Abstract
Cities today are confronting never before seen challenges to their pole position on top of the economic hierarchy. In this chapter, we lay out four challenges, past and future, that cities today face and identify policies that can help address the problems we identify. The common theme throughout is that cities, their residents, and their business leaders need to embrace a dynamic ethos and be given a freer hand to reposition their municipalities to face a future that is shaping up to be quite different than the past.
We thank Tim Bartik, Josh Hall, and Brad Hershbein for suggestions and insights. Any errors are our own.
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Things change. And what if, tomorrow, cities woke, and went walking? If Tokyo engulfed your town? If Vienna came striding over the hill toward you? If the city you inhabit today just upped and left, and you woke tomorrow wrapped in a thin blanket on an empty plain, where Detroit once stood, or Sydney, or Moscow?
Don’t ever take a city for granted.
Neil Gaiman, SIMCITY
Introduction
Cities are constantly caught between two interlocking challenges: addressing past decisions that hinder the present while simultaneously anticipating future needs. The case for dynamism is simply that cities cannot pilot a successful path forward without the willingness to disrupt a deleterious or calcified status quo. In this chapter, we make the case for why policymakers must be prepared to embrace change, even as we acknowledge that past experiments have sometimes been harmful to poor, vulnerable, or minority populations. We do so by highlighting two important past policies presently ailing many US cities: infrastructure and zoning decisions that often disproportionately hurt the poor and racial minorities as well as the hangover from the building boom of the postwar period. We also identify two future trends that will reshape cities in the coming decades: global and national population aging and the rise of remote working. We conclude our chapter with a review of policies that could address the problems we raise. The common thread uniting our recommendations is that some of the best solutions are found when cities and private citizens are freed to pursue growth and innovation.
Past Decisions and Current Problems
One reason that current policymakers may be more reluctant to embrace dynamic policies is that past policymakers were often quite happy to make radical changes, often to the detriment of oppressed groups or poor people. We are sympathetic to this thermostatic reaction (“If they were too hasty, we should course-correct by being more cautious,”) and the first section of our chapter chronicles some of these consequential past policies that lie at the root of many of today’s urban problems. Nonetheless, we will argue further below that this thermostatic reaction is wrong: even accounting for haste, the only answer to past dynamic mistakes are current dynamic policies, else the past becomes a straight-jacket on the future.
Urban Planning Policies of the Past While this chapter seeks to make a forceful case for dynamism, we begin by acknowledging that past infrastructure and planning decisions have often had persistent effects that influence current urban issues. From zoning to infrastructure construction, the consequences of these policy decisions are often far-reaching and constrain current policymakers.
Federal neighborhood classifications are a classic example of a past urban planning mistake that weighs on the present. This started in the 1930s, when those seeking a new home loan would go through the Federal Housing Administration (FHA). The FHA did not handle existing loans; it only created new ones that were required to be “economically sound” by the federal government. In order to mitigate the risk to collateral values presented by racial transition, the FHA would not insure mortgages in neighborhoods potentially subject to change (Fishback et al. 2021). The FHA used data sources created by New Deal statistical projects to identify neighborhoods where they would be less likely to lend to minority groups.Footnote 1
Another example is the construction of the interstate highway system. Deciding where and when to build a highway through a central city involves considering a host of factors: will buildings have to be torn down? Will individuals have to be relocated? How will this highway impact travel times for suburban commuters? What about the commute and travel patterns of inner-city dwellers? Yet, once the pavement is laid, the policy path in the United States tends to treat that pavement as a permanent part of the urban landscape.
