The Investor's Shelf — one book
Triumph of the City: How Our Greatest Invent

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier

Edward L. Glaeser
2011
T4 404 pages · about 6h 44m to read OL19873317Wgoodreads

The economist's case for density as the engine of productivity.

Summary

Glaeser, an urban economist at Harvard, argues that cities make people more productive, more innovative and more environmentally efficient, and that most urban policy works against the density that produces those effects. His central mechanism is proximity. Cities concentrate skilled people, which raises the rate of knowledge transfer between them, and Glaeser presents evidence that wages rise with city size beyond what individual characteristics explain, that the effect is largest for skilled workers, and that innovation and patenting concentrate in dense areas.

His environmental argument is that urban residents consume substantially less energy per person than suburban ones because of smaller dwellings, shared walls and shorter transport distances, and that restricting building in dense, temperate cities pushes development to places with higher emissions per household.

His policy positions follow. He attacks building restrictions and preservation rules as the principal cause of housing costs in successful cities, arguing that they transfer wealth to existing owners and exclude everyone else. He argues that declining cities should not be rebuilt through infrastructure spending, since the buildings outlast the economic reasons for the city, and that policy should help poor people rather than poor places. He is critical of Jane Jacobs on height restrictions specifically, arguing that her preference for low-rise districts conflicts with the density she otherwise advocated.

Critics argue that Glaeser underweights displacement and the effects of development on existing communities, and that the education and skill correlations he reports may reflect selection rather than agglomeration. The building restriction argument has become mainstream since publication.

Key takeaways 8

  1. Cities raise productivity by concentrating skilled people, and wages rise with city size beyond what individual characteristics explain.
  2. Proximity accelerates knowledge transfer between people, which is why innovation and patenting concentrate in dense areas.
  3. Urban residents consume substantially less energy per person than suburban ones because of smaller dwellings and shorter transport distances.
  4. Restricting building in dense temperate cities pushes development to locations with higher emissions per household.
  5. Building restrictions and preservation rules are the principal cause of housing costs in successful cities and transfer wealth to existing owners.
  6. Policy should help poor people rather than poor places, since subsidising declining locations traps people in them.
  7. Buildings outlast the economic reasons for a city, which is why declining cities have housing far cheaper than their economies justify.
  8. Critics argue that the productivity effects may partly reflect selection of capable people into cities rather than any effect of the city itself.

Who should read it

Investors and policy readers thinking about housing, urban development and where economic activity concentrates.

Where it sits in the reference 2

Philosophy
Secular themes

Who recommended it 4 · 4 direct

@pmarca, companion thread to 'It's Time to Build'
“on the central role cities play in our world and why it's so important for us to build them”
Chai with Pabrai bookshelf — Investing and Capital Allocation
Stewart Brand's Selected Books for the Manual for Civilization — Long Now
Zappos Insights — 'The Zappos Family Library Book List' (archived Oct 2016 capture; the list Zappos published of the books it gives team members free of charge)

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