Why New York Will Win The Recession

Maybe you've seen Richard Florida's Atantic article on meltdown geography, or the New York Times on LA's beleaguered hipster suburb . Both effectively say suburbs will eat it in this recession. Why?

Because as heavily dependent as Gotham is on the smoldering financial services industry, it's actually worse in many smaller cities and towns, probably due to all those boomtime real estate brokers, mortgage-banking call centers and other subsidiary industries. Florida, an "urban theorist," writes that the "New York area" gets 8 percent of its jobs from finance, close to the national average of 5.5 percent and compared with"28 percent... in Bloomington-Normal, Illinois; 18 percent in Des Moines; 13 percent in Hartford; 10 percent in both Sioux Falls, South Dakota, and Charlotte, North Carolina. "

Even more important: New York (and cities like Chicago) have dense professional networks, which take a long time to build.

For Florida, this explains why the world has had but three financial centers since the 17th century (Amsterdam, London, New York). Such networks also figure heavily in the city's dominance of other industries: "New York is more of a mecca for fashion designers, musicians, film directors, artists, and-yes-psychiatrists than for financial professionals," Florida writes.

Florida should be treated with some skepticism. It's early in the meltdown, and the author seems eager to comport the crash to his own longstanding arguments about the inevitable dominance of "Creative Class" cities. For example, he ignores impact of the financial services crash on industries supported by its wealth, those fashion designers and artists he's so fond of.

But the Times' article on the "bourgeois bohemia" of Eagle Rock, Los Angeles reinforces his idea that intra-city networks are hard to build.

One of the flood of recent newcomers to the town, a screenwriter, once dreamed of "a miniature Whole Foods," "a gastropub" and a "retro" diner lining the streets. But now amid the economic crash, "the shops at risk are the ones playing the Decemberists in a continuous loop," the Times writes, before quoting urbanist Joel Kotkin:

"The ecosystems of these neighborhoods are very fragile... Over-stimulation, and, in a recession, under-stimulation, and you have dangers."

In other words, Manhattan landlords can quickly cut their rents to attract new residents and industries in hard times. Places like Eagle Rock,which started cheap, face a much longer slog to build up dense communities of smart, like-minded people.

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