- June 13, 2023
- Economic Mobility
At our spring 2023 Project on Municipal Innovation event the world-renowned economist, author, and Harvard professor Edward Glaeser spoke to chiefs of staff and deputy mayors of 30 of the largest US cities about the history of cities and pandemics, the economic successes and failures of cities through a data-based analysis, and the trends that should guide current downtown recovery plans. Today we're releasing the transcript of that speech with a bonus Q&A session. Listen to Glaeser answer questions relayed from selected cities in this exclusive episode, at the end of his lecture below. His talk has been lightly edited for clarity.
I often think the best economic development strategy can be summed up as: attract and train smart people and then get out of their way, right? In fact, that's fundamentally what it's all about now, it’s not Laissez Faire by any stretch of the imagination; attracting smart people requires safety, it requires decent schools, it requires all the things that local governments are fundamentally responsible for delivering. And it's what all of you think about in terms of your daily lives. And that's why I'm so grateful to have a chance to talk to you today.
Whenever I gave a talk, let's say prior to 2019, there would always be a fair amount of emphasis on just how powerful urban economies are. At their heart cities are density proximity, close cities are the absence of physical space between people. So, we as Americans at the start of the 19th century, we're leaving the dense enclaves on the eastern seaboard to populate across the country; at the start of the 21st century, instead of spreading out, we were clustering it. Now our counterpart of this is the rise of prices in dense areas. From 2006 to 2012, from before the boom to after the bust, pretty much all of the real price growth in America metropolitan areas was in the densest bit of those metropolitan areas. And in fact, the low-density parts of America had basically no real price growth over this entire time period.
This is partially the demand for places likely to work as places of productivity. But in many places, price growth was a lot faster than why it grew. And that reflects both the restraints on supplies and the fact that we've made it too hard to build housing, but also the demand for cities as places of pleasure, as well as places of earning, right? It's what Dr. Johnson, the famous author of the dictionary, was talking about in London in the 18th century when he said that “if a man is tired of London, he's tired of life, because there is in London all that the man can enjoy.” You know, there are great joys associated with being in a city. And in fact, prior to the COVID pandemic, I would have said that America's largest unsolved social problem is the rise of prime age joblessness. You know, when I was born in 1967, 1 in 20 prime age men were jobless. For most of the last 15 years, more than 15% of primary age men have had no jobs.
And this is not a spatially neutral phenomenon, right? It's one that is overwhelmingly not in the high-density parts of America, but in the low-density parts of America - overwhelmingly in America's eastern Heartland, a great swath of territory that starts down in Louisiana and Mississippi runs up through Appalachia and ends up in the cities of the Rust Belt.
You could see in the far West, right? There are basically very low levels of joblessness in Seattle, but all around it in the lower density parts, there’s enormously high levels and the point about joblessness is that it's much worse than earning a small amount of money, right? Every one of our measures be it, you know, suicide, be it family dissolution, be it opioid use, right? Joblessness is a terrible outcome. And it's largely because having a job isn't just about earning, it's about social connection. It's about a sense of social purpose.
And so this rise of joblessness struck me as something that was easy for cities to solve because in a place whether it's Seattle or Boston or San Diego, right, there would be jobs in the great urban service economies for people who didn't have advanced degrees from Stanford and MIT. But what were they going to do in West Virginia? What were they going to do in Kentucky?
But, all of this positive view of cities then ran into this…we have had well described urban plagues for about 2400 years since the plague have happened in 430 BCE. Cities are vulnerable to disease for two reasons. One, they are the nodes on our global lads of travel and trade. They are the course of venture for goods, for people, for ideas and for viruses, right? Two, their proximity enables the disease to spread closely. And so it was in Athens in 430 when, perhaps over a two year period, one quarter of the city's population died. That would be a death rate of 100 times that we experienced from COVID-19. One of the two fathers of history who lived in Athens in that time period describes a city that has gone amuck, in which people live only for the day because they do not expect to live to see tomorrow. Now, Athens survives, and soldiers on in this war for another 25 years. But in some sense, it glory is dimmed forever. It recedes from being perhaps the New York City of the Mediterranean to being, I don’t know, the Philadelphia, to being the New Haven perhaps.
