SCN Interview with Harvard Economist Edward Glaeser

Edward Glaeser, an economics professor at Harvard University, recently sat down with Spare Change News editor Tom Benner to discuss his myth-shattering book about cities, “Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier.”

SCN: Your book makes the case that cities make up America’s economic heartland, and that cities don’t create poor people but instead are where the poor go for economic opportunity.

EG: There are two core messages of the book, and they’re both related. The first is a policy message, which is that there is no reason why the American dream needs to mean a white picket fence in the suburbs — and since the beginning of our nation, cities have played an incredibly important part in pushing America forward and creating economic opportunity and creating social change. And our policies should stop treating them like ugly stepchildren and should start giving them the fair deal they deserve, and that means different policies towards housing and transportation and schooling.

The second major theme of the book is that we live in an age in which it is effortless to telecommute across the planet, in which we could all just choose to inhabit whatever sylvan spot appeals to our love of nature. And yet, with so many different measures, cities are more successful, more vibrant, more important than ever. We’ve just crossed that great halfway point where now 50 percent of humanity lives in cities. Within the U.S., cities are far more productive than less dense areas. The three largest metropolitan areas in the country produce 18 percent of America’s gross domestic product, while containing only 13 percent of the country’s population. And if the rest of the country saw its per capita productivity levels rise to those seen in the New York metropolitan area, our nation would become 43 percent richer.

There’s a reason why new technologies have made cities more, not less important. While those new technologies — the death of distance, the ability to transport goods over long, far amounts of space with relatively low cost, they got rid of the old manufacturing cities thing, and that’s not going to change – but these new technologies, the globalization, also increase the returns to being smart, they increase the return to new ideas, because now you can make it on the other side of the planet, because you can sell it on the other side of the planet, because we live in a more complicated world in which knowledge is more valuable than ever. Our greatest talent as a species is our ability to learn from people around us, we come out of the womb with this just remarkable ability to sop up information from the people who are close to us, from our parents, to our peers, to our siblings, even from our teachers. Cities play to that, cities enable us to get smart by allowing us to hang out with other smart people. Even though some face-to-face contact may be made obsolete by long-distance communications, the hardest, the most difficult knowledge to transmit really does need that face-to-face contact. Anyone who teaches knows it’s one thing to know your script — that’s the easy part — the harder part is to actually get your ideas across. We’ve evolved as a species over millions of years to have these tremendous cues for communicating comprehensive or confusion, and you just lose so much of that that when you’re not in the same room.

The other thing that cities thrive on is the fact that young workers who come to cities can’t plan what they’re going to learn, if they knew what they were going to learn, they wouldn’t need to learn it. In cities, just purely by accident, they get to observe people who are smart and successful, they get to observe the failures of the people around them, they get to get smart by being in the maelstrom of events. It’s no surprise that the industry that is most tied to new technology, that has in a sense the best access to long-distance communication, the software and computing industry, is also the most famous example of a geographic cluster in the world today, Silicon Valley. In fact, Google, this paragon of long-distance connection, also decides to house itself in the Googleplex, where they’re all on top of each other so they can learn from each other.

And of course, cities are also providing that, not just for the smart software designers at Google, but for everybody, and that gets to the point about cities and poverty. Cities do tend to contain a lot of poor people, but that isn’t a sign that cities are failing, it’s a sign that cities are actually succeeding, they’re attracting poor people with the promise of economic opportunity, with social services, with the ability to get around without a car. The inequality of cities is not something that cities should be ashamed of, although we should always work to try to eliminate inequality at the world level, at the nation level, but the fact that poor people choose cities is not something cities should feel poorly about, no more than suburbs should be pleased with their artificial homogeneity.

SCN: You suggest in some ways our public policy favors the suburbs. How so, and what needs to change about that.

SG: There are three things that I talk about, and two of them are easy to change, if you had the political will to do it. The most obvious is the home mortgage interest deduction, and our policies supporting homeownership. More than 85 percent of single family detached houses are owner occupied. More than 85 percent of units in buildings with three or more housing units within them are rented. There’s a very natural connection between structure type and ownership type — when you rent out a single family detached house, it tends to depreciate by about one percent per year because renters don’t necessarily take such great care of houses. And when you’ve got a whole of owners in a big tall building, you have all the chaos of a coop board meeting. So naturally, you have this connection between ownership and structure type. This means that bigger structures are more common in places where land is more valuable, which means in cities. That’s practically a defining element of cities is height and moving toward denser dwellings. Now, if you’re going to have a national policy that says we want every American to own their home, you’re basically saying it’s the job of the federal government to push people out of urban apartments and into suburban homes, and to throw forward hundreds of billions of dollars in tax support to do that, both explicitly through the home mortgage interest deduction, and also implicitly through the subsidies for Fannie Mae and Freddie Mac. There are many other reasons to rethink the home mortgage interest deduction. In the wake of great housing convulsion of the past decade, it feels like madness is that the federal government is there bribing Americans to leverage themselves to the hilt to bet on the ups and downs of the housing market. The home mortgage interest deduction is wildly regressive; the average benefit for homeowning families earning more than $250,000 is 10 times as big as the annual benefit for families earning between $40,000 and $75,000 who also own homes. That’s according to James Poterba and Todd Sinai. And of course the home mortgage deduction bribes people to build bigger houses, which typically use more energy, and how can that make sense in a world in which we should presumably be encouraging people with things like carbon taxes to use less, not more, energy. Reforming the home mortgage interest deduction, it’s not that the design is hard, you could just lower the cap from $1 million to $200,000 by $100,000 a year, year by year, you could just change it overnight. It’s not hard to figure out how to do that.

