The Great Inversion and the Future of the American City

by Alan Ehrenhalt

  By five thirty most of the strollers and children are gone, and the scene has begun to change significantly. There are middle-aged men with white shirts and briefcases now, younger men carrying messenger bags, women lugging big round papasan wicker chairs from a neighboring furniture store, and quite a few people carrying clothes on hangers from the dry cleaner that sits next to the station.

  The Starbucks on the corner of Armitage and Sheffield is busy at this time of day, as it was early in the morning, but the scene is much more social. Few conversations took place in the store early in the morning; much of the inside crowd was composed of young women working silently on their laptops. At six in the evening, however, little knots of people congregate in front of the store to talk, almost as if each group had an assigned time: One group leaves the corner and another turns up to replace it.

  One also gets more sense of Sheffield as a left-leaning urban enclave in the evening than in the morning. There are Greenpeace activists on two of the four corners; adults drift by on skateboards and Rollerblades. I begin to wonder whether this is more a neighborhood of aging hippies than I thought it was. Then I see a red Corvette convertible glide by, and I am reminded of a basic truth: It is still a place where it can cost more than a million dollars to buy a house.

  ONE THING most of Chicago’s planners felt sure of in the 1980s was that once the westward spread of central-city affluence reached the end of Sheffield, it would face an insuperable physical barrier. The western boundary of Sheffield, Clybourn Avenue, was a wide, ugly thoroughfare lined with strip malls. Just beyond it was an industrial zone called Goose Island, with factories where many of Sheffield’s old blue-collar workers used to be employed. After Goose Island came the Chicago River, and a few blocks beyond that, the eight-lane Kennedy Expressway. Any two of those obstacles seemed sufficient to halt the residential boom. It looked like a safe bet that the upper-class march that had moved west from Lincoln Park in the 1970s could not be repeated beyond the river and the freeway.

  But anyone who made that bet was wrong. In the two decades after Sheffield became rich, an equally dramatic—although different—transformation took place on the other side of the barrier, in Wicker Park and Bucktown. In retrospect, it isn’t that hard to understand. This was a boom generated to a large extent by public transportation. And on the CTA’s Blue Line, both Wicker Park and Bucktown were only a few minutes farther from the Loop than Sheffield was. When you are sitting on a train, a factory district, a dirty river, and an eight-lane freeway don’t loom so large as obstacles. Martin Oberman puts it succinctly: “In Chicago,” he says, “gentrification follows the El.”

  “Gentrification” is a word that fits Wicker Park and Bucktown, even if it’s the wrong term for Sheffield. Both had reputations as havens for artists and bohemians well before World War II, in the years when the Chicago poet Nelson Algren entertained the French philosopher Simone de Beauvoir in a third-story apartment above a Wicker Park storefront.

  The bohemian tradition never really died in these neighborhoods. Nevertheless, by 1970 they had deteriorated even further than Sheffield. Crime and poverty rates were higher; an even larger proportion of the white middle-class residents had moved away. North Avenue, the heart of the area, was shabby and unappealing. “I remember when that stretch of North Avenue was hubcap shops and liquor stores,” state representative John Fritchey said a few years ago. “No one wanted to claim it then, and now everyone wants to claim it.”

  That’s true. Some locals, like Fritchey, believe that North Avenue is the dividing line between Wicker Park on the south and Bucktown on the north. Others ferociously claim that the border lies two blocks farther north, at Bloomingdale Avenue. But it doesn’t really matter. The two neighborhoods just seem to blend into each other.

  And they have a frenetic quality that quiet Sheffield has never possessed. Armitage Avenue in Sheffield is a busy and attractive street; on a summer evening, Damen Avenue as it runs through Wicker Park and Bucktown is more of an open-air festival, the sidewalks jammed with so many young people that it feels a bit like SoHo or Greenwich Village in New York. Damen Avenue is lined with bookstores, boutiques, sidewalk cafés, and art galleries; there seem to be more art galleries in Wicker Park than there are business offices. If one wishes to make comparisons to the Left Bank of Paris seventy years ago, and to the twenty-four-hour public display that its streets presented, then Wicker Park and Bucktown are a closer fit than Sheffield.

