Tag Archives: Flint

Northern Cities Need To Be Bold If They Want To Grow

Geography and climate have played a significant role in U.S. population growth since 1970 (see here, here, here, and here). The figure below shows the correlation between county-level natural amenities and county population growth from 1970 – 2013 controlling for other factors including the population of the county in 1970, the average wage of the county in 1970 (a measure of labor productivity), the proportion of adults in the county with a bachelor’s degree or higher in 1970 and region of the country. The county-level natural amenities index is from the U.S. Department of Agriculture and scores the counties in the continental U.S. according to their climate and geographic features. The county with the worst score is Red Lake, MN and the county with the best score is Ventura, CA.

1970-13 pop growth, amenities

As shown in the figure the slope of the best fit line is positive. The coefficient from the regression is also given at the bottom of the figure and is equal to 0.16, meaning a one point increase in the score increased population growth by 16 percentage points on average.

The effect of natural amenities on population growth is much larger than the effect of the proportion of adults with a bachelor’s degree or higher, which is another strong predictor of population growth at the metropolitan (MSA) and city level (see here, here, here, and here). The relationship between county population growth from 1970 – 2013 and human capital is depicted below.

1970-13 pop growth, bachelors or more

Again, the relationship is positive but the effect is smaller. The coefficient is 0.026 which means a 1 percentage point increase in the proportion of adults with a bachelor’s degree or higher in 1970 increased population growth by 2.6 percentage points on average.

An example using some specific counties can help us see the difference between the climate and education effects. In the table below the county where I grew up, Greene County, OH, is the baseline county. I also include five other urban counties from around the country: Charleston County, SC; Dallas County, TX; Eau Claire County, WI; San Diego County, CA; and Sedgwick County, TX.

1970-13 pop chg, amenities table

The first column lists the amenities score for each county. The highest score belongs to San Diego. The second column lists the difference between Green County’s score and the other counties, e.g. 9.78 – (-1.97) = 11.75 which is the difference between Greene County’s score and San Diego’s score. The third column is the difference column multiplied by the 0.16 coefficient from the natural amenity figure e.g. 11.75 x 0.16 = 188% in the San Diego row. What this means is that according to this model, if Greene County had San Diego’s climate and geography it would have grown by an additional 188 percentage points from 1970 – 2013 all else equal.

Finally, the last column is the actual population growth of the county from 1970 – 2013. As shown, San Diego County grew by 135% while Greene County only grew by 30% over this 43 year period. Improving Greene County’s climate to that of any of the other counties except for Eau Claire would have increased its population growth by a substantial yet realistic amount.

Table 2 below is similar to the natural amenities table above only it shows the different effects on Greene County’s population growth due to a change in the proportion of adults with a bachelor’s degree or higher.

1970-13 pop chg, bachelor's table

As shown in the first column, Greene County actually had the largest proportion of adults with bachelor’s degree or higher in 1970 – 14.7% – of the counties listed.

The third column shows how Greene County’s population growth would have changed if it had the same proportion of adults with a bachelor’s degree or higher as the other counties did in 1970. If Greene County had the proportion of Charleston (11.2%) instead of 14.7% in 1970, its population growth is predicted to have been 9 percentage points lower from 1970 – 2013, all else equal. All of the effects in the table are negative since all of the counties had a lower proportion than Greene and population education has a positive effect on population growth.

Several studies have demonstrated the positive impact of an educated population on overall city population growth – often through its impact on entrepreneurial activity – but as shown here the education effect tends to be swamped by geographic and climate features. What this means is that city officials in less desirable areas need to be bold in order to compensate for the poor geography and climate that are out of their control.

A highly educated population combined with a business environment that fosters innovation can create the conditions for city growth. Burdensome land-use regulations, lengthy, confusing permitting processes, and unpredictable rules coupled with inconsistent enforcement increase the costs of doing business and stifle entrepreneurship. When these harmful business-climate factors are coupled with a generally bad climate the result is something like Cleveland, OH.

The reality is that the tax and regulatory environments of declining manufacturing cities remain too similar to those of cities in the Sunbelt while their weather and geography differ dramatically, and not in a good way. Since only relative differences cause people and firms to relocate, the similarity across tax and regulatory environments ensures that weather and climate remain the primary drivers of population change.

To overcome the persistent disadvantage of geography and climate officials in cold-weather cities need to be aggressive in implementing reforms. Fiddling around the edges of tax and regulatory policy in a half-hearted attempt to attract educated people, entrepreneurs and large, high-skill employers is a waste of time and residents’ resources – Florida’s cities have nicer weather and they’re in a state with no income tax. Northern cities like Flint, Cleveland, and Milwaukee that simply match the tax and regulatory environment of Houston, San Diego, or Tampa have done nothing to differentiate themselves along those dimensions and still have far worse weather.

Location choices reveal that people are willing to put up with a lot of negatives to live in places with good weather. California has one of the worst tax and regulatory environments of any state in the country and terrible congestion problems yet its large cities continue to grow. A marginally better business environment is not going to overcome the allure of the sun and beaches.