Transportation is another area where we continue to strongly subsidize suburban development. The work of Nathaniel Bowne Snow at Brown finds that each new highway that cut into an urban center reduced that city’s population by about 18 percent relative to the metropolitan area over the whole post-war period, that these highways really were a big push toward suburbanization. That shouldn’t be a surprise to anyone. Yet we still have spending formulas that are geared toward building new highways in less dense areas. The infrastructure stimulus in the recent downturn delivered more than twice as much aid to the five least dense states than the five most dense states on a per capita basis, we continue to subsidize roads in low density areas.

I don’t think the right way to deal with that is the compromise first brokered in the Transportation Act of 1973, which says we give some aid for cities to have more transit in exchange for suburbs to have (highways). The benefit to suburbs of highways is much larger than the benefit to cities of subways typically, because cities are already relatively well connected, and they’re already dense. One of the things we’ve seen on the research on new subways built in places like Atlanta is that they didn’t end up actually changing ridership patterns very much because these cities are already built around the car and they’re not having huge effects. I think by and large we’d be better just with the federal government to just get out of it, because anything that runs through with the federal government is going to end, somehow it’s all going to end up in roads in Nebraska no matter what, it’s just the way the Senate has written.

We do need transportation investments, but I see no reason why investments in transit in Greater in Boston can’t be done within the state. This is not fundamentally a cross-state issue, it’s fundamentally an issue that concerns Massachusetts residents.

The third area, which is much thornier, is the issue of education. Obviously it’s a huge bias against central cities pushing people to move out of these areas. We’ve certainly seen some very encouraging results with charter schools, but it would be a mistake to think they’re a silver bullet that’s going to fix everything. We’ve engineered a structure that provides very strong incentives for parents to leave cities in order to provide education for their kids. That doesn’t need to be — you go to London, you go to Paris, there’s none of this, this doesn’t need to be part of the way that cities work, but it’s because of the way we engineered our system of local schooling has created this. Clearly this needs to be rethought, I just wish I had an easier answer other than the long hard path of education reform to get there.

SCN: Is that a matter of political will, putting more money into urban schools, encouraging families with young children to stay in cities.

EG: It’s political will, but it also requires more of a whole set of answers. We know from the research on this that just more money doesn’t do very much, it needs to be more money intelligently spent. Whereas the home mortgage interest deduction, we don’t need more research on this, we just need political will. Whereas with schooling, it’s just a much harder problem.

SCN: Boston is supposed to have great mass transportation, yet Europeans come here and they say, no, you have lousy mass transit. What’s you’re assessment of mass transit in Boston? And what do we do with a public policy that favors pouring more into a Big Dig than the Red Line?

EG: This is a very tough sell politically. You’re right, certainly the Europeans have spent a great deal on their public transit, and they have absolutely splendid public transit systems. Subways are incredibly expensive to maintain, and it’s a very hard thing to convince suburban voters that they should be contributing to this.

Obviously we need to maintain the Red Line, we need to keep these systems looking better. But we also need to be more creative about things like providing more competition like late-night jitney service, for example. One of the things that came up when I was chairing this citizens committee for the future of Boston at the behest of City Council President Michael Ross was how important to so many particularly younger people, but also to people of less means who were commuting to their jobs early in the morning or commuting back from their jobs late at night, was the fact that the T stops at 1:00 [am]. That’s a big issue. Yet when you run the numbers … actually you can’t run the trains at night, at least according to the MBTA because of maintenance issues. If you try and run buses above, the labor costs are over $100 an hour, it just becomes extravagantly expensive. That was my estimate when I went through this. The natural way to handle this, which could be done in many circumstances, is to allow more regulated but private competition of things that are jitneys, small-scale buses that use existing routes, and that actually are encouraged to operate in a way that provides cheaper service at night. You can get bars to subsidize them in order to make sure that no one’s driving drunk. There are lots of creative ways that we can do it that are lower cost, particularly off those hours that actually treats this seriously.

In Boston, as in everywhere else, I’d like to see something of a congestion charge for driving. There’s no reason why people shouldn’t be paying for the use of city streets. You can’t just give stuff away, otherwise people will abuse it. You should be charging people for the social cost of congestion that they create by driving. That money can then used to subsidize the jitneys or, much as Ken Livingstone has done in London with his congestion charge, paying for more public transit.

SCN: We can’t see that flying through the state Legislature.

EG: Oh, no. But it’s part of the job of academic economists to say things that are not going to happen.

SCN: What could we do, either at the state level or the federal level, to increase our stock of affordable housing?

