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?