These decisions reshaped their cities right down to the present. Brinkman and Lin (2019) explore the construction of the Interstate Highway System and the political channels that influenced the placement of its segments. They find that actual interstate construction deviated quite a bit from planned construction routes in central cities when compared to suburban interstate segments. The authors argue that policymakers did not expect white city dwellers to be so opposed to the potential negative externalities of the highways. Minority neighborhoods thus bore, and continue to bear, the brunt of the negative secondary effects of interstate highway construction.Footnote 2
The consequence of both mid-20th Century policies is that central cities have many physically divided neighborhoods that are often highly racially and ethnically segregated. Specifically, these policies helped facilitate white flight and suburbanization (Baum-Snow 2007; Patterson 2020). As economic opportunities and a large share of the tax base left the inner city for the suburbs, minority groups were generally left behind on many fronts. These troubled neighborhoods now have concentrated poverty, higher commute times, and the other environmental harms that come from living near busy highways like air pollution, crime, and increased risk of traffic-related pedestrian death (see, e.g., Anderson [2020] and Herrnstadt et al. [2021], and the references cited therein).Footnote 3
Excesses of the Postwar Housing Boom Cities throughout the United States are confronting myriad housing challenges, with much of the academic literature and public debate focused on sky-high housing prices in thriving metropolitan areas like San Francisco, Los Angeles, and Boston (e.g., Bunten 2017; Asquith et al. 2021; Hsieh and Moretti 2019). The dynamic policy case for these cities—permit more housing, streamline environmental re-views, upzoning—has been made in many venues. In this chapter, we seek to call attention to another acute challenge that has received less popular and academic attention: what should cities do with the hangover from the postwar housing boom?
The discrepancies between the nature of the postwar housing stock and the needs of today’s economy are stark (Parolek 2020).Footnote 4 The postwar period saw a large, sustained housing boom catering to the working- and middle-classes across the entire country, partially in response to provisions in the 1944 GI Bill that allowed returning WWII and Korean War veterans to obtain mortgages with zero down payments and interest rates capped at 4% (Chambers et al. 2014). These policy innovations helped spur a massive building boom in the central cities’ outer neighborhoods, as well as in the former farmlands and small towns in their peripheries, turning them into today’s inner-ring suburbs (Jackson 1985). The Baby Boom and strong postwar wage growth for young adults made even small houses on small lots enormously appealing (Chambers et al. 2014). In consequence, the average MSA in 2019 had 25.6% of its housing stock built in just that 20-year 1940–1960 period (encompassing WWII and the immediate postwar period). Some MSAs like Detroit, Flint, and Los Angeles have more like 40% of their housing stock from that period.Footnote 5
Today, these houses sell at a discount, particularly in markets where the housing supply has been highly price elastic (Rolheiser 2020).Footnote 6 Rolheiser (2020) gives several reasons beyond age why postwar housing is increasingly disfavored. The first is that the average single family home in 1950 was 1,065 square feet, but this same figure had risen to 2,721 by 2015 (see cites within Rolheiser 2020). Second, these homes rarely have any capacity for home offices or other features that would be desired by many higher-earning white-collar workers. Third, most of the population growth in the next 20 years is going to come from groups who have few reasons to buy a small-ish, single-family detached home in a suburban area: older households; single-individual households; and households without children (Spader 2019). These homes are too far from city centers to compete for homebuyers desiring dense, walkable neighborhoods, but are also on lots too small to compete with the wide open spaces of the exurbs. Lastly, updating these houses for modern tastes is complicated by the fact that they are overwhelmingly in neighborhoods and cities zoned exclusively for single-family housing (Badger and Bui 2019; Micklow and Warner 2014). These factors make postwar housing an unappealing target for upscale redevelopment, while being also unappealing to downscale homebuyers worried about the budgetary implications of buying an aging home. It is thus little surprise that suburbs with high concentrations of postwar housing have seen rising poverty rates and population losses, particularly those in the postindustrial Midwest (Renn 2017).
Current Trends and Future Outcomes
Restructuring from past mistakes involves not just retooling with current needs in mind, but ideally with future ones as well. There are myriad challenges cities in the United States and elsewhere will face in our tumultuous 21st Century, such as global warming, mass migration, and technological change, but we want to focus on two here that only very recently have received much attention: global population aging and remote working.
Remote Working and Urban Policy A modest but permanent shift toward remote working, particularly among higher earners (Barrero et al. 2021; Dingel and Neiman 2020), will weaken many cities’ ability to raise tax revenue through traditional channels, like property and income taxes. Understanding the nature of this challenge requires looking no further than the celebrated Tiebout (1956) model. Tiebout argues that if consumer-voters are fully mobile across localities, then the socially optimal level of public goods provision can actually be obtained thanks to self-sorting by individuals according to their preferences and competition between localities. If occasionally life imitates art, then remote working brings the life of cities one step closer to the simulated world of Tiebout’s model.
