Rebuilding the Unbuildable

Has New Orleans remotely recovered from a reported population loss, mostly spurred by 2005 Hurricane Katrina’s destruction of the city and its environs, of 29% in the last decade? Its 370,000 population is half what it was 50 years ago. In 2010, an estimated 90,000 housing units remained abandoned, jobs plummeted in the post-Katrina era, and the recession added to the toll. An initial 2006 proposal, to allow the city to shrink down to its core areas and focus the rebuilding effort where it mattered most – buying out the poor souls where rebuilding was not economically justified – died quickly in the Crescent City’s populist and politicized smoke-filled rooms.

Even today after much has been done to reduce the roiling urban blight, you can still walk by homes rotting, weeds grabbing at the remaining pillars and boards, as too many parts of greater New Orleans still remains withered and decimated, far short of the golden years of this great urban mix. Of course there’s been rebuilding and restoration… but the city, well, it’s just not the same anymore. Did the politicos at the top, those who have not been convicted of corruption, just bite off more than they could chew?

New Orleans was decimated by a natural disaster, an infrastructure suffering from America’s bad habit of “deferred maintenance” – cutting costs of necessities to pay for unbelievably generous public pension benefits – and the political battles that ensued only made that damage worse. But there is another major city that has been decimated by drastic change… this time not a sudden natural disaster, but a slow economic erosion based on excessive labor costs slammed by global pricing in an outsource-driven international marketplace.

“The city of Detroit has gone through a major economic and demographic decline in recent decades. The population of the city has fallen from a high of 1,850,000 in 1950 to 701,000 in 2013. The automobile industry in Detroit has suffered from global competition and has moved much of the remaining production out of Detroit. Some of the highest crime rates in the United States are now occurring in Detroit, and huge areas of the city are in a state of severe urban decay. In 2013, Detroit filed the largest municipal bankruptcy case in U.S. history.” Wikipedia.

Detroit has become America’s largest slum (see the picture above). As basic government services have contracted to the bone, police response times mixed with dark, unlighted streets, have become a criminal’s delight. Schools have deteriorated well below America’s already-abysmal standards. At every level, a skeleton staff of civil servants struggle to handle a workload that truly requires vastly larger staffs. Garbage collection to street repairs to health inspections are ridiculously sub-par.

But the post-bankruptcy plans for Detroit are more about “fix and repair,” lower taxes to attracted entrepreneurial investment, cutting as many pension commitments as possible through the provisions of Chapter 9 (municipal bankruptcy) of our federal bankruptcy code. Fixing all of Detroit is still the agenda, even though there is no reasonable expectation that the population necessary to justify a total fix will remotely return to the city in the very, very long-term vision. And we know that between the taxpayers in both Michigan and across the land, the appetite for the big repair just isn’t there. Further, while you might attract a few die-hard entrepreneurs into the core city, exactly how crazy do you have to be to move into this high-crime wasteland of a city to begin a business focused on growth? It might work for a few, but it is hardly a business plan that strikes me as credible.

It’s time to face the reality that we need some serious reprioritization in rebuilding decimated communities. Detroit won’t be the last such economic disaster, and New Orleans won’t be the last town slammed by natural devastation. If these cities simply cannot be expected to restore populations to peak occupancy, let’s focus our economic resources where it can actually create a sustainable solution. Buy out the outliers in the unsustainable sections of the community and focus resources where they matter.

“The scale of the two cities and the nature of their calamities differ, but Detroit can learn from New Orleans, where a fix that appeared rational to some experts and civic leaders was thrown aside for a way forward that has been slower and messier but politically more palatable and, many here believe, fairer.

“Shrinking the footprint ‘was a logical and practical idea that was completely irrelevant to the time and place it was presented in,’ said Steve Bingler, an architect who played a role in the humbler city plans that came later. ‘They really wanted a silver bullet.’

“The arguments heard in Detroit in recent years echo those that were made here at the time: The New Orleans population had been contracting long before Katrina and would certainly be much smaller afterward; even the billions of dollars in federal recovery aid would be insufficient to rebuild the whole city; those who came back would be stranded in parts of town lacking services like police protection and streetlights…

“Debt refinancing, property tax reassessment and, most critically, a huge infusion of recovery money have all helped maintain services, but the money available is still inadequate. The city has had to prioritize the paving of roads, the fixing of streetlights and the building of parks. The Police Department has been spread thin, an issue in this year’s mayoral election, but plans to hire more officers have required significant cuts in many other departments, including public works.” New York Times, February 21st. Americans deserve plans and dreams that can be implemented and that are both viable and sustainable. We need to rebuild, but we need to keep it real.

I’m Peter Dekom, and if we deploy our rebuilding capital intelligently, we may actually generate a new cash-generating tax based… instead of a costly and constant bailout to prevent a slow and inevitable failure.