EG: The federal level is actually very difficult. My own view is that [HUD] Secretary Donovan and the people who work for him at HUD are very well-meaning people who actually would like very much to make places like Boston and New York and San Francisco more affordable by encouraging more supply of housing, they certainly will fight as hard for their vouchers as they possibly can. But it’s very, very hard for the federal government to get involved in local housing supply. They’ve tried a little around the edges, but … just the mismatch between the very micro-level at which a neighborhood makes a decision about whether or not to supply homes versus sitting at HUD’s headquarters, it’s just very hard to figure out how you engineer that in any way. I have over the years come up with a number of fairly fantastic schemes — fantastic meaning a fantasy, not meaning that they’re so great — none of which have any remote chance.

But at the state level, the basic problem is communities making it very difficult to build, particularly to build housing that would be appropriate for people with less means. This is an issue of local control, and we understand fully the local logic of why so many communities say no to new building. The state has with 40B, 40R and 40S, has taken two different approaches, one of which is basically to try and bribe localities to build a little more. I think we could do more of that nature, basically you charge the communities that are wealthy, high priced, and don’t allow any building, and then you subsidize the communities that have lower income and then provide a lot of building. This is like 40R and 40S, which have elements of this, they’re just too weak and too restrictive in terms of the types of units. And you can give bonuses for providing more housing that’s appropriate for people of less means as well. You can target this, or for more environmentally friendly housing. And then of course you’ve got 40B, which is just the end runaround. I think it’s important that we protect that as one of the pushes against NIMBYism that we have. But I think the political odds of expanding that are fairly limited.

I think the estimate is that the housing stock of Boston increased 8 percent over the last decade, which is no small reason why Boston for the first decade since the 1870s grew by more than the state of Massachusetts, added more population between 2000 and 2010 than the state of Massachusetts did. Although Bloomberg is much better at getting credit for building a lot of stuff, as a percentage, Boston did much better. It’s starting off a lower base, so it may be slightly easier. But I think Mayor Menino deserves some credit for this. I don’t think it was automatic in him 20 years ago that he was going to be a big supporter of pushing more construction, but I think he’s been quite good, and I think that needs to be acknowledged and encouraged.

SCN: In your book you tell a story about Henry David Thoreau, who famously went to the woods following his student days at Harvard, and who caused a lot of environmental damage at Walden Woods, a fact that is surprising to many who revere the author of Walden as a conservationist.

EG: The Thoreau story, I find it very compelling. Thoreau went out for a picnic on a beautiful spring day in 1844, and he went to do a little fishing and the fishing was good because there hadn’t been much rain lately and that made it easy to catch. He and his friend went and they took the fish to cook in a chowder, and the wind flicked the flames into the nearby dry grass, and the flames spread and spread, and soon there was an inferno that had wiped out more than 300 acres of prime woodland. During his own day, of course, Thoreau was castigated as an enemy of the environment. The Concord Freeman called him a flibbertigibbet, which I think was pretty bad for 1844, and indeed, I think they were right to do so, it’s hard to think of anyone who did as much damage to the environment as Thoreau did during that era. I certainly don’t know of anyone living in Boston or Cambridge who did as much harm to nature.

The odd thing, of course, is that Thoreau is now seen as the secular saint of American environmentalism, and his book Walden preaches a gospel of what a wonder it is to live around nature, whereas his own life seems to tell a completely different story. His own life seems to tell the story that we’re a very destructive species, and if you want to be good to nature, stay away from it, as indeed Thoreau would have done good for nature if instead of going out to the woods he had stayed home in Cambridge and stuck to his books instead of thinking that he needed to he cook chowder out in the (woods). I think Walden’s a very dangerous book for environmentalists, I think they should be very wary about breathing too much of the virtues of living around nature.

And I should say, I know of what I speak. It’s not just that I’ve done research on the carbon emissions associated with living in different parts of the country, the fact that single-family detached houses typically use 83 percent more electricity than urban apartments do, and even controlling for income family size, living in high density areas tends to be considerably greener because of lower levels of driving and smaller living spaces. I also know of what I speak because I’ve lived it, because I moved like many Americans when I acquired small children — you can tell I’m an economist, only an economist talks about acquiring small children — when I started to acquire small children five years ago, I also moved to a suburb not that far away from Walden Pond and started to do as almost as much damage to the environment as Thoreau did. I feel bad about it, but at least it’s good that I actually know what suburban living is like for writing about cities and suburbs.

It is important to remember that if we want to conserve energy, living close to each other is often a good way to do it. It’s particularly important in the great growing countries of India and China. Because if their carbon emission levels rise to those seen in the United States, global carbon emissions will go by 127 percent. But if they stop at the levels seen in hyper-dense but still wealthy Hong Kong, global carbon emissions will go up by only about 25 percent. So it’s those areas where the future energy use of the world is going to be dictated, and that’s where it really is important at least not to create the policies that encourage people to sprawl. The goal here is not to make anyone who wants to live in a suburb forced not to do that, but to try and get rid of the policies that artificially encourage people to do that, and to charge for the social cost of their actions, whether that’s driving on crowded city streets or emitting carbon.

TOM BENNER is editor of Spare Change News. Email him at





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