Somewhere in Amazon's request for proposals to become the home of its second North American headquarters (HQ2) there should be a disclaimer warning prospective applicants to be careful about what they wish for. Because becoming a hub for techie hipsters will pretty much ruin your city for everyone but the creative class that only mingles among itself.
Seattle, where Amazon was founded in 1994, used to be a diverse resource, shipping and manufacturing hub where Boeing plant employees helped form a stable middle-class of city dwellers. Today, it's a haven for hipsters, full of tattoo parlours, organic food stores and Starbucks. What it's gained in well-paid young tech talent, it's lost in socioeconomic and racial diversity. As a recent piece in Le Monde Diplomatique notes, it's even more white and male than the supposedly backward cities of the rust belt.
The paradox of creative cities such as Seattle, San Francisco or Toronto is that, in proclaiming to embrace diversity, they actually attract less of it. If you're looking to hang out with well-educated macchiato aficionados with disposable income who support transgender rights, Justin Trudeau and Bernie Sanders, they're the place to be. But they tend to displace middle-class families and the low-wage workers and immigrants who came before them. They're forced to flee to the periphery, making for long commutes to their jobs servicing the creative class.
In Toronto, the middle class lives more and more in far-flung exurbs such as Durham region, leaving the city increasingly polarized between the creative-class-dominated neighbourhoods in the centre and low-income, largely immigrant, communities in the inner suburbs. According to a new United Way study, income inequality more than doubled between 1970 and 2015 in the city of Toronto as middle-class neighbourhoods vanished. The city is now polarized between high-income central neighbourhoods where tech, financial, media and other creative-class professionals live, and poor ones in the inner burbs where folks earn below-average incomes.
It's no coincidence that, wherever the creative class congregates, you'll find a housing affordability crisis. That's in part because the creative class wields its political power to implement zoning restrictions that drive up the cost of housing. Greenbelt policies adopted by creative-class-led governments further choke off the overall supply of single-family dwellings.
Urban guru Richard Florida of the Martin Prosperity Institute at the University of Toronto, who gained fame and fortune by counselling growth-hungry cities to make themselves attractive to creative-class types, now recognizes the zoning policies they favour as one of the downsides of the urban revolution he helped engender. "Overly restrictive land-use laws not only drive NIMBYism, but also contribute to a damaging form of New Urban Luddism," Prof. Florida recently wrote. "This makes housing less affordable and holds back the very clustering that drives innovation, productivity and growth."
Not long ago, Prof. Florida was encouraging cities to fight the NIMBYism that was driving up housing prices and rents. Now, he warns that rolling back restrictive land-use and zoning policies risks exacerbating what he calls "winner-take-all urbanism" by making creative-class cities even stronger magnets for the "technology, talent and tolerance" set. His change of heart is based on a recent National Bureau of Economic Research study that tracked zoning restrictions over time.
"Deregulation would bring substantial geographic consequences," Prof. Florida explains. While insisting he is "not advocating keeping these onerous land-use restrictions," he concedes that lifting them "would make the superstar economies of California and New York … even stronger, [but] it would draw people and jobs away from the Rust Belt, worsening the already bad economic situation in those states."
Applied to Canada, his hypothesis would likely mean an even worse decline of Southwestern Ontario cities and other stagnating urban regions as the Greater Toronto Area draws in more and more aspiring creative-class types who can't currently afford to live there.
So, not only has the creative class increased income polarization within urban regions, it has intensified the geographical inequality that separates San Francisco and Toronto from Detroit and Windsor, Ont. And restrictive land-use and zoning policies may be all that's keeping this "winner-take-all urbanism" from getting even worse.
An exception to this trend can still be found in Texas. Dallas, Houston and Austin have lured thousands of creative-class entrepreneurs from California with low taxes, while permissive zoning has kept housing affordable for the middle class.
This week, the Wall Street Journal named Dallas as the top U.S. contender for HQ2 based on Amazon's own selection criteria.
It's not clear its current residents should be all that thrilled about it.