Healthy cities: Is economic growth a partner or a problem?


A high level of life satisfaction in cities is achievable through policies that encourage interaction, equality, and human development, but not necessarily economic growth.

While we lament that our country’s growth rate can’t seem to climb higher than 2%, the obvious eludes us: continued GDP growth has failed miserably to benefit anyone but a slim margin of the population. Growth achieved through improved productivity (meaning more automation and fewer workers), outsourcing and technological innovations is translating into excellent numbers at the top (higher corporate profits, stock market growth, and higher executive pay) and very marginal benefits for those at the bottom or even the middle.

It is no more evident than in the United States where the official unemployment rate of 6.7% stands in glaring contrast to the nearly 20% of the population that now collects government hand-outs in the form of welfare or food-stamps to make ends meet. (Source)

Growth has accompanied falling wages, underemployment, and alienation.

It’s no wonder then that two of the US’s most economically dynamic cities (New York and San Francisco) also have the highest income disparity and inequality. Earners in the top 10% in these cities earn an average of 18 times as much as those in the bottom 10%, the highest disparity in the country. (Source)

San Francisco is plagued by some of the highest income inequality and lowest levels of affordable housing in the US.

San Francisco is plagued by some of the highest income inequality and lowest levels of affordable housing in the US.

The increases in income, and the disparities, aren’t making us any happier either.

That’s what Richard Wilkinson and Kate Pickett conclude in their highly acclaimed book, The Spirit Level, saying that “economic growth and increases in average incomes have ceased to contribute much to wellbeing in rich countries”.

What is far more important in indicating level of happiness, they say, is the level of income equality. Across countries and over time, they revealed a consistent finding that reducing inequality is the best way of improving the real quality of life in developed economies.

We’ve known for decades that the relationship between human development and GDP is not linear. At the same time it follows a predictable curve on the graph, with many countries achieving high levels of human development (defined by life expectation, literacy, quality of health, life satisfaction, and so forth) all with lower GDP levels.



What we see is that while very low income levels are associated with low human development and life satisfaction, there is surprisingly little difference in those values beyond $10,000 per capita GDP, with many Latin American countries experiencing higher life satisfaction than, say, the United Arab Emirates.


Life satisfaction itself is a complex term, which can differ enormously from country to country, but which invariably includes security, affordable housing, access to health services, rights and freedoms, and strong family and community interaction. What it rarely includes, though, is high income.

Not surprising then is a recent YouGov poll in the UK, which found that “relationships with my partner/family” came out top (80%) when respondents were asked to choose the three most important factors for personal happiness. “My health” came in second place (71%) and “money” third (42%). “My possessions” polled a mere 4% of votes.

A report out in the UK this month, the Wellbeing and Policy Report commissioned by the Legatum Institute, is calling for a new policy direction that puts wellbeing at the core of economy and society. The report shows that people are much happier in strong communities where trust is high and that mental health is the single biggest factor explaining cross sectional variation in life satisfaction.

And we needn’t forget the concept of Gross National Happiness, which encapsulates the shift in consciousness from seeking material growth to happiness, equality and wellbeing. It was developed as an alternative to GDP by the small country of Bhutan in the 1970’s and is now being taken more seriously as an alternative development model.

We obviously need to keep all this in mind when designing and re-designing our cities. Low-growth cities can just as easily as their high-growth counterparts satisfy the needs of the population, especially when we consider that high-growth cities are often plagued by property speculation and a lack of affordable housing, less green space and more competitive and status pressure, all leading to lower levels of life satisfaction.


Successful cities will encourage interaction says Charles Montgomery, author of Happy Cities.

Good planning matters too.

Charles Montgomery, in his book Happy City, says that “The most important psychological effect of the city is the way in which it moderates our relationships with other people,” arguing that suburban sprawl with its car-dependent homes and streets reduces interaction between people, and it is precisely this interaction which makes people happy.

By his definition, successful cities include Vancouver, Copenhagen and Bogotá, where high-density neighbourhoods shared by people in different income-groups, the promotion of public transport and cycling, as well as pedestrianization, have all led to thriving, living cities full of interaction and devoid of the alienation that modern, high-growth cities and their suburbs are often plagued with.


And aside from aiding interaction, successful cities need to be geared to helping their citizens maintain good health and spend more time with their families, which might mean more green space, parks and recreational areas in cities. Cities can also adopt a low-growth economic policy to reduce property speculation and keep housing affordable.

We also need to encourage an outlook that moves beyond material wealth to life satisfaction. This means giving space and opportunity for alternative lifestyles to flourish, including jobs that do not necessarily earn high incomes (artisans, artists and small businesses, for example) but will nevertheless offer high life satisfaction to those who choose them and benefit cities by creating a dynamism devoid in cities geared solely to the generation of money.




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