Joel Kotkin on ‘Superstar’ Cities

The Wall Street Journal had an article yesterday called the Myth of the Superstar Cities. This op-ed piece, by Joel Kotkin, discusses the concept of American ‘superstar’ cities, such as New York City, Los Angeles, San Francisco, or Boston, and how they are generally considered ‘better’ in ways such as economic growth, trendiness and opportunities. Unfortunately, as Kotkin maintains, these are more images than reality. These cities are growing no faster, and sometimes more slowly, than other large (albeit less flashy) cities such as Phoenix or Houston. The most unusual feature of the ‘superstar’ cities are their stratospheric housing prices, which in the long term will cause a drain in talent and businesses from these superstars.

Here some different ways of looking at this article. The superstar cities are outliers because they have outsize populations in certain specific ‘industries’, such as finance, publishing, art, and so forth. The network effects of having these all in the same place (telecommuting notwithstanding) can yield a ‘rich get richer’ phenomenon where these cities become the hubs for such activities, and make it hard for other cities to catch up. While there is certainly potential for other cities to woo businesses and talent in general, it might be difficult for them to catch up in certain sectors. The superstars might still be superstars in the future for a reason (not just as enclaves for the super-wealthy), despite high housing costs.

On the other hand, while these network effects are strong, they are not insurmountable. And having a large number of other cities capable of competing with the superstars will in turn require them to innovate. Either the elite cities will rise to the challenge and flourish (and probably become more affordable), or other less glamorous cities will come in and take their place. Either option is good for residents.

6 Responses to “Joel Kotkin on ‘Superstar’ Cities”

  1. Gary February 19, 2007 at 12:18 pm Permalink

    Shorter version of this article, buried until the last paragraph: “Cut corporate tax rates or we leave NYC. I’m just sayin’ Charlotte is lookin pretty good.”.

  2. Ben February 19, 2007 at 7:00 pm Permalink

    Cruised in from a link on kottke.org. This is a very interesting topic for me since I live in San Francisco and was just pontificating on Friday about the need to live in a super city if one wants to keep up with the ever-changing world. Having grown up in Denver I was amazed at how much my life changed and–in my opinion–improved while here in San Francisco. Sure, the real estate is very expensive and unaffordable, but most other amenities are comparable to Denver. Many people are being priced out of the area when they want to buy a condo/home. But I think the super cities are going to link (consider London, Tokyo, Shanghai, among others) and with the global economy people will be commuting on a regular frequency between the cities, so these cities will thrive on the global scale. The rich will get richer and the poor poorer, both economically and culturally. That being said, I’m still not sure when I’ll actually be able to afford a house….

  3. Timon February 19, 2007 at 9:04 pm Permalink

    I was just out this weekend looking at houses for a friend outside SF and it is really oppressive, really horrific. We are talking about paying $4000 a month for a mortgage on a modest 2-bedroom in distinctly unglamorous commuter semi-suburb, this is an obcenity. Do these culture/techno saavy professionals really not grasp the difference between paying $4000 a month for 30 years in exchange for a creaky pile vs something clean and bright for 1/3 the cost in Austin? What Kotkin leaves out of the article is Gyourko’s previous study, which showed that absent self-serving zoning rules, the cost of housing has always been a little more than the cost of construction. Imagine if houses on sale said, land: $90,000, construction: $180,000, building permit: $400,000.

    It is already the case that anyone living in expensive cities is subject to a huge effective land tax, payable to the people who showed up 30 years ago and clamped down on any change to the “character” of the places they were transforming. Is there any chance that this will become obvious to the thirty-somethings who are going to become early empty-nesters, because their childless nest costs 3 times what it would if blue-state land-use politics took notice of those currently excluded (like they do in Texas)? I know SF is pretty but it is starting to look ugly to me, like a handsome cretin or pretty bitch. My artist friends in Texas and Oregon own houses and have kids! Kindergarten teachers live well and don’t feel poor.

    I hope the Vailization process continues, and we come to be regarded by the culture at large as the suckers we are. Straining to buy a BMW is already stupid and repellent and making deep sacrifices for an NYC or SF address is no different. (And no one in SF and NYC wants you there in the first place, whereas in the %96 of America that is customarily friendly your neighbors will take an interest in you.)

  4. Sam Arbesman February 19, 2007 at 9:55 pm Permalink

    Ben: Your prediction is actually coming true. There was a BBC article from last year called Are cities the new countries? about how these super-cities are much more similar to each other than they are to the rest of their respective countries. So what you’re saying about the big cities linking is already beginning to happen.

  5. NYC-er February 20, 2007 at 9:01 am Permalink

    The point of cities as countries is serious because either you want to live surrounded by the gun-toting, ethnocentric, oppresively religious, closeminded right… or you want to live in New York.

    For most of the people I know in NY, either they live in NY or they would live in another country. Living somewhere else in the US is not an option.

  6. Mark M. Smith February 22, 2007 at 6:17 am Permalink

    I find that one of the most compelling parts of the article (aside from the obvious populism of the piece) is that it focuses almost exclusively on jobs and the middle class.

    What is really being glorified is a suburban lifestyle. A place where land is relatively cheap and where middle-class jobs are plentiful. Yet, many people who choose to live in the suburbs have already done so or have moved to cities that are more focused on their suburbs than on an urban core.

    Growing up in the suburbs of Kansas City I recently moved out to San Francisco in exactly the opposite fashion suggested by the article. Yet the reasoning for doing this is never really explored. Never is the reasoning for wanting to live in ‘superstar’ cities considered aside from viewing them as playgrounds for the wealthy.

    My claim would be that it is for the same reason that anyone has traditionally chosen to live in a major urban area as opposed to migrating out to the suburbs. While there are many, many reasons for this many of them tend to be cultural and thus are much harder to stick a figure to.

    In other words if a city is merely a place where you live so you can more easily get to your job then, yes, perhaps the ‘superstar’ cities aren’t for you and you’d be best served by moving to the suburbs or the suburbs of another, non-superstar city. If a city is a place you want to live, on the other hand, then perhaps it doesn’t make as much sense.