The Rust Belt has proven to be an ideal laboratory for exploring the practical problems associated with a society habituated to easy mobility, specifically what results when mobility outruns population growth. Booming growth tends to mask economic and social side effects. But lucky us, we haven’t had any booming growth for a while, so the results are plain to see here.
TOO MUCH RETAIL SPACE
In the early 1990s, a certain discount retailer erected a store in Cleveland Heights. Twenty years later, that same retailer put up a new, bigger store about half a mile away in the neighboring city of South Euclid, stomping out a former golf course in the process. The Cleveland Heights location was abandoned and remains a vacant hulk to this day.
Whenever this kind of thing happens, people talk about which city offered which tax credits, who was serious about being business friendly, which neighborhood is on the decline, blah blah blah. But more likely it’s just that these buildings aren’t made to last any longer than twenty years. Once the roof starts to leak and the parking lot is full of potholes, the owners more often than not just walk away from the thing rather than spending any money to fix it up, and write off the loss on the depreciated value to offset other profits. In other words, these may look kind of like buildings, but functionally they are tents—Sheetrock and metal-stud and particleboard tents pitched on concrete-slab ground cloths, taking up space that no one can use for anything else.
TOO MUCH HOUSING
Houses have generally been built for the longer haul. New people can move in and use them after the previous occupants leave. Urban planners describe a regional pattern of housing reuse as “filtering.” The people who initially build homes and live in a city’s earliest neighborhoods eventually move out for newer or bigger quarters and other people move in behind them. As those buildings get older, their relative value decreases, and the people moving into them correspondingly tend to be of somewhat lower income than the previous residents. The wealthiest people are generally building and moving into the newest buildings, while the poorest people are moving into the most affordable properties in the older areas—and in between, people are steadily “filtering” from lower value to higher value homes as they are able. It never happens quite that neatly, but that’s the concept.
There’s a functional elegance to this filtering scenario in that it provides housing for people at a wide range of incomes and allows for attainable step-ups to more expensive places as people are able to improve their lot economically and socially. And, in a cold Darwinian sort of way, it selects out the least viable structures, while buildings that have more inherent quality tend to get more attention and retain more value even as they age.
The functional elegance has run into some inelegant dysfunction in the Rust Belt, however, because for the filtering mechanism to work well there must be steady population growth. When population growth stops but building continues, two things start happening right away: the number of abandoned properties goes up as people “filter” out of the worst housing, and overall property values go down due to the market oversupply that outpaces regional demand. The depressed values further discourage investment in the upkeep of the lower-end properties, which accelerates the decline in real estate values.
STRESSED TAX BASES
Because schools and city services are typically funded through property and income taxes, a decline in relative property value and average income means either that municipalities need to increase tax rates to generate the per-household dollar amount needed to sustain services at historic levels, or those services need to be cut, or some of each.
Some communities can deal with that—they understand that their higher tax rate still translates to a reasonable tax bill for a house of a given size when compared to the newer places (which charge a lower tax rate on a house that costs more per square foot to get a similar dollar amount). This is why people happily still choose to live in places like Cleveland Heights, Shaker Heights, and Lakewood in the Cleveland area even though tax rates have crept up over the decades: the total cost of a mortgage plus taxes is still favorable compared to that of outlying areas, and the inner-ring lifestyle simply does not exist out there. This isn’t specifically a Rust Belt phenomenon, but an age-of-housing phenomenon: nationwide, older homes tend to have lower per-square-foot property costs and higher property tax rates than newer ones. But in a high-mobility/low-growth scenario such has characterized the Rust Belt since the 1970s, some areas of a city lose so much value so quickly and so pervasively that there seems to be no way out of it except to let things crumble and start over.
The inequities and waste are further exacerbated when the region is a patchwork of small, competing municipalities rather than one geographically big city. It’s hard to sell independent municipalities on the concept of some kind of regional cost sharing when many of them were created specifically not to share with their neighbors, but rather to keep
