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Brooks Wilson's Economics Blog: The Living City?

Wednesday, June 17, 2009

The Living City?

Tom Leonard has written an interesting article, "US cities may have to be bulldozed in order to survive," for the in which he or the people he interviews anthropomorphizes American cities like Flint (HT Drudge). 
"Places like Flint have hit rock bottom. They're at the point where it's better to start knocking a lot of buildings down," she said [Karina Pallagst, director of the Shrinking Cities in a Global Perspective program at the University of California, Berkeley]...

If the city didn't downsize it will eventually go bankrupt, he added [Dan Kildee, the treasurer of Genesee County, which includes Flint]...

The city is buying up houses in more affluent areas to offer people in neighbourhoods it wants to demolish. Nobody will be forced to move, said Mr Kildee.
A city is not a living being with a heart, soul and brain, and we should remember that.  It is a political organization formed by citizens to establish rules that will allow people to interact socially and economically.  I understand the difficulty in continually referring to the relevant people involved in government or market actions, but it is a useful exercise.  When Karina Pallagst said that, "Places like Flint have hit rock bottom," she must be referring to the remaining citizens, the property owners, or the citizens that comprise the local government.  Dan Kildee's perspective seems clearer; he is referring to the people that run the city and the financial difficulties they face in providing services to citizens.  The article only condescendingly refers to the citizens served.

When net migration is negative, the remaining population, through their political representatives must decide how to cut back on services.  Kildee suggests that city officials have and should continue to buy property in "good" neighborhoods and offer it in exchange for property in "bad" neighborhoods.  The city officials would demolish homes in the "bad" neighborhoods and return them to a natural state.  This may be a good way for city officials to deal with a declining population if exchange is conducted at market prices but the article suggests that the purchases of homes may not be conducted at market prices.
Flint's recovery efforts have been helped by a new state law passed a few years ago which allowed local governments to buy up empty properties very cheaply.
Without more information, I am doing a little guess work, but it seems that the owners of abandoned homes are the big losers.  If I am a city official wishing to retain employment and needing someone to tax, who better to tax than those who have left the jurisdiction and no longer capable of voting.  Force the owners of abandon properties in the neighborhoods to be preserved to sell at below the market prices and offer it to voters at discounted prices.  Then force owners of abandoned properties in neighborhoods to be demolished to sell at cheap prices and create green zones for remaining citizens.  What a racket!


  1. Dr. Wilson,
    Interesting article, but however I feel that completely bulldozing cities is not the right thing to do. Every economy needs the prosperous parts as well as its negative parts to come to a market equilibrium.

    Your student,
    Lindsey Scott

  2. Distinction and abomination is what i say!!! When Karina Pallagst says "Flint has hit rock bottom" and they should start knocking down buildings, I'm with her. It only makes since to me before the town is literally a ghost town. We are in a real economic crunch right now. One that has left families and even towns on the brink of bankruptcy. It's time to start cleaning up and cleaning out in order to survive..

    Michelle Morris

  3. Dr. Wilson,

    If the supply of homes/buildings were limited to newer homes, would the equilibrium price increase based on the cost of production? Overall, the housing market would potentially improve with the destruction of the buildings of lesser quality; however if the declining population decreased with such a change, it would seem that the new citizens of Flint would be subject to more expensive property since the zones of cheaper buildings would be wiped out.

    Clint Warren

  4. Jacinta Tatman27/6/09 12:12 AM

    This is one of those things that make sense in theory, but once put into practice it would cause a backlash.

    People who are living in the affluent areas are practically supporting the city since they have the money to do do. Moving people from "bad" nieghborhoods into these rich areas would cause those who previously lived in the affluent neighborhood to leave in fear that their new neighbors would cause their rich area to become just like the "bad" area they moved from.

    This wouldn't be any better for the city since those who have the money to put into the city would end up leaving, causing the city to be worse off than before.