Wednesday, June 10, 2015
The New Ecomony: Losing Liberty in an Age of Access
[The New Atlantis] A few months before 9/11, when I first moved to downtown Los Angeles, the city’s high rises teemed with lawyers and bankers. The lights stayed on late — a beacon of industriousness. But as I quickly discovered, they rolled up the sidewalks by sundown. No matter how productive and wealthy its workers, downtown was a ghost town. LA’s urban core was no place to raise a family or own a home. With its patchwork of one-way streets and expensive lots, it was hardly even a place to own a car. The boom of the late 1980s and early 1990s that had erected LA’s skyline had not fueled residential growth. Angelenos who wanted to chase the dream of property ownership were effectively chased out of downtown.
But things change. Last month, I moved back to “DTLA,” as it’s now affectionately known. Today, once-forlorn corners boast shiny new bars, restaurants, and high-end stores. The streets are full of foot traffic, fueled by new generations of artisans, artists, and knowledge workers. They work from cafés or rented apartments, attend parties on hotel rooftops, and Uber religiously through town. Yes, there are plenty of dogs. But there are babies and children too. In a little over a decade, downtown’s generational turnover has replaced a faltering economy with a dynamic one.
What happened? Partly, it’s a tale of the magnetic power possessed by entrepreneurs and developers, who often alone enjoy enough social capital to draw friends and associates into risky areas that aren’t yet trendy. Even more, it is a story that is playing out across the country. In an age when ownership meant everything, downtown Los Angeles languished. Today, current tastes and modern technology have made access, not ownership, culturally all-important, and LA’s “historic core” is the hottest neighborhood around. Likewise, from flashy metros like San Francisco to beleaguered cities like Pittsburgh, rising generations are driving economic growth by paying to access experiences instead of buying to own.
Nationwide, the line between downsizing hipsters and upwardly mobile yuppies is blurring — an indication of potent social and economic change. America’s hipsters and yuppies seem to be making property ownership uncool. But they’re just the fashionable, visible tip of a much bigger iceberg.
Rather than a fad, the access economy has emerged organically from the customs and habits of “the cheapest generation” — as it has been dubbed in The Atlantic, the leading magazine tracking upper-middle-class cultural trends. Writers Derek Thompson and Jordan Weissman recount that, in 2010, Americans aged 21 to 34 “bought just 27 percent of all new vehicles sold in America, down from the peak of 38 percent in 1985.” From 1998 to 2008, the share of teenagers with a driver’s license dropped by more than a fourth. And it isn’t just cars and driving: Thompson and Weissman cite a 2012 paper written by a Federal Reserve economist showing that the proportion of new young homeowners during the period from 2009 to 2011 was at a level less than half that of a decade earlier. It’s not quite a stampede from ownership, but it’s close.
In part, these changes can be chalked up to the post-Great Recession economy, which has left Millennials facing bleak job prospects while carrying heavy loads of student debt. But those economic conditions have been reinforced by other incentives to create a new way of thinking among Millennials. They are more interested than previous generations in paying to use cars and houses instead of buying them outright. Buying means responsibility and risk. Renting means never being stuck with what you don’t want or can’t afford. It remains to be seen how durable these judgments will be, but they are sharpened by technology and tastes, which affect not just the purchase of big-ticket items like cars and houses but also life’s daily decisions. Ride-sharing apps like Uber and Lyft and car-sharing services like Zipcar are biting into car sales. Vacation-home apps like Airbnb have become virtual rent-sharing apps. There’s something powerfully convenient about the logic of choosing to access stuff instead of owning it. Its applications are limited only by the imagination. Read More