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Mario Polèse
Urban-Development Legends « Back to Story

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I think your point is somewhat valid, but your evidence is weak.

First, as an example: Atlanta does have world-class universities in Emory and GA Tech. It also has CNN and the CDC. It has museums. And, it definitely has bohemian neighborhoods. There are a lot of "creative class" draws. Atlanta also has a relatively low cost of living and a relatively high profile, particularly since the 1996 Olympics (which kicked off the explosive growth you're discussing).

More generally, improving childhood education does promote economic development. Even though Bloomberg can't do anything about neighboring communities local school districts, improving the districts within his purview will effectively lower the cost of living in NYC (in that families will not have to pay for housing and private education), and will attract more skilled workers and executives as residents, which will attract more firms who have executives who want to live there and need the local skilled workforce.

The number one factor in choose a neighborhood in which to live is typically the quality of the local school district. If executives believe they can keep more disposable income because their kids will get a quality public education, they will opt to live in that neighborhood. Likewise, middle-class families will trade off housing and neighborhood for quality schools - spend a little more on the house vs pay for private schooling.

You are correct that there is no one-size fits all approach to economic development. Every place has its own unique strengths and weaknesses. But, there are general ways to think about what those strengths and weaknesses are (cluster analyses, quality of life amenities, etc.). And, to your point, cities must be proactive about changing economic trends and incorporate some flexibility into their planning to allow for changing economic conditions.

In all, an interesting article. Thanks.
development of a state depend on various factors. main thing is that what is good for one it may not necessary to be good for other state also, ti varied from state to state.if some state is rich water resource than it is good to develop hydro power than any other . similarly if some state is rich in nature beauty than it good to develop tourism. from writer view we cant accept the same economic policy in every state it must vary and should be change with time according to changing economic condition and new opportunities

thank you
It isn't always the amount of the tax. The recent payroll tax connected to those working in the region served by the Metropolitan Transit Authority created a new tax form even though one line on the existing state payroll reports could have accomplished the desired goal. In turn taking this more expensive route no doubt required more MTA personnel for processing and probably more physical space versus letting the existing Albany tax collectors merely add one more tax to their impressive roster.
I bet Georgia Tech is sad to learn it is not a top-notch university. Perhaps some day Atlanta will spawn a top-notch university.
I don't think Austin's motto is 'Keep Austin Weird', at least not formally. That's the motto of a small business alliance in Austin.

Austin's formal motto is 'Live Music Capital of The World'.

Many people in Austin like cheese. They do not like ants, but they do like bats. Austin's population generally sleeps at night, except when they do not. Everyone in Austin is OK with whatever as long as it doesn't interfere with whichever, so bring your own spoons.
This article reads like the background music to my career as a Uk Regeneration Director at London Docklands; Liverpool; and latterly, Salford. I too would conclude that for most localities getting the business as usual stuff right is the most important "regeneration" task. However,the creation of Canary Wharf as a global banking centre(London Docklands); the establishment of the Albert Dock to kick start a new Urban Tourism industry(Liverpool) and to some extent, the creation of a new Media City at Salford Quays were all achieved in circumstances where the locality's ability to do business as usual was less than optimum.
The UK stats show Tower Hamlets(Home of Canary Wharf) to be economically,the most successful locality in Britain. At the same time all the other stats show this locality was almost overwhelmed in dealing with it's social difficulties.
My own conclusion is that for localities to stabilise their regeneration position they firstly ensure that basic public service delivery is optimal.Secondly, they might exceptionally establish special purpose regeneration vehicles as an additional regeneration mechanism - but not as substitute for facing up to the primary task of delivering well run public .
services.
If you manage to successfully achieve both strategies, then you may indeed achieve that other holly grail- "Transformational Regeneration".
Thanks again - Chris Farrow
Matthew T. Sternberg January 24, 2012 at 11:03 AM
I have been in the economic development field for 25 years and concur with your assessment. But it's not only that some fads are ineffective, they can be outright harmful. When the Creative Economy came along, the state of Vermont and many of its communities embraced it because it would allow them to claim a strong commitment to economic development without having to address the real issues of transportation, regulations and taxes. They could claim that those things didn't matter as long as the people were creative. This became a main focus of the state's policy. So the fad resulted in a major set for those of us who were trying to solve the structural problems. This was a major reason I left the state in 2006.
Interesting
Excellent article!
And of course, every newly elected mayor or City counselor has to try something new, which in many cases re-sets the previous efforts so you end up with a series of short-term starts that never have a chance to make it to the finish line.
Good article. Thanks for posting it.
Elizabeth Campbell January 08, 2012 at 8:43 AM
Having just given away a small commercial building in a post-industrial "cool city" to avoid paying exorbitant utility costs, I think another issue is the cost of owning a business in marginal ghost towns. The costs of minimum water and sewage bills quadrupled in the last four years, yielding a rate far higher than the residential rate. When a business is not bringing in any money, there is no way to balance the books if small business is expected to pay the bills for the surrounding neighborhood. We bought a building in a marginal area to try to keep the margin from infringing on our neighborhood. We helped two other business owners in the same block apply for and receive grants. We all felt optimistic and looked forward to building community. The usual bugaboos--robberies, vandalism, graffiti, were constant sources of stress. We moved into our building to protect it. But the killer was the utility bills. That is what made the bleeding unstoppable. We signed a quit claim deed and gave it to a young couple who still had optimism and energy left.
Thought provoking. You mentioned "community economic development" but didn't seem to allude that it worked or didn't work, as you did with the other theories. I am curious, do you have examples of it that you drew from during your research? Sounds very similar to the "buy local" trend that is happening in places like Oklahoma City. Thanks!
Business location decisions are based primarily on access to inputs (labor and resources) and proximity to markets (customers). Of course, it is often true that there might be several places that are roughly equal in terms of providing access to these business essentials, and a large firm can then get these jurisdictions to compete against each other in terms of tax breaks before making its final decision. It’s difficult for politicians to resist this type of pressure. Residential location decisions are based primarily on access to employment, quality of schools, cost and perceptions about safety.

