Urban Renaissance or Cities of the One Percent?

03/04/2015 02:40 pm ET | Updated May 04, 2015

In a striking reversal of the suburban sprawl that has marked the last 60 years, job growth in America's cities is outpacing that in the suburbs as more and more people choose to live, and work, in urban areas. This trend, as noted in a report released by think tank City Observatory last week, has some pundits heralding an urban renaissance, where all city dwellers thrive as innovation blooms and downtown economies flourish. As we've seen in booming cities like San Francisco, however, where job growth and skyrocketing inequality have gone hand in hand, the equation is rarely that simple. This trend has immense potential for revitalizing cities after a slow economic recovery, but only if city leaders take decisive steps to ensure that everyone can participate in and prosper from these new job opportunities.

As recently as 2007, employment outside city centers was rising faster than inside, a longstanding trend that began with the exodus of many city populations to the suburbs in the mid-twentieth century. Over the past few years however, urban populations have grown faster than outlying areas, and employers have followed. Though construction and manufacturing jobs were hardest hit in the recession, these new jobs are more likely to be in business services or tech -- a trend that can overwhelmingly favor young, highly skilled workers and push out low- and middle-class populations that have been long-time residents.

The rise of the tech sector in the Bay Area provides a perfect example of this demographic shift in play. San Francisco now has the highest concentration of high net worth residents (those making over $30 million) of any city in the country, but also the fastest-growing income inequality, according to the Brookings Institute. According to the SF Human Services Agency, the middle-class population has shrunk from 45 percent to 34 percent from 1990 to 2012 and the proportion of residents living in poverty grew 30 percent between 2007 and 2012. Rising real estate prices are rapidly displacing low-income communities of color to the geographic fringes, where they are often stranded from job opportunities, transportation, health care, and other vital community assets. While this trend has obvious and devastating effects for these communities, this kind of inequitable growth ultimately threatens the entire region's economic future.

Growth doesn't have to look this way. Studies show that regions with lower inequality and less segregation by race and income have more upward mobility and experience longer periods of economic prosperity. Inclusive growth and smart growth should be synonymous, and in cities all over the country, local leaders are putting equitable strategies to work, with great success.

A focus on fair and affordable housing is obviously a crucial part of building inclusive cities, but let's focus in on the jobs piece of this equation. If new jobs are increasingly being located within urban centers, then we need local policies that connect vulnerable workers to quality jobs and career pathways. The New Orleans Economic Prosperity Strategy, for example, is attempting to connect the 52 percent of its African American men who are jobless to jobs coming online at the city's airports, universities, and health care systems. The Oakland army base redevelopment will create some three thousand jobs, at least a quarter of which are targeted to groups with barriers to employment, such as ex-offenders. In Baltimore, where the biotech and medical industry accounts for a third of new jobs, the BioTechnical Institute of Maryland set up a program to prepare low-income, mostly African American high school graduates for careers in biotech, with more than 75 percent of its graduates moving on to jobs in laboratory settings.

Taking steps to ensure that working Americans receive fair and decent pay is also key. Raising the floor on low-wage work and mandating basic quality measures (paid sick days, benefits, e.g.) helps those in the service, manufacturing, and other low-wage sectors provide for their families and stay in their homes. In Los Angeles, where 40 percent of those working in the hotel industry still live in poverty, city officials passed an ordinance in September to raise their wages to $15.37 an hour - a policy that will change the lives of nearly 13,000 workers, most of whom are women and people of color. This week Washington, D.C.'s Wage Theft Prevention Act and amendments to New York's existing policies will go into effect, cracking down on employers who fail to properly disclose or pay wages to their workers.

These initiatives are laudable steps in the right direction, but they are the exceptions and not the rule in urban growth. More than 80 percent of the U.S. population lives in metropolitan areas and that number is only expected to grow in the coming years. If we don't act now to build inclusive growth at scale in urban economies, we're heading towards an urban downfall, not an urban renaissance.