Posted on Saturday, April 08, 2006 - 6:53 am:

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Edward Glaeser is...a brilliant economist who is regarded as a "genius" and the "most exciting" expert on cities. He was made a full professor at Harvard University when he was only 30; eight years later, he is also director of one of the nation's leading institutes on state and local government. And professor Edward Glaeser thinks the nation should allow the city of Detroit to slide right down the shit hole.

"Places decline and places grow," he said with an apparent shrug, in a major, adoring profile in The New York Times Magazine a month ago. "There's no reason not to let decline go forward.

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Posted on Saturday, April 08, 2006 - 11:38 am:

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In any case, Glaeser discovered that there can be more to urban success than cars and palm trees. For a city without warm weather and a car-friendly environment, skills are destiny. That is why New York and Minneapolis, with vast numbers of college graduates, have done so well. "Boston would be just another declining, cold, manufacturing city if it weren't for its preponderance of human capital," Glaeser says. And his studies suggest that the more skilled a city's population, the more skilled it is becoming, as entrepreneurs attract skilled workers who in turn attract entrepreneurs. Americans, as a result, are sorting themselves through education and geography more and more with each passing year.

The process yields losers as well as winners. Late last year, Glaeser wrote a controversial article that made a case against rebuilding New Orleans. He has since become an intellectual leader to a tiny, unsentimental, let's-not-rebuild-the-city faction. "There's some small core of the city that should be there," he says, "but the city itself has been in decline for 50 years and in relative decline for 150 years relative to the U.S. population as a whole. It's not a great spot to have a city; it's incredibly expensive to build the infrastructure to keep it there. You can't possibly argue that New Orleans has been doing a good job of taking care of its poor residents, either economically or socially. And surely some of the residents are better off by being given checks and being allowed to move elsewhere." Glaeser admits that many critics have responded to his views with shock, asserting that he is unfairly attacking the city at a moment of terrible vulnerability. "No one has accused me of hating the poor or being racist," he says. "But I have been accused of not having a heart."

It's a familiar complaint. A few years ago, in an article Glaeser wrote about poverty for Harvard's alumni magazine, he suggested eliminating public housing in the U.S. in favor of housing vouchers. His argument was attacked for being coldblooded as well as impractical. Chris Mayer, a housing economist at Columbia Business School and a frequent admirer of Glaeser's research, says that Glaeser's perspective on things tends to attract controversy and incite debate. "I think Ed does care a lot about helping the poor and about social equality," Mayer says, "but his view of how to get there is a different view than other people."

Glaeser, for his part, says he feels the same about New Orleans as he does about many cities of the Rust Belt. "I believe very strongly that our obligation is to people, not places, and I think we certainly have an obligation — ethical, economic, what have you — to the residents of Detroit," he told me. But he sees no economic or geographic reason to have a large city there anymore, and he views the prospects for any rebound as dim. (Detroit ranks last among cities with more than 500,000 residents in percentage of college graduates.) The city produced the cars that produced the sprawl that helped destroy the city; such tragedy might have been lessened had it produced more universities too. "There are no reasons why it can't, and shouldn't, decline," Glaeser says. "And I would say that for many other cities. There's no reason not to let decline go forward." The greatness of America is dependent in part upon regional evolutions and migrations, he adds. "Places decline and places grow. We shouldn't stand in the way of that."

Glaeser first began to think about how real estate fit into this urban order a few years ago, after he spent some time looking at the effects of skills and sprawl on cities. While Glaeser seems able to turn out academic papers at an astonishing pace — he almost always writes at home, so he can smoke cigars while he types — it sometimes takes years for him and his collaborators to assemble the data and equations used to support his ideas. In addition to his urban research, Glaeser has written on voting behavior, hatred, poverty and public health; a few years ago, with David Cutler, he wrote a widely discussed paper that looked at why Americans are becoming so obese. (They attributed it partly to the microwave oven.) Yet urban subjects have consumed most of Glaeser's time and attention. In the late 1990's, he began thinking less about incorporeal forces like human capital and consumerism and more about the physical nature of places — buildings, roads, buses — and what kind of effect that had on a metropolitan area.

In 2000, Glaeser took a sabbatical from Harvard and began to spend a few days a week in Philadelphia working with Joseph Gyourko, a real-estate economist at the Wharton School of the University of Pennsylvania. Glaeser had already been thinking about the relationship between housing and urban poverty when one day he and Gyourko began to discuss why cities like Philadelphia and Detroit — places with poor future prospects, both economists believed — weren't doing even worse in terms of population. Why didn't everyone leave, Gyourko wondered, and go to a place like Charlotte, N.C., that had a fast-growing economy? This question addresses a puzzle of urban economics. Cities (think of Las Vegas or Phoenix) can grow at a very fast rate, exploding overnight with businesses and residents. Some can increase in population by 50 or even 60 percent in a decade. But cities lose their residents very slowly and almost never at a pace of more than 10 percent in a decade. What's more, when cities grow, they expand significantly in population, but housing prices tend to rise slowly; even as Las Vegas grew by leaps and bounds in the 1990's, for instance, the average home there cost well under $200,000. When cities decline, however, the trends get flipped around. Population diminishes slowly, but housing prices tend to drop markedly.

Glaeser and Gyourko determined that the durable nature of housing itself explains this phenomenon. People can flee, but houses can take a century or more to finally fall to pieces. "These places still exist," Glaeser says of Detroit and St. Louis, "because the housing is permanent. And if you want to understand why they're poor, it's actually also in part because the housing is permanent." For Glaeser, this is the story not only of these two places but also of Buffalo, Baltimore, Cleveland, Philadelphia and Pittsburgh — the powerhouse cities of America in 1950 that consistently and inexorably lost population over the next 50 years. It is not just that there were poor people and the jobs left and the poor people were stuck there. "Thousands of poor come to Detroit each year and live in places that are cheaper than any other place to live in part because they've got durable housing still around," Glaeser says. The net population of Detroit usually decreases each year, in other words, but the city still attracts plenty of people drawn by its extreme affordability. As Gyourko points out, in the year 2000 the median house price in Philadelphia was $59,700; in Detroit, it was $63,600. Those prices are well below the actual construction costs of the homes. "To build them new, it would cost at least $80,000," Gyourko says, "so there's no builder who would build those today. And as long as those houses remain, the people remain."

The resulting paper, "Urban Decline and Durable Housing," caused a stir among urban economists even before its publication last year. (It was initially circulated with a subtitle along the lines of "Why Does Anyone Still Live in Detroit?" until the authors, thinking it politically insensitive, removed it.)

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