It would be understandable for denizens of Nashville, Houston, or Miami to be indifferent to the current fate of America’s troubled “blue cities.” New York, Chicago, San Francisco, and Detroit, for example, have become notorious for a toxic combination of street homelessness and crime, on top of pandemic population loss. All are governed by Democratic mayors and populated by Democratic majorities. The fact that these social ills can be linked directly to poor local governance, including bail “reform laws” that spring criminals, makes it even harder to feel these big cities’ pain.
But indifference is far from the best response. In the vast, interconnected free trade zone known as the United States, a decline of what had been robust, job-producing cities affects the nation as a whole. And we all will, literally, pay the price.
COVID ONLY ACCELERATED THE BLUE STATE EXODUS
Throughout history, the cross-pollination of talent and ideas enabled by office life and proximity to others has sparked. That formula is threatened not only by the rise of the new home office but by the failure of cities (mainly those run by Democratic mayors) to provide basic public goods: safe streets, effective schools, well-maintained parks.
What the economic historian Deirdre McCloskey has called the era of the “great enrichment” that has seen billions of people leave behind a life of poverty has, to a great extent, historically been based on the prosperity of cities: from Florence and Venice to Manchester and London to New York, Chicago, and San Francisco.
There is little doubt that some of our biggest cities face a crisis of purpose.
In an environment of reduced office commuting in the wake of the pandemic, midtown Manhattan, though not the ghost town it had become, has still not recovered. The “rough sleepers” of San Francisco are driving others out. Based on FBI violent crime data and economic indicators, Detroit is the most dangerous city in the country. Baltimore comes in fourth.
We have seen this movie before — and its ending is not one we should want to rerun. The suburbanization of the 1950s and 1960s led to massive big-city population loss and the emergence of concentrations of poverty.
This is not to call for some hackneyed new version of a “Marshall Plan for cities,” as per our last major urban crisis of the 1960s. Indeed, the mistakes made then continue to haunt us. It is, however, to say that we must avoid policies, including financial bailouts, that would make matters worse.
MAYORS ACROSS US STRUGGLING TO MEED AFFORDABLE HOUSING DEMAND
New ideas, as Jane Jacobs observed, can take root in the low-cost environment of old, dilapidated buildings. But in the past, metropolitan areas have instead been subject to a wave of urban renewal that tore the heart of cities, replacing historic structures with public housing and parking garages. These government-subsidized and often government-owned monsters were central planners’ ideas of renewal. In reality, they stood in the way of it by substituting ineffectively for the policies that catalyze true renewal: reuse of inexpensive older properties and encouragement of new local enterprise. Urban renewal was premised on a centrally planned notion of what cities should be. The result was decline — and then dependency.
It wasn’t merely that the cities were made ugly and unproductive. Municipalities such as Cleveland and Detroit became dependencies on the broader American prosperity, relying on the life support of transfer payments: Medicaid, cash welfare, food stamps. This is part of why the rest of the country suffers along with cities they don’t live in and might not ever visit: Through our quasi-socialized healthcare system, even rural denizens pay for the medical bills of big city crime victims — and for the federal grants for hospitals and universities (“eds and meds”), which are the “industries” of these once-great cities.
The recovery potential of these cities is clear. So is the potential for government to mess it up again.
“Blue cities,” including Los Angeles, Seattle, San Francisco, and San Jose, were among the most robust post-pandemic job creators. Each ranked in the top 15 in metro employment growth. We cannot afford to see these engines of employment and innovation growth stall. They are the sources of the medical and military application breakthroughs that will be matters of life and death. But the fact that New York, our largest city, and Chicago, the bedrock of the American heartland, are not among the growth leaders does not mean that others will inevitably substitute for their growth.
Our shared interest in having as many healthy cities as possible does not lead to self-evident policy prescriptions. Indeed, it means, perhaps counterintuitively, avoiding grand plans and instead pushing the troubled blue cities to get their own houses in order.
No city can be a dynamic growth center if its legacy costs, such as retiree pensions and healthcare coverage, consistently crowd out its operating needs. When New York provides generous pensions and nearly free health insurance to retirees enjoying low-tax Florida, city residents get a partial answer to the question of why Gotham is in a tailspin.
Getting costs under control must fundamentally be a matter for local leadership. The growing sentiment that the mentally ill must be cleared from the New York subways and Skid Row, Los Angeles, is a promising sign. But far more imagination is needed in other areas. For example, if office buildings are to be adapted for housing, regulation must not dictate what types of living spaces developers can provide. It may be that residents are willing to accept tiny apartments. It may be that they’d like to share dormitory-type spaces with other young singles. Building codes that dictate specific unit sizes and configurations may stand in the way of building reuse.
None of which is to say there is no constructive role for government to play. But as transit systems flounder from low ridership and revenue, any assistance must be predicated on reducing bloated labor costs.
As big-city school systems lose students — New York has lost 100,000 — state governments must not stand in the way of increasing the number of charter schools, which are more likely to be effective in serving disadvantaged students.
As employee pension costs and post-retirement healthcare subsidies crowd out spending for basic city services, there must be no bailouts from state governments or Washington.
At the same time, the federal government must cease making matters worse through uncontrolled immigration that brings desperate and impoverished immigrants in the thousands to New York and other cities still trying to recover from the pandemic.
So, too, must state regulators and Washington, specifically the Federal Energy Regulatory Commission, get out of the way of the construction of energy lifelines, notably the natural gas pipelines, that keep big-city homes warm and electricity rates under control. The so-called renewable mandates of New York and California state governments have led to sky-high power costs in the cities of those states. Even worse is the specter of energy unreliability in the form of brownouts and blackouts. For reasons related neither to safety nor the environment, for instance, New York closed the nuclear power plant that had provided 25% of New York City’s energy. And avoiding policy mistakes such as high minimum wages is crucial.
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Office buildings may be adapted for housing or even industry, given the right regulation. Public housing sites might be sold. Expeditious approvals for new businesses can be a lifeline. Such should be the norm rather than chasing established businesses to relocate. Unlike in the 1960s, planners must not be the ones deciding what gets built and where.
The big blue cities can recover — but, as we have seen over the past 50 years, that recovery is far from inevitable. Absent the requisites for a rebound, we are all at risk of bearing the costs.
Howard Husock is a senior fellow in domestic policy studies at the American Enterprise Institute, where he focuses on municipal government, urban housing policy, civil society, and philanthropy. He is the author of the paper The virtues of American localism — and its 21st-century challenges.