Cities will need to be dynamic to embrace the reality of this increased competition for residents. First, cities will collect less commercial property taxes than in the past. Even if workers still have to come in to the office at least a couple of times of month, companies will be more reluctant to pay for the kind of physical office space that would sustain having thousands of people in the same building at the same time if that only occurs irregularly.Footnote 7
Second, while cities ideally would simply recoup lost commercial property tax revenues by taxing residential home offices, there are several reasons why it may be impractical. Many states have both property tax caps and homesteading exemptions for homeowners, which effectively limits what cities and school districts can raise from residential property taxes (Twait and Langley 2018). Further, intensified Tiebout competition for high-earning remote workers will make it harder for cities to try to raise land taxes. Those residents most likely to work from home will be even more sensitive to property and income tax rates than they were in the past, now that they no longer have to factor in daily commuting time into their location decisions. We have already seen some of this pattern emerge during the initial remote work shock of the COVID-19 Pandemic, where many residents and businesses decamped from their cities’ Central Business District for lower-density suburban ZIP codes (Ramani and Bloom 2021). While we expect some reaggregation to occur after the pandemic ends, several influential commentators (e.g., Glaeser and Cutler 2021; Florida and Ozimek 2021; Fox 2021) expect attracting (or not repelling) remote workers to be a top-tier concern.
Population Aging Pre-industrial cities were “death sinks” affected by many crises, from the increased spread of disease to nutrition concerns. However, as individuals in cities became richer, new evidence notes that the positive income effects of industrial urbanization may have outweighed its negative health effects (Gindelsky and Jedwab 2021). As schooling increased and infant mortality fell, “industrious” residents of large cities likely began decreasing their fertility, focusing on quality over quantity of children.
Fast-forwarding to the present, population growth has seen steady declines across the globe. Individuals are intending to have fewer children than their immediate predecessors, which may translate into a decline in cohort completed parity (Hartnett and Gemmill 2020). Globally, people over 65 are the fastest growing segment of the population and outnumbered children under 5 for the first time in 2019 (Jarzebski et al. 2021). This fact creates a mismatch: many city amenities in “hot cities” are geared more for young, hip adults, leaving them poorly positioned for a world where people 65 and older are expected to be the largest growing demographic.
There are several reasons why fertility has declined. One important reason in the US is that many of the cities with the greatest number of job opportunities for young people also have the highest living costs and consequently the lowest childbearing rates. In San Francisco, for example, only 13% of the population is under 18, compared to 23% nationally (Fuller 2017). Other reasons include that younger individuals were forming their childbearing desires during the Great Recession period that was difficult for childbearing (Kearney et al. 2021),Footnote 8 as younger cohorts faced larger financial constraints, such as higher student debt with poorer job prospects, compared with previous generations.
While there are a variety of forces acting to suppress birth rates, the key takeaway is clear: if birth rates continue to stagnate or fall, the number of prospective in-migrants from rural hinterlands, small cities, and countries abroad is expected to fall throughout this coming century, barring a remarkable reversal in birthrates outside of Sub-Saharan Africa. Thus, the challenge facing cities is that they will have to cater to the needs of a growing number of aging residents while simultaneously attempting to attract young in-migrants, who will still be needed for economic growth and prosperity.Footnote 9
Policy Responses: Dynamic Is the Answer
If you are a mayor of a city confronting one or more of these challenges—that is to say, practically every mayor in the United States—how do you begin to act? In the past, cities often reinvented themselves either in the aftermath of disasters (e.g., the 1872 Boston Fire, Hornbeck and Keniston 2017) or by running rampant over the rights of the poor, like Baron Haussmann’s redevelopment of Paris or Robert Moses’ mid-century redevelopment efforts in New York City. We as a society have not yet invented the socio-political technology (if such a thing even exists) that will allow urban policymakers to both redevelop and redesign as needed while also respecting property rights (or without the pretext of a major emergency). This absence is likely playing a role in the frustrations voiced by several cultural and economic commentators about the US’ increasingly stagnant economic and physical landscape (e.g., Cowen 2011; Douthat 2020; Andreessen 2020).