Now for most of the past 650 years, our cities have been much less vulnerable to plague. And in the early 19th century, this was a period of early globalization. It was also a period of pandemic, and it was a period in which cities emerged at a hinge in history in which all of a sudden governments stopped just killing people - because don't fool yourself prior to 1800 that's pretty much what all governments do did. Then all of a sudden started in the 1800s, city governments started saving people's lives, right? And these were your ancestors, your intellectual, municipal ancestors 200 years ago.
The early plagues death rates in New York - over the past 200 years, early 19th centuries, yellow fever, a mosquito borne illness, emerges out of Africa across the Caribbean and then after the east seaboard…and then it gets to cholera, which emergers in a particularly brutal form in the Ganges Delta, gets carried over land, the British Army carried it over land and it makes its way eventually in 1832 to New York; these death rates are more like 10 times COVID-19, not 100. But they're still pretty severe.
Cities continue to grow despite these plagues partially because in an age of poverty, the economic allure of the city was so strong, but partially because cities struck back, they struck back because ordinary people got together and organized alliances to provide vital urban infrastructure. In 1842 the Croton aqueduct being opened. Sewers and aqueducts were in some sense, the great act of the 19th century, more important in some sense than the railroads spanning the country, was the fact that we figured out how to make cities livable.
This required an enormous amount of spending; America's cities and towns were spending as much on water in 1900 as our national government was spending on everything except for the post office and the army. It was an enormous undertaking. And it actually was not because we got the science right because we got the science wrong in early the early 1800s. There were two schools of thought on disease, one emphasized contagion, which happened to be medically correct - although it emphasized person to person as opposed to going through the water, going through the mosquitoes. The other emphasized miasma, which is now the idea that the disease came up right from the area infected. But the miasma theory said, “the way you fight disease is you drain swamps, you get the water from somewhere else, you create a sort of healthy environment in the city.” It turned out they didn't understand that the important part was getting rid of mosquitoes, but they still got rid of mosquitoes that way.
And in fact, cities started getting healthy. Now, it wasn't just about the infrastructure. In 1842 New York continues to have cholera epidemics for another 25 years. In fact, my great, great, great, great, great grandfather died in that one in 1849 New York. The reason for that was the last mile. It is exactly the same thing that we see in sub-Saharan Africa today where people walk to water. You build an aqueduct, actually put in a few 1000 hydrants providing free water for poor people, but water is hard to carry and connecting to that system within your own home was expensive. And so poor people continued, as they do now in sub-Saharan Africa to use their shallow wells. And it wasn't until the Board of Health was found in 1866, Dr. Stephen Smith was the sort of urban entrepreneur who put this together, New York starting to get healthy. And that was precisely because they imposed fines on tenement owners who did not connect to the water.
This combination proved incredibly potent; death rates declined. We have had most of the century pandemic free in this country and then all of a sudden, we have May 2020 when the pandemic looked very, very urban. That's because of the ports of venture New York, Boston, Atlanta, New Orleans Detroit, right? Cities bear the price of the disease coming first. And in those early days, it seemed as if low-density living was a source of protection; of course, by November, it was North Dakota with the hot spot. An airborne illness as opposed to a waterborne illness really can go anywhere. And indeed, so it was with COVID-19.
Indeed, ultra-high density living does not appear to be associated with it in the US although it was so in India. Manhattan, Brooklyn Heights - those are in some sense, the densest and the tallest parts of the city. But it's the outer boroughs, it's Staten Island, in the suburban field that had the most of those things in these early months.
