Making Philadelphia Better

Let us suppose that you wanted to make the City of Philadelphia better.

I have an idea how to do it, which I frequently ruminate upon as I walk through the city.

The big idea is this: the fundamental resource of a city are people. Thus, the best way to improve Philadelphia is to create incentives for people to move to Philadelphia.

I believe that people are more important than any other available resource as to the development of a great city, but I must concede that here I cannot prove it. I assert its truth, and for now will ignore the possibility that it is wrong.

Let me also make another assertion. Right now, there are two catagories of jobs. There are jobs that are location dependant, and there are jobs that are not. Examples of jobs that are location dependant include construction, face-to-face service industries, agriculture, some transportation, retail, medicine, and protective government services. Jobs that are not location dependant include financial services, mail-order, and a wide variety of back-office functions.

Location dependant jobs will become more plentiful as the number and variety of inhabitants in a locale increase. If more people move to Philadelphia, there will be more location dependant jobs that can only be done in Philadelphia. This has the potential to start a virtuous cycle: more population leads to a larger local market in location dependant jobs. A strong demand for local labor will increase put upward pressure on wages, which will further signal to the providers of labor (i.e. individuals) to move to Philadelphia to sell there labor at higher rates.

The problem, of course, is that this could lead to inflation, and could strain public resources.

To attack the problem of local inflation, one must look at its sources, and here I believe the single biggest source of inflation, and the single biggest cost that wage-earners in Philadelphia worry about is housing. But this is a fixable problem, and it leads to my single biggest concrete suggestion.

Government should take aggressive steps to increase the population density of Philadelphia, particularly through reducing taxes and lifting zoning regulations that burden the creation of housing. The highest density housing, i.e. apartment buildings and condominiums, should be the favored creatures of the law. New buildings, as high and as dense as is practical, should be promoted. Particularly when their location would allow easy access to the legacy mass transportation network.

As supplies of housing increase, the fraction of wage-earner income devoted to housing should drop. This frees up more income to support savings, increased consumption (leading to increased employment), and the redevelopment of old or uneconomical housing stock. In turn, this will send important pricing signals to the real estate market, helping developers to recognize the highest and best uses of land.

Low living expenses and a healthy demand for service industry positions provides a key component in the development of entertainment and artistic communities. Artists need inexpensive living, as their work (at least generally in their early stages of their career) tends not to be well compensated. At the same time, artists and entertainers tend to form important communities of mutual aid, criticism, and exchange of ideas. But all of this requires that artists can find day jobs to support their art (again, at least in their early careers.)

Low living expenses and a strong demand for labor provide perfect incubator conditions for new enterprises and entreprenuerial activity. Even risk-takers weigh risks. If the personal financial consequences of a bold but risky entreprenurial idea are softened by the knowlege that the local market will always have a job for you (and you won't lose your house or apartment) then it's easier to take the risk.

Finally, for jobs that could theoretically be done anywhere (the non-location dependant jobs) Phildelphia would have a better chance of competing for them if the city became known for low living expenses and a boldly entreprenurial local culture.