Fortunately, there are policies at hand that ameliorate several of these issues simultaneously that do strike precisely this balance. We now highlight a couple of such policies, but a common thread through all of our selected solutions is that mayors, policymakers, and (yes) citizens need to embrace the wisdom of the adage: “If we want everything to stay as it is, everything has to change.”
Return to Annexations and Mergers Many cities around the world are struggling with sustainable depopulation strategies (Detroit [Owens et al. 2020], Baltimore, large parts of Germany, Japan, etc.). In response to declining urban populations, cities in the United States have taken a variety of planning responses. We believe that some of the most important barriers to smart planning are psychological. LaFrombois et al. (2019) summarize these city plans as everything from ignoring population decline to actively incorporating population trends in future plans. For example, despite the fact that Toledo’s population has been declining since 1970, the city’s 2010 strategic plan stated a population goal of 400,000 (2010 population was 287,208) while having no data to support or justify this goal. As of the 2020 census, Toledo’s population stands at 270,871, implying ten years of essentially unproductive spending by the city.Footnote 10 Instead of relying on overly optimistic growth forecasts with relative population stagnation likely over the near future, cities may need to rediscover an old solution: annexations.
In the nineteenth and early twentieth centuries, annexations and mergers were the primary means for cities to grow. In fact, Chicago, Philadelphia, and other cities all aggressively annexed surrounding towns, including land that had not even been surveyed yet Jackson (1985). Annexations became less popular throughout the early twentieth century, and essentially ground to a halt in the postwar period, as white-flighting suburbanites used their political muscle to have state legislatures pass laws making it much harder for cities to follow them out to the suburbs via annexations.Footnote 11
With these suburbs now facing demographic and fiscal decline, there are now many good reasons for states to reconsider their laws hindering municipal mergers and annexations. Many of these inner rings, white-flight suburbs suffer from problems compounded by having a high concentration of postwar housing: declining residential and commercial property values, aging housing, and property taxes higher than their anchor cities. A 2017 report by the Manhattan Institute argues that municipal merger and annexation offer a chance to avoid an inequitable situation where poverty becomes concentrated in a band of suburbs on central cities’ outskirts while wealth becomes concentrated either near the urban core or in the exurbs—an outcome that the rise of remote working seems even more likely to midwife (Renn 2017). Many of these suburbs face a future of encroaching poverty and fiscal distress. Thus, while their citizens may resist a merger even when the mayor and city council support it—as has already happened in Ecorse, Michigan, and East Cleveland, Ohio—it probably represents the best path forward for the communities themselves.Footnote 12
Mergers have significant benefits for the central cities as well. One is that if growth is now less likely to come from “natural” population forces,Footnote 13 then annexation is one way to help maintain a city’s population size. Another benefit is that expanding the tax base to include a wider variety of housing can be strategic, because development and redevelopment waves tend to occur over very long cycles interspersed with long periods of sustained low prices (Glaeser and Gyourko 2005; Rosenthal 2008). For example, Indianapolis, which has a consolidated city-county government, was able to maintain fiscal stability over the 1980s and 1990s when the city core was disfavored and the suburbs were prosperous, as well as recently when the core has become wealthier and its de facto inner-ring suburbs have seen rising poverty rates (Renn 2017). Having the age, quality, and design of housing vary over a large area helps ensure that at least some part of the municipality will still have highly desired housing on an ongoing basis.Footnote 14
Lastly, more land (and population) means a greater say over how infrastructure is built and maintained in the future. Currently, many mass transportation services have to operate over several different municipalities, each with its own seat at the table. For example, the Boston-area Massachusetts Bay Transportation Authority serves 78 different towns and cities in Massachusetts and Rhode Island, meaning that Boston (the primary employment hub) has a relatively diluted voting share. In some cities like Baltimore and New York, final decisions about public transit funding and expansion are controlled by the state. A consolidated municipal government could thus have more political sway, leaving it better situated to make sure all of its constituent's needs are met, particularly if they are low-income or minority.
