DLC | Blueprint Magazine | January 8, 2004 Too Much Froth The latte quotient is a bad strategy for building middle-class cities. By Joel Kotkin and Fred Siegel Table of Contents Like smokers seeking a cure from their deadly habits, city politicians and economic development officials have a long history of grasping at fads to solve their persistent problems and rebuild middle class cities. In the 1960s and 1970s, the fad was for downtown malls. In the 1980s, it was convention centers and sports stadiums. But none of the fads came close to living up to their lofty billings. Today, a new fad is bewitching urbanists and pols alike. Known as the "creativity craze," it promotes the notion that "young creatives" can drive an urban revival. It is a belated extension of the New Economy boom of the late 1990s. As with the idea of a New Economy, there is some merit to the focus on creativity. But as we learned from the dot-com bust that followed the boom, even the best ideas can be oversold. Long before the current craze, Robert D. Atkinson of the Progressive Policy Institute wrote, "The ticket to faster and broader income growth is innovation." And one of the keys to innovation, he noted in describing his Metropolitan New Economy Indexes, is the ability to attract talented and innovative people. But he also emphasized the importance of school reform, infrastructure investments, work force development partnerships, public safety, and reinventing -- and digitizing -- city government. All these critical factors have been widely ignored by those who've discovered the magic bullet of "creative" urban development. The new mantra advocates an urban strategy that focuses on being "hip" and "cool" rather than straightforward and practical. It is eagerly promoted by the Brookings Institution, by some urban development types, and by city pols from both parties in places like Cincinnati, Denver, Tampa, and San Diego. It seeks to displace the Progressive Policy Institute's New Economy Indexes with what might be called a "Latte Index" -- the density of Starbucks -- as a measure of urban success. Cities that will win the new competition, it's asserted, will be those that pour their resources into the arts and other cultural institutions that attract young, "with-it" people who constitute, for them, the contemporary version of the anointed. Call them latte cities. But, like all the old bromides that were supposed to save America's cities, this one is almost certain to disappoint. Based partly on the ideas in Carnegie Mellon professor Richard Florida's book, Rise of the Creative Class, the notion of hip uber alles reminds one of the confectionary world of earlier gurus such as Charles Reich, author of The Greening of America, and John Naisbitt, author of Megatrends. Both promised a largely painless path to a brave new world, but both now are largely forgotten. It's not surprising that after 50 years of almost uninterrupted middle class and job flight to the suburbs -- even with the partial urban revival of the 1990s -- urban officials might be tempted to clutch at straws. The appeal of such fads is plain to see. They seem to offer a way around the intractable problems of schools that fail to improve, despite continuous infusions of money; contentious zoning and regulatory policies that drive out business; and politically hyperactive public-sector unions and hectoring interest groups that make investment in cities something most entrepreneurs studiously avoid. The "creative solution" pointedly avoids such hurdles, suggesting that the key to urban resurgence lies in attracting the diverse, the tolerant, and the gay. Having such a population is well and good, but unlikely by itself to produce a revival, let alone a diversified economy. Those most outspoken about such a culture- and lifestyle-based urban revival have all the heady passion of a religious movement; indeed, they've organized themselves into something called the Creative Class. One hundred of them -- they called themselves the "Creative 100" -- met in Memphis last spring to lay out their principles in a document called the Memphis Manifesto. Their mission, it reads, is to "remove barriers to creativity, such as mediocrity, intolerance, disconnectedness, sprawl, poverty, bad schools, exclusivity, and social and environmental degradation." The 1934 Soviet constitution couldn't have said it better. This is an urban strategy for a frictionless universe. There is no mention of government or politics or interest groups. There's no recognition of the problems produced by outmoded regulations, runaway public spending, or high taxes. Instead we get the following froth: "Cultivate and reward creativity. Everyone is part of the value chain of creativity. Creativity can happen at any time, anywhere, and it's happening in your community right now." Why do supposedly serious people