In 2010 Boris Johnson, when he was Mayor of London, famously stated that he would not accept “Kosovo-style social cleansing of London” as a result of the then Government’s proposals to cut housing benefit payments. Johnson’s comments highlighted the pressures of retaining the social mix of central city areas in the face of increasing inequality of income and rising land and property prices. It was, and is, an issue that not only affects social housing at the lower end of the scale but also the intermediate market where young professionals and entrepreneurs — the drivers of the city’s future economy — can no longer afford to live in the capital.

I was reminded of Johnson’s words as I read Richard Florida’s recently published The New Urban Crisis, which sets out in well researched detail the sorts of issues that troubled the Mayor of London. The book comes 15 years after Florida’s book The Rise of the Creative Class which identified the growing importance of creativity in a wide range of jobs — not just in the arts but computer science and maths, architecture and engineering, social sciences, media, finance, healthcare and education — and how clustering them together in cities was becoming a key driver of economic growth. The New Urban Crisis sets out the downside, how creative clustering is driving inequality and exclusion in our cities, encouraging skyrocketing housing prices and gentrification. 

Although Florida denies that he regrets his championing of the creative classes, he does lay rather too many of the city’s problems at their feet. The creative economy has been a success, it has been beneficial to many cities since Charles Landry came up with the concept in the late 1980’s when he talked about “how cities can create the enabling conditions for people and organizations to think, plan and act with imagination to solve problems and develop opportunities”. In 1990 Michael Porter, in his book The Competitive Advantage of Nations, argued that urban agglomerations were the primary engines of economic development because they are locations “where knowledge, creativity and innovation flourish.” Cities accelerated the generation of ideas — the essential currency of the service economy and third industrial revolution. As Florida says, “It is no longer natural resources or even corporations that drive economic progress but the ability of cities to cluster and concentrate talented people.”

Cities accelerated the generation of ideas — the essential currency of the service economy and third industrial revolution.

London has gained economically from the clustering of financial services in the City of London, tech businesses in Shoreditch, and education and medical sectors in Bloomsbury and Kings Cross. In the States, Pittsburgh has transformed from a rust belt city whose economy collapsed with the steel industry to a successful city reconfigured around an economy of ‘eds and meds’.

So what’s gone wrong? According to Florida, it’s the rise of Winner-Take-All Urbanism, where an urban elite has colonised central areas of cities, pushing up the price of housing and pushing the poor out to the periphery. The high cost of land and the intense competition for urban space fuelled by overseas investment and absentee landlords has turned real estate into a new form of “global reserve currency”. Supercities dominate wider economies: London comprises a massive 30 per cent of the entire economic output of the UK. The situation is exacerbated by NIMBYs who not only fight to preserve their own housing values but put a “brake on the very clustering that drives innovation and economic growth,” and are dubbed as ‘New Urban Luddites’. Unlike the original Luddites, these are not exploited workers but some of the biggest winners of winner-take-all urbanism. The book recognises the issues of gentrification but suggests that chronic, concentrated urban poverty is a far greater problem. 

Much of his analysis will come as little surprise to regular observers of physical and economic planning and neither will some of his solutions, like “invest in the infrastructure for density and growth”, “build more affordable housing”, others are more radical, although not without support. He presses the idea of a Land Value Tax (LVT), which would create incentives for property owners to put their land to most intensive use; LVT captures the uplift in value from development — something that TfL will be doing to pay for a substantial chunk of HS2. Last year the London Assembly proposed that the Mayor investigate the idea of a Land Value Tax to replace council tax, business rates and stamp duty. Florida says that suburbs must become denser, greener, more mixed use and more connected to urban centres via public transport.

The problem with Florida’s analysis is that he is fixated on the city while the key drivers are national and international: neoliberal economics, taxation regimes that favour the wealthy and global corporations, the near disappearance of unions and the advent of disruptive technologies.

The problem with Florida’s analysis is that he is fixated on the city while the key drivers are national and international: neoliberal economics, taxation regimes that favour the wealthy and global corporations, the near disappearance of unions and the advent of disruptive technologies. “Do we want the divides and contradictions of winner-take-all urbanism, or the promise of a fuller and fairer urbanism for all?” Florida asks at the end of the book. Surely we do, but the answers are not in the hands of local but of national politicians. This book is a timely reminder to them of the importance of cities as economic drivers of national economies. Perhaps Florida’s most important recommendation regards ‘empowering cities and communities’: greater devolution of taxation and decision making is surely the key to addressing the challenges of the new urban crisis.