We note here that while we believe that larger, more powerful cities could theoretically be more effective custodians of the interests of low-income and minority residents, we also acknowledge (as in this chapter’s first section) that this has historically often not been the case. It is imperative that public participation and public trust are fostered either by copying successful policies from other cities or by coming to terms with how past policies and actions encouraged or dampened public approval and the quality of life of local residents (Kahn and McComas 2021). To whit, cities need to do a better job of working with communities, making residents believe that they have a voice, and ensuring that public goods are community based and oriented.
Missing Middle Housing While we think that the empirical literature strongly backs developing large, multi-unit rental housing to address the worst housing shortages in the Coastal United States (e.g., Asquith et al. 2021; Bunten 2017; Hsieh and Moretti 2019; Li 2021; Pennington 2021), we also want to draw attention to what to do with increasingly undesired postwar housing and the “missing middle” housing problem (Parolek 2020). The roadblocks to reinventing or repurposing much of this housing are substantial. One major problem is these houses are often found in the neighborhoods where “citizen voice” rings out the most loudly. Specifically, postwar housing is disproportionately found in the little municipalities ringing central cities that are heavily owner-occupied, and are thus heavily incentivized to protect these areas from any changes which might threaten their property values, often militating against densification or rezoning.Footnote 15
The first step is identifying who now comprises the market for these neighborhoods. In our view, these neighborhoods will be a mix of retirees or near-retirees and the working poor and lower middle class: for example, people like the COVID-19 pandemic’s much-lauded essential workers. Broadly speaking, these are people who cannot work from home, but make enough money to pursue homeownership for their families. This will be in part a consequence of increasingly aggressive sorting along Tiebout lines, with the wealthy, the young, and the upper-middle class continuing to occupy the city centersFootnote 16; another chunk of people able to work from home will concentrate in the exurbs, as technology slackens the locational tether of the daily commute; and the very poor will probably continue to be disproportionally distributed in rural areas or in certain inner-city neighborhoods.
Thus, this really becomes two questions: how can central cities and their inner-ring suburbs encourage private redevelopment of this housing to accommodate (largely) working- and lower-middle-class non-remote workers? And, given the rising numbers of people retiring in place, what do cities need to do to be able to serve a growing population of older people?Footnote 17
Putting pressure on single-family housing zoning is the best way to address the shortage of “missing middle” housing that can best serve these groups (Wegmann 2020). While most cities' ability to redevelop housing directly is limited, giving developers a freer hand can make a big difference here even on a parcel-by-parcel basis.Footnote 18 Accessory dwelling units (ADU) and duplexes can appeal toward those young working-class and lower-middle-class people whose wages have been stagnant and are still reliant on a daily commute, but want a path toward living in a conventional suburb while they slowly accumulate the money for a down payment. Many duplexes have little backyards children can play in, allowing a young family to start their small children in a local school system while they look for a home. Duplexes can also appeal to older people looking to downsize, but who (for whatever reason) neither want to live in the center city nor out in the exurbs or rural areas. For example, a 60-year old in somewhat poor health may find a duplex close-ish to the center city appealing. They may need to downsize some years before they finish their working careers,Footnote 19 and can live on the first floor of a duplex without the inconveniences of stairs or lawn maintenance. Similarly, this same 60-year old could move into their son or daughter’s ADU to help them with childcare, while similarly fulfilling their desire to downsize (Micklow and Warner 2014). Fortunately, efforts are already underway in many states and localities to encourage greater density, such as Minneapolis’ and Oregon’s recent bans on single-family housing; Massachusetts’ new law forcing towns to permit multi-family housing near commuter rail stations; and California’s new law allowing up to three additional housing units to be built on any plot zoned for single-family housing. For those localities who hold out against densification, the federal or state government can exert further pressure: in exchange for fiscal help to cover property tax shortfalls or grants to local homeowners to cover some of the costs of updating aging homes, the localities have to make changes to their zoning codes to permit “gently” denser housing. Gentle densification will (presumably) not excite as much opposition as putting in large new apartment buildings, but will still help put these suburbs on a more sustainable fiscal and demographic path.Footnote 20 This leverage can also extend toward improving local transportation options, such as having requirements that these cities cannot oppose efforts to extend commuter rail, subway, or bus lines from the center city into their neighborhoods, which will help ease some of the inequities of the past in newly diversifying suburbs. The result would (hopefully) be that these inner-ring suburbs could be (literally) rejuvenated by new residents who will enjoy expanded housing options reasonably close to the city at a lower carbon impact than exurban development.