I concur with Polèse‘s “back to basics” conclusion. There are even some rust-belt cities in Pennsylvania that have partially mitigated the collapse of the domestic steel industry through this approach. These cities have transformed their property tax into a value capture user fee. This has been accomplished by reducing the property tax rate on building values and increasing the tax rate on land values. As a result, it is less costly to construct, improve and maintain buildings. Increased construction activity provides jobs and lower rents are good for businesses and residents alike. Also, the higher tax on land values makes it more expensive to hold prime sites out of use. Thus, it creates an economic imperative for infill development.

The cities that have adopted this approach continue to suffer from the loss of thousands of manufacturing jobs. But they are doing better than neighboring cities that rely on the traditional property tax and its upside-down incentives that punish owners with higher taxes for improving properties while reducing taxes for owners who allow properties to deteriorate.

For more information, see http://www.justeconomicsllc.com


The conclusion to the article is what? I am very disappointed by the the author. Of course each respective strategy is going to have strengths and weaknesses because of the shifting global economy, industry changes and innovation. I am not sure anyone ever said that a one sides fits all strategy to economic development is the best way to create growth.

In addition the way he cast off the findings on the Boston Fed research is alarming. Some cities don't have those forms of partnership, or don't have them to the level necessary, or don't utilize them in the appropriate manner to create growth. Instead of simply casting off the study I would have like to have seen more reflection on how you match the appropriate level of public and private collaborations with the various economic development strategies (which he calls fads) to achieve the best outcome.

The article ended on a very sour and somewhat depressing note.
I'll be brief> Culture follows power. Power does not follow Culture. This principle is quite apparent in Montreal, a city that traded power for culture.
Well its not so inspirational for the New Year, is it?

For every failed initiative, there are successful ones. What about he city of Singapore? reinventing itself from a second rate set of docks to a technology led economy - with heavy (but smart) state intervention. Ditto Taiwan. Ditto South Korea.

Low taxes, low regulations - hmm I don't see China or Brazil (the real growth success stories of the past 20 years) really taking much notice of this, do you?

I think the key message of the article is that taking ideas at face value, and somewhat superficially is a recipe for disaster. Economic development strategies and activities should be undertaken with deep knowledge of the local, regional, national and international economy.

Don't get me wrong, I find some resonance with most of the criticisms. But I don't see that this stops places like Shanghai or Dubai from strongly shaping their economic trajectories.

And governance isn't just about the 'politicians' - businesses give governance themselves - networks, leaders, initiatives, building clusters and new markets.

Long term restructuring is a 25-50 year hike. And economies are dynamic. So leadership has to be dynamic, and play the long game at the same time. That's what the likes of Singapore, S. Korea, China etc do very well.
Too much is made of Florida's point in an absolutist context rather than the general hypothesis.

The article makes some good points, but a community should pursue the type of local economy it wants.

Also, there seems to be a lot of criticism of local government wanting to dictate local economics. I think many local governments would be happy to be out of economic development for the most part. Of course, the private sector won't be able to get tax abatements or TIF.
Good piece. But neither the article nor the commentators mention luck. Given the large role that it plays in the economy of cities, I suggest that sticking to what gives cities their advantage is the best strategy. These qualities include good public transportation, parks and playgrounds, public gathering places, and emergency services. They don't create success--that's a matter of luck--but they do nudge it along.
It's in our nature to seek not only causal connections where they don't exist, but also to seek simple solutions to complex problems. Some say, "get govt. out of business" and bad regs do hamper business, but effective regulation of the financial industry would have prevented colossal economic hardship. Govt. regulation is more a qualitative issue than a quantitative one. Govt. and business decisions require wisdom and honesty, which are in short supply in the types who seek money and power.
Superb piece. While many of the academic developmental fads have laudable goals, they confuse correlation with causality. Resurgent cities have a "creative class" so lets implement policies to bring them in! What if they are a consequence of the resurgence, not the cause?

