The Urban Divide
Sep 02, 2001
By Joel Kotkin
Publisher: The Los Angeles Times

The Los Angeles Times

ROTTERDAM, Netherlands -- For much of the last half-century, Americans have enviously looked at Europe's cities as beacons of enlightened urbanism. Yet today, as such diverse cities as Chicago, New York and Houston enjoy a remarkable and largely unexpected resurgence, some urban centers on the continent are showing many of the all-too-familiar signs of decay once broadly associated with U.S. metropolises.

These realities are painfully evident in Rotterdam, Europe's largest port city. On the modern boulevards of this city of 1.2 million, evidence of failing health is unmistakable: abandoned blocks of former warehouses and factories; large numbers of seemingly aimless young, mostly non-white men hanging out on streets; and a widespread atmosphere of economic sloth. Meanwhile, much of the white middle-class population is fleeing to suburbs, including to "new" towns that resemble the high-tech nerdistans on America's metropolitan periphery.

Middle-class flight to suburbia, so indicative of America's past urban dysfunction, has spread throughout Europe, even to such socially minded countries as Sweden and the Netherlands. According to a recent Dutch survey, the largest proportion of affluent households is in new towns on the periphery of cities, while people with the lowest per-capita incomes live in the historic centers of affluence such as Amsterdam and Rotterdam.

"The Dutch cities have chased away the upper-middle class--the very people who are flocking to places like New York," says Eduard J. Bomhoff, founder and director of the Netherlands-based Forum for Economic Research. "People feel increasingly uncomfortable with the atmosphere in the central city."

Some other European cities are similarly affected by increasingly alienated, economically marginalized non-native populations. This includes great global cities like Paris, which has vast, mostly Arab ghettos on its periphery, and smaller, older industrial cities like those in northern England, which have been repeatedly racked by racial rioting.

"Paris now has all the attributes that used to be associated with the worst of American cities," says urban historian Fred Siegel, who teaches at New York's Cooper Union and is a former visiting professor at the Sorbonne. "You see the crime, the graffiti and the presence of a large underclass."

Some of the reasons for this reversal of fortunes lie in changing demographic and economic realities. Until the 1960s, most European cities were largely homogeneous and, due to powerful labor movements, even their native working class had achieved a relatively high standard of living. In contrast, U.S. cities, with their large African American and Latino ghettos, suffered from a seemingly unbridgeable class and racial divide, evidenced by riots that consumed many of them in the 1960s.

Today, many European cities have become increasingly minority. In both Rotterdam and Amsterdam, for example, more than 40% of the population, and greater than three-fifths of the young people, are non-Dutch, including not only residents from regions with strong historic ties to Holland--Dutch Antilles, Surinam and Indonesia--but also Moroccans, Turks and others from the Islamic Middle East.

Initially, these populations were welcomed wherever they traveled because they helped alleviate labor shortages on the factory floor and loading docks that had developed in the 1960s in many of Europe's industrial countries. Yet by the 1990s, as elsewhere in the advanced industrial world, global competition, automation and a shift to an information-based economy hastened the erosion of these kinds of jobs. For example, the number of people needed to operate the port of Rotterdam has fallen from roughly 200,000 in the 1960s to barely 60,000.

Largely as a result of these demographic and economic structural changes, coupled with Europe's generally low rates of economic growth over the past decade, unemployment among ethnic minorities in Paris, Rotterdam, Amsterdam and throughout the former industrial heartland of northern England runs as high as 20% to 30%, two to three times that of the mainstream population. In some cases, two generations have been on some form of public assistance, creating the kind of social pathologies long associated with supposedly decaying U.S. cities.

"Moroccan and Antillian young people are now our biggest social problem," says J.C.G. "Hans" Stam, managing director for Rotterdam's city-development corporation. "They disappear from school at 12 and show up in the police lines by the time they are 15 or 17. Holland is famous for its tolerance, but this is one of the problems of tolerance."

In other European countries outside the Netherlands, deep-seated European traditions of racism may also be a factor. A recent survey of European Union residents, for example, found that nearly one-third admitted being "quite' or "very" prejudiced against foreigners. This rose to nearly 50% in Belgium, home to the EU capital of Brussels; at least four in 10 people in France, Italy, Britain and Germany, where nearly 9% of the population is made up of immigrants, expressed racist attitudes.

Problems connected with race have certainly not disappeared in U.S urban areas. Large swaths of even prospering major cities--Los Angeles, Chicago, New York, Houston--are still plagued by crime, unemployment and other social pathologies. Rates of crime, poverty and illiteracy in most U.S. cities remain higher than those in Europe.

Yet, despite these persistent problems, few U.S. cities are in worse shape today than they were a decade ago. New York City was once virtually bankrupt, crime-ridden and seen as hopelessly decaying. Today, its property prices, incomes and rate of job creation are well above early-1990s levels. In fact, economic growth since the mid-1990s has been stronger in the city than in its surrounding suburbs. Crime has dramatically fallen, and a semblance of order has been restored to the city's streets.

