Urban or suburban?
Photographer: Justin Sullivan/Getty Images
I recently had a discussion with my Bloomberg View colleagues Conor Sen and Justin Fox about whether cities or suburbs are the future in the U.S. This turns out to be a very popular and contentious topic. Richard Florida, the noted urbanist, recently bemoaned the death of the great urban revival that saw young Americans flocking to city centers during the first 15 years of the century.
This is certainly worth worrying about. These trends aren’t just important for real estate speculators — they affect the economic performance of the entire nation. Cities are amazing generators of productivity, for a number of reasons. First, they allow companies to locate close to their workers, and consumers to live near to the companies they buy from — a process known as agglomeration. Second, cities cluster a bunch of smart people together, allowing knowledge and ideas to flow freely among companies and combine to inspire new innovations.
So if, as Florida and many others fear, cities are keeping people out by limiting the supply of housing, the U.S. could be in trouble. Constraining the number of people — especially knowledge workers — who can live in urban cores could choke off productivity growth. That’s bad for everyone.