Why did this happen? Mobility, right - the share of people leaving their homes, according to data on cellular phones, the people in Manhattan and Brooklyn Heights didn't move, the people in the outer areas did move. In those early days, a 10% reduction in trips was associated with a 20% reduction in the illness. Now, no, but this was before masks or vaccines or any of the things that we have now. Staying put was the clearest way of staying safe. Now, why was there this difference? Was it because people in the outer boroughs were uninformed or you know, lying to the health commissioners?
Not at all: they were poor, they worked in essential jobs, they actually didn't have the privilege of, you know, doing their Wall Street job sitting at home. And this is really a critical fact about working from home. This is a very elite phenomenon, right? And those people who think the future of America involves working from home and telecommuting? They're living in a bubble of highly educated people around themselves.
So in May 2020 which is the average rate of working from home, 68.9% of Americans with advanced degrees, working from home; 5% of high school dropouts, working from home; 15% of Americans who only had a high school diploma working from home. And that partially explains the relationship between total mortality and COVID and the share of the population of the college group. This is incredibly tight relationship, and the differences are enormous. There's a fourfold difference between San Francisco and Las Vegas or Oklahoma. Enormous difference in Seattle, I was just informed, they lost more people from fentanyl than they have from COVID.
And there are some places that are unusual. So, New York, perhaps because of its density because perhaps because it was early, had more deaths than its education would suggest, as did Boston although on a much lower scale. And some places, Sacramento, Salt Lake, Portland and Seattle actually had lower deaths than their education levels would suggest. Now, the emergence of the disease also impacts urban economies in ways that we are still sorting our way through.
Over the past 650 years, our economies have evolved in ways in which a pandemic’s effect on the economic effect is very, very different. If you go back to 1350 the Black Death that killed perhaps a third of Europeans was not a negative economic event. It was a horrific human event, right? But in a subsistence, agricultural economy, if one third of the people die, the amount of land left over is huge - and wealth is determined by the land per capita.
So after the Black Death, there was an enormous rise in wages just because there was so much land, so much demand for labor relative to the number of people who were living. And there are those who argue that the wealth that was occasioned by this set off the demand for urban luxury goods, that actually gave us the Renaissance in the 15th century, war in 1919, and the influenza pandemic.
That is the age of the factory, right? Those factories were impacted by the influenza pandemic, they shut down temporarily. But the fundamental demand for their products didn't change. People still wanted cards and sofas and ice boxes during that pandemic just as they did during COVID-19. And so the factories bounced back, but fast forward 100 years, factories are gone. Jobs been outsourced, jobs been automated, right? And for less educated Americans, the ability to serve a latte with a smile is an employment safe haven. But in our modern era, when those smiles turn into a source of peril, rather than a source of pleasure, the whole economic model is destructive. And indeed, it was in large parts of America.
Now, it turned out when I first wrote the book that we were writing in the early days of the pandemic, I thought that the main thing would be to sort of lack of demand. What I didn't understand was that our federal government would engage $4 trillion worth of stimulus spending. Which means in fact, far from seeing lack of demand and collapse of wages, wages in leisure, hospitality have gone through the roof because you actually have to show up. And because all of the economic dislocation was cushioned, at least temporarily by this massive river of federal money.
Nonetheless, for all of us who think about cities, we're still facing the enormous dislocation in the fact that our offices are still empty. This is because of technologies; data from key fobs and other entry technologies shows the share of people going to relatively fancy offices in a number of big cities. These numbers are about, you know, 50% down from pre pandemic and they are still, this is as of March 6th of this year, they're still 50% down. Astounding things going on. These numbers are smaller, this comes from Google mobility (maps) so this is going to be a more representative sample, but you know, New York as of October 2022 when Google stopped reporting the numbers, New York is still down 40%. Houston is off 23%. And the other three cities I have here, Chicago, Phoenix, and L A, somewhere around 30%. So it's still a big decline but perhaps not as extreme.
In general, the demand for recreation and retail is has also dropped. It's dropped by less, between 10 and 20%, so cities as playgrounds seem to survive a little bit better than cities as office parks.
