|A little bit of ruin porn to make your day. The abandoned Packard auto plant in Detroit. Parts of the complex were in use as recently as 2010, but Packard left the vast majority of the complex in 1959. Source: BBC.com|
It all started after reading an article by Aaron Renn entitled Looking Back from the Future. In his article, Renn says that there are few clear and easy answers for struggling post-industrial cities (aka Rust Belt cities, both large and small), but he recognizes that the factors of their future success may now be unknowable. Aaron notes New York’s transformation from its near-default in the 70’s to its position today:
“Let’s look back at a place once left for dead: New York City. In the 1970s, it was failing and nearly went bankrupt. Films like Death Wish and Taxi Driver portrayed an urban dystopia. The city’s population was falling, and some argued that there was nothing left to do but implement a strategy of planned shrinkage.
How could such an unexpected transformation have occurred? New York certainly benefited over the past two decades from the fantastic leadership of two mayors, Rudolph Giuliani and Michael Bloomberg. But this can obscure larger forces that played a major role in the city’s transformation.Yet today New York is a gleaming, booming city at all-time population and job highs, one where public angst often focuses not on civic failure but on problems brought on by success, such as high rents and overcrowded subways.
How could such an unexpected transformation have occurred? New York certainly benefited over the past two decades from the fantastic leadership of two mayors, Rudolph Giuliani and Michael Bloomberg. But this can obscure larger forces that played a major role in the city’s transformation.
The reality is that many cities around the world — Boston, London, Seattle, Tokyo, Washington, D.C. — have radically transformed themselves for the better over the same period. This suggests that common factors have been at work.”
Those “common factors”? We all know them to be now to be the factors that enabled the global economic shift from manufacturing to knowledge — global networks and access to highly skilled talent, ultimately leading to the exponential growth of knowledge industries.
Aaron attributes at least part of the revival in the knowledge cities to leadership, saying that in New York’s case, the administrations of Rudolph Giuliani and Michael Bloomberg set the tone for the rebound. He even notes how my hometown of Detroit, long left for dead, is making a comeback by utilizing many of the same assets other global cities utilized, and how a smaller city like Flint, MI can’t expect to plot the same course for itself:
“We can see this play out in the differences between Detroit, which is seeing something of a central city revival post-bankruptcy, and Flint, Mich. Detroit is the center of a large region with a thick labor market, has a big pool of engineering and other educated talent, is home to several major corporations, and still dominates the North American auto industry. It has true big-city amenities and a major international airport, and it is the biggest trade gateway to Canada.
Flint lacks all of these. Does that mean that the future is hopeless for Flint or for other similarly struggling cities and regions? No. Just as we didn’t know that New York City could turn around, we also don’t know what the future holds for Flint — and that could be a good thing. What we can say is that, as with New York, macroeconomic and other changes will need to occur to bring Flint and places like it back into favor before they will really be able to transform.”
Aaron ends by saying that political leadership must do the difficult job of dealing with its legacy challenges, from underfunded public pensions to inadequate infrastructure, work to pave the way for private growth that might be presently unknowable, and to avoid the kinds of government boondoggles that seek to stimulate growth, but actually hamper it.
All in all, a good piece. But it reminded me that other factors come into play when it came to how the knowledge economy selected its winners and losers. And struggling post-industrial cities were certainly losers.
My comment to his article and the subsequent tweetstorm pointed out that cities like New York, Boston, DC and the Bay Area were well positioned with certain assets as the economy turned in their favor, even as they were at their lowest moments. Late 70’s New York still had Wall Street, even if financiers commuted in from Westchester County or Connecticut then, instead of living on the Upper East or West sides now. It was still the nation’s media capital. It was still a fashion capital, and it still had the eye of the entire world as the home of the United Nations. Harvard, MIT and other universities make Boston a deep reservoir of elite talent; the same goes for Stanford and Berkeley in the Bay Area. DC naturally attracts the nation’s best and brightest as our capital. Each of these cities managed to leverage these assets for their growth.
Many Rust Belt cities have similar assets — Chicago, definitely so; Detroit, Cleveland, Pittsburgh and St. Louis, moderately so. The problem for them, however, is two-fold: one, after relying so much on manufacturing for so long, the transition to utilizing other assets still moves at a glacial pace. And two, much like Flint lacks the assets that Detroit does, limiting its prospects, Rust Belt city assets don’t carry the same weight as those on the coasts, therefore limiting their own prospects.
That brings me to my next point: the Rust Belt’s post-industrial transition remains an existential one, and that was echoed in the 2016 presidential election. I maintain that Rust Belt cities are in a position not unlike where Southern cities were in the eight-decade span between the end of the Civil War and the end of World War II. After losing their economy (the slave-driven plantation agriculture economy), enduring automation challenges that further reduced agriculture employment, and falling behind Northern cities in participating in the manufacturing economy, Southern cities struggled for nearly a century to figure out what to do.
After World War II, the economic winds shifted in the direction of Southern and Western cities, now together marketed as the Sunbelt. They could market lower land, labor and construction costs to woo businesses. The construction of the interstate highway system meant that the rail disadvantage of the South could be negated. The spread of air conditioning made hot Southern and Southwest summers tolerable.
The Sunbelt perfected the practice of nibbling away at the Rust Belt’s economy to serve as a new economic foundation for them. Once established, they took it and ran with it.
As for a Rust Belt future, I see Rust Belt cities eventually engaging in similar practices, but with their target being coastal cities. Many Rust Belt cities have (to the surprise of many, I found out in my tweetstorm) strong urban bones with an abundance of walkable urbanism. And it’s well known that this asset comes at an affordability that coastal cities can’t match. While YIMBYs are doing everything they can to increase housing in coastal cities and push prices downward, we may find that businesses elect to move to other cities with similar assets at a lesser price, and hope to bring more people with them. At some point a new economic foundation is established, and the process will accelerate.
Chicago has already reached this point, even if it hasn’t experienced the same success as the coastal cities. Pittsburgh, Cleveland, Detroit, Milwaukee and St. Louis sit behind Chicago, at varying levels. Sadly, I don’t know if the Flints or Akrons or Rockfords of the Rust Belt will ever see the same change, at least under our current economy. But hey — in 1920, Charlotte was a small cotton processing center and minor rail hub with 46,000 people, while the prosperous auto industry was attracting enough people to Detroit to push it just shy of one million people. Today, Charlotte is a major banking and financial center, the economic capital of two states, and has over 800,000 residents, while Detroit has fallen below 700,000. The script was flipped.
Am I saying this will be a conscious Rust Belt strategy? Not at all. Even 40 years after reaching peak manufacturing employment nationwide, Rust Belt cities are still trying to figure out how to operate in an environment where manufacturing simply doesn’t dominate anymore. Eventually each city will conduct its own evaluation of its assets and determine the appropriate way to market them. This, however, is just my own understanding of how the broad macroeconomic cycle plays out and takes place into account.