Naturally, we should look out from Detroit. (Michigan Central Station
Naturally, we should look out from Detroit. (Michigan Central Station)
‘Tis the season for end of year lists. And I figured I would be remiss not to add my two cents. So here they are: the most important news this year that have shaped cities’ economic fates.
Let’s begin on the wrong foot, shall we.
The Worst
Detroit goes broke: At the onset of the year, Chrysler landed a two-minute Super Bowl ad that was less about a car than an entire city. Spilling from a sleek, tinted four-door, Eminem turns to the camera: “This is the Motor City. And this is what we do.” What they would do, federal officials hoped, was lead the 2011 economic rebound as a remarkable turnaround story. Jon Chait watched the spot, got a little teary-eyed, and spotted “a public entity responsible for the well-being of the community.”
Well. Chrysler is having a record year, recouping profits not seen since its 2009 bankruptcy. Detroit? Not so much. The city has never been a bellwether for others; it’s more of an urban anomaly. Unable to find a fix for its thinning population and revenues, the city may be forced to declare bankruptcy. No other major city is in so bad a shape. But a bankruptcy there would reverberate throughout the region. And it may make the other municipal outliers of the year—Harrisburg, Central Falls, and Jefferson County—look less like outliers and more like a dire possibility.
Budgets get axed: Like a receding shoreline miles from a massive sinkhole, the funds doled out to cities continued to shrivel this year, courtesy of the financial crisis and political climates. The new legislators from the 2010 Tea Party takeover, in Congress and statehouses, coupled with the drying up stimulus funds, have pushed cities into positions of austerity. From the Times comes the latest example: the Community Development Block Grants, given directly to cities, have been shaved by a quarter in the past two years. One can easily connect these funds to a teacher a city can or cannot hire, a welder it can or cannot contract. Yet, the amount cities receive directly from the Feds, in poor and plump times alike, is relatively tiny. (Allentown, the city the Times profiles, netted Grants represented less than 3% of its budget.) Instead, the main drainer of city wells is declining property values. Which brings us to…
HAMP still sucks: It’s not the only vine in the convoluted housing mess, but Obama’s main mortgage-modification program is a big one. And its ongoing failure remained steadfast over the year. Cities, stuck under state laws and macro forces, can do little about the foreclosure crisis HAMP aimed to mend. Another federal intervention, the Neighborhood Stabilization Program, has unexpectedly turned foreclosed properties into investor toys, flipping back and forth, weighing heavily on city books. The tools to fight foreclosure problems did not expand in 2011. And the problem is not going away in 2012.
Stadiums still suck money: In some respects, the era of city mega-projects may be done. But stadium boondoggles—as evident here, here, and, oh boy, here—sure aren’t.
Cities militarize: A blockbuster report from The Daily Beast and the Center for Investigative Reporting shows the alarming transformation of city police forces into militarized operations. Closely related is the steady turn in cities toward more surveillance cameras. Impact-wise, a bulkier police force has little tangible ties to reduced crime. The security camera deployment, as David Lepeska details, is trickier. It can be cost-effective if used wisely. Those costs, of course, don’t consider the gigantic, irreparable chinks to civil liberties. And yet, more cities vowed to put up cameras this year, largely undeterred. Even if they are cost-savers, the measures chip away at a city’s soul.
The Best
Detroit starts to flicker: It’s not all bad news coming from the Motor City. In fact, the Obama Administration has some reason to pin its urban hopes to the city. Cheap rents, in offices and apartments, are genuinely fueling a growing tech center downtown. And the city’s housing market, after scrapping the bottom of the bottom, is showing signs of a recovery. It clearly has kinks to work out, but the city could be a model for smart (and transparent) public-private infrastructure financing—an area where the country has plenty of room to grow.
Jobs come back: Of the 372 metropolitan areas tracked by the BLS, 281 posted lower unemployment rates this fall than a year ago. The job picture still varies widely across cities, with San Antonio and a slew of other Texas cities leading the pack this year, according to the Milken Institute. Yet a bulk of the persistent joblessness, numbers this year revealed, is led by the suburbs, a better bit of news for central cities, particularly if businesses continue to flock to downtowns. Suburban poverty, and its accompany baggage of transit policy, is a problem that cities will need to address more and more. But, hopefully, a numbing lack of jobs is one they will deal with less and less.
Meredith Whitney was dead wrong: Take it away, Bloomberg:
Whitney’s Armageddon never came. Instead, munis became the star performers of 2011.Via: Forbes
