Changing Midopolis. So what?

According to pundit Mike Davis, "Across the nation, hundreds of aging suburbs are trapped in the same downward spiral -- from garden city to crabgrass slum." (Kotkin, Joel (2001) Reason Public Policy Institute Policy Study 285).

In some ways, every inner-ring suburb is a special case, but the future need not be feared. However, that does not mean that the future can necessarily be made to look like the past.

If the issue is reduced demand for a depreciating housing stock leading to a filtering down of houses from high income housholds to lower income households, the first question is what is the problem? I mean, what is the problem with increased economic and ethnic diversity -- everyone has to live somewhere?

On the face of it, nothing. However, there are a lot of details to consider. First, if current residents prefer a level of taxes and city services and amenities based on the recent past, a decline in property values (or fear of a futrure decline) might cause a mass exodus. Moving is expensive, so this transition is costly. Second, no one can look at inner city America during the 1960s-1980s and call that a success even in areas where vaccancy rates were low. I do not have specific evidence to back this up, but economic theory and research suggests that more economically and ethnically diverse cities should have better average school quality and overall lower crime rates than more segregated cities. That is, crime rates and school quality in the low income areas are so bad that when averaged in with the higher income areas, the situation is worse, on average. So moving inner city problems to older suburbs cannot be considered a successful outcome.

So where are we so far? Tearing down Midopolis' aging housing stock is not an economically viable option and becomming a crabgrass slum is a possibility that should be avoided. Where is the middle ground? What is the future of Midopolis?

What is wrong with the inner ring?

So after experiencing decades of growth and popularity during the 1950-1970 time period and another decade of stability, inner ring suburbs across the US are now largely (but not exclusively) experiencing a decline in property values, stagnant or declining population and the fastest growth rates of population living in poverty comparied to central cities, rural towns or more distant suburbs.

Why?

In the 1980s, schools were good, crime was low, access to central cities was good, new edge cities with their 5,000,000SF of office space were nearby -- what is not to like? The houses.

Volume builders can put up lots of new houses at a size and with amenities that middle and upper middle households find most desirable at a very reasonable cost. Older suburbs have older, smaller houses that are really expensive to replace. As a result, when new families are looking for a place to live, they look further out. So who moves in? It isn't like houses become vacant? With property values lower than in the new suburbs, the new residents tend to be more diverse economically and ethnically. Since social problems and school quality tend to be correlated with low income, the quality of life indicators that realtors and new home buyers look at might tip ever so slightly and the slide has begun.

Because of their location close to the central city, if the land were still agricultural, most of these cities would developed now as exclusive suburbs. Location does matter. But the smaller and aging housing stock makes such redevelopment impossible.

But recent experience tells us that while some midopolises are headed for collapse, others experience a rebirth -- although rebirth should not be confused with turning back the clock to become what they once were.

The Big Picture

Economists tell us that economic activity (jobs) will tend to cluster for a couple of reasons. First, and most true historically, firms (businesses) that export goods to other cities prefer locations with access to transportation infrastructure -- ports or rail depots. This has become much less necessary as the interstate highway system has made highway interchanges almost as usefull as a large port or or rail depot. Second, firms (businesses) tend to do better when they are nearer to other related firms. This can be to either promote face-to-face communication with suppliers, accountants, banks, advertizing agencies or it can be to access a large pool of potential workers.

So where does this leave people to live? Well, outside these employment clusters. Economic theory also tells us that because commuting costs (time and money costs) are so important, land closest to emplyment centers should be most valuable and, because they have the highest time cost to commuting, where the highest income households choose to live. But that doesn't really describe how the world looks. The wealthy tend to live in suburbs furthers away from traditional downtowns.

Historically, this is because when the streetcar and later the auto allowed people to move away from crowded and polluted downtown neighborhoods that were populated by people of all different incomes and ethnic backgrounds. So the suburbs were populated by people who may have had the higher commuting costs, but they also were willing to pay the most for lower crime, better schools and a back yard. Crime and schools might be obvious, but the backyard is much overlooked. And to that I mean not backyards specifically, but housing that matches the economics and the lifestyles of the day. Building a new house where a house currently exists is expensive, building a new house on agricultural land where lots of houses are going to be built at once is cheap. More than anything else, this tells the story of suburbs and why inner ring suburbs are beginning to struggle.

The goal of this web log is to tell the story of inner ring suburbs, explain the economic forces that shape them, and try to think through strategies that will bring them successfully into the the mid-century.