Friday, July 20, 2007

Urban Policy -- Downsizing the Obsolete Areas

Michael O'Hare at the Reality Based Community raises a recurring and always interesting urban and economic policy question:

What should be done about places that have lost their economic reason to be populated?"


"Is there a humane way government can help obsolete regions to grow small gracefully?"

I'm thinking about places like Atlantic Canada, the Northern Great Plains, New Orleans, some swathes of the rust belt at the large scale, and poverty-blighted urban neighborhoods at the small (most of inner Detroit).

Pittsburgh is a region long familiar with this question as it has known it was vulnerable to single industry economic obsolence since at least the 1940s. The Steelworkers knew that the massive concentration of work in the region meant that the region was at risk, and by 1983 when the last massive wave of mill closures went through the region, they had adapted as best as possible a strategy of cost mitigation instead of confrontation. Over the past thirty years, the Pittsburgh region has dealt with the decline of its heavy industry in a variety of ways -- bio-mechanical engineering, health services, financial back end services, non-profit sector growth, public economic development funding, and massive out-migration. One of the other ways that we as a region have dealt with this problem is by ignoring local concentrations of massive failure. The city of Duquesne is one of those anti-bubbles.

Chris Briem at NullSpace is tracking the fall of Duquesne and its regional policy implications as there are other communities that are almost as weak as it, and whose institutional social and economic capital reserves are also rapidly depleting. Chris notes that these failures tend to be non-linear and cumulative death spiral:

the most concrete government reform going on is happening almost by accident as the Duquesne School district progresses toward disincorporation and everyone else rushes to catch up. It must be some version of the second law of thermodynamics. Has there ever been an example of government behaving in a more reactive way? It's not like this has all come out of the blue. The worst disasters are not the things that come out of nowhere, but the things you see coming but just ignore.....

What sane person will want to move to Duquesne if it means they are forced into some proverbial crap shoot with the state deciding which neighboring school districts their children will be 'assigned' to. Is this a death sentence for the municipality as well? There have to be ramifications that have not even been thought of yet. Take the situation of neighboring West Mifflin which is slated to get some or most of the displaced Duquesne students. Those parents are angry and upset ....

I speculate they reflect a straightforward forecast of the school districts' demographics and past migration patterns. If there is some abnormal event that makes a particular district more unattractive (like the schools shutting down completely for example) the additional migration impact would not be incorporated into these numbers.

People are, as the economic term of art go, 'sticky.' They like to stay where they can if they can even if there is a better solution somewhere else. Some people are less sticky than others. For instance a twenty three year old recent college graduate with low to no student loan debt and a marketable degree is far less regionally sticky than a fifty five year diabetic on dialysis with six more years on his mortgage, seven more years to full pension and medical benefits in a job that he really does not like anymore but can not afford to go to COBRA or lose coverage entirely. So how do towns and regions downsize gracefully while respecting the stickiness factor as communities in distress are most likely to lose their least sticky individuals and families first.

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