BUSINESS

Here's A New Theory On Why Cities Are Gentrifying At A Dizzying Rate

Hint: It has to do with working longer hours.
One look at this traffic jam tells you all you need to know about why people are leaving the suburbs.
One look at this traffic jam tells you all you need to know about why people are leaving the suburbs.

Imagine you start a new job. The pay is better, but the hours are longer. How do you cope? 

If you live in the suburbs, the answer might be to take the extra money you are bringing in and move closer to work. The shorter commute nearly makes up for the extra time spent in the office, and you spend about the same time at home as you did before. 

Now imagine this on a massive scale. Increasingly long hours for skilled workers are fueling gentrification in inner cities across America as the wealthy try to squeeze a little bit of leisure out of their high-stress, demanding work weeks.

That’s the crux of a theory floated by Lena Edlund, Cecilia Machado and Michaela Sviatchi in a new working paper for the National Bureau of Economic Research. This migration of monied people, they write, creates a feedback loop that leads to rents that climb higher the closer you get to the center of a city:

One of the simplest ways to control commuting is to live close to work, which for skilled workers may mean the city center. There, by definition, land is scarce and higher demand translates into higher land rents. In time, local amenities adjust, boosting the attractiveness of the locality, further fueling the gentrification process.

The data seems to back up their theory. For example, the authors write that “between 2000 and 2010, Manhattan and Brooklyn poverty rates declined by 10 percent, but rose on Staten Island (the most suburban of New York City’s five boroughs). While more notable recently, poverty has been rising faster in suburbs than cities since the 1980s.” It should be noted that Staten Island has no quick connections into Manhattan, where most people in the New York City area work. It connects only by a 30-minute ferry ride, or a long drive that involves at least two bridges.

It’s not just about the lengthening work week. The authors think women’s increasing emphasis on career is also a factor. In the 1950s and 1960s, when a man with a good job probably had a wife at home with the kids, the commute to the suburbs wasn’t such a big deal. If dad had to stay late at work, or wanted to stay in the city for a drink after work, mom would be home with the kids. These days, it’s more likely that both parents are at work, which makes it more important that home is close to work. 

The authors also found that skilled workers are more likely to work in the central business district of a city, while “unskilled jobs, on the other hand, are more dispersed and increasingly so.” The poor, displaced by increasing rents, are moving to the suburbs. Some are finding jobs there, others are forced to deal with the commutes that the rich have rejected.

This is primarily a story about time: Skilled workers, somewhat paradoxically, are working more than their unskilled counterparts. So gentrification becomes about moving to try to maximize the leisure time they have in the fraction of their lives that isn’t spent sitting at a desk.

But this is also a story about transportation and density, two things that American cities are notoriously poor at managing. If we built higher, more people could live closer to work for cheaper (empty foreign real estate purchases in New York aside). Similarly, if there were better public transportation from the city peripheries, there would be less need for the wealthy to crowd into the city centers.

The authors suggest this might be why Japan and South Korea, despite having a lot of the same working conditions, haven’t seen a lot of urban gentrification. 

Then again, maybe the key to stemming gentrification is just for everyone to agree to work less. 

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