There are endless variables at work and one can see them within cities as well. When a neighborhood in nyc goes from horrific to gentrified one wonders: "how did that happen? Why?" Policy-makers and academics look at the results and create a story that sounds reasonable and off they go; onto another delusional recipe for success.
I think that Polese has it backwards( re:Florida ideas). It is not investment in the arts that brings the creative class. It is space and the infrastructure of a community that attracts us. Lofts, affordable apartments, lower store rents as well as access to transportation, amenities, internet. As soon as there is a hint of growth, real estate interests try to cash in. That drives the people who revived the neighborhood away.
This seems to be a long-winded way of saying ease of on business taxes and regulations, keep a lid on union demands. To say that all the economic development measures mentioned are merely "fads" is too sweeping a judgement. All can be helpful when applied judiciously. Unions can and do make unreasonable demands, but are workers paid too much? Do they get more than their due in benefits? Compared to whom? Workers elsewhere who get less?

And to be fair to Jane Jacobs, her views on economic well-being are more comprehensive and nuanced than Mr. Polese suggests. She used examples from modern Tokyo to Renaissance Venice to show city-regions can interact with their surrounding rural areas to create a balanced economy that replaces capital expenditures with capital inflow from exports.

Alas, our current U.S. federal policy is thwarting this dynamic instead of incentivising it.
Oops, I see now that the article is published by the Manhattan Institute (interesting name for a think tank that puts down big city life). I shouldn't have expected more.

PS Please use a captcha tool that is legible.
Laissez faire by any other name would smell as sour.

C'mon, this article is a downer. It is a complete capitulation to ignorance and just muddling through. We know much more about how cities work and grow (or not), and what makes them so. For every loser Polese cites, there are winners. I work in one that works via a lot of vision and hard work by the political and civil leaders, and with the avid participation of the citizenry. I live in another that is a perennial cripple because the local vision extends only a block in any direction from the developer or business sharpie who promotes it.

Next time, more substance and fewer generalizations, please. When you skew the presentation so that everyone's a fool, how do you omit yourself from that impression?
I do know of one job strategy that has worked - data-free pontificating in the City Journal.

"I somehow doubt it?" - Well who knows! We'll just leave it at that. No investigation needed for this decisive opinion piece, or excuse me, lazy journalism.
You missed one - the catch-all "casino, let's develop the waterfront, get a new stadium, and a WW2 battleship and covert warhouses to condos business plan.

Every lazy, corrupt politician falls back on this plan. It's easy, attracts clueless hipsters
with disposable income but does little to improve the area. Crime rates do not improve because the new residents are targets. The schools don't improve because those who move in to quench their desire for exposed brick and reclaimed lumber floors have no children. In fact they themselves are children.

Camden is a perfect example of this type of clusterfark. A high end condo development went south because folks couldn't walk the streets at night. There were no bars, restaurants, etc.

And few employers.

So they do what everyone does: Give Camden a wide birth and head into Philadelphia.

In order to revitalize a community, the residents need to feel safe. You can't load it up with hipsters and yuppies. You good schools...families...and a middle class. What's wrong with giving first shot at homes at a very low interest rate to police, firemen, sanitation workers, teachers, etc. - provided they stay for - a minimum time period and do not sublet? Let those who will create the foundation needed for a solid community move in first.

Also - as is with most "gentrified" communities the first line of businesses needed are not cupcake shops, wood fired pizza parlors and sustainable coffee shops. They need supermarkets, hardware stores, dry cleaners etc.

Finally - they need employers. Offer incentives to companies to move. Offer loans to start-ups that make sense and can bring something to the community in the way of jobs not red-bearded "bean to bar" chocolate makingtransplants (like in Williamsbrg who make a killing and thrive by offering free booze for employment.

The author seems to miss Atlanta completely which causes one to question his rigor. Atlanta is home to world class universities in GA. Tech and Emory University. The CDC makes Atlanta the center for public health. These institutions draw world class scholars and researchers that live in nearby neighborhoods and whose children populate the schools.
Given the fact that cities have no control over their borders, they seem to be locked into a model of, possibly, providing services such as education whose yield can be transported elsewhere while being subject to imported goods that are produced in other places, thus depriving the city's residents of jobs that could support them.

The same could be said of some states with good universities whose graduates move elsewhere. I come from a plains state with a terrific university that ordinary residents had long complained was actively working to deplete the state of its best minds. This was widely dismissed by the state's luminaries at the time. But now, 30 years later, it's quite apparent that the original complaints were justified. Of course, nothing has changed, and the school still works hard to send the state's best and brightest off to brilliant careers in New York and Washington.

For many years now, we've seen the same thing at even the national level under globalization, which at this sorry stage in our history needs no elaboration.

