Measure M funds will go toward walking and biking investments, up from the one percent walking and biking received in previous transportation spending. Needing a two-thirds super majority to pass, Measure M grabbed 70 percent public support.


Passing with an even greater majority of 73 percent was Measure A. This measure will boost investments in park space. In other words voters in Los Angeles, the city whose modern version was built entirely on the car, the city synonymous with traffic jams and ozone choking smog, overwhelming voted for a denser and greener future. More apartments (LA has already seen a good increase in recent years) and work space will be added to major arteries near transit stops. Metro Chief Executive Officer Phil Washington hopes to convert up to 25 percent of the county’s population into regular transit users in the near future, more than three times the current rate. Or as Alissa Walker, writing in LA Curbed just before Election Day regarding Measure M: “In a way, its biggest legacy would not be any physical piece of infrastructure, but rather the fact that it’s the first comprehensive plan to truly address the environmental damage that LA is wreaking upon the planet.” Meanwhile over in Santa Monica voters decisively rejected the anti-urban Measure LV which featured a law requiring a public vote to approve nearly any new building higher than 32 feet, among other such curbs on construction.

For those following such news like this it is a hopeful time. If Los Angeles justifiably ends up being considered a turning point in the coming years, it is hardly alone. The city of Rochester in upstate New York recently removed a 2/3-mile long stretch of highway I-490, known locally as the Inner Loop, which severed Rochester’s downtown from its neighbors on all sides. Many other cities are at least contemplating freeway removal in some form, a needed correction to the disastrous urban renewal schemes of the mid-20th century. In New York City two of Manhattan’s central points, Herald Square and Times Square, are now car free pedestrian plazas. In Detroit, the birthplace of the automobile industry, the pace of segregated bike lane construction will soon have the city in the top five for protected bike lanes, above such cities as Portland and Minneapolis. In a city where around 40 percent of people don’t have access to a car, cycling is up 400 percent since 2000.

Even Houston, the other American metropolis hardwired for the car and perhaps the ultimate capital of sprawl, has seen a bubbling in recent times. In 2013 the city adopted Complete Streets which codified the consideration of public transport, cyclists, and pedestrians when new roads are constructed or existing roads remodeled.

Such trends go beyond the initiatives of individual cities. It has been repeated to the point of cliché that millennials (and younger Generation Xers) drive less and prefer urban living more than their parents. If a generation of Americans were in the cultural clutches of Jack Kerouac’s On the Road and the mythology of the suburbs, demographics show that younger generations raised on Sex in the City and How I Met Your Mother would rather live in cities and take public transit to work. If anything, the demand to live in cities has grown to the point that displacement (often state sponsored) and gentrification is the greatest issue facing cities such as New York, Boston, Seattle, San Francisco, DC, and Nashville. City-boosting books have proliferated in recent years ranging from Edward Glaeser’s Triumph of the City, Leah Gallagher’s The End of the Suburbs, and Richard Florida’s Cities and the Creative Class.

Yet for all that a Time Magazine article from August 8th, 2016 revealed that due to low gas prices, brought on in part by destructive fracking, a week in June saw U.S. drivers consume more than 9.8 million barrels of gas every day, breaking a previous record set in 2007. Fuel emissions account for more than 16 percent of total U.S. greenhouse emissions.  Ask a random person what the federal government spends the most money on and it’s a decent bet she will correctly say the military but how many random people would take to get to the fact that besides the military the government spends more on real estate than practically anything else?

Between direct subsidy and tax and loan commitments it adds up to $450 billion a year. There’s the well-known ‘mortgage interest tax deduction’ that allows people to deduct the interest on their home loan from their annual tax bill. The deduction, allowing deduction on mortgages up to $1 million as well as second homes (it costs roughly $100 billion a year) has been called the ‘Mansion Subsidy’ since it favors the wealthy- only about a third of taxpayers even earn enough to make it worthwhile to itemize their tax returns.

