Expensive cities kill creativity

 

Expensive cities versus St LouisSarah Kendzior’s latest article for Al Jazeera English dovetails perfectly with the launch of Transition Economics 2014, and explains why so many rebels are now found outside of the large, expensive cities known for “creativity.”

Creativity – as an expression of originality, experimentation, innovation – is not a viable product. It has been priced out into irrelevance – both by the professionalisation of the industries that claim it, and the soaring cost of entry to those professions.

The “creative class” is a frozen archetype – one that does not boost the economy of global cities, as urban studies theorist Richard Florida argues, but is a product of their takeover by elites. The creative class plays by the rules of the rich, because those are the only rules left. Adaptation is a form of survival. But adaptation is a form of abandonment as well.

I can tell you from personal experience, you can afford to be a rebel with much greater ease without the expense of a huge neoliberal city breathing down your neck each month. You can start your own business, buck the conventional wisdom, open a restaurant or do just about anything when you do not need to keep an absurd level of cash flowing every single second.

I do not always like St Louis, where I now reside. It’s hotter than hell in the summers. Many of the locals are insular, persisting in asking where you went to high school. Nothing cosmopolitan is a short drive away. The income inequality is similar to Brazil. But since everything in life is a tradeoff, what are the upsides?

Principally, my wife wanted to return to her hometown to be closer to family while we had children, but we both wanted to escape the crushing cost of living in Washington DC. After the bubble burst in 2008, we learned quickly that so much of the economy was to be run from a central point in Washington that costs were going to get, inexplicably, even more punishing. By way of context: My wife is a physician and I do my thing; we have resources. We wanted a house in a prosperous neighborhood, to send our kids to a high-quality daycare and eventually to have access to good public schools. So we did the math to compare the two cities.

Cost of living in Washington DC

Two bedroom apartments in downtown DC are regularly around $4000 per month though they can easily be higher.

Private schools, which would be required in most parts of DC if one is to avoid the tragedy of the public school system, cost around $30,000 per child per year. If you want to go to school with Sasha and Malia, it’s more like $40,000 per year. (Note: If this makes it sound like Washington is actually two separate cities, good. You get the picture.)

Here is a free-standing home outside of DC with access to Bethesda, Maryland public schools. They are selling it for $769,000. To get into it, you need to come to the table with around $125,000 in cash, and even then your monthly payment would be in the ballpark of $3600 a month. This was one of the cheapest listings in the neighborhood; most of the other listings were between $1.5 and $2.25 million.

Between houses, cars, taxes, food, general expenses and a bit left over for savings, you’re looking at hundreds of thousands a year, every year, without fail, forever.

Cost of living in St Louis

st-louis-art-museumIn St Louis, you can get situated in a nice house in a nice neighborhood for around $300,000 with access to good public schools. The other costs here are minimal. Parking is $1 an hour. Taxes are reasonable. Utilities are negligable. Traffic is light. Cars last a long time in the climate. Food is fantastic and very inexpensive by comparison, even in great restaurants. A $20 bar tab in St Louis is enough to make you too drunk to drive home, as opposed to the cost of one cocktail plus tax and tip.

I can’t drive to the French Embassy. If I want to lobby Congress, I have to get on a plane. I can’t hang out with diplomats all day long. That kind of thing is only possible in DC – and I miss it terribly.

But I can do almost anything else. And once in a while, I can afford to do nothing and go to the free art museum with my kids for the day, just because I feel like it. And that’s priceless.

 
  • nixonmonica

    I feel the same way Eric. I think the trend is going to continue to be a massive exodus from these urban supposed hubs of innovation because the cost of living continues to skyrocket while wages continue to decline.

    • http://www.ericgarland.co/ Eric Garland

      That and the leadership in those places obviously sucks.

      • nixonmonica

        Leadership? Fuck you mean the 25 yr olds trying to run companies today who think they understand marketing and strategy because they can create a FB page?