embrace such ideas? After decades of decline and often fruitless political combat, mayors, city councils, and urban development officials seem ready to embrace any notion that holds out hope without offending the entrenched constituencies that resist real reform. "The economic development people will buy anything that makes it seem easy," suggests Leslie Parks, former chairwoman of the California Economic Development Corp. "They see a schtick that requires few hard choices, and they bought it." Parks traces much of the current enthusiasm for the "creative" strategy to the late 1990s dot-com boom. In this period, there was a palpable economic surge in certain cities -- San Francisco; Portland, Ore.; Seattle; Austin, Texas; New York -- that also attracted bright, "creative" young people, and, incidentally, many gays. These are the cities that Florida and his acolytes have held up as models for other towns. Yet virtually all these places have been hemorrhaging jobs and people since the boom busted. San Francisco, according to economist David Friedman, has actually lost employment at a rate comparable to that of the Great Depression. Roughly 4 percent of the population has simply left town, often to go to more affordable, if boring, places, such as Sacramento. San Francisco is increasingly a city without a real private-sector economy. It's home to those on the government or nonprofit payroll and the idle rich -- "a cross between Carmel and Calcutta," in the painful phrase of California state librarian Kevin Starr, a San Francisco native. As for the others, they are no bargain either. Seattle has also lost jobs at a far faster rate than the rest of the country and has its own litany of social problems, including a sizable homeless population; the loss of its signature corporation, Boeing; and growing racial tensions. Although Portland is often hailed as a new urban paradise, it is in a region suffering very high unemployment. "They made a cool place, but the economy sucks," notes Parks, who conducted a major study for the Oregon city. "They forgot all the things that matter, like economic diversification and affordability." New York City has also suffered heavy job losses. Gotham's population outflows, which slowed in the late 1990s, have accelerated, including in Manhattan, the city's cool core. In contrast, New York's relatively unhip suburbs, particularly those in New Jersey, quietly weathered the Bush recession in fairly fine fettle. Today, economic growth is shifting to less fashionable but more livable locales such as San Bernardino and Riverside Counties, Calif.; Rockland County, N.Y.; Des Moines, Iowa; Bismarck, N.D.; and Sioux Falls, S.D. In many cases, this shift also encompasses technology-oriented and professional service firms, whose ranks ostensibly dominate the so-called "creative class." This trend actually predates the 2000 crash, but it has since accelerated. Since the 1990s, the growth in financial and other business services has taken place not in New York, San Francisco, or Seattle, but in lower-cost places like Phoenix; Charlotte, N.C.; Minneapolis; and Des Moines. Perhaps more important, the outflow from decidedly un-hip places like the Midwest has slowed, and even reversed. Employers report that workers are seeking more affordable housing, and, in many cases, less family-hostile environments. To be sure, such cities are not without their share of Starbucks outlets, and they have put great stress on quality-of-life issues -- like recreation and green space -- that appeal to families and relocating firms. But the watchword is livability, not coolness. "It's gotten very easy to get workers to relocate here," notes Randy Schilling, founder and CEO of Quilogy, a St. Louis-area technology company. "You get a guy here from Chicago, New York, and San Francisco, and even if he gets a pay cut, he and his family lives better." There is, fortunately, an alternative to a hollow urban politics that relies mainly on the hip and the cool. Such a politics lies not in trendy ideas that will be forgotten a decade from now, but in commonsense policies that stress basic services like police and firefighters, innovative public schools that are not beholden to teachers' unions, breaking down of barriers to new housing construction, and policies that lead local businesses to expand within the urban area. It's a politics that, to paraphrase the great urbanist Jane Jacobs, seeks not to "lure" a middle class with bars, bells, and whistles, but instead aims to create one at the grassroots level. That's the kind of "creativity" that cities, and Democrats, really need to embrace. Joel Kotkin is a senior fellow at the Davenport Institute for Public Policy at Pepperdine University. He is writing a history of cities for Modern Library. Fred Siegel is a professor at The Cooper Union and culture editor of BLUEPRINT.