Hi, I'm Rich Florida here. We're now in week four of the course which is about my most current research interest, and maybe the most pressing problems facing cities today. This new urban crisis we're experiencing of inequality, of rising economic segregation, some might say gentrification. Some might say some of our great cities are becoming so expensive, they're unaffordable for low income people and poor people and the middle class and for creative people. I know in the past week or so the New York Times ran a story. And I think that the headline of that story, or the lead of that story was people in Silicon Valley waking up in the San Francisco Bay Area, waking up at 2 AM to commute three hours away to their jobs. So that's this week's topic. We've covered why cities mattered. We've covered why we're moving into a world of cities and the rise of the global city across the world. We've covered why cities are important centers for innovation and creativity and for the same reason that they're important centers of innovation and creativity, because people cluster together. And knowledge-based economic activities cluster together. And high-tech companies, and media companies, and entertainment companies, and big companies cluster together. That creates many of these divides. And one way, I like to think about it, which is the simplest way to think about it, is the same very forces that push us together and drive our economy also make cities so expensive that they simultaneously drive us apart. So this section of the course, really the penultimate section, I think is one of the most interesting. And it really forces you to deal not just the upside or the great things about cities but the downside of the cities and the real challenges they face. So, again, look forward to seeing what you contribute to the discussion boards. Look forward to keeping the class discussions rolling. I want to always encourage you every week and all the time to keep building on one another's conversations. And in that spirit we have two interesting comments from learners this week that I want to take in turn. The first one is from a learner who's from Silicon Valley. And this person has lived in the Silicon Valley, in the San Francisco Bay area, for 30 years, so most of his adult life. And this person says, when I first moved there housing was of course more affordable than it is today. Silicon Valley is one of the most expensive markets in the United States maybe only second to Manhattan. In fact, in my book I talked about the price of a house in SoHo and how that house in SoHo, you could buy 50 houses in Detroit or 100 houses in Youngstown. But I actually ran the numbers for Silicon Valley and they're quite comparable. You could buy 50 houses in Detroit for the price of one in Silicon Valley, or maybe 100 houses for the price of one in Youngstown, Ohio. But it's heir first community, this person says. It has a large number of Asian people, people from India, of course, lots of Hispanic and Latino people. And he says, now things are getting more expensive. Now houses are over a million and half, and in fact, more than that. The middle is missing, something I've written about. And one of the things that drives this of course is people want access to good schools. And Silicon Valley has good schools. And he talks about, and this is really important and something I talk about in my book. None of the law enforcement people, none of the police officials, the fire officials, firemen, none of the emergency technicians, maybe none of the school teachers, can afford to live there anymore. And I think that gets to kind of the nub of the new urban crisis. On the one hand, we do have this missing middle as we talk about in the course. I think in 1970 about three quarters of Americans lived in middle-class neighborhoods, now less than 40% of Americans. And I'll bet, when the updated statistics are out it's less than a third of Americans do. Our society is dividing into areas of concentrated advantage and concentrated disadvantage, both in the city and in the suburb. It's not like all the rich people are in the suburbs and all the rich poor people are in the city or vice versa. It's that our whole landscape is being carved into areas of concentrated advantage and concentrated disadvantage. But one thing that's clearly happening in places like the Bay Area, places like Manhattan, places like Washington, DC, Boston, Seattle is this missing middle. And the people who are lifeblood of a city, I guess the way I like to put it is how do run a city if the teachers, the policemen, the fire people, the emergency technicians can't afford to live there. And I think that's the dilemma that were in today. One way that you can think about it which is kind of a silly word. Cities innovate, they create, they produce, are involved in production. But cities have to reproduce themselves. They have to figure out this thing called reproduction. And in many ways this inability of the service people who are the lifeblood of the city makes it really hard to reproduce that city. So in many ways, the new urban crisis is not just a city crisis of innovation, a crisis of divide. It's a crisis to the very reproduction of the city. And it's not happening everywhere. There are some cities and some places that are still affordable. But increasingly in these superstar cities and in these tech hubs and in