While a better business environment that is attractive to high-skilled workers and encourages entrepreneurship is unlikely to completely close the gap between a place like San Diego and Dayton when it comes to being a nice place to live and work, it’s a start. And more importantly it’s the only option cities like Dayton, Buffalo, Cleveland, St. Louis and Detroit have.

Urban Farming

The collapse of Detroit’s auto industry and its related population loss have left the city with a large supply of vacant land, some of which has been returned to its historical use as farmland.  The LA Times reports:

Large gardens and small farms — usually 10 acres or less — have cropped up in thriving cities such as Berkeley, where land is tough to come by, and struggling Rust Belt communities such as Flint, Mich., which hopes to encourage green space development and residents to eat locally grown foods.

In Detroit, hundreds of backyard gardens and scores of community gardens have blossomed and helped feed students in at least 40 schools and hundreds of families.

While a widespread return to agriculture is unlikely to improve any American city’s prosperity, these cities demonstrate that flexible zoning and land use regulation allow entrepreneurs to find the most valuable use for any piece of land, benefiting local residents accordingly.  For areas where labor is relatively inexpensive and land is widely available, urban farming could be a viable short-term answer to economic growth.

Hantz Farms has found a way to profit amidst the economic turmoil and change in Detroit, profiting as a company and creating jobs simultaneously.  This success story demonstrates that job creation comes from the private sector. Producer profits lead to both new jobs and consumer surplus, whereas government “job creation” merely redistributes wealth, resulting in a deadweight loss.

However, Detroit city officials maintain reservations about urban farming.  The Times article explains:

Their concerns include figuring out who would pay for cleaning pollutants out of the soil and removing utility infrastructure, such as gas and sewer lines; how to rewrite the city’s zoning laws; and how to adjust property tax rates and property values to allow for commercial farming.

Bootleggers and Baptists in Detroit

The massive layoffs within the auto industry have exacerbated housing problems in Detroit, but by many accounts, the city has been in decline for decades. While the population loss and unemployment in Detroit is much more severe than in most parts of the country, central city decay is not unique to Michigan. Because the auto industry’s collapse has made Detroit’s situation worse, Time has established a blog for local writers and photojournalists to document their perceptions of their city.  Daniel Okrent writes:

Detroit fell victim not to one malign actor but to a whole cast of them. For more than two decades, the insensate auto companies and their union partners and the elected officials who served at their pleasure continued to gun their engines while foreign competitors siphoned away their market share. When this played out against the city’s legacy of white racism and the corrosive two-decade rule of a black politician who cared more about retribution than about resurrection, you can begin to see why Detroit careened off the road.

Okrent identifies the problems consistent with the Bootleggers and Baptists theory in political decisions.  While policies may seem benign, they are often backed by special interests who have their own benefit in mind at the expense of the general population. This phenomenon is particularly visible in the city’s zoning and land use regulation, which many blame for the common pattern of inner city decline. In Detroit, this was witnessed as low-density, relatively expensive housing in the suburbs, with higher density housing and a shrinking population of generally lower-income residents left in the city center.

Because the city has now been losing population for decades, the housing stock is greater than necessary, and some occupied houses are surrounded by  abandoned ones. As suggested in Flint, a city with a similar problem with vacant homes, some people propose that Detroit should use its eminent domain power to buy out neighborhoods that include vacant houses and turn them into green space.

While this program might sound like it would benefit the city as a whole, zoning’s controversial history should caution Detroit residents against supporting a policy that will necessarily benefit some residents at the expense of others.  Across the country’s urbanities, we have seen that zoning is subject to abuse by policy makers and wealthy or well-connected citizens, making it difficult or impossible for the land use market to serve others fairly.

Rather than looking to the political process to improve Detroit’s neighborhoods, residents should acknowledge the myriad opportunities that the city’s relatively cheap housing, capital, and unemployed labor offer to future investors. In Flint, home buyers have already purchased low-priced historic homes for renovation. Detroit is full of opportunities for entrepreneurs, provided its history of corrupt politics comes to an end.

Is Smart Growth the Way to Better Cities?

Anthony Flint of the Lincoln Institute of Land Policy wrote a Boston Globe op-ed explaining that cities are well placed to become increasingly important centers of population and commerce. This is due in part to the ongoing pattern of national urbanization and in part to the Obama administration’s emphasis on the importance of cities and sustainable development.

20071018-garden_city_detailSmart growth, a policy championed by some people within the environmentalist and urbanist movements, advocates goals such as improving public transportation, protecting the environment, creating affordable housing, and supporting economic development. These goals are hard to find fault with, but the question remains whether federal policy is an appropriate place to be promoting a specific type of urban development.

Flint cites Jane Jacobs as an important thinker in shaping the contemporary ideal of urban living with vibrant mixed-use development that invites pedestrian use. While this sort of development fits in with some “smart growth” objectives, Jacobs emphasized that land use needed to be determined using local knowledge rather than top down mandates. She fought these mandates at the municipal level, and one can only imagine how she would react to development direction from the newly created Office of Urban Affairs.

