The alpha city

3 June 2021 | Posted In: #139 Winter 2021,

Modern, urban economies produce a distinctive kind of city life — one where wealth appears to be high in general. However, as Rowland Atkinson discusses, the reality is that many middle-income and poorer residents are negatively affected.

Cities are where our economies, wealth and a range of positive outcomes are forged. Yet in many cities around the world, a particular kind of economy exists — dominated by finance, international property investment and growing inequalities. Many people are affected by the way property and finance help those to make more money, while the many who struggle are excluded from prosperity. Even worse — in a city looking to attract further wealth and the wealthy — we see decisions made that worsen pressure in the areas of housing, education, health, and community life.

Meanwhile, many working in politics can be seen to represent the interests of the wealthy and corporate groups — those in law, real estate, property development, think tanks and so on. Many working in these sectors promote the idea that investment and the presence of the wealthy are necessary for the city to benefit all citizens. But this argument is increasingly criticised.

This is because it fails to recognise (and often conceals) how development and finance does not benefit poorer and middle-income citizens. While many discuss the way that the rewards of work are unevenly distributed, in reality, the biggest divide is between those who work for a living and those who own land and other assets. Owning such wealth is a way of making much more money, while those who work have seen their lives become increasingly difficult.

Many who support free-market principles often push for pro-development planning legislation. In many ways, ideas about how the city economy should work become accepted as simply how things are so that they are rarely challenged. These codes have underpinned a kind of capitalist revolution.

This has been in place since the early 1980s and only accelerated over time. During this time, the rich have got richer, corporations and wealthy individuals have paid less and less tax, public housing has been degraded and sold-off, welfare systems have been withdrawn or eroded, and most forms of social investment have been popularly described as wasteful. All of this begs the question — who is the city for?

The alpha city is a term used to describe the kind of city that brings together many of the wealth elite (the richest people), their often, wealthy enablers (those at the top of the property, corporate and political systems), unending rounds of development (in the land and housing markets), and the prominent role of finance.

The term is also a description of how those with power tend to privilege property and wealth while doing much less to intervene or to support those in more challenging situations as well as the city’s middle classes. While being an alpha city may sound like a winning formula, the reality is that these gains are almost only to the wealthy.

Many of us, looking up from positions of hardship and the struggle of daily life, sense that something is wrong with how the city works. How can we defend the endless production of staggeringly expensive homes, the many empty homes alongside them and their position next to scenes of homelessness and overcrowding?

We are often told that we need to pursue the rich, international investors and to promote a low-regulation environment because this will contribute to the rest of the city and nation. Such arguments also underpin changes brought to many communities through regeneration, estate “renewal”, and wholesale demolition of thousands of homes.

These areas of land and housing become the raw material of the property-finance machine, assisting developers to create more, high-cost housing sold on what is essentially an international market to many cash-rich buyers. Those protesting the loss of social, and remnants of affordable housing, essentially compete with the forces of international investment.

The last financial crisis helped these arguments because it seemed that there was no money available for social causes (though in reality there is great corporate and personal wealth). At the start of a new financial crisis on the back of COVID-19, we again face important questions about where and how we get money to restore life in our cities, communities, and economy.

In an alpha city, space is made for capital, often more than it is for people. This involves building large numbers of high-cost homes; demolishing public housing estates to make way for open-market housing; and challenging any request for social or affordable housing or social infrastructure such as schools.

The city acts like a pincer squeezing the poor. Its heavy dependence on a finance economy and the attention of the world’s rich delivers little for many. In fact, it brings increasing calls for the removal of poorer and less wealthy households to make way for those with more in the form of estate demolition, sales of public land and the absence of social housing in almost all new housing. The alpha city creates a hostile environment to those on no and low incomes, but it is also a challenging place for those on decent salaries.

These problems are not new, but they have been worsened by the way the city acts as a kind of machine that sifts out the poor from the wealthy. It is essential that we understand how the wealthy and the poor and middle-incomes are ultimately all connected — they share the same city, the same government and society.

This fact is too often concealed by the overstated social and economic value of investment and finance. This often fails to connect that activity to the ultimate role of all business and commercial life — to provide opportunities, care, and wellbeing for all members of the city. This role is too often lost in calls to see business as a means of private wealth creation. Worse, it seems that such rewards are seen as something to be placed beyond the reach of those who contribute to its creation. This is not sustainable, nor socially just.

The poor and middle-income households form the fuel of the alpha city machine. But they also become, as they work and try to survive, its waste product — people who are stressed and straining, working for corporations, borrowing more and more to buy —which helps to fuel rises in house prices — paying more and more of their income to rent, trying to maintain a place in the city. Many of these people are not catered for, included in, nor benefit from a property, finance, and wealth economy that cities have become.

Right now, this city machine seems broken or at best idling. But its components are all ready to start working again when the conditions are right. COVID-19 has mothballed it, but it is hardwired to keep working the same way as soon as possible. The interests of those who have money or who invest it are immensely powerful and altering this direction will be extremely challenging.

One of the first things we need to face down is the argument that we somehow need the rich and property development in order for the city to be the best of all possible places. We need to tackle this myth because it is clear that life is worsening for large numbers of its citizens. We are told that the rich are essential, and to fear the exit of the rich to places where tax is lower. It is often said the rich benefit many through investments or buying services, that the property taxes they pay support core social services and so on.

Of course, there is a kernel of truth to all of these arguments. But these arguments quickly fall apart when set against the self-evident inequalities of the city and the sense of massive winners and crashing losers. This is a game overseen by a political elite who have helped to ensure wealth remains untaxed to any significant degree.

A much better set of outcomes can easily be imagined, but this requires a basic proposal — that the wealthy should make a more significant contribution. This should come through taxes on property and wealth, and that of developers and corporations.

This should be done because it is right and overdue. This would enable a fairer and socially sustainable city to be created. The preferable alternative for a future city is one that delivers for a much greater number of its citizens and a more balanced economy, for social investment, greater social protections, a revised urban equilibrium in which property prices deflate and where affordable housing is guaranteed in all new development.

  • The paperback version of Alpha City by Rowland Atkinson is available from Verso Books.