Unequal Cities: Overcoming Anti-Urban Bias to Reduce Inequality

Published by EH.Net (September 2023).

Richard McGahey. Unequal Cities: Overcoming Anti-Urban Bias to Reduce Inequality. New York: Columbia University Press, 2023. ix + 197 pp. $35 (hardcover), ISBN 978-0231173346.

Reviewed for EH.Net by Rowena Gray, Department of Economics, University of California, Merced.

This is a timely book, providing historical and institutional context to urban problems such as housing affordability, crime, and unequal education systems. Most of the world has urbanized under a variety of organizational structures. McGahey, economist at the New School’s Schwartz Center, has a long record of work on these issues. His connections to the policy world through think tanks such as the Brookings Institution make him well placed to develop a unifying framework that moves beyond the dominant view. The book associates that view with Jimmy Carter’s Commission for a National Agenda for the Eighties, which declared that there were no national urban problems, just a bunch of individual cities each with its own issues.

To illustrate his thesis, the author presents the details of just three cities from that bunch: New York, Los Angeles, and Detroit. The main point is that, rather than nurturing cities as the centers of our economic success that they are, the United States political system is set up to overvalue the preferences of rural voters and smaller states, preventing cities from taking charge of their own destiny. Further, given that technology allows for ever larger metropolitan areas, center cities have been increasingly hamstrung in making their own policy relative to wealthier suburbs which share the benefits of economic growth but are then able to insulate themselves from paying for the problems of center cities and enjoy the better education, safety, environments and so forth of their growing tax bases.

At first I wondered what could be learned from knowing more details about how much of a basket case Detroit has become. But the author does a nice job of plotting out how Detroit was an early adopter of the sprawling city model, with newly built suburbs for whites and the eventual move of the automobile plants to follow. There will be a new rust belt at some point in the future and managing declining cities is possibly more difficult than managing growth, so this is a useful case study. Of course, we might think of more case-study cities that we would have liked to see included—Houston would be my top candidate, as it had about the same population as Detroit in 2000 but coming after 50 years of growth rather than decline. Houston’s successes with homebuilding have been highlighted elsewhere and it would be interesting to contrast the institutional context there with other cities.

McGahey puts political structure front and center, but he does give sufficient space to inequality and race as other key factors driving current urban problems. Certainly, inequality has risen in many American cities over the past few decades, and elite capture of high offices could even be more explored in the book. The book’s case studies show that inequality and the political structure are not always tightly linked, though—Detroit doesn’t suffer from inequality in the same way as New York and Los Angeles. Similarly, the same political system existed in the immediate post-WWII period but other conditions such as prolific house building kept inequality in check.

The book entertains innovative solutions to the organizational conundrum, such as allowing for a city-state type structure of governance or returning to cities the greater powers to annex their surrounds that they possessed in the nineteenth century. While some of the practical, immediate solutions offered in the book, such as bolstering unions and giving them more voice, would be controversial among economists, most would agree with the more relaxed approach to zoning that the book suggests. An extension of this policy exploration might look to what happens in other federal-style countries, to pin down what it is that they do better that could be implemented in the U.S.

What kinds of changes would we see if politics were organized around metropolitan areas, as the book proposes? Maybe New York Governor Kathy Hochul’s housing plan could have passed instead of being blocked by NIMBY suburbs. Perhaps, though, NIMBYs would simply devise alternate strategies to block unwanted development, or other economic divides would become sharper, such as is seen in the UK where the Greater London area has been able to grow to double the area of New York City but whose dominance in the UK economy has arguably hampered outer region growth. McGahey, however, is not full of such pessimistic notions—he points to some recent collaborations of interest groups in Los Angeles through their so-called Community Benefit Agreements which link development plans to benefits for other groups such as workers and consult other interested groups like environmentalists who might otherwise block development. It’s not clear that this sort of piecemeal approach is the way forward. New York has struck some such deals, and McGahey rates those deals struck as bad for citizens, indicating a fundamental problem—these arrangements have to be negotiated by individual politicians, who might make mistakes or be bad actors.

The readers of EH.Net will probably be confused by the use of the straw man of the typical neoliberal economist in this book. McGahey asks us to believe that the average urban economist doesn’t think that politics are important and is laser-focused only on cities as drivers of innovation and growth. For economic historians, who have been at the forefront of documenting inequality and who are open to learning from other disciplines and are used to considering institutional context, the notion that economists believe the market solves all problems will not ring true. It’s a useful rhetorical tool in the book, and it makes sense given McGahey’s involvement with movements to diversify economic thinking such as the Institute for New Economic Thinking, but it’s a little heavy handed at times.

One key lesson that I took away from the book—in times of great crisis like the Great Recession (or individual fiscal crises of cities), the long-run consequences can be dire for services like education and safety and suggest a role for other levels of government to step in to avoid extreme austerity at the city level. Because federal funds since the Nixon and Reagan eras have been distributed to states, cities haven’t even been receiving a fair share of recovery resources. I took less from the more speculative epilogue, which mulled the future of cities in the polarized political sphere that we now find ourselves in. We learn so much more from the rich historical and institutional context that is packed into every other part of the book.

Ultimately the book is a very accessible depiction of some of the key issues facing the people of the United States today, providing rich detail for those interested in urban policy and for especially for readers in the case-study cities. Trying to explain the underlying reasons for underinvestment in city education and housing systems, recently brought into sharp focus by the COVID-19 pandemic, is a worthy task and done well in this new book.

Rowena Gray is associate professor of Economics at the University of California, Merced. Her work on technological change has appeared in Explorations in Economic History and Labour Economics, and she currently works on the urban history of crime and housing in the United States.

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