        • http://www.ericgarland.co/ Eric Garland

          I mean the guys who kept the banks huge, as well as the techie douchenozzles who refer to the poor and sick as human trash.

          http://valleywag.gawker.com/happy-holidays-startup-ceo-complains-sf-is-full-of-hum-1481067192

          • nixonmonica

            All fucktards yes.

          • http://www.ericgarland.co/ Eric Garland

            You’re spicy today even by Monica standards.

          • nixonmonica

            Yes and thats saying something isn’t it? The whole thing is ludicrous. So, if one wants to work these days they have to pack up and move to SF and live in a $3500 a month one bedroom apt the size of my walk in closet or have 3 HB1 Visa room mates like we did back in our 20s because we are supposed to go back to the wages we made fresh outta college if even that….oh yes that sounds just bloody brilliant.

    • SLB

      Those that found opportunity within the cities will be pushed out to the now cheaper suburbs by the increased cost of living in the now exciting and walkable (read: able to pull in tourists/entertainment seeker) cities. New wrinkles in the same old land hoarding, slum lording, gentrification. and crazy over-development blues.

  • Maria Granovsky

    Love this post, Eric! And feel it acutely as a NYC resident. Just one question: In this sentence: “In St Louis, you can get situated in a nice house in a nice neighborhood for around $300,000 per year with access to good public schools. The other costs here are minimal.” – did you mean $30,000/yr or $300,000 for buying a house (i.e., not per year)? Because, frankly, one can get by on $300K even in NYC. ;-)

    • http://www.ericgarland.co/ Eric Garland

      Yes, $300k a year is well enough to afford a little bit of the good life in Saint Louis. What I meant was that here you can live in a neighborhood in the top 1% of American household income, and the houses are not much more than $300,000. http://www.ericgarland.co/2013/11/13/americas-wealth-superzips-st-louis/

      As I joke with friends, if you want to do something silly like pay $500,000 for a house, you are forced to accept either 100 acres of arable land or a heliport. Maybe a polo field. Possibly a functioning brewery.

  • Shawna W. Brinson

    Agreed! The “rebels” definitely include a wide swath of people working in nonprofits. I’ve recently compared NP salaries at various jobs/duties for here vs. DC/SF/NYC. Scary for a lot of people not in the very top tier of leadership… yeah, I think I will stay put.

  • Vieux_Foque

    From the perspective of the New Marketingspeak “Silicon Beach*”, that 4br house for $769k is a sweet deal. In Silicon Beach a grotty 1br “bungalow” built in the 1920s and not upgraded since will be listed at $950k, but you’ll have to offer 5% over and make it an all-cash deal. The area is flooded with hipsters living 3-4 or more to an apartment. The City of Santa Monica is looking to cash in and has so many new developments under construction that they expect to add 40k new beds in the next year – with all the attendant traffic but no new roads or bike lanes.

    Apartment rents have gone from $1500 for a 40yr old 1br to double or more, in the past 18 months. Larger apartments (or nice ones) are in the $4k-$5k range. Rents for small businesses have doubled or tripled in the past 18 months, and are driving out the local restaurants and other shops that make the fabric of a city.

    The local landlords are happy as swine in fertilizer, as their renters turn over often and so rents continue to climb while maintenance can be ignored.

    The urban theoretician Richard Florida is partly to blame I think, by opining that “the creative class” gets big salaries for being creative and edgy and adding je ne sais quoi to the cities they flood into, and being plump for exploitation by the rentier class. The reality is that these 20-30somethings are also being exploited by the employer class, as they are forced to work in jobs that pay very little but somehow get them “exposure”.

    *Silicon Beach is Santa Monica to Venice and eastward into Culver City. But the LA cost bubble has spread through much of the metro Los Angeles area.

    • http://www.ericgarland.co/ Eric Garland

      “Apartment rents have gone from $1500 for a 40yr old 1br to double or more, in the past 18 months.” Ack! In Santa Monica? And 40k new beds and the same traffic lights? AAAAAAACK. That sounds just awful.

      I agree, I think Richard Florida’s ideas, though well supported with academic research, are being tested in the real world. I don’t they look very nice in practice.