Reform can’t fix
American cities.

What’s striking about the modern crisis of the American city is the near-total absence of pushback against it. The hundredth news report on rampant crime or homeless encampments has lost all shock value. Or maybe we don’t react because we can’t see a way out of this mess. To the extent that remedies are discussed, they are mostly limited to short-term crisis management.

Structural problems like traffic congestion, or unaffordable housing, are a rare issue of election campaigns. And long-term solutions, like faster means of transportation, stand far outside the overton window, even though they could re-open the suburban frontier and revitalize our large cities. Elon Musk is betting on tunnels. We prefer flying cars. But those are not the visions of the future you’re likely to see debated in forums on the crisis of the American city.

When structural problems do get discussed, they’re often followed by a set of proposed solutions that harken back to the past, or engage in an escapist fantasy. In this essay, we’ll take a quick survey of three so-called solutions that come up repeatedly in public debates, and we’ll highlight where they fall short. Right off the bat, two out of three are in denial about the dysfunction, while the third tacitly accepts how bad things have gotten, and merely tries to find its place in this new reality.

Unsurprisingly for our era of empty bromides, not a single one of the proposals we’ll be discussing dares to offer a vision for reclaiming the lost greatness of our cities. And it’s this postmodern nihilism, beyond all other shortcomings, that dooms these ideas from the start, and leads us to look elsewhere for a way back to the future.

It’s hard to see a future for mass transit in American cities given the way our suburbs are built. The sprawl of single-family housing makes city-wide coverage far too expensive. It also means that suburbs can never generate enough passenger traffic to sustain the lines without subsidies. So, it’s no surprise that cars remain very popular and used in over 75 percent of trips taken in major American metros.¹

Contrast this to Japan, where nearly half of the country’s population lives in just two cities, Tokyo and Osaka. Since Americans don’t pay as much attention to Japan as they used, you may be tempted to imagine these two cities as disaster zones on par with San Francisco. But visit Japan’s sprawling metros, and you’ll find that the streets are clean and safe at any hour, the houses are affordable for middle income families, and the trains run meticulously on time.²

Do the Japanese know something we don’t? At the risk of being too reductionist, the most notable difference in their system is that zoning laws aren’t left to local city councils. The national government sets one zoning policy for the country as a whole. This is unthinkable in the U.S., where any attempt to pass such a policy would be instantly decried as tyranny. But is it better to be ruled by one tyrant or by 10,000?

In fact, Japan’s centralized approach to zoning helps the country stave off the virulent parochialism of local politics, freeing the island nation to have a sensible code that encourages mixed use, narrow streets, and high-density housing.³

So while Tokyo has roughly twice the population of New York City, the higher density of Japanese housing means that Tokyo’s metro area is twice smaller and four times more compact.⁴ As such, it’s feasible to build a mass transit system with excellent coverage across the city, drastically cutting back on costly car ownership. Hence, cars account for under 15 percent of all trips made in Japan’s two largest cities.⁵

Unless the U.S. is ready to take a page from Japan’s book on zoning or housing policy, no discussion of mass transit in American cities can ever amount to anything other than fantasy.⁶

First, let’s state the obvious. Zoning laws in the U.S. are set at the local level. Whatever were the merits of this system at its inception, its net effect today is giving mayors and city councils a perverse incentive to restrict the supply of housing and drive up the cost of shelter.

This effectual transfer of wealth from the young to the old is enforced without any thought given to the damage inflicted on the economic prospects of younger generations. Is it any surprise then that fertility rates are near their all-time low?⁷

The political solution to this problem is unpopular. The greatest period of construction and expansion in New York City’s history was between 1924–1966, when Robert Moses held quasi-dictatorial powers over the building of parks, highways, bridges, tunnels, and housing around the city, holding 12 concurrent titles at one point. Through wits, force, and astonishing speed, Moses built visions of colossal scale to remake the city before objections even had time to mobilize.⁸

When Moses retired, the building effectively stopped. New York City hasn’t built any large-scale infrastructure since, and what it does build ends up costing a fortune and taking forever. For example, work began in 2007 on a 6-mile subway track in Manhattan that has so far taken 15 years to complete and cost $3.5 billion for each new mile of track.⁹

The zoning restrictions and the lack of new infrastructure to keep the city growing conspire in creating a state of gridlock that only serves to push real estate prices higher. This effect was described by Stiglitz in the Henry George Theorem, and empirically proven by later economists in city after city. The theorem states that in a static city where growth has stalled, any spending increase on public goods will only drive rents higher by an equal or greater amount.¹⁰

In short, contrary to every political promise, no amount of government spending by rule-bound agencies can make housing more affordable. If anything, it can only make matters worse.

Faced with this dysfunctional state of affairs, it’s not surprising that working and middle class families have started exiting New York and California for more affordable places like Florida, Texas, Arizona, and Nevada.

Although this strategy may very well pay off for the early movers, one has to wonder what’s to prevent the same problem from taking root at those destinations as well. After all, they make use of the same system of local zoning and show a similar pattern of urban sprawl. Indeed, the evidence suggests that this may already be underway, as real estate prices in popular cities like Austin and Miami rose by 50–100 percent since 2020 in response to the influx of housing refugees.¹¹

But there’s a hidden cost to this exit strategy too, because despite all their dysfunction, New York City and the Bay Area are still the nation’s premier hubs of economic and productivity growth. So, driving people out is not just at odds with New York and California tradition, but also carries a big price tag for the whole U.S. economy by slowing down economic growth and lowering social mobility. In turn, these negative effects can only serve to further aggravate our politics.¹²

There’s something also to be said for the ugly aesthetics of this exit. When Steinbeck wrote The Grapes of Wrath in 1939, he told the story of the destitute driving from Oklahoma to California to escape the Great Depression. It was a tragic yet optimistic picture.¹³

Today, when we see people driving the other way, we get the sense that things have gone terribly wrong in this country. And that image can’t be squared with the political rhetoric that still paints a picture of a thriving nation making rapid progress on all fronts. This makes both the picture of this exit and its politics deeply pessimistic.

Ultimately, we can’t escape the dysfunction forever. The escape to the past leads us back to the messy present, and the escape to a virtual metaverse is no escape at all. Instead of giving up on our once-great cities, we should fight to recover their greatness. And the very first step in that fight is to bring transportation back to the future.