March 14, 2014

Real estate prices in major cities around the country are spiraling out of control. Richard Florida tells us why. Credit: sakeeb / Flickr Creative Commons

Guest:

As real estate costs continue to soar in many cities across the country, it can feel a little like a game of Monopoly: you have to shell out a million dollars for a cramped, two-bedroom condo. So what's going on?

Richard Florida, the Director of the Martin Prosperity Institute at the University of Toronto and a senior editor at The Atlantic says this is because of the rise of "the creative class."

Florida found that while technologically innovative companies like Apple and Google initially started in suburban corporate campuses, there’s been a mass migration of high-tech startups  from suburbs to urban centers.  This increased growth has started creating the “superstar city” phenomenon, in which a handful of large cities pull in more and more creative people, which, in turn, continues the cycle of growth. 

Income inequality in the United States has skyrocketed. Credit: Emmanuel Saez / Wikimedia Commons

But knowing why this is happening is not enough. 

While our economy has continued to evolve, national policies have not kept up with the changes. “An innovation economy requires proximity and density," Florida says. "That means more people will live near transit, more people will cluster near urban centers, prices will go up, and we’re going to have to address that in a new set of policies.”   

As long as resources are allocated based on an outdated industrial model, Florida warns that the diversity that made cities desirable in the first place will increasingly price out the very people who make our cities dynamic.

Still curious?

cities, urban theory, creative class, Business, Culture, jobs, economy, Richard Florida

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