So why are we doing this, why are we allowing ourselves to be subjected to this slow-motion pillage and plunder? I believe the answer is that we're not choosing to do anything of the sort, given the fact that "we" (ie, most of us) have no voice in the matter as citizens or producers, but only as consumers. In that sense, we are communities of fractional people, capable of exquisite, informed decision making in the marketplace of products and services but deaf, dumb and straitjacketed in the civic sphere.
The article is a fine one but it does not address the equally serious issues that attend the mix of business and politics -- the problems of cronyism and corruption. Those problems are huge.
Juan Carlos Neri Guzmán December 27, 2011 at 11:06 PM
Congratulation, is an excelent article about city
Unfortunately, your analysis is much to simplistic and uninformed to hold much weight. What you fail to mention or identify is today's economic development reality that ALL of the strategies you dismiss in your article matter. Regions (your focus on "cities" is also testament to how ill-informed you are about these issues) today must implement BALANCED strategies with multiple components in order to be successful. Smart, target-focused attraction, existing business development, small business development and technology commercialization, quality of life enhancement, workforce development, etc., are ALL critical to how region's compete - but strategic attention must be effectively balanced among them. Target sector development can be effective, but not focused on a SINGLE industry as you seem to imply, but a handful of clusters in which the region is most competitive. This provides security in case there is a dip in one or more target sectors. Also, these strategies have to be INTEGRATED, with attention paid to all elements of cluster competitiveness, including intra-cluster relationships and talent development. Bottom line, your analysis is incredibly thin and misapplied.
There remains the question of why cities should even try to develop? There is something to be said for a nice, steady state; or even for a slow loss of population. Who besides real estate speculators and elected officials think it is always a good idea? Inner city residents who can't find employment? Maybe they should move elsewhere. Families struggling to make ends meet? Maybe they should move somewhere else too.

Even development of the nation as a whole is not necessarily a good thing if all it means is an emphasis on GDP. We've had that for nearly half a century now, during which time we've seen a steady detrerioration of the middle-class. Issues of quality and equity and opportunities to use leisure constructively come in there somewhere.

A six-hour day might not increase GDP but it probably would improve the quality of family life. Smaller cities and towns have better home prices, more responsive local government in many cases, etc.. The internet makes them more attractive too.
The example of Montreal's Quartier des Spectacles needs to be contextualized a bit to give a true understanding of what has happened in this city. You know very well, as a resident of Montreal, that the city has had a vibrant arts scene since the 1960s. As a Montreal resident since the 1980s, attracted by the faded beauty and the exoticism (to a young guy from the prairies) of the city, I have seen Montreal as a magnet for artists from all over North America. They were attracted by the relaxed, open-minded vibe of the city--and cheap rents. Just to put the matter into context--and I agree that the Quartier des Spectacles will do nothing to attract creative people to the city--the creative people were already in Montreal or migrating to it before the government intervention. In the context, le Quartier des Spectacles is little more than a boondoggle to benefit "fat cats" such as Equipe Spectra (the people who run the Montreal Jazz Festival, les Francofolies, etc.) and the notoriously corrupt construction industry.
"If Atlanta keeps growing, however, we may reasonably predict that it will, in time, house a highly educated population, spawn top-notch universities and cultural institutions, and maybe even nourish trendy neighborhoods where bohemian classes will hang out."

A minor quibble: Atlanta already boasts these features. Georgia Tech and Emory University consistently perform well in the rankings in engineering and law/medicine, respectively. Atlanta has numerous theatre companies, including larger affairs such as the Fox and the Alliance, in addition to the ASO. And in terms of "trendy neighborhoods," Atlanta has Little Five Points. The local "hippie" community will say that in the sixties and seventies, Little Five Points boasted a community which was easily the equal of the Haight-Ashbury district, and in modern times it features many underground markets, restaurants, and musical venues which attract indie artists (such as the Variety Playhouse).
This is quite a good article. Good point about a city like NY with its inflow of international capital, being able to sustain high taxes, but Syracuse and Buffalo, not. I strongly recommend a booklet by Dr William Fruth, entitled "The Flow of Money and Its Effect on Local Economies". Every politician should read this before taking office.
This article underscores the time honored rule that "infrastructure follows value."

A new company, as well as city seeking to stimulate job creation, must first have something of commercial value, the exploitation of which generates revenue used to acquire infrastructure to support growth.

Infrastructure does not create value, as the article further demonstrates.

