Inequality 

 

 

Inequality has returned to the center of public attention and political debate in way that was unimaginable even a few years ago. The rising tide of inequality, in both industrialized and developing countries, has prompted concerns of social instability and faltering economic growth.[1] Thomas Piketty’s Capital in the Twenty-First Century, raises the possibility that this is a long-term trend that will affect the global economy for decades to come. Cities are central to inequality, as the generators of economic growth and the space where inequalities are most visible and contested. Understanding this trend and how cities can proactively address it is central to Global Urban Futures project.

 

Urban housing has become increasingly unaffordable for middle and low income households. This is a reflection of the rising demand, but also of housing policies that have failed to address affordability and stimulate production of homes for the people who make cities work. Real estate construction is focused on luring ‘luxury buyers’ and international capital; in central London 60 percent of newly-built homes are purchased by overseas investors.[2] In both developed and developing countries, a growing gap between private and public wealth is leading to the increased adoption of private urban solutions, such as gated communities, private education, private security and private transport.[3] These disparities are not inevitable; governments across the world, from Mexico to Ethiopia, and from France to Indonesia, have undertaken reforms of housing programs; showing that smart solutions can be implemented.

 

In developing countries, the massive growth of cities has not been matched by investments in urban infrastructure and services. The most visible consequence is the explosive spread of ‘slums’; mass areas of informal housing and employment. In Africa, despite strong per capita growth in income over the past 15 years, 62 percent of urbanites live and work in slums, and there has no discernible improvement in the provision of water and sanitation.4 These informal areas have lower rates of education, health services, and policing, which contribute to unequal and unsafe places to grow-up and live.[5] While cities in developing countries grow at a breakneck pace (90 percent of urban growth is in Africa and Asia), their populations skew young, and there are deep concerns that poor quality education coupled with a lack of job opportunities is creating a ‘demographic time bomb’. A new understanding of cities that considers intra-urban inequities is needed. This requires moving past national and aggregates when tracking progress on development indicators to a more granular detail of informal neighborhoods, and looking beyond small-scale projects that reach a fraction of slum households to city-wide and regional plans that connect all urban residents to quality basic services and economic opportunities.[6]

 

The lack of equitable investment in urban infrastructure and services is not limited to developing countries. Increased inequality is associated with declining investment in public goods in a range of contexts. The collapse of New Orleans during Hurricane Katrina and the recent water crisis in Flint, Michigan illustrates the failure to invest in infrastructure that protects everyone, regardless of income, race and ethnicity.[7] Unequal access to credit services for black Americans contributed to the discriminatory targeting of these households for sub-prime loans. The subsequent crisis wiped away black families’ wealth and assets for generations to come.[8] The growing disparities in income and wealth, often fractured along racial, ethnic and class lines, leads to growing competition and conflict between different groups in the city.[9]

 

Inequality in urban areas is not inevitable. In spite of high rates of income inequality in the late 19th century and early 20th century, inclusive planning and investment in Europe and the US provided access to basic infrastructure, education and employment for rapidly growing urban populace. From the London underground to the New York’s city’s systems of reservoirs, the industrial age ensured affordable access to quality infrastructure and services to all city dwellers. More recently, cities across Latin America have been able to reduce high levels of inequality; the varying progress made demonstrates the extent to which municipalities can make a difference.[10] Alliances between civil society actors and policy makers can strengthen the democratic management of cities and ensure a shared and equitable urban future. In doing so, cities can make a significant contribution to an urgent global problem.

 

Samantha Cocco-Klein March 28, 2016

 

1 OECD, Does income inequality hurt economic growth? (Paris, OECD, 2014), UNDP, Humanity Divided: Confronting Inequality in Developing Countries (New York, UNDP, 2013)

2 Andrew Heywood, London for sale? An assessment of the private housing market in London and the impact of growing overseas investment, (London; the Smith Institute, 2012)

3 Maristella Svampa, Los Que Ganaron, (Buenos Aires, 2001), Edward Blakely and Mary Snyder, Fortress America: Gated Communities in the United States, (Washington; Brookings, 1995)

4 UN Habitat, The State of African Cities 2010, (Nairobi: The United Nations Human Settlements Program, 2010)

5 UNICEF, Children in an Urban World: The State of the World's Children 2012, (New York: United Nations Children’s Fund, 2012)

6 Mark Swilling, Reconceptualising Urbanism, Ecology and Networked Infrastructures. In E. Pieterse, & A. Simone, Rogue Urbanisms: Emergent African Cities. (Rondebosch: Jacana Media, African Centre for Cities, 2013)

7 William Morrish, After the Storm: Rebuilding Cities upon a Reflexive Urban Landscape. (New York: New School for Social Research, 2008). John Eligon, A Question of Environmental Racism in Flint. (New York Times, Jan. 21 2016)

8 Sarah Burd-Sharps and Rebecca Rasch, Impact of the US Housing Crisis on the Racial Wealth Gap Across Generations, (Brooklyn, NY: Social Science Research Council, 2015)

9 Rebecca Tippett, Avis Jones-Deweever, Maya Rockymorre, Darrick Hamilton and William Darity Jr., Beyond Broke: Why closing the Racial Wealth Gap is a Priority for National Economic Security. (Center for Global Policy Solutions and Duke University, May 2014)

10 UN-Habitat, Construction of More Equitable Cities: Public Policies for Inclusion in Latin America. (Nairobi, United Nations Human Settlements Program, CAF, development bank of Latin America, 2014)