Creative Destruction – Urban Style

If you’ve played around with Google maps, especially their real-world view, and if you have stumbled by places like Detroit, there are some fascinating scenes. My Webmaster on this blog, Drew Gross, found a bargain “perfect house” there. The ad and the pictures of the house showed a nice, conventional three-bedroom, two-bath house in reasonable condition for $15,000. At first, Drew thought the ad was a typo, but indeed, it was accurate. He looked at Google’s satellite view of the neighborhood, and then he understood. The property was the only structure standing in an urban wasteland of demolished and about-to-be-demolished once-fine homes.

In days of yore (yore?), when homes fell back on property taxes and were abandoned, the relevant city would take the properties and sell them on the cheap to developers or bargain hunters willing to invest a little sweat equity to get themselves a house they could not otherwise afford. But today, while some inner cities are thriving – in New York, Seattle and DC – other cities are simply rusting away.

People and jobs have left Detroit in droves. They may have great professional sports teams, but their core city is a wasteland. Hitting a population peak of 1.85 million in the 1950s, today the city is home to way less than half that number, about 700 thousand. So restoring blighted homes and neighborhoods would be an act of utter futility for this bankrupt metropolis. There just aren’t enough people to live in those building, not enough businesses that need the space.

Same goes for many towns. For example, “Cleveland, whose population has shrunk by about 80,000 during the past decade to 395,000, has spent $50 million over the past six years to raze houses, which cost $10,000 each to destroy, compared with $27,000 annually to maintain.” New York Times, November 11^th. The local answer is increasingly the bulldozer and skip loader. Take away the crack houses and drug hotels. Take a load off the cops. Kill off the repositories of rats and roaches.

But these towns are not the only urban victims in the rust belt crumble. “Large-scale destruction is well known in Detroit, but it is also underway in Baltimore, Philadelphia, Cleveland, Cincinnati, Buffalo and others [You can add Youngstown, Ohio and St. Louis, Missouri to that list as well] at a total cost of more than $250 million. Officials are tearing down tens of thousands of vacant buildings, many habitable, as they seek to stimulate economic growth, reduce crime and blight, and increase environmental sustainability.

“A recent Brookings Institution study found that from 2000 to 2010 the number of vacant housing units nationally had increased by 4.5 million, or 44 percent. And a report by the University of California, Berkeley, determined that over the past 15 years, 130 cities, most with relatively small populations, have dissolved themselves, more than half the total ever recorded in the United States.

“The continuing struggles of former manufacturing centers have fundamentally altered urban planning, traditionally a discipline based on growth and expansion… Today, it is also about disinvestment patterns to help determine which depopulated neighborhoods are worth saving; what blocks should be torn down and rebuilt; and based on economic activity, transportation options, infrastructure and population density, where people might best be relocated. Some even focus on returning abandoned urban areas into forests and meadows.” NY Times.

And this is where national numbers really don’t tell you enough about those at the extreme ends of the bell-curve. Because the top of the food chain are doing so well, richer than ever, they tend to pull the average statistics to “tolerable economics.” But droughts in once-productive farmlands and labor-averse manufacturing and outsourcing against the Rust Belt leave vast pockets of struggling Americans with little hope for a participation in the “recovery.” They have been downsized for the rest of their lives, at least those too old to retrain for the modern job market… and we are cutting government money for training and education under the false mantra of “fiscal responsibility.” Short term bandages with longer term pain. In the end, do we care enough to change this… or is America now “everyone for him or herself”?

I’m Peter Dekom, and this is not exactly the country I grew up in.