Fostering Urban Amenities and Valuing Non-Mobile Businesses Beyond housing and mergers, what else can cities do to maintain their appeal? Here, too, we argue that a dynamic approach that is willing to disrupt the status quo is going to be best suited for orienting a city toward a successful future. For example, one solution to newly underutilized commercial office space could be converting offices into apartments or condos.Footnote 21 This greater density can magnify cities’ key advantage: the ability to provide large, complex public goods (Glaeser 2000). This same logic could even be applied to decaying parts of the single-family housing stock, where cities may have a freer hand than suburbs to upzone or encourage redevelopment to have home offices.
Cities will also have to consider making a break with a past mindset of pursuing tech companies and the “creative” class, because many of these residents and companies are going to have a much smaller physical footprint going forward.Footnote 22 Namely, it will be harder to rationalize throwing millions of dollars of tax breaks at an Amazon HQ3 or a Googleplex2. In contrast, it may increase the value of attracting a major manufacturer or entertainment industry (like an NFL team), whose value is much more tied to the location in question.
Cities also need to figure out how to square the circle of keeping taxes relatively low while offering more amenities to attract new residents. Amenities or industries that increase appeal and city revenues simultaneously are probably the desired sweet spot. For example, if a permanent increase in remote working leads to less road utilization and housing demand, then cities can experiment with amenities like pedestrian malls and urban farming. Pedestrian malls in particular are famously attractive to residents, cheap for cities to implement, and increase the property values of nearby buildings (Amos 2019).Footnote 23 More speculatively, another solution that views amenities as both an attraction and as a source of revenue could be something like a publicly funded maker space. People could walk in, register, a program in CAD anything that they want to be produced in an advanced manufacturing setting, and then walk home with the prototype. The maker space, like private ones, could offer classes on welding, sewing, metal stamping, etc. This would be a location-specific amenity that would be valued by entrepreneurs and hobbyists who would want to live nearby. By the same token, it could also be a tax opportunity, because the city could then claim a small fraction of the royalties generated by any patents or businesses that emerge from its maker space. To keep claims of originality and ownership straight, each CAD design could be registered on a city-operated blockchain. There are of course some significant technical, financial, and legal challenges that would have to be overcome for the municipal assessors office to establish a stake in the profits or royalties from projects that would emerge from the maker space, and a city would initially not earn any of these tax revenues for quite some time. That said, with capital and labor more mobile than ever before, and labor on track to become scarcer as well, municipalities will need to find creative solutions to resolve some of the problems created by a smaller, more flighty tax base.
Ultimately, it is in the interest of national and state policymakers to encourage these experiments in local amenity creation and tax collection. While another intriguing possibility is to dangle incentives for remote workers to relocate, currently pursued by places like Tulsa (Tulsa Remote) and West Virginia (Ascend WV), there are still inherent limits to having municipalities chase a limited pool of relatively mobile remote workers. While some of this Tiebout-like competition will probably lead to better public goods provision than in its absence, classic Tiebout competition with property taxes can actually be socially suboptimal (Calabrese et al. 2012), a point policymakers should bear in mind.
Final Thoughts
Whether we are looking back or looking forward, it is easy to list the problems cities face. We ourselves begin by observing the consequences of past urban policies. Exclusionary loaning practices and highway construction in center cities have led to disproportionately negative effects on minorities in inner city neighborhoods. The boom of postwar housing construction has left present-day city residents with a mismatch between the housing stock as it exists and the housing they prefer. Issues like the rise of remote workers and population aging highlight the challenges cities will find lying ahead.
