The New Urban Crisis

This brings us face to face with both the central element of the New Urban Crisis and the central contradiction of contemporary capitalism. The clustering force is at once the main engine of economic growth and the biggest driver of inequality. The concentration of talent and economic activity in fewer and fewer places not only divides the world’s cities into winners and losers, but ensures that the winner cities become unaffordable for all but the most advantaged. This unrelenting cycle is great news for wealthy landlords and homeowners, but bad news for almost everyone else.

But the reality is that the outsized gains to capital have accrued more from increased real estate values than from returns to assets like stocks and bonds.

the exorbitant real estate prices in superstar cities and tech hubs are a key factor, if not the key factor, in the staggering rise in economic inequality across the world.