We observe our fifth birthday

On October 17, 2014, we launched City Observatory, with the aim of providing solid, data-driven research on cities, and offering a timely and informed voice on urban policy issues. Five years–and a thousand posts later–we want to reflect on the journey we’ve taken and those who’ve helped, and spend a few minutes highlighting the key issues that we think will occupy us in the days ahead.

A profound thank you to our friends, sponsors and partners

Many thanks to all those who’ve made this endeavor possible over these past four years. This project simply wouldn’t have been possible without the efforts of our contributors and co-authors–including Daniel Kay Hertz, Dillon Mahmoudi, Michael Andersen, Alex Baca and Patty Stubel.

We’re grateful to the John S. and James L. Knight Foundation for its founding support fo City Observatory.  Along the way we also got a helping hand from the the Quicken Loans Community Fund.

There’s been a great crew that helped create and build City Observatory, and we wanted to spend a moment to acknowledge their roles, and letting you know what they’re up to now:

Daniel Kay Hertz was a Senior Fellow at City Observatory, and is now Policy Director for the City of Chicago’s Department of Housing, and is also author of the acclaimed book, “The Battle of Lincoln Park.”

Dillon Mahmoudi served as City Observatory’s data analyst and GIS wizard.  He’s now an Assistant Professor of Geography and Environmental Systems at University of Maryland, Baltimore County.

Alex Baca has contributed a series of provocative essays on gentrification to City Observatory, as well as serving as an editor and advisor.  When she isn’t writing for the Atlantic, Medium, Slate or any of host other publications, Alex is at her day job as housing organizer at Greater Greater Washington.

Michael Andersen helped edit City Observatory. He’s now a Senior Researcher at the Sightline Institute, where he’s regularly connecting the dots between transportation, housing and sustainability issues in the Pacific Northwest.

In the early days of the site, Patty Stubel did yeoman work, and was our Tableau guru. The team at OCD design created a critically acclaimed look and feel for our website. Leslie Carlson and Mike Westling, the marketing mavens at Brink Communication helped us get our message out to national and local media. Bridget Marquis has been an insightful advisor to all of our efforts.

Our occasional contributors, including Todd Swanstrom, Heywood Sanders, Naomi Fast, Robert Liberty, Ethan Seltzer, Mike Eliason, and Jason Segedy have enlivened City Observatory with keen observations from around the country.

None of this would have been possible without the support and encouragement of Carol Coletta.  City Observatory was her brain-child, and she’s continued to give us unerringly good advice.

It’s been an exciting time to be in the thick of national discussions about cities. If you’re a regular follower of City Observatory, you’ll be familiar with many of the key themes and lessons we’ve been emphasizing.

Much of what’s written about cities is pigeon-holed into narrow policy categories:  transportation, housing, economic development, equity, sustainability. But to us all of these seemingly unrelated issues are facets of a single underlying urban challenge. How do we build great cities for all?

Our shortage of cities

Our view is the the problems we face, from housing affordability, to traffic congestion, to poverty, and to staving off climate change all relate to our inability to build the kind of great urban places that people increasingly want to live in.  In an important sense, we are experiencing a shortage of cities–we have a huge demand for great urban living that is only partly being met. For example, what manifests as shortage of housing is fundamentally the imbalance between the kinds of places people want to live and where housing has been built.

The economic evidence for this thesis is strong.  Our “Dow of Cities” measurement emphasizes  there’s been an increasing demand for central urban locations, and a relative decline for peripheral suburban ones. Home prices in central, and especially in walkable urban neighborhoods has gone up because these places are highly valued, and because, in many cases, a combination of density limits, apartment bans, parking requirements and arbitrary, NIMBY-dominated approval processes have essentially made it illegal to build more of these kinds of neighborhoods.

The harbinger of this urban shift has been the locational preferences of young adults. We’ve shown that the “young and restless“–25 to 34 year olds with a four-year degree, are increasingly choosing to live in the close-in urban neighborhoods of the nation’s largest cities. We’ve spent a fair amount of time debunking popular accounts that we’ve somehow hit peak millennial (we haven’t), and that cities are losing young adults (they aren’t). But to the extent the flow of young people to cities has slowed, that’s mostly an indication that we’re bumping up against the limits of housing supply in urban areas. The remarkable trend of the past decade is that more people have moved to cities even as they have become relatively more expensive.

The growing desirability of cities has profoundly changed the rules of the economic development game. Corporate location decisions are increasingly dictated by the H.R. department:  which communities have strong concentrations of skilled young workers and are these places attractive to others we might recruit? The result has been an unprecedented resurgence in job growth in urban centers. It also turns out that the agglomeration benefits of cities, sketched out long ago by Jane Jacobs, and documented by a wave of recent economic studies, are powering national economic growth.

Embracing change

The shift back to cities hasn’t come without controversy. What’s been most evident, in the leading cities, has been the revival of many formerly struggling neighborhoods: new population growth, new housing and new businesses. One popular critique is to decry gentrification as displacing long time residents. But while these changes are striking where they occur, they are still rare.

Better understanding these process of change continues to be a principal interest of ours at City Observatory. Our own analyses have shown that gentrification is extraordinarily rare. Of the 1,100 high poverty neighborhoods in the US in 1970, more than 90 percent are still high poverty areas today, with fewer than a tenth seeing reductions in poverty rates to less than the national average. Far more common–but much less remarked upon–has been the steady decline of formerly healthy neighborhoods into places of concentrated poverty. The number of such neighborhoods has tripled in the past four decades.

Far more common, especially in areas outside the most successful metropolitan areas has been “displacement by decline” as Akron’s Jason Segedy has described. In most metropolitan areas the more common and less remarked upon pattern of change is the steady decline of “middle neighborhoods”–places that were once stable and middle class, but which are increasingly abandoned. Urban policy debates spend too much time worrying about a small problem that afflicts few places, and too little time thinking about how to overcome a far more pernicious and persistent one. And the alarm about gentrification often impedes opportunities to harness new investment happening in in cities.

The most common reaction to concerns about gentrification–simply trying to block all change–simply makes the problem worse. Blocking new housing development aggravates the shortage of housing in neighborhoods experiencing change, and guarantees that wealthier, newer residents will outbid lower income occupants for housing. To some, it’s a seeming paradox, but if you want to minimize displacement, you need to build as much housing as you can, of all types. New market rate housing, even for high income households, leads to less bidding by higher income households for existing housing, and seems to help hold down rental price increases. A compelling and extremely detailed “big data” study by the Upjohn Institute’s Evan Mast shows that new market rate housing sets off a chain of household moves that quickly produces housing availability in low and moderate income neighborhoods.

Our national challenge in the years ahead is to capitalize on the growing demand for urban living to create greater opportunity for all. For decades, economic opportunity and wealth were decentralizing, moving from the center to the suburbs, and leaving the poor and people of color cut off from upward mobility.  The movement back to the center creates a situation in which we can use new investment and added economic activity to revitalize urban neighborhoods, improve public services and increase opportunities for those who’ve often been left behind.

These first five years have been an exciting time for America’s cities. We look forward to tracking their progress in the years ahead.  Cheers!