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Can Struggling Cities Shrink Their Way To Health?

Luther Gordon, 54, has lived in the same Detroit neighborhood for more than two decades, as he told The New York Times. He doesn’t plan to leave his city, but his city should be thinking about leaving him.

After losing a quarter of its population in the past decade, Detroit is looking for ways to consolidate its remaining residents. The exodus has turned many Motor City neighborhoods into virtual ghost towns. These neighborhoods cost the city much more to maintain and service than their few remaining residents can afford to pay in taxes. City officials want to concentrate the dispersed population into core neighborhoods that can be more affordably served.

The city wants to turn other districts, mainly the most blighted, into green space or, if enough industry can be found, industrial parks. There is little hope of attracting new residents to these zones any time soon.

One option Detroit is apparently not considering — but which I think it, and other cities like it, should consider — is to simply pull the city’s boundaries inward, literally shrinking away from the areas it cannot afford to keep.

This process happens all the time in other contexts. Families downsize their homes when children move out or income is reduced. Companies lop off divisions and lay off workers when times are tough. Surgeons and gardeners know that one must often cut away sick or dead tissue to preserve the living organism.

But it seems governments are genetically programmed to grow when they can, and to ossify when they cannot. Detroit is an extreme example, but the country is littered with school districts, townships, counties and cities that were established generations ago and which no longer make economic sense in their current form.

Why would Detroit, or any city in similar straits, maintain the same boundaries that it had a half-century ago when its population was roughly double what it is today? Are they waiting, probably in vain, for an economic rebirth that the ensuing blight makes less likely? “No new industry, nor mass immigration is going to repopulate Detroit,” a poster wrote on the message board DetroitYes. “Unless oil, gold, or the fountain of youth is discovered here, the population in Detroit will not increase substantially.”

Growing cities often annex adjacent land, bringing suburbs and exurbs inside city limits. De-annexation is far less common but is not unheard-of.

De-annexation has been discussed on message boards serving cities as diverse as Detroit, Kansas City and Oklahoma City. It is sometimes proposed as a way to deal with budget problems or urban blight. More often, however, residents of relatively well-to-do outlying areas are the ones to raise the idea. They are interested, not in cutting underperforming neighborhoods out of the city, but in creating their own independent governments in order to get better returns for their tax dollars. The 92-square-mile Ward 4 area of Tucson Ariz., has entertained secession dreams, but hasn’t made any serious attempts to strike out on its own. Staten Island has a lively secession movement, which hopes to cut New York City’s five boroughs down to four. But, despite 20 years of talks, little has happened.

Cities, and government institutions like universities, should take a cue from the business world. They should split or merge, grow and shrink, as circumstances change around them. The world always changes, and entities that cannot adapt to change eventually perish. Detroit is not going to be able to grow out of its problems, but it just might be able to shrink out of them.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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One Response to "Can Struggling Cities Shrink Their Way To Health?"

  • Mike Sheldrick
    April 19, 2011 - 12:14 pm

    There is a big difference between an affluent outlying area’s residents seceeding, forming their own government, enjoying the fruits of their ample tax base – and the stark abandonment of a neighborhood and its poor. I am in favor of fiscal responsibility, but not at the expense of leaving the poor without schools, sewers, police, courts and rest of what we know as civilized life in this country. If the proposal is to relocate the poor with government help, or to close redundant operations while providing aid for accessing the surviving services and facilities, perhaps that is workable – but will that, in fact, alter the reality of a dying city? The truly poor may be a burden, but they are not tumors, and the core cities should not act as surgeons.