Urban Renewal

Strategies to save our cities

We all know what cities used to be for. In our parents' and grandparents' time, they went downtown to shop at a department store, to take in a movie, to visit the latest exhibits at the local museum, to go to a concert, or to go see a game at the stadium. Most people, even when they lived in the suburbs, commuted downtown to work.

Most of those rationales for cities have faded. A rising number of people have their jobs, as well as their homes, in the suburbs. There's no need to go to the picture palace downtown when there's a multiplex at the mall. Though many of the old museums are still downtown--besieged by decay, degradation, and political correctness--they face a rising number of competitors in the suburbs. And a sports complex these days is as likely to be in Auburn Hills or Landover as in Detroit or Washington.

Today, far too many cities--particularly older Northeastern metropolises--are home only to the wealthy few able to afford their rehabilitated townhouses and to the downtrodden poor who can't afford to go anywhere else. A recent article by Robert S. Guskind predicts dire consequences from that trend. In the year 2016, Guskind foresees, America's cities will be divided into a few wealthy enclaves being slowly swamped by the rising underclass.

In the 21st century, Guskind writes, a million soldiers will patrol the ghettoes, and a million urban convicts will rot in a huge prison in the Arizona desert. He envisions a Washington where the wealthy live in terror: K Street lobbyists have to pass through checkpoints and barricades; rich Georgetown residents enter their townhouses through secret tunnels; and The Washington Post has fled its urban stronghold for a secure harbor in the suburb of Loudoun County, Virginia.

Guskind's article did not appear in a thunderous organ of the nationalist right, but in the June 18 National Journal, the influential Capitol Hill weekly. No doubt his tale gave nightmares to the pinstripers who can afford the Journal's hefty subscription fee.

A more telling (and more plausible) sign of urban decline appeared in the July 23 Economist, which reports that Chicago Mayor Richard M. Daley has called for banning public telephones in his city, calling them "outdoor offices for drug-dealers and criminals."

So our cities are losing the old-fashioned luster of the bustling, exhilarating metropolis. They are increasingly bleak places where you can't find nightlife or even a telephone. In a search for solutions to the many fiscal and managerial problems plaguing America's older cities, many mayors are privatizing. Surprising items are for sale: In New York City, Nick Gilbert reports in the June 21 Financial World, Mayor Rudolph Giuliani is considering selling two or three of the city's waste treatment plants, which could net New York $800 million. Giuliani also might sell the entire New York City water supply system, which could add $9 billion to city coffers. (Like many cities, New York once had a private water supply; the "Manhattan" part of what is now Chase Manhattan Bank was originally a private water company.)

Most mayors, however, are proposing more timid reforms. The conventional wisdom among mayors these days is "public-private partnerships," in which business and government unite for the common good. "A bipartisan consensus is being built in the heart of America," the July 11 Business Week editorialized. "Mayors and governors of both parties are quickly moving toward a centrist economic and political program that calls for entrepreneurial-minded governments to actively help companies grow."

Seasoned magazine readers know that whenever Business Week discovers a vital center around which reasonable Republicans and Democrats can coalesce, it's time to grab your wallet and check your change. Instead of reflexively praising public-private partnerships, it's better to ask if such "partnerships cause the state to grow or shrink.

Many times, of course, such "partnerships" bloat governments. Sports stadiums are a case in point. Liberals in particular should be outraged by new stadium construction. Such facilities take money away from the poor through increased sales taxes or lottery tickets and reward wealthy players, very wealthy skybox patrons, and extremely wealthy team owners. Plus, there's no evidence that stadiums generate new wealth for a city, since most people attending sports events are simply diverting money that they might have spent on other entertainments.

In Cleveland, Rondo Bartomile reports in the June Progressive, the city asked voters in 1990 to approve $275 million in new taxes for the Gateway Center, a complex combining a stadium for baseball's Cleveland Indians and an arena for basketball's Cleveland Cavaliers. Advertisements promised that the new facility would provide 28,000 new jobs, new housing for the homeless, and $15 million for schools in return for government's 50 percent ownership of the project.

It has been four years since the new taxes were approved. None of the money for social programs has appeared, the stadium was $43 million over budget, the arena is currently $49.2 million over budget (and isn't finished), the city has provided an additional $12 million in transportation subsidies, and the state of Ohio has spent $31 million on the Gateway project and loaned the venture an additional $17.4 million. This remarkably poor "investment," Bartomile writes, is evidence that "Jesse James and Al Capone working as partners couldn't do a better job of cleaning out your city treasury than a major-league sports entrepreneur."

Another dubious effort at "partnerships" is in telecommunications. In at least 50 cities, Herbert Lindsay reports in the July American City & County, municipalities buy telephone lines and then rent them to businesses and homes. Those cities (notably Anchorage and Fairbanks, Alaska) argue that because they own hundreds or thousands of telephone lines, they can get a better deal from telephone companies than individuals can. Thus, they can not only save their residents money, but can earn more revenue.

But cities don't always manage their lines as efficiently as private interests. The telephones in New York City's World Trade Center, Lindsay reports, earn the center's landlord, the Port Authority of New York, $12.4 million each year, while Cheyenne, Wyoming, which has about the same number of telephone lines, earns only $136,000 each year from US West, that city's monopoly telephone company.

Some effective "public-private partnerships," however, do reduce government by privatization and contracting out. Some of the reform-minded mayors who are shrinking the state, such as Milwaukee's John Norquist and Philadelphia's Ed Rendell, are Democrats. But many of these principled politicians are a relatively new phenomenon-- Republican mayors, as Rob Gurwitt reports in the February Governing. Republicans traditionally controlled such Sunbelt cities as Dallas and San Diego. But crumbling Democratic machines allowed Republicans to extend their control to several big cities for the first time in a generation. Los Angeles was ruled by Democrats for 36 years until Richard Riordan's triumph in 1993; New York City had Democratic mayors for 22 years until Rudolph Giuliani's victory (or even longer if you argue that party-switching John Lindsay wasn't really a Republican).

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