Decay of the City

After reading The Raven’s recent post regarding a review of Professor Richard Florida’s The Rise of the Creative Class, I felt compelled to write on the topic of economic development.  Florida’s text discusses the kinds of communities which are vibrant and sustainable; they attract new businesses, attract population.  I’m not living in that kind of community.

Population growth in the greater urban-suburban area in which I live has slowed to a crawl over the last 30 years.  The former heart of this population, the City, experienced a steady flight of residents during this period.  Two nearby bedroom communities experienced steady growth as residents moved outward from the City.  During this time, the Township (which neighbors the City to the west) saw tremendous growth in its population and businesses.

The City was a primarily blue collar town, home to a number of manufacturers supporting or part of the automotive industry.  After the Oil Embargo of 1973, the automotive industry decline took its toll progressively on the businesses in the City.  A number eventually left or closed; no new businesses of the same size came to replace those that left.  Property values have steadily declined overall while blight consumes larger portions of the City proper.

The City suffered and continues to suffer from the same sort of malaise that affected Detroit.  A lack diversity in the local population paired with a corresponding lack of diversification in industry – all the eggs in one basket – result in a disastrous level of exposure when the primary industry fails.  The erosion of its revenue base, first through numerous tax abatements requested by industries which eventually left, secondly through the flight of population and thirdly through the falling property values, leaves the City in a, on-going downward spiral.  Businesses that were not automotive-based but served the blue-collar workforce employed by automotive-based businesses have had no choice but to downsize, move or fold since the local population no longer supports them and tax burdens have not lessened.  Unless checked through better strategic planning, the City will not attract new business or individual residents.

The loss of population in the City has resulted in more revenue growth (at least in the most recent decades) for the Township.  As older, established department stores declined and left the City, more city residents shopped in Township at the Mall and along the Township’s retail business corridor.  This area is experiencing sprawl, spreading now to the benefit of two neighboring townships (the retail corridor follows two state highways that intersect and run through these townships).  Unfortunately, there have been no incentives for businesses to move back to the City since tax burdens did not decrease at the same rate as businesses and residents moved away from the City.

For the short-term, the Township businesses could expect to see a stable period; some of the businesses (ex. retail businesses in the Mall) are reaching a mature point in the business cycle, while other newer opportunities are still juvenile (ex. financial and medical services bounding by an interstate and the retail business corridor).  One bright spot has been an older nearby business corridor that runs along yet another state highway crossing through the south end of the Township.  This corridor has experienced a rebirth after years of decline.  The re-growth has taken a couple of phases.  Phase I consisted of the extensive remodeling of an abandoned K-mart store into a multi-use conference center-restaurant-office space facility.  Other businesses located nearby benefited from the increased traffic generated by this reclamation.  Phase II consisted of the building of a retail plaza, including a Wal-Mart store as an anchor.  This phase not only dramatically increased traffic along the older nearby business corridor, it spawned a renewed interest in vacant properties and inspired the renovation and improved relocation of other businesses along the same stretch.  Although business volume was lost by sprawl to the neighboring townships, it was offset and regenerated along the older nearby business corridor; stringent development codes encouraged retention of higher profile businesses as well.

The increased traffic (more than 55,000 cars per day) along the older business corridor has improved the likelihood that businesses in the heart of the Township will continue to thrive over the next decade.

The Township can continue to remain moderately stable, since it is based primarily on service-based industries versus any single manufacturing industry.  The risk to the Township is the same as that experienced by the adjoining City; if the Township does not effectively seek and nurture a new spectrum of businesses and manage growth carefully, its population will begin to slide.  It, too, could begin a downward spiral from which it could be difficult to recover.

The City could begin to reverse the decades of damage, if it can apply the lessons from “smart growth” management studies:

“Overall, the patterns we find, as well as other prior research, suggest a clear relationship between restrictive growth policies and housing prices. More restrictive policies raise housing prices.

Higher housing prices lead to a lower level of affordability and slower population growth, as fewer households are able to purchase housing. Higher housing costs and slower population growth raise the labor costs of current and prospective employers, and area employment growth falls.

Another aspect of restrictive growth policies is that they tend to make housing prices more volatile, because restrictive policies increase the time interval for developers to respond to any change in housing demand.”  ("Growth can be 'smart,' but also costly", The Business Journal, August 31, 2001)

If the City could take advantage of both of its now lower property values and abandoned or vacant business properties while offering a short-term moratorium or a temporary reduction in taxes for new businesses and applying other “smart growth” practices, the City could see a rebirth of its own.  It would be in the best interests of local businesses and residence to promote these ideas with the City Council and City Planners.  Only time will tell whether the City comes to this conclusion.

I could send them a copy of The Rise of the Creative Class, but I’m not certain that they’d see the answers I see in that text.

12:27:05 PM    comment []

WARNING: SLOW BLOGGING AHEAD…

The Easter Bunny has arrived, sprinkling eggs which beckon from the lawn of some local park even as I type this.

I’m off to help my son find his share of eggs, then on to shop for all the goodies required for a couple of holiday feasts that my husband won’t buy.  You’ve not forgotten our diametrically opposed shopping methods, have you?  He buys only what’s on sale, I buy what we need.  At the moment, hubby’s hunting down the perfect 6 pound rib roast (on sale) and I’ll be seeking the organic milk and ingredients for Key Lime Pie (definitely not on sale).

I wonder occasionally how our kids will shop when they reach adulthood.  Poor things.

9:36:36 AM    comment []