these great global cities and in these innovative and creative cities the people who the city depend on to make it a great place to live and a good place and a reasonable place to live and a fair place to live, they're increasingly priced out. Today's second question comes from a learner who seems to be from Toronto. And Toronto likes to think of itself as a very fair city. There was even a motto, Toronto the Good. And many people who've lived in Toronto think that, of course it has a lower crime rate than most American cities. It has good urban schools. And it doesn't have quite the divides that you would find in a typical US city. But, this person says, the divides in Toronto are becoming extreme. And they're being exacerbated by developments in the downtown core, big tower developments, that drive out poor people. And this person adds the transit system. Well, first we can even say that it's so hard to get into the core because traffic is so terrible in Toronto like many superstar cities. But the transit system is becoming more and more expensive for people to use. It's really interesting in our countries, we subsidize. We pay for roads that people drive on. We don't charge them to drive on the roads. We don't get our roads get priced. If you have a car you can drive pretty much a lot of places for free. But we make people, even poor people pay the price in transit. So it's kind of unfair. Even for the middle class this is true. The cost just like the other learner, the cost of housing has become prohibitive. The previous person mentioned the house in the Bay Area cost $1.5 million. We know, and this person says, the average price of a house in Toronto is over a million bucks. So people who could have purchased this house ten years ago now can't. And if they can buy a house, they're going to have to borrow money from relatives. I asked my students in my MBA course at the University of Toronto. These are young people going and getting an MBA. So they're going to get pretty good jobs when they get out of school. I said, how many of you could afford to buy a house in Toronto when you graduate? And I don't think a hand went up. And then I asked well, how would you buy a house? And they said well, that's easy. The people who can buy a house in Toronto have the bank of mom and dad. So I think this person's point of young people especially, when they want to buy a house in an expensive city, have to depend on their parents and on their family. And again, what this causes are cities to become areas where the advantaged can buy in and the disadvantaged can't. What I think is really important about this, and it really bears your thinking about, through all of human history we've passed down advantages from parent to children. I know this because I grew up in a working class household. My dad had only a seventh grade education. He worked in a factory. My mom had to work at the newspaper taking ads to make ends meet. So we didn't have a lot of advantages. We weren't poor, we were working class. But we didn't have a lot of advantages. But people who grow up in affluent houses or middle class households they get access to better schools. They get access to private schools. And in many ways, that created a kind of inter-generational advantage. But it wasn't about where you live. In the past anybody who worked hard could find a way. My father with the seventh grade education could buy a house in the US suburbs close to New York City. But now to locate in these vibrant labor markets, in this super star cities, to locate around all of these new opportunities for employment, and not commute an hour, an hour and a half or two hours away, you need to have money. So, one of the striking and I think very distressing and troubling things about this new urban crisis is that the only way you can find. It's not only that class and your parents' background gives you an advantage or not. It's that the ability of mom and dad to help you buy a house or an apartment or rent a condo in one of these neighborhoods gives you an additional advantage. So I think it's something that you need to think about. And one thing we do know is that across the board in Canada, in Europe, in the United States and the advanced nations, the prospects for economic mobility, which used to be much better, have declined. And now it's much harder for people who grew up in less advantaged places to move up the economic ladder like my father did in his day or like I did in my day. So it's just something to think about. And of course one of the great contradictions there is that at the same time that all of that is happening, no matter how you slice it, no matter what data you look at, guess which are the places that are best for low income people, people who are visible minorities, people who don't have a lot of advantage. Big, thriving cities and metropolitan areas like the Bay area, like Toronto, like New York. They tend to have a better shot, if you grew up there, of moving up the ladder, even though it's harder than it was in the past. Thanks for your questions. They're terrific and keep sending them in. And again, keep devoting yourself to the course. Watch the videos, do the reading. Participate in the discussion boards. And most of all make sure that you're building on one another's contributions and learning from one another, which is really the best and most important way we learn.
