The rise of inequality

Third Way reports,

San Francisco is now home to 80,000 more dogs than children. In Manhattan, singles make up half of all households. And “super-global Chicago may be better understood in thirds—one-third San Francisco and two-thirds Detroit.”

A new paper for Third Way’s NEXT series, by Joel Kotkin of Chapman University in California, argues that the price of housing “represents a central, if not dominant, factor in the rise of inequality” and that there is tremendous variation in housing costs by region. In parts of the country affected by high-priced housing, it has become so expensive that it acts, according to Kotkin, “as a cap on upward mobility … driving many—particularly young families—to leave high-priced coastal regions for less expensive, usually less regulated markets in the country’s interior.”

In the ongoing national debate over economic opportunity and rising inequality, one important factor is consistently overlooked—the price of housing in elite urban cores. The result is the making “of two divergent Americas, one that is largely childless and has a small middle class and another that, more like pre-1990 America, still has a large middle class and children.” Big cities, as Kotkin points out, have been losing the middle class— with the result that they are becoming areas of great wealth and entrenched poverty—while the suburbs tend to have less inequality. These trends fly in the face of what Kotkin calls “the Density Delusion” as the solution to housing affordability. But, as Kotkin points out, not only is dense housing more expensive than the much derided “sprawl,” the importance of housing has led to job growth in smaller cities and in the suburbs.

Kotkin's article is full of interesting graphs. Read it here.