There are rules that allow a deduction of property taxes from taxable income along with the exclusion of taxes on capital gains on the first $250,000 for individuals, $500,000 for married couples, from the sale of a home. The biggest subsidy is the Federal Housing Administration (FHA) single family loan program. To make credit more available and interest rates lower, the FHA guarantees mortgages to the tune of $1.1 trillion from 2007 to 2011.

All this government funding is uneven, much less likely to go to small multi-family dwellings where most renters live. Add to the almost infinite gulf between funding for highways and roads compared to public transit and it shows a generational government policy of pushing suburbanization and sprawl.  Despite its obvious merits for the environment and human productivity density in the U.S. peaked 50 years ago. Since the 1940s 90 percent of new homes have been built in low density areas.

The basis of this goes back to the housing shortage the country faced in the aftermath of World War II. Between the war and proceeding Depression home building stagnated. The end of the war and accompanying baby boom brought housing to the forefront. Coming on the heels of the New Deal expectations of Americans for improved housing rose; however, government estimates at the time were that the country needed five million new housing units immediately raising the question of who would build them. The government had proven itself capable of building housing.  Public housing took root in New York in the 1930s. Congress passed the Housing Act of 1937 (also called the Wagner-Steagall Act) which empowered the United States Housing Authority to develop public projects through local public housing agencies. After decades of urban slums, for the first time the federal government accepted responsibility for decent housing though there was a catch: the law stipulated that for every unit of public housing created another unit of substandard housing would have be cleared.

Of course, government housing wasn’t the only trend from the 1930s. In 1933 FDR signed the Home Owners Loan Corporation (HOLC) into law. HOLC’s main purpose was to fund the refinancing of tens of thousands of mortgages in or at risk for foreclosure and it even granted low-interest rate loans to enable owners to recover lost homes. Between 1933 and 1935 HOLC supplied over $3 billion for over a million mortgages. HOLC made two signature contributions to the housing industry. First it introduced the long-term, self-amortizing mortgage with consistent payments for the whole term of the loan (previously mortgages were only for 5-10 years with the loan needing to be renewed leaving the owner at the mercy of the money market). Second, HOLC systemized appraisal methods across the country. The lasting dark side of this is that it introduced redlining. The basics of this racist policy was HOLC dividing neighborhoods into four categories: green, blue, yellow, and red with red being neighborhoods unworthy of investment. It goes without saying that black neighborhoods, even neighborhoods with emerging black populations, were marked red. These standards were adopted by the FHA when it came into being in June 1934. The FHA induced and insured loans, most prominently by insuring a higher percentage of individual loans and thus allowing needed lower down payments. Interest rates fell due to lower risk and default. The FHA also established minimum standards for construction and extended the pay period for its guaranteed mortgages to up to 30 years. By the early 1970s the FHA assisted around 11 million families to own homes and 22 million improve their property.

It is true that a pattern of suburbanization existed long before the New Deal. There was an American uniqueness that saw wealthier people moving away from the central core of cities, the opposite of European cities like Paris, Vienna, and Berlin (Brooklyn Heights lays some claim to being the first commuter suburb). In Crabgrass Frontier: The Suburbanization of the United States, Kenneth Jackson argues that if not for annexation movement by cities in the 19th century (most famously the 1898 consolidation of New York City into its present five boroughs, Philadelphia’s expansion was also huge) suburbanization would have set in even sooner.

This still doesn’t mean that the post-war explosion was inevitable. In Picture Windows: How the Suburbs Happened, Rosalyn Baxandall and Elizabeth Ewan cite a 1946 Fortune survey that revealed:

The U.S. people are strikingly in favor of positive government action to end the severe housing shortage. A majority of those with opinions want the government to embark on a large scale building program” and that more people, particularly the young, veterans, the poor, and those living in large cities, and especially in North Atlantic states; i.e., most people, preferred renting an apartment to owning a home. The Economic Report of the President to the Congress in 1949 stated that “about 80% of the housing now being built is for sale, although veterans and others with families of uncertain future size and jobs of uncertain tenure would much prefer to rent.