"... and even that comes with no guarantee to work." So, a long article that says no one knows for sure how to revitalize a city. And exactly what is the caffè latte crowd - are its members supposed to be clones? In my local cafes in recent times I've talked with a building surveyor, an acoustics engineer, a mining engineer, an insurance executive, a nurse, a film maker, an accountant ...
'Priced themselves out of the market'.
Interesting article. Unionized workers, while making mistakes by thinking that corporations had the welfare of the nation in mind as well, got the short end of the stick.
It wasn't that they priced themselves out of the market, the markets took control of the global economy via academic and political collusion, spreading myths of prosperity if they never had to pay taxes. When people got fed up with that, the corpse just moved all the while whining.
I would ask the author to leaven his enthusiasm for the market which is manipuable and chooses to ignore basic civilized behaviour, proving the need to be HIGHLY regulated.
One of the problems in the US is the way the idea of "local control" has been bought by an unthinking public. The more local (and therefore smaller) the governing unit, the easier they are to bribe and manipulate. Take privately owned, for- profit athletic teams for instance. The threats of the owner class to move to another location has forced many cities to the brink of bankruptcy to pay for stadiums built with bond issues backed by taxes to be given away to the super rich owners. The states in the US compete in a race to the bottom to induce industry torelocate and devastate the quality of life and safety net for for their citizens along the way (and usually enrich the accommodating legislators ).
Hard to disagree with any of this, and most of it seems exactly right. But it doesn't seem to leave much in the way of options for local communities beyond excelling in the usual menu of local services, keeping the streets safe and clean, pushing for high quality schools, and filling in those potholes. Maybe we're on to something there.
An excellent essay. I saw Omaha slowly turn itself around with astute management, but it has been a hard slog. It is an area of the Midwest that has great schools and a brain drain.

I recently moved to Denver area. The cities and suburbs of this area have completely different characters and nothing here can be compared to Omaha. For one the scale of the Denver region is huge. Some areas are obviously healthy. Other areas are suffering. But it sure is nice that the mountains are near by. Vacation options are close by and plentiful.

This contrast does force one to wonder what works for cities in any general way. We are a country whose growth spurt has slowed remarkably by outsourcing. Automation of much of what once constituted work life will definitely made the idea of a middle class successful life a pipe dream for most. What else is left except attempting to increase efficiencies of living which the concept of city life might well embody as the only avenue left for cities to prosper. Maybe.

I am of an age with teh auther (Bachelor's of Urban Planning 1972, Master's 1974) and agree. As a field, urban development/redevelopment has embraced every fad to come down the pike, second only to public education, and with similar results.

The answers are really pretty simple, but of course anathema to most politicians: keep taxes fairly low, and provide good value for the taxes and fees you do collect---you can justify higher taxes, to a degree, if the public services are good enough that people and businesses see that they get what they pay for. The dead weight waste of corruption of course interferes with that formulation.

Keep business licensing and similar hassles to a minumum. Don't denigrate the productive members of your city or state, be they individuals or businesses, for short-term political advantage. Be consistent. Keep your promises. Respect the rights of others, including property rights.

And the hardest of all for the political class, don't serve the dying hand of old declining industry in a way that keeps you from welcoming the industries of the future.
Andrea's analysis is the most intelligent and honest comment. "BBB" is the brutally honest answer: "Ban Blacks and Bums" and you have thriving inner cities. Simple as that.
I think you are just seeing the local version of a national effect. Since the 70's, national employment prospects have dimmed due to automation and globalization. You can see this in the US in the ever-decreasing recovery of employment after every recession, now to the point that there is no recovery of employment after the recession ends.

So the city view of this is just the national view writ small; subsidies to industries, sports franchises, local cooperatives, etc, that succeed are just zero-sum operations that stole employment from somewhere else. The same holds true for migration from high cost locales to lower ones. It's just a zero-sum race to the bottom, and clearly viewed in toto, cannot succeed. Every success has caused a failure somewhere else.
Prof. Polese rightly emphasizes that fashionable policies usually lack evidence why they may be believed or should be followed, but this never inhibited municipal politicians. He may however be wrong about benefit of central funding of schools in the Canadian province of Ontario. This was an innovation of the late 1990s, by the government of Premier Harris, which also reorganized hospital funding and the publicly-owned electricity utility, to damaging effect. For the previous century, muncipalities decided how much to spend on public schools, which encouraged specialization and competition. (Children could apply to enter any school in the city: they were not obliged to attend the nearest.) No evidence yet suggests that uniformly-funded schools improve the economic or cultural welfare of Ontario cities.
Enjoyed your article, thank you! I do, however, disagree with the notion that bike paths aren't practical. Bike paths, dedicated bike lanes and well-marked roads together with local promotion of safe driving/biking practices makes biking to work more convenient and safer for the cyclist; Portland, Oregon is a fine example of such a city.
The Erie Canal led to the boom in western New York State, so isn't it about time Rochester and Buffalo faded? Our folly is in believing these megatrends (to borrow a term) can be reversed.

