Creating a Wise Economy

The biggest challenge to the Youngstown/Detroit right-sizing approach | February 10, 2011

Note: this blog post was original published in late 2009, shortly after Dave Bing took office in Detroit and when the issue of downsizing that city first began to be discussed in the popular press.  Given the image boost that Detroit received as a result of the Chrysler/Eminem Super Bowl ad, and other causes for guarded optimism that have been coming out of the city in the last year, I thought it was time to revisit this issue.  My biggest concern regarding these strategies is that I have yet to see a way to make such a massive spatial fix happen in the real world of market economics, especially in an economic setting where public sector dollars are not flowing like milk and honey.  I am hoping that some of  you good readers have some bright ideas or have seen it happen.   I’d like there to be a good answer, but I don’t know what it is.

Oh, and if you click the article link, you’ll see that the author is one again none other than Aaron Renn, the Urbanophile.  I am nothing if not consistent. 

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My last blog post focused on one of several points made in an article at www.newgeography.com that discussed issues around post-industrial environment.

In addition to an interesting insight into what I recently dubbed the cockroach system for entrepreneurial development (I’m betting I am going to regret that…), the article also provides a great illustration of the loss of building density in Detroit’s neighborhoods over the past 60 years.  It also presents a concept diagram of a future spatial reorganization of the City of Detroit.  That concept diagram shows a central business center orbited at a distance by small, compact villages, connected by transporation corridors and separated by what the diagram calls “opportunity areas.”

This is the first time that I, at least, have seen a concept that begins to make a little bit of sense out of the newly – popular idea that cities that have lost population could create a quasi-rural environment to enhance the quality of life of those who remain.  From a fiscal point of view, if for no other reason, that idea has not seemed workable to me because a big part of what makes it possible to deliver urban services is  the density of the users.  Ask any suburban county that has been trying to figure out how to pay for a transit system, and you’ll see what I mean.

If the users are too spread out, there aren’t enough users in the area that can be reasonably served to generate enough income to pay for it.   And that applies whether we are talking about bus lines, garbage pickup, sewer systems or fire services.  Regardless of how you feel about density, it’s pretty clear that density makes higher levels of public service possible.  What the Detroit concept does is create centers of reasonable density, which might overcome the challenges that would face a quasi-rural city made up of scattered households surrounded by large gardens or swaths of nature.

But here’s where I am still struggling: how do you do this?

How does a Detroit or a Youngstown create, or at least facilitate, this kind of massive spatial change?  Presumably, people outside of the “villages” would need to either relocate to the villages (or accept living a more rural type of existence – no bus stops, minimal road maintenance, etc.).   Obviously it would be in the best interest of the city for most of its population to relocate to one of the easier-to-serve areas, and the new conceptual model   But a property that is not in one of the villages would presumably become less valuable than a property that was in one of the designated villages. 

As we have seen with the recent housing crisis, declining property values make it all the harder for property owners to make any sort of moves.  The result, it appears, would be an “opportunity area” population that cannot afford to  escape to the center or the villages.  Being unable to afford to sell their existing “opportunity area” property for a decent enough price to afford the higher costs in the more desirable areas, they would be stuck — and given typical expectations of public health and safety services, that population stuck in the “opportunity areas” would still require at least most of the basic public services.  The city might be able to get away with not paving roads, but the police and fire departments would still find it necessary to provide public safety, and senior citizens would still need assistance, and so on.  Unless almost all of the “opportunity area” residents are able to get out on their own, the likelihood that the city’s public service costs would actually decrease significantly seems slim. 

That equasion might change if the value of the “opportunity areas” were to climb, but if the basic premise is that the city encompasses more land than its population can support economically, a land rush on the opportunity areas wouldn’t be waiting around the bend.

So (assuming a massive government-funded buyout was not in the cards), how could the population financially make the shift from dispersed to concentrated?  And is there anything that a Detroit or a Youngstown could do to help people make the private decision to relocate to a place that is better for the City to serve?

Anyone?  Anyone?

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