Giving cities the ability to experiment, be bold, and be flexible in addressing past, current, and future issues is of utmost importance if we want them (and their residents) to thrive. We suggest several policies that will allow cities to do just that. A push for cities to embrace annexations and mergers could simultaneously alleviate concerns about urban depopulation as well as provide housing-type diversification and make more inclusive transportation choices feasible. Specially, focusing on rewriting current zoning laws or incentivizing construction of the “missing middle” housing stock could allow cities to attract new residents and provide current residents with more housing options. Finally, encouraging cities to lean into their respective amenity comparative advantages, as well as thinking about realistic but innovative new amenities, could be a potential cure for population aging and the flightiness of remote workers.
Ultimately, we view these policy responses as being united thematically by giving cities a freer hand to grow, build, and experiment. We also argue that it is important that policymakers continue to leave room for private actors to innovate and build as well. The Greene Street Project of Easterly et al. (2016) ably demonstrates the limits of policy and the importance of private actors. The project maps out the 400-year long evolution of one block of Greene Street in Manhattan’s SoHo neighborhood. Given that the block is currently highly affluent, it is somewhat of a surprise that the block was much more working class for most of its history, including hosting brothels and factories. The reader inexorably draws the lesson from the Greene Street Project that policymakers who may have been tempted at any given point in its history to freeze it in time would likely have derailed its socioeconomic ascent and done their city a disservice.
At the end of the day, cities will always have problems to solve. The problems themselves may fade into the past, or they may change and become more acute. The only reasonable response is for cities themselves to retain a willingness to disrupt the status quo, even (or especially) when it is backed by powerful constituents, find ways to harness the vital energies of their residents, and maintain a balance between present decisiveness and future flexibility.
Notes
- 1.
Additionally, recent research has shown the persistent, harmful effects of the arbitrary boundaries drawn on the 1930's Home Owners Loan Corporation (HOLC) “redlining” maps. The HOLC was a temporary program created to handle existing home loans. Not only were factors such as home ownership and home values stunted in neighborhoods deemed more risky by the HOLC in the 1930’s, but it has been shown that racial segregation by neighborhood grade was found across the maps’ drawn boundaries. Areas graded D, or most risky, became more heavily African American than nearby C-graded areas over the course of the twentieth century (Aaronson et al. 2021).
- 2.
Mohl (2004) discusses the urban history of freeway revolts. In the city of Baltimore, for example, city planners initially hired Robert Moses to draw a plan for where highways should be located. The Moses plan projected the displacement of some 19,000 people in the central city, mostly in slums. Moses was quoted stating the benefits of this plan to cut through poorer neighborhoods as “the more of them that are wiped out the healthier Baltimore will be in the long run.” The Moses plan drew widespread opposition, primarily from people in the targeted neighborhoods but also from respected Baltimoreans.
- 3.
Using recent American Community Survey data, Patterson (2020) notes important current trends: 20% of Black households do not have access to an automobile, 24% of public transit riders are Black, the second largest group of riders (even though their share of the US population is 12%), 24% of Blacks live near highly trafficked roads, and 18% of traffic-related pedestrian deaths are Black.
- 4.
Houses built prior to WWII but after the turn of the last century tended to cater to a rising class of relatively affluent automobile owners, while building housing for working-class people (such as duplexes and triplexes) tapered off (Harris 2013). These houses tend to be somewhat easier targets for redevelopment, because they were built quite close to city centers as the infant paved-road network made it impractical to build too far out. There were some exceptions during this time period, as the 1920's also saw a large number of small, single-family detached houses built for the rising manufacturing workforce in certain cities, such as Detroit (Farley and Danzinger 2000; Martelle 2014), or new boomtowns, such as Greater Miami (Knowlton 2020).
- 5.
Source: Authors' calculations from the 2019 American Community 1 Year Survey (Table B25034).
- 6.
We note that these vintage effects favoring pre-1945 housing and discounting postwar housing appear in other countries, such as the Netherlands (Rolheiser et al. 2020).
- 7.
While we believe that remote working will be higher after the COVID-19 pandemic than before, we note that while office vacancy rates and utilization declined with the onset of the pandemic, there is yet no evidence as of this writing (in Fall 2021) that commercial rents have declined, perhaps because landlords are reluctant to change their rates in either direction until there is more economic clarity (Chung and Dill 2021).
- 8.
Dettling and Kearney (2014) find that increased housing prices lead to fewer children born. In their analysis, housing prices exert a larger effect on birth rates than unemployment rates.