How's this for a slogan - "Schenectady - if you can spell it you should live here"?
In Michigan, the government has poured millions into online "magazines" that do puff pieces on small businesses; the company producing them calls it "place-making," and insist they will turn fading industrial cities into thriving, creative one. So far, they've only made the company a lot of money: http://arborweb.com/articles/happy_talk_full_article.html
Since no one else has responded to "Andrea D. Merciless," I'll add that my working definition of racism is looking at the behavior of individuals and blaming a group. Andrea's post is a classic example.
Agree. Fashions provide working places for urban consultants but real reasons behind cities' dynamics should be looked for in somewhat larger cycles of noosphere.
Thank you for the brief review of rises and falls of "urban theoretics"
I am reminded of a competition I once entered which simulated running a business. In the first round, which my team won, the (unwritten) objective was to maximise sales and output. The second round - where we got kicked out due to failure was more realistic. The (unwritten) objective was to get reasonable sales but minimise taxes.

If only the right wingers could realise that the way Governments provide services, which businesses rely on, is to raise some tax revenue.
Excellent Article. So much to digest and put into perspective. I believe every City experience some kind of downturn at some point in time and it is always difficult to figure out what will work to turn them around. One thing for sure, we cannot let them keep going down, we have to find the right formula of the time to project into them and bring them around. We find that even with our small, 360,000 population of London, Ontario - One of the best places to live, work, study, play, raise your children and retire, and a good quality of life. All we have to do is to find that right formula that will replace all the unemployment as a result of the declining auto-industry. WE WILL.
Jacob Urup Nielsen December 23, 2011 at 5:07 PM
Absolutely agree with the concluding remarks that there are no "quick fixes" for cities to be succesful. However, I do believe that cities which invest in creativity will have a more succesful and innovative workforce in the years to come.
"Creative class" is also a pretty elastic term, which can be stretched to the point of meaningless. In Amsterdam, which goes at weak-at-the-knees whenever Florida's name comes up, everyone wants to be part of this hip & cool creative class: it started with actual artists and musicians, then soon spread to the advertising industry (is an account manager who sells ad space in a business magazine part of the creative class), and now even includes accountants to cater to the "creative industry". In brief, the term "creative" has now become toothless, but lots of office-drones are keen to latch onto it so that they don't have to think too deeply about how non-creative their working lives really are.
The arts yes, but avoid creating ready-made gentrified neighborhoods with theatres, concert halls and museums. Just simply make loft-like spaces available cheaply, let people know, and get out of the way. The rest will come on its own.
This is a very thought-provoking article. I have seen a nearby upstate NY city try all of the approaches discussed in the article. First, they had an Industrial Development Agency that attempted to lure new manufacturing companies to fill empty space in a vast, abandoned complex of former factory buildings. Generous benefits were offered, espcially exemption from property taxess or a payment in lieu of taxes. The State of NY established "Empire Zones" that offered companies even more benefits, although tied to job creation. The state has finally done away with Empire Zones after realizing that very few permanent jobs were created. The local Industrial Development Agency had similar problems and was eventually superceded by another agency that is funded by a county-wide sales tax surcharge. This agency has increased the number of people who work downtown, but almost no NEW jobs were created. Instead, businesses simply moved from nearby locations to take advantage of tax breaks. These companies then threaten to leave town whenever they are asked to begin paying property tax, and so the city leaders always extend the tax breaks. Have these relocated businesses helped downtown? It is true that downtown looks better with new buildings full of employees, but my observation is that very few of those employees patronize other downtown businesses. After 5 pm on Friday downtown is a ghost town until Monday morning. Downtown has not become a real neighborhood it its own right. Those downtown employees mostly live in the suburbs and shop there as well.

This city also tried the community development approach. There, the realities of politics took over. Development money flowed to businessmen with connections to the dominant political party. The results have been mixed as far as increasing the number of successful small businesses downtown, but many downtown small business owners who are not political insiders have become discouraged at the obvious favoritism, and some have closed up shop as a result. Many of those owners of retail businesses I have spoken with tell me they feel as though the city wants them to go out of business so their space can be given to those with better political connections.

Currently a huge, empty industrial complex has been turned over to private developers and made shovel ready. The idea here is the current favorite: build a mix of retail, office, and residential space. Retail on the first floor, offices on the second floor, and residential apartments and condos above. The problem here is that the proposed development is not within walking distance of downtown, and it is separated from the city by a four lane highway that provides quick access to both a nearby suburb dotted with strip malls and an interstate. Even if this project is built and occupied it stands to hurt downtown's prospects.

The city also tried creating an "arts district", as neighboring cities have attempted. The idea is creat conditions conducive to artists moving to the neighborhood, which will cause galleries, coffee shops and bistros to sprout up. These in turn will give the neighborhood a fashionable vibe that attracts yuppie residents who drive up housing prices and rents. The artists are forced out by rising rents, but by then gentrication is all but complete. That didn't work either. First, there aren't any spaces downtown of the sort that traditionally attract artists (large, open spaces like lofts and warehouses). Although a few artists did eventually have space downtown, there were never enough to spur general development and as soon as commercial tenants were found the artists were evicted.