Similar, if somewhat less dramatic, turnarounds have occurred in Chicago, Los Angeles, Baltimore and Washington, D.C. More remarkable still, a sense of urbanity has arisen in cities that barely existed a decade ago. Downtowns and their environs in Denver, Houston, Dallas, Indianapolis and Charlotte, among others, have come to life, with growing middle-class residential populations, new shops, restaurants, clubs and Information Age businesses.

"American cities now have outdoor cafes and things we used to associate with European cities--the public foliage, the ambience, the walking environment," says historian Siegel. "American cities are becoming chic."

Why have U.S. cities rebounded while Europe's have become more troubled? Since both have experienced similar demographic and economic changes, the answer may be found in the effects of centralized planning and the welfare state on European cities.

For one thing, strict regulations on business, as well as high tax rates and minimum wages, have discouraged the formation of the kind of immigrant-led economic niches, albeit often producing many lower-wage jobs, that are characteristic of many U.S. cities. In Europe, there are no equivalents to Los Angeles' Toytown, Jewelry or Fashion Districts, Houston's burgeoning Harwin Corridor or New York's Flushing; no major European city has had its economy transformed by newcomers as has Miami, with its Cuban elites, or the San Gabriel Valley, now largely a North American annex of the global Chinese diaspora.

European rigidities freeze working-class populations, particularly immigrants and their descendants, in economic limbo. In Germany, for example, refugees with skills, most recently from the Balkans, have found it easier to get on welfare than to be allowed to take a job. For many European countries, protecting those already employed, notably the native-born, often seems more important than unleashing the economic energies of newcomers.

Expansive welfare-state protections, especially housing subsidies, also give poor urbanites in European cities little incentive to move to new jobs, as occurs regularly in the United States. Nearly half of all immigrants to the Netherlands cluster in the country's four major cities; there is nothing like the kind of secondary migration noted in the 2000 census in America, which showed large numbers of opportunistic newcomers moving from the coastal regions to more economically advantageous locations such as Nevada, Arizona, North Carolina and Georgia.

At the same time, in many countries, government centralization--the vast majority of budgets and regulatory powers are in the hands of national and, increasingly, European bureaucrats--gives local leaders little power to attract a more affluent population to their cities. Laws tolerant of squatting also lead to settlements of dissolute, often native-born people in urban neighborhoods in such cities as Rome and Copenhagen; they essentially live off the state.

"All the local cities are totally dependent on the federal government, so it's in their interest to make 'kind' decisions instead of 'tough' decisions," says Dutch economist Bomhoff. "The city councils make decisions to build social housing in nice central locations because they can get more money from the central authorities. So why should they care? Poverty brings them more money and more jobs for the bureaucracy."

This stifling atmosphere contrasts with the innovative localism that has fueled the U.S. urban recovery at a time when there has been virtually no federally directed urban policy. Widespread calls for a "Marshall plan" for U.S. cities, loudly trumpeted after the 1992 riots in L.A., were mostly ignored by an increasingly suburban-dominated Congress and state legislatures.

Instead, the past decade's progress can be traced to innovative mayors--Bob Lanier in Houston, Rudolph W. Giuliani in New York City, John Norquist in Milwaukee, Richard J. Daley in Chicago, Richard Riordan in Los Angeles, Wellington Webb in Denver--and dedicated business and citizen activists. Forced to create their own niches in the face of powerful suburban competition, U.S. cities have adapted by building economies dominated by high-end services, tourism, entertainment and specialty, small-scale industries. This transition is being pushed by a new generation of mayors, such as Oakland's Jerry Brown and Washington, D.C.'s Anthony A. Williams, who, like their Venetian, Dutch, Hansa or British counterparts from Europe's golden age, see their primary jobs as bringing economic growth and material progress to their cities. Among the major European cities, only London can be said to have made a similarly successful transition.

Yet none of this suggests that Europe's cities cannot reclaim their former status as models for urban development around the world. The very models for the successful city-state originated in Europe's own history. The dynamism of L.A.'s Toytown or the Jewelry District recalls the spirit of earlier European trade fairs and specialized industrial districts. The very architectural shape of many of America's most resurgent urban districts--lower Manhattan, South Boston, Northside Chicago--are largely derivative of Europe's old urban culture.

What is needed in Europe is a redefinition of cities appropriate to a globalized, Information Age economy. Attempts to perpetuate the regulated welfare state of the 20th century will only guarantee more decay and racial strife. Instead, Europeans should look to the new models of resurgence being crafted in America and, even more so, to the wondrous dynamism that speaks across the centuries from the era when Europe created the urban future.

Joel Kotkin, a contributing editor to Opinion, is a senior fellow at the Davenport Institute for Public Policy at Pepperdine University and at the Milken Institute. He is the author of "The New Geography: How the Digital Revolution is Reshaping the American Landscape."