Given the uncertainty and even preference for renting and city life why wasn’t more rentals built and instead home ownership elevated to the center of American culture? As Picture Windows puts it:

The answer is that Levitt, Burns, Lustrom, and the other master Builders, along with their allies- the bank and loan associations, real Estate lobby, lumber industry, media, chambers of commerce, and Conservative politicians- knew rental housing would never make them money. The automobile industry, the highway lobby, and other appliance manufactures felt the same way. Together these groups tried to persuade the government and the public that individual home ownership was crucial for preserving “the American way of life”.

Joseph McCarthy may be infamous for the madness of the Red Scare; however, his greatest legacy to reactionary politics may have been his five month vice-chairmanship control over the U.S. Senate Joint Committee Study and Investigation of Housing in 1947 and 1948. In 1945 the Senate, with support of President Truman, passed The Taft Ellender-Wagner Act (TEW) that continued the New Deal idea of a decent home for all. TEW contained a national housing policy, improved loans for farmers, relaxed FHA insurance, and provisions for 500,000 public housing units over a fourteen year period. TEW stalled in the House of Representatives just as Republicans took control of Congress in 1946. The investigative committee’s stated purpose was to analyze the reasons for the housing shortage. Yet with McCarthy in control of it the real purpose was to discredit public housing, mainly by portraying it as the last refuge for the poor and destitute, not to mention a communist conspiracy, rather than a right guaranteed for all. A radio blitz funded by the real estate industry to that effect lasted for a decade. When Congress passed a bill on housing, the Housing Act of 1949, it contained a provision for public housing but its lasting legacy was urban renewal that would displace a million households from the 1950s until 1980.

The 1956 Interstate Highway Act provided funding for 42,500 miles of freeway, with the Federal government paying 90 percent, while at the same time refusing funding for railroads. Between 1950 and 1970 the suburban population doubled, accounting for 83 percent of total growth in the country. While large pockets of cities were redlined under FHA guidelines, the suburbs were subsidized. For cities it was ghettoization. The New York area gives insight into how this played out. From the mid-1940s to the mid-1970s Nassau County, a single suburban county on Long Island, received more home loans than all of the city combined (162,669 to 146,691). Next door Suffolk County received 76,543 loans while the Bronx got 9927. To the north of the Bronx suburban Westchester received nearly three times that amount (29,660).

Homes were only one part of the equation. In 1954 Congress changed the Internal Revenue Code to allow ‘accelerated depreciation’ of income-producing property in seven years, meaning property owners were permitted to write off the value of a building after only seven years. This created a huge hidden subsidy for a commercial building boom, and since the benefit could be passed onto another owner who could depreciate again, owners had incentive to speculate with new buildings and sell quick. Construction had to be new to qualify for the write off. Developers responding to the lack of public space and receiving large write offs for every ‘income producing structure’ flooded suburbs with motels, malls, fast food restaurants, and office parks. Looking for the cheapest land they could find sites were often put on the far edges of suburbs encouraging sprawl. By the time the Tax Reform Act of 1986 put an end to the decades long spree the damage was done. The absurdity of it could be measured in mall space. By the late 1990s there were 43,000 suburban shopping centers; by 2000 Americans had built almost twice as much retail space as any other place in the world: over 19 square feet per person.

Thanks to all that overbuilding, online shopping, and the Great Recession many of these malls are now being abandoned or turned into cultural centers. This speaks nicely to the evolution of the suburbs. Long gone are the days of the all-white, middle class Levittown or Orange County. As urban centers have grown whiter the suburbs have grown more diverse. Over a third of suburbanites across the country are now racial or ethnic minorities. As some cities have prospered, suburbs have grown poorer, a process described by Alan Ehrenhalt in his book The Great Inversion. According to a Brookings Institute study suburban poverty grew by 25 percent from 1999-2008. In New York’s Long Island, the place where white flight sucked so much of the tax base out of the city, the population is increasing mirroring the country as a whole. Recent years have seen a decrease in the number while the number of wealthy and poor households has increased. The number of poor households is now almost 25 percent according to the latest Census Bureau — a poverty rate that now rivals or even exceeds the city. If trends continue, the middle class on Long Island will be a minority in coming decades. As of 2015, 18 percent of homes on Long Island were multi-family, still less than half the percentage New York metropolitan suburbs over all, but the number will continue to grow.