What the next "urban redevelopment fad" be no one knows, but city and county leaders stand ready and waiting to embrace it, throw taxpayer money at it, make sure their political allies profit, then declare victory and move on to the next issue. The image I keep seeing is of vultures slowly consuming a dying animal. It's not pretty.
Andrea D. Merciless December 23, 2011 at 12:17 PM
No matter how much makeup one uses, an ugly woman is still an ugly woman. Same with cities with too many wrong kinds of people.
Andrea D. Merciless December 23, 2011 at 12:13 PM
To rebuild a city, the main issue is not so much what it needs as what it doesn't need. A city can be improved without this so-called 'creative class'. After all, many immigrant groups have formed their own peaceful and well-to-do enclaves AND WITHOUT BEING 'CREATIVE'.
No, the problem of many cities is not that they don't have enough 'creative' people but that they have too many blacks. Blacks, being generally less intelligent, more aggressive, physically stronger, and wilder, tend to cause all sorts of problem--for themselves and for other races. Look at stats for black-on-white crime, black-on-Hispanic crime, black-on-Asian crime, Black-on-Arab crime, black-on-gay crime, etc.

There are many 'not rich but stable and nice communities' all over America, and the #1 factor is 'how many blacks does it have?' Fewer blacks it has, nicer it tends to be--unless it has lots of Third World illegals.
Of course, there are plenty of decent blacks, but there are too many crazy ones too. Worse, crazy blacks are worse than crazy members of other races cuz blakcs are physically stronger and more aggressive. Thus, they are more likely to act like thugs and bullies.

To be sure, to 'creative-ize' a city means to find creative ways to get rid of blacks. After all, areas that are 'gentrified' or gentric-cleansed do so by attracting yuppies who raise property values, which means most blacks are pushed out. Government works with the urban gentrifiers by using section 8 housing to drive urban blacks in to working class or middle class white suburbs or small towns. So, while rich 'creative' class in downtown areas do better and better(and live in a whiter and whiter community), less privileged whites have troublesome urban blacks dumped on their doorsteps.

It's all a dirty game, especially since SWPL gentrifying 'creative' class pretend to be so rogressive. But what they really do is push criminal black elements out of the city(while voting for Obama) into working class and lower middle class white communities. Push the blacks out and support 'gay marriage'. That's today's 'creative progressivism' in a nutshell.
Of course, the creative class do welcome some haute 'clean cut' blacks--like Obama--into their community to show off how tolerant they are, but notice they pick and choose the nicest blacks for themselves while dumping the most dangerous blacks onto poorer whites. But when poorer whites complain about increased black crime in their neighborhoods, rich 'creative' whites look down on them as 'racists'.
Interesting article. I always find these kinds of treatments of human social behavior, lumping us all into various "crowds" and "classes," somewhat demeaning and dehumanizing, but hey, you're a social scientist. Leave it to the "creative classes" to endow life with worth, I guess. And far and away, your criticism of local, internal approaches is your weakest, though I totally agree that cities have actually quite limited power. But there is a contradiction in treating this approach like any other trend, in that trends are inevitably about placing discrete phenomena into a larger context, whereas the locally-focused small business building model eschews the larger context, and if the town they build for themselves just happens to draw in outsiders, well hey, that's just lateral. Gov't should focus more on investing in communities, and should certainly restrict big retailers, which keep the money flow from staying put, effectively bleeding the community dry.
"Resurgence will remain elusive as long as wage expectations remain above what market conditions warrant. What we do not understand is how to change the mind-set of such communities."

what you also do not understand is how to change the "mind-set" of markets. Understanding either in isolation will probably not lead you to urban development paradise.
"After all, an educated population is an asset that can be lost. A city with poor development prospects is doing the right thing in educating its young effectively, of course, but it is also increasing the chances that they will leave, which is good for the students but makes the city even poorer."

i'm not a disciple of Florida, but, in my mind, a simple argument makes the case for investing in education.

it's true that the educated are likely to leave, but it's even more likely that the UNEDUCATED will stick around, and that's not good for anybody, especially the uneducated.
Boils down to saying 'We do not know. Will try something that may work out'. Getting the right combination of factors, good local governance, rational taxes, good public spaces, quality of life all contribute to the development of the city. While analyzing the reasons, you should also look at why the established cities decay over a period of time - sometimes a single factor might trigger the downslide that is unstoppable..
Looking from an Austraolian perspective, I see the problem as one of too much government at too local a level. Here in Oz it is the State Governments which look after health and education. City governments (and Sydney has about 40 of them covering one or two neighbourhoods each) just look after the building codes, the local roads and the garbage.

Our cities are doing just fine, even those who have recently lost major industries have reinvented themselves,: not through government action, but through private initiative.

If you didn't measure a city's success by the small area at its centre, but by the whole metropolitan area or even the region in which that city forms part, you would see that different parts of the region will flourish at different times and that that is a completely natural development.
Nobody knows. Anything.
You've got to admit; it sounds right. And probably is.
But if I were made to comment, I'd say that a high and growing cost of doing business signals the death knell for an economy.