- 9.
Of course, general population decline is not the only demographic threat. Highlighting the US experience, the 2020 Census data showed between 2010 and 2020 domestic migration shifts to smaller metros and non-metropolitan counties as jobs and housing began to disperse outward in the aftermath of the Great Recession. This trend may further solidify in the COVID-19 era thanks to the aforementioned remote working shift (Frey 2020).
- 10.
That is not to say that population decline is irreversible. For example, Washington, DC recovered from a mid-century population slump, in part through active civic engagement and policy planning. In the mid-1990s, business and civic leaders planned and pushed for both a new downtown sports and entertainment arena and the establishment of a downtown business improvement district stretching from the White House to the Capitol Building. Using city-owned land, tax increment financing, tax abatements, arts grants, and zoning changes, the goal was to produce a “living downtown” to complement office buildings with more housing, culture, and entertainment. However, many cities have been trying similar strategies without Washington’s success, meaning there is no policy panacea for the decline.
- 11.
For example, Wisconsin started in the 1950s making it much easier for outlying areas to incorporate (which makes it harder for them to be annexed) and have its courts to interpret the law to make it harder for municipality-initiated annexations to occur. The result is that almost all Wisconsin cities’ avenues for growth into unincorporated territory have been closed off (Zeinemann, 2007).
- 12.
In both cities, efforts by elected officials to pursue a merger with Detroit and Cleveland (respectively) caused a citizen backlash, resulting in recall campaigns. Readers should bear in mind that these cities are now majority African American, who purposefully sought to leave the center cities for the suburbs. The politics of these mergers should thus not be taken for granted by researchers or policymakers, even in the case of extreme fiscal distress.
- 13.
By “natural,” we mean migration, net births, or immigration. All of these have either been in decline for some time or are forecasted to decline as sources for population growth (for migration, see Molloy et al. [2017]; for births, see Kearney et al. [2021]; and for immigration, see Tavernise and Gebeloff [2021]).
- 14.
Cities should of course aim not to get overzealous in their annexation attempts. Memphis recently began de-annexing some outlying neighborhoods that were simply not generating enough tax revenues to cover their costs. These neighborhoods tended to be exurban or semi-rural in character, thus much less dense than your average inner-ring suburb.
- 15.
As Mast (2020) shows with ward versus at-large representation, councillors representing small geographical units are much less likely to support new housing development.
- 16.
We suspect that COVID-19 will not dent young, affluent, unmarried people’s desire to live in “trendy” parts of large cities. Educational sorting and agglomeration economies continue to ensure that these locations remain the best places for dating for young, college-educated people. While dating can occur remotely, most people (for obvious reasons) will find this undesirable for longer than short stretches.
- 17.
We expect both groups to grow, spurred jointly by population aging, which will strongly increase the demand for professions like home health aides and nurses (Goodhart and Pradhan 2020).
- 18.
While most developers prefer to operate on big, undeveloped plots of land, great innovations are occurring with manufactured homes and 3D printing to make small-scale development quickly, cheaply, and well, e.g., Kamin (2021).
- 19.
Asquith (2021) shows that renting has risen steadily among older workers since the Great Recession, particularly among those without a college education.
- 20.
This is in part because in most states the effective property tax rate on an apartment building of any size is higher than a single-family home, due to “homestead” exemptions.
- 21.
In fact, this is simply an extension of a trend begun in the 1980’s when many abandoned urban factories were converted to loft apartments (Hornick and O’Keefe 1984).
- 22.
For example, the (Bartik 2018) results on the impact of local incentives are heavily dependent on the assumption that 100% of the directly created jobs will appear in the local area—even relatively small reductions in the number of jobs that might be done remotely greatly diminish the value proposition of most incentive policies.
- 23.
They can also be successfully implemented in fairly small cities. The first city to build one was Kalamazoo, Michigan, whose current population is about 76,000.
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Asquith, B.J., Bock, M.C. (2023). The Case for Dynamic Cities. In: Kassens, A.L., Hall, J.C. (eds) Challenges in Classical Liberalism. Palgrave Studies in Classical Liberalism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-32890-9_2
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