Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1543

Earlier this week I talked about the huge importance of cities and how our governance structures are entirely ill-suited to the realities of our new urban focused economy. It was in relation to a talk that Richard Florida gave at the Rotman School.

Well this morning, I stumbled upon an old blog post by Alan Broadbent , who is the author of a book called Urban Nation . In it, he echoes a similar belief: Our governance structures, particularly as they relate to cities, are completely outdated. Toronto would be better off as its own, separate province.

Here’s an excerpt from his blog post :

"In my book Urban Nation (2008), I wrote that Canada’s cities were the orphans of Confederation, creatures of the provinces locked in constitutional arrangements that are almost a century and a half out of date. Our large urban regions are now the economic, social, and cultural engines of the country. They compete with other large urban regions around the world to create prosperity and well-being.

In Canada, these regions create the wealth that gets shared with the rest of the country through our redistribution and transfer arrangements. It is in our cities that the capital pools are assembled to take the oil, gas, and minerals out of the ground, where the factories and laboratories are built, and where much of our modern industries of information and design are based.

But our cities are not in control of their own destiny. Like Blanche Dubois in A Streetcar Named Desire, they are very much reliant on the kindness of strangers. They have few residual powers and limited revenue tools, being overly reliant on property taxes and barred from levying income or sales taxes, the big revenue generators. They are closely controlled by provincial governments and generally ignored by Ottawa. Their role in Confederation is to send money and keep quiet.”

This is a big deal and a big problem. We’re stymying the full economic, social and cultural potential of our cities. We’re underutilizing our greatest assets. It’s time for a new, urban focused, governance structure.

In light of Bill de Blasio being elected yesterday as the new mayor of New York City, I thought I would post this interesting graphic I found on Atlantic Cities :

What it shows is a clear split.

If you live in Manhattan or nearby areas in Brooklyn, Queens and the Bronx, you most likely saw your property values rise from 2008 to 2012. However, if you live on the outskirts of the city, you may have seen your property values fall as much as 20% (the darkest red areas).

This shift back to city centers has been well documented and labeled, by some, as The Great Inversion . But in many ways it’s a symptom of a greater phenomenon at work: rising income inequality.

It’s happening in New York. It’s happening in Toronto. And in many other global cities. New York VC Fred Wilson believes that the solution lies in the three Es : education, empowerment and entrepreneurship. That sounds like a great start to me.

Richard Florida recently gave a talk at the Rotman School as part of Toronto's  “Big City, Big Ideas”  lecture series. It was called: Why Creativity Is the New Economy. You can  watch it here via Rotman . It’s about an hour long.

If you’re familiar with the work of Richard Florida, you’ll find much of what he talks about familiar. But there is one point that I think is absolutely worth reiterating again, and again: The new economic unit of our time is the city . It used to be nations but, in today’s world, cities trump nations, provinces and states in terms economic importance.

Florida has long stressed this point in his work and I think he’s absolutely right. The problem, however, is that our governance structures are ill-suited to deal with this shift. There are too many layers of government and our cities do not have nearly enough autonomy. 

Toronto is also facing a profound leadership deficit at the municipal level, to say the least (See Rob Ford ). This cannot continue. Strong municipal leaders are critical to our sustained global economic competitiveness. It’s every global city for themselves and I, for one, want to win.

To give you an example of the dramatic rise of cities, take a look at this recent TechCrunch article on billion dollar startups . If you take a look at learning number 9, you’ll see an incredible interesting fact: San Francisco– not “the Valley”–is now home to the most billion dollar startups. Startups are eschewing the suburbs for the city.

I’ve written a lot on this trend , but I still don’t think that our governments have truly woken up to the fact that, in the new economy, our cities are our most important asset.