  Since the 1990s, though, these neighborhoods have faced some of the issues that Sheffield did earlier. A single-family house in Wicker Park can cost a million dollars now; some of the artists who settled there twenty years ago have been priced out and have moved to places even farther west, such as Logan Square and Humboldt Park. It is not hard to find someone in the crowd on Damen Avenue who will lament that the glory days of bohemian life are over. But most of those who have lived here over the past couple of decades and remain today seem to accept the change.

  SHEFFIELD, WICKER PARK, and Bucktown tell the story of Chicago’s demographic inversion, and they tell it colorfully, but they are not the neighborhoods that produce the largest numbers. Sheffield had an estimated population of about eleven thousand in 2007; Bucktown was only a little larger, and even Wicker Park, the largest of the three, had twenty-three thousand. None of these is expected to grow much between now and 2020.

  Sheffield is all but built out, and large-scale development in either Wicker Park or Bucktown would face significant community resistance. The big numbers lie elsewhere, along the very borders of Chicago’s Loop, and in the Loop itself. This is where the high-rise growth of the central city took place on a massive scale prior to the 2008 recession. The Chicago Planning and Zoning Department estimated in 2009 that what it calls the Central Area—five miles running north and south with the Loop in the center, and a mile west from the lake in most places—had acquired a residential population of 165,000 by 2007. It had grown 48 percent in the years since the 2000 census was taken. The planning department predicted that the number will be up to 230,000 by 2020.

  That may be wishful thinking on the city’s part. But even the current estimate of 165,000 is difficult to grasp until you walk around the Central Area and gaze up at the multitude of residential buildings, some of them fifty and sixty stories tall, that did not exist in 2000 and are now filled with home owners or tenants. In the district surrounding the Loop, sociologist John Koval wrote in 2006, “High-rise villages and communities—interspersed with warehouse conversions—are literally popping up like so many mushrooms on a summer morning.”

  These new high-rise villages have some unexpected touches: trees and flowers in the middle of the wider streets, with wrought-iron fencing around them; old-fashioned streetlights reminiscent of the ones Haussmann placed on the boulevards of Paris. Such amenities are no accident—they came by direct order of Mayor Richard M. Daley, who had, it seems legitimate to say, a bit of a Paris obsession. On his return from a visit to Europe in 1996, he decided that downtown Chicago’s larger office buildings should be lit at night in a manner reminiscent of those on some of the boulevards of Paris. Later, he insisted that the new condo neighborhoods have at least one shade tree for every twenty-five feet of street frontage, a somewhat autocratic decree but one that Haussmann would have approved of. Nearly a thousand hanging baskets went up on downtown streets in a single year, many of them three feet tall and marked with the inscription, urbs in horto—“city in a garden,” which happens to have been Chicago’s city motto since 1837.

  In 2008, the condo mushrooms basically stopped sprouting. Huge new residential projects—including architect Santiago Calatrava’s 150-story tower on Lake Shore Drive—were put on hold until the real estate market picked up. By mid-2009, there were more than ten thousand unsold condominiums in the Central Area. Most of the townhouses and midrise condominiums were maintaining their attractiveness rather well; it was the developers who overdid it, who chose to build fifty or sixty or seventy
stories simply because they could get the money. Some real estate analysts speculated that by the spring of 2009 there was already a backlog of Central Area condos that could take as much as five years to clear. But even the pessimists did not dispute that in the year 2020, no matter how many condos are built or sold, downtown Chicago is likely to be a nest of center-city urban affluence unequaled in size—or even approached—by anyplace in America outside Manhattan. Sheffield is unique in its own way, but in other respects, it is a harbinger of things to come.