All economies are dynamic organisms that wax and wane in a complex interaction with markets of every kind. It is too large and complex to predict with any certainty, and it is impossible to discern where the growth will come because innumerable decisions of market participants, some smart (some not) some backed by large investments (some not) together with economic forces unknown from near and far form the nexus for the mystery of economic growth, as much a mystery as bio-organic growth, which can be described, but not understood.

One key ingredient is a society that fosters optimism. Without optimism, nobody will step up to risk capital on a venture that can't be proven to work beyond a reasonable doubt. Growth requires optimistic people.

Perhaps the other most important key ingredient is keeping the government class out of the equation to the largest extent possible. Their motivation for helping are selfish and doomed to be wrong. They don't know what they're doing.

The best that can be hoped for is that government keeps out of economic affairs to the largest extent possible and where that isn't happening, which is almost everywhere, one has to hope that the costs imposed by politics can be borne without destroying the competitiveness of local enterprises.

The fiscal recklessness of the US government and almost all of the states, combined with the same ills in Europe have destroyed optimism, ruined competitiveness and proven to be a cost of doing business that no business today can bear.

There is no sector of the economy, not one, that is immune from the pessimism caused by government's failure to control its spending, limit taxes, and inability get something in its vast portfolio done right. Fix something Washington, anything, and the nation will breath a sigh of relief and begin to feel pride again. The pessimism today stems from the world's largest economy, the US, having the weakest most pessimist leadership in Obama than we've ever had.
He doesn't understand the first thing about the economy, society, or history. He is a glib showman first (politician) and a socialist/radical pessimist, second. No wonder the stock market is tanking and the world teetering. There is no semblance of leadership from the US under Obama, not just because he hasn't got it in him, but because everyone the world over knows it. The con is all but over, but the aftermath will be long in dispersing.
How to have a successful city? Right-to-work laws, and a safe downtown. Right to work means jobs; safety means that the middle class tax base doesn't flee to the suburbs. Rustbelt cities tend to offer unions, mafia and dangerous downtowns. Prognosis: Camden, Newark, Baltimore.
Having spent the last twenty years working on economic development in mid-town Manhattan and in Jamaica, Queens, I have learned that there are tools available to government and not-for-profits to promote job creation and private sector economic activity.

First, maintaining and improving the quality of public spaces and cultural institutions is essential in our increasingly knowledge-based economy. Private investors and tenants are drawn to safe, attractive, welcoming and interesting places.

There is a component of non-economic, irrational decision making in location determinations by the private sector in the form of an over-calcuation of risk in novel ventures or settings. Investors rarely want to be first in a place. Therefore, government must reduce investment risk by providing free/low-cost/patient capital in order to lower the perceived risk of new places/environments.

Finally, as noted, government regulators and finance officials must attempt to provide speed and certainty to government processes related to the creation of new projects. Particuarly in risky ventures, time is money and the less certainty about the time frame and liklihood of approvals and government related costs are attached to a development project, the less likely it is to happen.
Well, Quebec would be great if it weren't for the language police. I used to summer in Quebec and it was hard to find a young person who could speak English. I asked some friends about this and they said that if you are French you are mandated to go to French school. They don't learn English. The province is so paranoid of losing "it's culture" it has gone too far. English is the language of business. Well, even in their local paper's help wanted section they are looking for bilingual speakers in almost ALL positions. Quebec will do itself in by doing this.
Branding includes product development which in economic development consists of investing in asset creation, infrastructure and public policy reform. Branding is a strategic approach to helping communities design competitive strategies to create sustainable economic prosperity. Mario's point that a community's brand promise must be authentic is spot on. His mischaracterization of branding as creating a snappy slogan is problematic. You can learn more about place branding by visiting www.strengtheningbrandamerica.com
The article concludes "good governance, in sum, and even that comes with no guarantee to work."

There's the rub. Modern political elites will never provide "good governance" meaning fiscal probity, because behind the scenes they want to feather their own nests while spouting populist blather for the mere folk. And they sell the imagery of "guarantee" in order to pose as caring and competent.

For this, the successful city politician, like the airy-headed academic, is a first-class showman in a vaudeville act of razzle-dazzle in which anyone daring to suggest simple, old-fashioned and proven fiscal sanity is yanked off their stage. This is why so many stories can be found of city politicians corrupt, tried and jailed throughout the nation. The voters are that dumb, generally, while simple numbers refuse to be.

This foretells collapse as the market correction anywhere the showmen predominate for a while. And then of course they retire to hide.
A great analysis which really boils down to, 'don't even try, it's just too
complicated'. Talk about the separation of church and state, what is really required is a separation of economy and state. Governments should stick to what they do best, that is, to do for the multitude only what they cannot do for themselves.
But do we suppose that it is possible for a politician not to meddle? Never in a million years. So let's just go for minimizing meddling.
I just realized that I have paraphrased the entire final paragraph.
Well done indeed!