This is what happened to urban populations. New York dropped 300,000. San Francisco dropped 54,000. Chicago dropped 45,000. The current population survey asks what share of Americans are working primarily from home? And that gives you a national representative example of someone giving to these cities. That number for 2021 was only 18%. So this working from home is not a national phenomenon as much as it is a phenomenon that is associated with our largest and densest urban areas.
Now, as people wonder about whether or not Zoom will make cities offices obsolete, I'm reminded of the fact that there's a long dance between technology and cities. In fact, I wrote my first paper on whether or not electronic interactions will make face to face interactions, and the cities that enable us to have these interactions, obsolete - in 1994.
So it’s 30 years that I've been thinking about this theme. And I was responding, to a certain extent to the futurist Alvin Toffler, who had been living through a great centrifugal age. If you think about much of the 20th century, it's the age of the automobile, the radio, the television, in which technologies were centrifugal. They pushed us away compared to the aqueduct, which is a great central technology, a technology like the skyscraper, like the elevator, like the steam engine that enabled urban growth.
But the 20th century was a period where people left that cities to move to suburbs, at least through most of it. This was related to the massive decline in the cost of moving goods. So more than a 90% decline in the cost of moving one ton a mile by rail. And cities had formed around transportation technology, every one of the 20 largest cities in America in 1900 was on major water, right? They were built up by rail and as transportation costs plummeted Americans moved, they moved from places that were productive because they were close to coal mines opposed to harbors to places where people wanted to live, which partially explains why.
The variable that best explains metropolitan area growth over the last 100 years is January temperature. Right now, there are many things that are built together one of which is, in fact, the warmer parts of America have been generally more pro-business since 1947 and much more likely to have right to right to work laws. And the work of Tom Holmes compares counties that are on pro union versus pro management side of state lines, huge growth in industry on the pro management side of those lines, right? It also in the fact that it’s much easier to manage to cool a house. Dallas Houston, Phoenix, each added a million people a year over the last two decades. Let's face it: some part of this is that Americans just don't like cold weather. And I will say someone who's lived in Boston for 30 years. A terrible lack of character.
This is what happened to the populations of the 10 largest cities in the US. And these are cities not metropolitan areas, only two of them gained population, New York kind of amazingly and LA. All the rest are small, Cleveland Detroit, Saint Louis, massively small shadows of their former self. And, you know, we often followed a foolish sort of infrastructure led view. So Detroit built itself a People Mover which glides over essentially empty streets. And this is utter madness – what Detroit needed was good schools and safe streets for children. What it did not need was extra transportation infrastructure.
But when this city was built for 1.5 million people, and it's less than half then you could send a bus at whatever speed you want down these roads, you can get there because you do not need a monorail. Toffler, in New York in the 1980s, in the wake of the fact that cheap transportation had killed off urban industries like the garment industry in New York. America's largest industrial cluster in the 1950s was not automobile production in Detroit, it was garments in New York City, slaughtered by globalization over a short number of years.
And so to Toffler it occurred that these forms of high technology would make urban offices obsolete, right? We would just go home to electronic colleges as he called them and just dial in - like he was envisioning Zoom in 1980! Now, before the 90s and 2020s right to first prediction had been enormously wrong for 40 years. For 40 years, new technologies did not make cities obsolete. They in fact seem to be making cities stronger.
This is the Wallace Office at Mike Bloomberg's City Hall, which is based on the Wallace office Bloomberg LP, which is based on Solomon Brothers trading floor. And in some sense, this sort of thing, what's going on in these, these trading floors or these Wallace offices, in some sense, it tells us what's going on in the city. So trading, for us, are kind of entities that are filled with really rich people when in a normal industry they would live like university deans, right? They'd have huge desks, lots of executive assistant to protect them - instead they're on top of each other, they're sweating on each other, they're yelling at each other. Why? What's going on? Why are they there?