  One lesson we should not attempt to draw from all this is that massive numbers of suburban families will return to the city, reversing the demographic changes of the past half century. Even if the city’s projections are accurate and Chicago’s Central Area is home to as many as 230,000 people in the year 2020, that will still be less than one-tenth of the population of the city as a whole. The rules of urban population change that prevailed in the past century are not going to be erased that easily.

  The city is likely to grow modestly in the coming decade, and the Central Area somewhat more than modestly. The Census Bureau reported early in 2009 that the percentage of residential permits issued within the city was 7 percent of the metro area total in the early 1990s, 23 percent in the early 2000s, and 40 percent in 2007. That process of change has paused; it has not concluded.

  The suburbs of Chicago are not emptying out by any means, but they are no longer growing very fast, and some of them, the most distant, less appealing, and less convenient ones, are not currently growing at all. Some of this is undoubtedly due to a recession that has made it difficult for urban dwellers to sell their houses and move, but much of it is due to the enhanced appeal of the city’s close-in neighborhoods.

  There are those urban critics who insist that this is a temporary phenomenon, that once national prosperity has fully returned, prosperous families will again be vacating the central city in large numbers to find exurbs where they can spread out. It is not possible to refute such predictions; what can safely be said is that virtually no one who has spent the past decade watching Chicago closely believes that it is going to happen. The consensus is that the abandonment of the central city and the rapid suburban growth that marked the second half of the twentieth century are slowly coming to an end. And so the urban areas of the next generation, not only Chicago and New York but others that have been much less fortunate so far, will be much different places than they were in 1990. In many ways, they will resemble the cities in which our grandparents felt comfortable, rather than the ones in which we ourselves grew up.

  The real essence of demographic inversion is based not on numbers but on choice: Increasingly over the past decade, both before and during the recession, people with the resources to live wherever they wished began choosing to live near the urban center—just as Viennese, Parisians, and Londoners at the turn of the previous century elected to do. This will have significant social consequences, especially when it comes to daily communication and casual social life. Central-city dwellers who have the option of communicating with friends almost entirely by electronic device will also have the option of socializing on the street or in neighborhood cafés in ways that suburbanites do not get the opportunity to do. Many of them will be drawn to the urban center by precisely that opportunity.

  A hundred years ago, the legendary architect Charles McKim talked about the civilizing effect of wealth. One has to be careful tossing around phrases like that today. But if by civilizing effect McKim meant a richer cultural scene, a more comfortable mingling of races and ethnic groups, a more vibrant outdoor life, and a more diverse array of people using the streets at all hours of the day, it seems fair to predict that the next urban America will be a more civilized place than the current one.

  CHAPTER THREE

  RE-CREATION IN NEW YORK

  THE HISTORY OF COMMUNITY LIFE in New York City over the past three decades, in boom times and hard times alike, has been the reclamation of its oldest neighborhoods, and the invention of new communities where none stood before. From the first conversions of factories into loft apartments in SoHo, in lower Manhattan, in the 1970s; through the discovery of Tribeca, just to the south, in the 1980s; on through the revitalization and soaring condo prices on the Lower East Side and in Chelsea in the 1990s; and the transformation of Brooklyn’s Williamsburg, in the first decade of the new century, New York has seen a relentless colonization by middle- and upper-class residents of neighborhoods once thought to have no residential future at all.

  By 2007, the process had reached to some of the least likely places one could imagine: the canyons of Wall Street and the surrounding Financial District; and the grimy industrial territory of Bushwick, the forgotten enclave at Brooklyn’s far eastern end, on the border with Queens.

  IT’S NOT ABSOLUTELY CLEAR why people wouldn’t find Wall Street a decent place to live, but for nearly two hundred years, virtually no one did. There were more residents at the lower end of Manhattan—roughly, the area south of the World Trade Center and Chambers Street—at the beginning of the nineteenth century than there were in the last decades of the twentieth. In fact, there were a lot more. The 1800 census shows that the four lower Manhattan wards housed 22,871 people, which was more than a third of New York’s total population. The 1970 census managed to find 833 residents in the same territory, many of them living in poverty in single-room occupancy hotels.

