Tuesday, December 30, 2008

Stop Investing in Shrinking Cities

CEOs for Cities is soliciting opinions about the "City Beautiful" approach to urban economic development. The debate is played out in a Boston Globe article and one economic development expert from New Brunswick lampoons the policy recommendations as evidence of the "Floridian virus" taking hold, referencing the obvious influence of Richard Florida's work on the preferred strategy. The connection between "City Beautiful" and Florida isn't that clear cut, but there exists plenty of common ground between the research in question and the Creative Class hypotheses. But I don't know if one necessarily validates the other. Once again, the dichotomy (e.g. Joel Kotkin versus Richard Florida; Flat World versus Spiky World) strikes me as a false one.

There is another controversy embedded within the conclusions that is much more vexing and it concerns the expected federal economic stimulus package:

If the goal of a stimulus package, or any economic development plan, is to stimulate growth, does it make sense to continue investing in places that will never be attractive?

Many of the 15 variables that Carlino and Saiz have identified as triggers for new growth - like coastlines, historical buildings, and a lack of rainy days - are not something a city can choose to build. Rather, they are permanent elements of place based on irreconcilable fates of history and geography. Why send another federal dollar to bolster manufacturing in Akron when it could support a golf course in sunny Phoenix?

The suggestion is to invest in the places where talent already prefers to live, not the glum cities currently shrinking. Upon my first reading of the Globe article, I immediately thought of Chicago and globalization. Chicago essentially invested in the healthiest part of the city, the rest be damned. Globalization would seem to reward urban triage. Only the fittest places will survive.

Another reading of the article revealed to me a loophole in this geography. What is popular now may not attract talent in the next decade. If Rust Belt Chic is the latest urban fad, then the geographically mobile will stream to rebuilding postindustrial cities. All the money poured into the Sun Belt might go to waste.

I think the main problem is that most Americans are not that geographically mobile. If Obama ignores all the people "stuck" in the Rust Belt, then he risks alienating a large part of his constituency. We all saw how politically divisive the bailout of the American auto industry was and still is. Sometimes the best policy is the worst choice.

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