Because in their industry, knowledge is incredibly valuable, knowledge is much more valuable than space when you're trading securities. Because you can make billions overnight and you just know a little bit more these things are there because of the value of knowledge. And that's exactly what's happened over the last 40 years, is that globalization and technological change have radically increased the returns to being smart, they've radically increased the returns to innovation, and we are social species that get smart by being around other smart people. That is why cities like Seattle, or San Francisco or Boston came back, right? And that is why the most dynamic parts of the country are actually the places that combine sunshine and skills like in Texas.
This is, you know, if you thought that technology was making face to face contact obsolete, then why, you know, why did Google buy the Googleplex? Why was Silicon Valley the most famous example of a geographic cluster in the world if being next to people was so irrelevant, right? It's easy to forget now. But in 1971 two jokers put up a billboard on the highway leaving Seattle to asking the last person to leave the city to “please turn out the lights” because just as no one could imagine Detroit without General Motors, no one could imagine Seattle with Amazon, Costco, Microsoft, before Starbucks. Seattle came back wonderfully because it had skills, it had the skills that enabled innovation and that attracted innovators, right?
Boston as well, Kendall Square, right? Incredibly reinventing itself. The picture by Rembrandt, the Anatomy Lesson of Doctor Tulp sort of highlights what cities do well, which is they enable us to cluster around each other and to learn from one another. Human capital does tend to be destined. A shared population with a college degree and per capita GDP, it's a very strong relationship. It's not just the fact that, that your skills make you more productive. It's about the fact that your skills make your neighbors more productive.
It is about what economists call human capital externalities. Typically, some wages go up by 10% as the share of adults in the metropolitan area goes up by 10% holding their years of schooling constant. Because having smart people around you teach us these things enables you to buy them, enables you to sell to them, maybe they'll give you a job.The relationship between share of the population with a college degree in 2000 subsequent employment growth across counties; again, skills are dense, attract and train smart people get out of their way. Of course, it's not just about the skills that we teach in schools, right? It's about the skills that are learned on a city street, that are learned at the at the breakfast table, over coffee cup.
In the late 19th century, the Englishman Alfred Marshall talked about how intense clusters, the mysteries of the trade become a mystery but are as work in the air. Now, I can't think of any mystery that is more important than the talent and the inclination to become, as this phrase is brought to you by the Calvin Foundation, the “in” to become an entrepreneur, right? Because in fact, entrepreneurial human capital is in some sense, the most protective thing that cities can have. 60 years ago, the economist Benjamin Chin was comparing New York and Pittsburgh and noting that New York was more resilient. He argued that there was, even then, this legacy of the industrial history of New York, which had favored the garment industry, an industry where there were no barriers to entry, and weak returns to scale. And anyone with a good idea and a couple of sewing machines could get started and those who began selling pants went on to found movie studios, went on to build skyscrapers, went on to build banks, right? Because entrepreneurial human capital is fungible. If you're good at looking for opportunities in one industry, you're good at for opportunities in another industry.
By contrast, Pittsburgh had steel mines and coal mines, those mines led to a mighty steel industry and that steel industry hired company men, those guys were great at solving logistics problems in the short run, they were terrible at rebooting the city when steel faltered, right? And so, this industrial legacy explains the presence of different forms of human capital. It was that entrepreneurial human capital in New York that was so protective, it’s remarkable. Given how mediocre our measures of entrepreneurship are, they’re powerful in terms of predicting urban resilience.
And so, when you think about your life, your city, focus much more on creating an ecosystem that enables new entrepreneurs first than about landing the whale and about getting Amazon to show up, right? It's really about the sort of long-run ability of your city to create new ideas over and over again.
Now, what do we know about working from home during the pandemic? There are a couple of studies that have looked at call center workers and they found remarkably the same thing; the first classic study by Nick Bloom in 2014 who looked at Chinese call center workers, Natalia Emmanuel and Emma Harrington, looked at US call center workers for a large retailer. They both find exactly the same thing - and many of you may have experienced this in your own life. When you send the call center workers home, they are just as productive at making calls. They're able to do an old task just as well. They are also less than 50% as likely to be promoted. Both studies found exactly the same thing.