  The first change in this state of affairs was the construction of Battery Park City, the planned community built on filled-in land along the Hudson River. Opened in 1985, this complex of mostly low-rise mixed-use buildings, with a riverside park at the edge, was an instant success and eventually came to house more than ten thousand residents in more than thirty buildings. Battery Park City is cut off from the center of the Financial District by West Street, which is impossible for a pedestrian to cross at most places, but its popularity was a hint to the real estate industry that people of means were willing to live at the lower tip of Manhattan. It was unclear then whether they would want to live amid the noise and congestion of Wall Street itself, but soon it became clear that quite a few of them would.

  By the turn of the twenty-first century, the lower Manhattan population had recovered its 1800 numbers. Then, to the surprise of much of the city’s real estate industry, it began to explode. A decade later, the skyscraper canyons, condo developments, and narrow, twisting streets at the southern tip of Manhattan were home to something close to fifty thousand people, by conservative estimates. Some placed the population nearer to sixty thousand.

  This would be impressive growth under any circumstances, but it was remarkable growth given the fact that during that same decade, lower Manhattan had experienced two catastrophic events: the terrorist attacks of 2001 and the financial collapse of 2008.

  Following September 11, 2001, many predicted that Manhattan would experience a hemorrhage of financial industry jobs, and that residential growth at the bottom of the island would come to a halt. They were right about the jobs: High-paying work in the financial industry began to leave lower Manhattan within weeks after 9/11, some for Midtown, some for what was perceived as the safer precincts of northern New Jersey. Most of the jobs did not return. After 9/11, lower Manhattan lost a great deal of its office space, which was either destroyed or simply abandoned. But the residential picture was entirely different. There was a short-term decline of about forty-five hundred residents in late 2001 and early 2002, but it had been erased by 2004, and the curve of residential occupancy tilted sharply upward in the years after that. In 2007 alone, twenty-one residential buildings opened south of Chambers Street, making 295 in all. Despite what seemed to be an exponential growth in new condo skyscrapers, more than 60 percent of the Financial District’s population continued to be renters.

  Who were the Wall Street newcomers of this last decade? To an overwhelming extent, they were wealthy people. A study in 2007 showed that new households in the Financial District had an annual median income of $256,
000. They were primarily singles and childless couples (74 percent), but there were more families living in the district than one might expect. In 2009, the median family size of 2.2 was larger than the comparable figure for Manhattan as a whole, and considerably larger than the 2.02 recorded for the same territory several years earlier. Anyone who walked down Wall Street on a Saturday morning in 2007 or 2008 would run into a cadre of young parents and baby strollers.

  The stately Beaux-Art Cipriani Building at 55 Wall Street in lower Manhattan, once home of the National City Bank, is now, like most of the buildings nearby, a collection of residences for those who can afford the high price it takes to live in the Financial District. (photo credit 3.1)

  Most of these families lived in prewar office skyscrapers that had been retrofitted for residential use. It is hard to take an office building built in the 1920s and modernize it to handle the business technology of the present day. But it is relatively easy—and much cheaper—to turn the same building into condominiums or rental apartments. The departure of financial industry jobs after 2001 left an ample supply of such buildings ripe for conversion.

  The owners had an enormous incentive: section 421-G of the state housing code, enacted in 1996. By this time, the number of older and underused Financial District office buildings had already grown substantially. Seeing the residential possibilities—although most of these lay well in the future—the authors of 421-G offered a substantial tax abatement for landlords converting from office to apartment use. The law enabled landlords to keep rents more or less within reason, at least by Manhattan standards. This included luxury dwellings. It soon became significantly cheaper to rent or buy a place to live in the Financial District than in Midtown or on the Upper East Side. In 2005, the median gross rent for a one-bedroom apartment in lower Manhattan was $1,775—higher than for the borough as a whole but much lower than in its most exclusive neighborhoods.