The New York Times reports that the middle class is being squeezed out of cities by rising housing costs. The rich have returned, and the poor never left, but in many big cities the middle income group – those within 80% to 120% of the median income – now represent less that a fifth of residents. The median household income in New York, to take a representative example, is $40,000.
For the most part, having the middle class live in the suburbs is not a terrible thing. It is good, I think, for any community to have a broad range of social types; on the other hand, people should live where they want to. The suburbs were invented for middle class families to have a safe place with a bit of green to raise their kids in. It is normal for the middle class to move to the suburbs.
The example that the Times used, though, was of police, firefighters, and school teachers being unable to afford living in their own cities. This, I think, raises a different issue than we face with any other part of the middle class. I think it is a very good thing for the people who provide a city's essential services – and I would include education in that list – to live in the city and share its life. Having the police live in every kind of community is an especially good idea.
It would be worth the while of any city to give every incentive for the city's essential staff to live in town. No city could afford to pay its cops enough to live in the high rent district, nor should it expect them all to live in the slums. The city government could work with landlords and banks to make it easier for city workers to live in town. If I were a big city mayor, I would offer housing subsidies as part of the recruiting package. For teachers, these subsidies might be contingent on them sending their own kids to the public schools.
If the private middle class leaves the city, that is their choice, though it is a loss for the town. If the public middle class leaves, though, the city services themselves will decline. Keep the city staff in the city, though, and they can be the nucleus of a revival of the urban middle class.