Now, what explains that? Well, why do you get promoted as a call center worker, you get promoted when your boss thinks you're good at handling difficult calls. How do you learn to handle difficult calls if you're all by yourself? How would your boss learn that you are any good at handling difficult calls if you're by yourself? That learning channel, the information channel gets shut down.
Looking at all the collaboration of Microsoft, in our results show that firm-wide remote work caused the collaboration network of workers to become more static and siloed with fewer bridges between disparate parts. Furthermore, there was a decrease in synchrony communication and increase in asynchronous communication together. These effects may make it harder for employees to acquire and share new information across the network. The links broke apart, the links between unusual people broke apart all of those things that lead to random events that enable us to learn broke apart.
Third fact, jobs that have to be done live and jobs that can be done remotely; live jobs drop in employment. Firms were not willing to onboard workers who would only be remote. So, for example, even though Microsoft told us their programmers were just as productive, online postings for programmers were down 42% between the beginning of 2020 and the end of 2020. They were not willing to sacrifice the learning challenge that happens when you're when you're live.
Fourth fact, we now have a voluminous literature on online learning in K through 12, right? Learning online is somewhere between catastrophic and utterly disastrous, right? It does nothing. Essentially, it's a complete waste of time. We learn when we are in person and are in an economy in which knowledge is the most important currency. Face-to-face contact will come back.
Now, if you wanted me to predict, I tend to think that in fact - and this matters for all of us, that Zoom does matter for all of you, right? It doesn't mean that people will give up on face-to-face interaction, but it doesn't mean that they are more mobile than ever. And for some of you, that's a blessing because it means that you can attract talent that you previously were frozen out, but for others of you it's a curse because you thought you had skilled people locked in and now, you know what they don't need to meet live anymore, hey do need to go the office together.
They're not actually going to all, you know, all just go home to their mom's basements and live there forever. They are back for play, but they may well decide “well, I don't need to be in Seattle, I don't need to be in San Diego. I can go to Austin, Texas and not pay state taxes. I can go to Honolulu and surf all the time. I can go to, you know, Vail, and take up skiing.” All of these options are open. So, cities face the need to compete for talent. It's only gotten worse, right?
In some sense, it feels to me like a replay of the 1970s when you had a collision of greater mobility that was created by, you know, suburbs, by highways, by container ships. And that collided with cities that faced a very understandable, progressive, urge to write longstanding wrongs. And that collision meant that the rich people, when cities tried to do this? They just fled. And this is what led inexorably towards New York's new bankruptcy, which is a searing sort of event in my youth. And in some sense the progressive urges to sort of fix existing wrongs in cities, are completely understandable because they're talking about real things.
I'm just going to talk about a couple about a couple of them, one of which is cities are really about productivity but not necessarily upper mobility. And we now have a body of evidence that suggests that sort of kids who grow up in dense areas really have fared much worse than kids outside of them. Successful cities are becoming permanently unaffordable, there is deep unhappiness, of course, about policing and incarceration and this anger over urban inequities collides with enhanced mobility.
So, density and productivity and upper mobility across metropolitan areas. This comes from the work of Raj Chetty and his Opportunity Atlas. He looked at a generation born between 1978 and 1983 and asked, “where do people who are born poorer than 75% of Americans and richer than 25% end up in the adult income distribution 30 years later?” They get poorer, and this is particularly about going to an inner-city school. There is a jump up in mobility average across America when you are right outside the big city school district as opposed to right inside that big city school district. Also your probability of being incarcerated as an adult inside that district versus right outside. Our schools are fundamentally failing. Our big city schools are fundamentally failing our kids.