It also speaks nicely to the synergy between the suburbs and city. Whereas one could walk the streets of any city and see the flood of national chain stores drowning the landscape, it is also true that many suburbs are becoming more urban featuring quasi-downtown pedestrian areas and open air shopping centers. This largely falls under the banner of New Urbanism. New Urbanism lists as its guiding principles mixed housing, mixed-use and density, connectivity, and walkability.  According to there are 4000 New Urbanist projects planned or under construction in the U.S. While there is much to admire in New Urbanism, especially when existing suburbs move to adopt it in some form, it is not without flaws. Some of its developments are built on large tracts of land on the suburban edge giving them limited connectivity with surrounding communities and requiring driving a great distance to reach. Its developments can be expensive to build therefore making homes there pricey to buy. And while there are New Urbanist projects in cities it is largely suburban centered.

If suburbanization provided a popular answer to the mid-century housing shortage, albeit with an enormous economic and environmental cost, it couldn’t have happened without enormous government support and infrastructure. From Jefferson’s yeoman farmers, to the romanticizing of ‘Small Town U.S.A.’ (‘real Americans’), to the Electoral College the U.S. has had an anti-urban bias from the beginning. As it is now clear that cities are the key for prosperity, sustainability, and creativity, and are increasingly popular themselves, especially with the young, it is past time for the government to shift its priorities.

Federal spending can be shifted away from highway and road construction and towards public transit and railroads. A national gas tax could be enacted to reduce the use of fossil fuels and accelerate innovation in green energy. We know that freeway removal in cities results in a decrease in traffic, a counterintuitive phenomenon known as ‘disappearing traffic’. Examples of this have been seen in New York, Portland, San Francisco, and Seoul.

As Sam Schwartz explains in Street Smart: The Rise of Cities and The Fall of Cars:

In fact, the biggest and best study of reduction in road capacity shows that lane closures not only cause traffic to decrease on the road’s remaining lanes, but only half the decrease reappears anywhere else. This means that if two lanes are closed on a four-lane boulevard, it might carry only 60 percent of the cars it did before the closure; but if you look at every alternative route, you’ll be able to account for only half of the “missing” drivers…”If you unbuild it, they will go away.

If housing is to be subsidized, it could cease to be a boon for the wealthy and be targeted for lower income people renters in cities.  Better still the government could renew its funding of public and community housing to make cities more affordable. And is it too beyond the realm of possibility that as suburbs grow increasingly diverse and cities prosper we may see support for suburban communities wanting to join cities?

A final point is politics. As the battle for a greener, egalitarian urban world goes forward one cannot overlook the political mechanics of its opponents. Suburbanization, and its inherent mythologies of a ‘consumer republic’ and ‘homeowners society’ with its picket fences and shopping malls, has always been seen by its boosters, from McCarthy in the 1940s to Ted Cruz today, as a reinforcement of a conservative status quo and a bulwark against more radical alternatives. Nate Silver, perhaps an oracle whose star had faded some since the election, once rightly quipped ‘If a place has sidewalks, it votes Democratic’. It is cities which have opposed the rise of Trump and which have vowed to continue the opposition, particularly in declaring themselves sanctuaries to undocumented immigrants and recognizing the peril of global warming and working towards local solutions. Cities are where radical alternatives can be incubated.  Cities can not only make us more prosperous and healthier, they make us more progressive. It is a point that has always been recognized by their adversaries and one that should be thoroughly embraced by their supporters.

Joseph Grosso is a writer and librarian in New York City and is the author of Emerald City: How Capital Transformed New York Read other articles by Joseph.