Richard Florida has a new(ish) book out called The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class—and What We Can Do About It. You can also get the general idea from this article he wrote in City Lab. He offers five policy prescriptions, which I summarize below.
- land value tax – Tax the value of land rather than the value of the developed property on it, so that land owners have a disincentive to sit on property and an incentive to develop it to the most economically valuable use a particular neighborhood will support. (My take – I like this idea. I wouldn’t get rid of zoning and building codes, but these can focus on the “look and feel” of the neighborhood rather than restricting height or density, requiring or prohibiting a certain amount of parking, etc. There also needs to be a strategy to preserve a certain amount of public open space under a system like this, whether it is public or held by some sort of land trust.)
- invest heavily in public transportation – This decreases commute times, allowing people to live in more affordable locations and work in higher wage ones. (My take: makes sense, although we should rethink whether the same old 20th or even 19th-century ideas of public transportation and transportation agencies are going to serve us well in the 21st. I think we need flexible routes, flexible vehicles, and flexible modes that can adapt to changes in the economy, landscape and technology as they come.)
- end the mortgage interest deduction so single-family homes are not unfairly subsidized relative to multi-family rental housing. (My take: makes perfect economic sense, but this would need to be phased in over a long period of time to not be a slap in the face to today’s middle class and working class homeowners who have made their decisions under the current system.)
- Set minimum wage at 50% of median wage on a city-by-city basis – his argument is that this is essentially how the high-wage manufacturing jobs of the U.S. postwar period were created. He brings up Henry Ford and the idea that even if prices go up somewhat, a newly broadened middle class is able to afford them. (My take – I’ve always been a little skeptical of minimum wage as a policy prescription because it only redivides the pie rather than growing the pie, at least in the short term.)
- Better fund public education, including early childhood development programs. What is there really left to say about this, except it is shameful we haven’t been doing it all along?
- Guaranteed minimum income, or negative income tax. The idea is to replace the hodgepodge of housing, food and other assistance programs we have now with cash outlays to the poor, which they can then decide how to spend on market price goods. (My take – it could be done in a revenue neutral way, and should appeal to rational, logical parties of all political stripes. Of course, politics and human nature are not particularly rational or logical, especially lately.)