America's lack of affordability is really about failure to supply housing. Places that build a lot aren't expensive and the places that are expensive don't build a lot. There's no reversing the laws of supply and demand. Unless you make it relatively easy to mass-produce housing for ordinary Americans, you risk creating a boutique town that is affordable only to the wealthy and the shocking thing is these are places that are more [economically] mobile, those places that are less [economically] mobile; this is how restricted their land use restrictions are according to the Wharton land use survey, right? The places that are best for enabling upward mobility for kids have made it hardest to build homes. That's exactly what educated people managed to do. They managed to come in and figure out how to make it impossible to change their own neighborhood.
The rise in mass incarceration; you know, I happen to believe that the increasing safety of our cities and remember New York for whatever it's going through now, still has a murder rate that's 1/6 of what it was when I was a kid. It's a massive difference but it happened partially through mass incarceration, and it happened occasionally with brutal tactics and policing.
Right now, we actually need police and we actually do need prisons. The original three strikes rule came out of Seattle as you may well know. Ida Ballasiotes led the ‘three strikes and you're out movement’ and dhe led it because her daughter Diane Ballasiotes had been killed by a sexual criminal who should never been on the streets. And she was clearly right that that person should be locked up.
But a society that cannot distinguish between a three-time rapist and a three-time pot dealer, is not remotely sensible and we need to be able to have a police system which both protects our children and protects our children from the police themselves. And indeed, when you think about, just on the policing side, we really do want all of our police to do two things, right? We want them to both, you know, ensure that people can walk home in safety, and we want to ensure that everyone is treated with respect and dignity by the police, right? Those two things are required.
We don't actually get two things from the cops, instead of one, by defunding them. We actually have to pay more if we expect more from our police and we have to couple that with stronger incentives for police to deliver both dignity and safety because both of them are necessary.
Ok, last thing I'm going to do measuring urban winners and losers, on four outcomes. I'm going to take changes in earnings, employment changes in home, housing permits, and changes in prices. We're just going to rank it to show you a couple of facts. The past three years, 2019 to 2021 so during the pandemic period, much of the past three years kind of looks like the past 50 years on steroids. Austin wins enormous price growth, hard to imagine that the price growth is sustainable. Large growth, 5% increase in employment over this time period, massive increase in the number of housing permits, robust wage growth.
Phoenix is number two on this list. 17 out of the 25 on this list are in the Sun Belt. There are a couple of midwestern cities that are doing pretty well there. One you'll notice there at 23, [Indianapolis] that a place that is still riding on the legacy of Steven Goldsmith, right?
There is one exception which does not belong on the top 25 list at all, which is Philadelphia. You'll notice Philadelphia looks very good, much lower housing price growth, much lower employment growth. But what a change in housing permits! This is because of a tax benefit which was associated with getting your permits right on the date. These homes are actually not being built, but the permits were filed in order to leave the tax benefit. So you probably don't want to cap Philadelphia in that.
Here's the bottom. You know, Boston ended up just three below the lowest by very high wage growth, for example. But very few of these places have the same kind of increases in housing permits. Now, I think Houston does have some real relationship were they overbuilt offices prior to COVID-19, which gives it a challenge but Houston continues to look like a normal place - prices don't go through the roof because it's really easy to master housing in Houston. Houston is permitting like a gazillion units before COVID and it's permitting a gazillion units after COVID.
But the really unusual thing is cities number 47, 48, and 49; Chicago, Washington, New York. For most of the past 50 years, the group said they're doing much better than their temperature, or their location would suggest, right? Their size is protected. The opposite is true over the past three years. In fact, large size, large office markets which were dynamic and successful priors 2020 have been cursed during this time period.
I was just end by saying, look, this is a thing, this is hard for big cities, and it's been hard all over the past few years. But cities have been much worse, and they have proven to a great deal. So, I was just asked by a reporter yesterday, how do I compare this to the 1970s in New York City? I think it's nothing like it. I think it's much smaller than the 1970s, that was an existential threat to every industrial city and some got moved and some, quite honestly, like Cleveland or Detroit or Saint Louis really haven't survived them in any way that resembles what they once were, but cities will survive this thing and they will thrive again and again.
