Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate.
The favored locales of the 0.002 percent.
It’s not just that the one percent is on the rise: The locational prerogatives of the global super-rich are changing the face of some of the world’s greatest cities. Foreign buyers are, for example, buying up huge chunks of central London and Manhattan, helping to push those cities' already astronomical housing prices even higher.
But outside of these two leading superstar cities, what are the favored locales of the global elite?
One useful source is the recently released Knight Frank’s Wealth Report 2015, which identifies the location of ultra-high-net-worth individuals (UHNWI), each with a whopping $30 million or more in net assets. There are nearly 173,000 such individuals worldwide, making them an even more rarefied group than the "one percent." Indeed, these super-rich account for the upper 0.002 percent. Collectively, they hold just over $20 trillion in global wealth.
The map below, by my Martin Prosperity Institute colleague Isabel Ritchie, charts the global cities of the super-rich.
London is the world’s top location for the super-rich, with 4,364 people with $30 million or more in assets. Tokyo is second with 3,575, followed by Singapore (3,227), New York (3,008) and Hong Kong (2,690). The table below shows the top 20 cities with the most ultra-high-net-worth individuals.
|Rank||City||Number of Super-Rich||
Percentage of Total
Things have changed since the last edition of the report. Now London is on top, besting New York City, which fell to fourth place. San Francisco, previously number four, has fallen out of the top 20 entirely. Singapore rises into the top 10, to number three, and Hong Kong is up three spots from 2013, to five. The top 10 also has two new European entrants: Frankfurt has the sixth most ultra-high-net individuals, and Paris has the seventh. Osaka, Beijing, and Zurich round out the top 10.
The dominance of Asian cities illustrates a larger trend. For the first time, Asia overtook North America as the region with the second-largest growth in ultra-high-net individuals. The wealthy in Asia also now hold more money overall than those in North America: $5.9 trillion compared to $5.5 trillion. However, Europe still reigns supreme, with the greatest growth in the number of super-rich and with the wealthiest super-rich overall. Europe’s high-net individuals hold $6.4 trillion.
But London, New York and Tokyo are very large cities. The picture changes when we control for population and track the locations of the global super-rich on a per capita basis. The map below charts the trend.
Now, smaller cities dominate. Geneva tops the list, with 144 super-rich individuals per 100,000 residents, followed by Swiss counterpart Zurich, with 71. Home to fabled Swiss banks, these cities have long been the favored locations of global plutocrats. As the table below shows, Singapore and Hong Kong retain their high placement, ranking third and fifth, respectively. London drops to eighth, New York to 19th, Paris to 24th and Tokyo to 32nd.
Not surprisingly, the global super-rich are a highly mobile bunch. According to Knight Frank’s survey of some 500 leading bankers and wealth advisors across the globe, the world’s super-rich continue to flee Russia and Asia* to stash money in real estate in North American and European cities. Russians are the most likely to be looking elsewhere, as the table below shows.
The report also offers its forecast of the cities that will be favored by the global super-rich in the future. By 2024, it predicts, New York will be home to over 520,000 individuals worth more than $1 million, with Tokyo (508,000) and Beijing (350,000) not far behind.
And of course, there are reasons to worry. “The great cities are becoming elite citadels,” Simon Kuper wrote in the Financial Times back in 2013. Superstar cities, like New York, London, Paris, Hong Kong and Singapore have evolved far beyond anything resembling gentrification to what he dubbed “plutocratisation.” “Global cities,” Kuper continued, “are turning into vast gated communities where the one percent reproduces itself.” This system exacerbates the growing and gaping divides in these cities, and also threatens the very creativity and diversity that has underpinned their growth in the first place.
*CORRECTION: A previous version of this post misstated that Australian ultra-high-net-worth individuals were especially likely to move. They're actually among the least likely to consider a move, according to the Knight Frank report.