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“If you have a decent job, do what you’re supposed to do with your money, save your pennies, and pay off your bills, you can have the world by the tail in Flint.”

Recently, Bob Nelson discussed plans to bulldoze sections of Flint, Michigan to shrink the city to make up for declining population. San Franciscan Gordon Young discusses in Slate why he’s giving up the Paris of the West to buy a house in Flint:

As the veteran of a brutal San Francisco home-buying odyssey, there’s no denying the appeal of a place where desperate Realtors sometimes offer up houses by the dozen. But this is more than a quest for cheap housing. I have an almost unhealthy attachment to Flint. I want to do something—anything—to help my hometown. Maybe a “summer place” in what has been ranked one of America’s most depressing cities can pump a little life into the local economy. And I fear that after 15 years in San Francisco—sometimes described as 49 square miles surrounded on all sides by reality—I’m losing touch with my roots, drifting uncomfortably far from the factory town my grandparents moved to at the turn of the 20th century.

Read the whole thing here. Young blogs at flintexpats.com.

Saving Flint

According to a recent article in the British Telegraph, Flint, Michigan once had 79,000 workers for General Motors and now has 8,000. The population of the city has fallen from 200,000 to 100,000. The unemployment rate is 20%. Young people are leaving in droves in search of jobs and better prospects elsewhere. Large parts of the city are emptying out, leaving at least 4,000 abandoned homes. Although the city has demolished 1,000 of them, 3,000 remain standing. Whole neighborhoods are crumbling rapidly.

So what to do? The normal political response is to take public actions to “save” places like Flint.  The urban renewal programs 50 years ago were designed to arrest the decay of older American cities such as St. Louis and Detroit – typically built in the nineteenth century and with decaying housing stock and outmoded land use patterns based originally on streetcar systems of transportation. Many federal billions were spent in futile efforts to reverse the market verdict, reflecting a refusal to accept that these old city neighborhoods were outmoded and their highest value economic use was as cheap housing for poor people. A “slum” was a pejorative term in those days for old housing – in many cases not all that bad structurally – that people with lower incomes could afford. But for American politicians, every part of every city should be thriving. If not, the government had to do something.

Reflecting the failures of past programs to “revitalize” the inner cities, the Brookings Institution now identifies 50 cities, most of them in the industrial “rust belt,” that need to shrink significantly to survive. After decades of failed efforts to halt downward economic forces, there has been a new acceptance that some American cities simply must get smaller. Facing its dire problems, city planners in Flint have finally come to accept this. The current economic crisis and the large number of foreclosures emphasize the need to rethink urban strategies that automatically assumed upward growth for every city.

One Brookings study proposes that the government adopt a program of “land banks” – government would acquire the land in old declining neighborhoods and then turn it over for redevelopment. It sounds unfortunately like of the thinking that was on exhibit in New Haven, Connecticut, leading to the Kelo Supreme Court case.

A much better approach would be to leave redevelopment to be determined in the market by the collective actions of property owners in a neighborhood area and land developers. Property owners could be facilitated in organizing a collective land bargaining association that would then solicit developer bids for the whole neighborhood. If a high enough bid was forthcoming, and if a large supermajority of property owners – say, 80 percent – voted to accept the offer, the neighborhood would be turned over to the private developer. A whole new neighborhood land uses compatible with present day market economics would result. It is possible that in places like Flint, a few neighborhoods might even be turned back to urban farming of high value local products. Whatever the result, market forces rather than urban planners would decide.

Legislative Action Against Kelo

In Texas, House Joint Resolution 14 could give voters the opportunity to increase the security of the state’s property owners, pending passage in the State Senate, which already passed a separate, weaker bill.  Currently, under precedent set by the Supreme Court case Kelo v. the City of New London, states can take ownership of property under their eminent domain powers by demonstrating merely that government ownership would offer “public benefit” as opposed to being required to prove “public use.”

The Institute for Justice explains that  HJR 14, which passed unanimously in the Texas House of Representatives, could potentially improve the state’s policy environment:

Under Kelo, a government is free to take your home or business and give it to anyone who might create more jobs or pay more taxes with your land than you do.  HJR 14 fixes Kelo in Texas by making it clear that “public use” means a use of the property by the government, the condemning authority or the public at large.

This action to strengthen the rights of Texas property owners contrasts with movements in some U.S. cities, including Cleveland and Flint, which are considering planned shrinkage as a way of dealing with mortgage foreclosures. City planning authorities in these cities tout the benefits of confining development to a more compact area because it would allow public services and infrastructure to be provided at lower cost.

However, this policy comes with negative incentives for property owners which these planners are ignoring.  If a locality’s residents begin to fear that their government, rather than protecting their property, may seize it to put it to use for the “public benefit” (which poses a much lower burden than “public use”), private investment, not to mention faith in good governance, will decline. If it passes, HJR 14 will allow policy makers (and policy researchers) to gather evidence across municipalities as to the costs and benefits of using eminent domain for public benefit takings, as some cities outside of Texas begin to employ this policy measure more heavily.