More Thoughts on the Motor City’s Road Upward

In my last post, I wrote of the financial issues around the Detroit municipal bankruptcy.  A key concern was the impact of the bankruptcy on availability of capital for future municipal improvements in Detroit and elsewhere.

Access to capital is a critical factor in the viability of cities, but it’s not the only obstacle to a post-bankruptcy rebirth for Detroit, Stockton, and the many cities for which a bankruptcy may be in the future.  Instead, access to capital is less important than a sound strategy for new land uses and attitudes that can revitalize a city.  Luckily, we have many examples of good strategies.

Sophie Quinton of Atlantic Cities writes about a booming urban district in Cleveland.  Although the industrial histories are different, Cleveland shares a Rust Belt heritage with Detroit, so should be a good role model for a Detroit rebirth.  What has worked in Cleveland may also work in Detroit.

The key player in for the 4th Street district in Cleveland was a land development firm with the resources, patience, and good timing to assemble the parcels to provide necessary for a critical mass.  The strategy was to create an entertainment district that would create a demand for housing and retail.  The strategy is working as other development firms are jumping into the district with their own projects.

I was recently introduced to the term “risk-oblivious”, which provides insight to the Cleveland effort.  The concept is based on the fact that the early stages of urban revitalization often include pushing back against a lawlessness that had permeated the district.

Many demographic segments are unwilling to reside in a district in which illegal activities recently held sway.  However, young adults are often willing to be risk-oblivious in exchange for lower rents and the sense of living on the cutting edge.  The process of urban revitalization is the gradual transition from risk-oblivious residents to risk-averse residents.  By the time the risk-averse folks arrive, the risk-oblivious have begun pioneering another revitalization district.

Using that terminology, the 4th Street district in Cleveland is well along the process from risk-oblivious to risk-averse.

Also, a developer need not be the catalyst of urban revitalization.  In both Chatham Square in New Haven and Codman Square near Boston, it was neighborhood organizations who led the effort.

In Chatham Square, the key step occurred when multiple citizen initiatives to preserve the district were coordinated into a coherent strategy.  The strategy included neighborhood festivals and outreach to the real estate community.

The outreach featured a frank acknowledgment of the challenges still faced by the neighborhood, but paired those challenges with the strategies being implemented to overcome the challenges.  It was a successful approach, with new residents buying into a neighborhood with vision.

For Codman Square, the focus was on new transit stations.  A transit line had been extended through the district, but no stations had been provided.  Extensive lobbying eventually brought those stations to the district, triggering other neighborhood improvements

It’s interesting to note that the Cleveland, New Haven, and Boston stories were are all headlined by relatively minor players.  In one case, it was a small development firm, with the other two being neighborhood organizations.

I recently debated a friend about the need for major capital in urban rebirth.  He argued that a large player was required to secure sufficient land and to provide sufficient capital for urban revitalization to succeed.  I disagreed, arguing that the better route was through numerous small players working in parallel.  The Cleveland, New Haven, and Boston examples buttress my argument.

I suggest that urbanism, in its totality, is a winning gamble, but that individual wagers can be lost.  That fact argues for many small bets in place of fewer large bets.

I’ll offer an analogy to support my point.  Let’s say that a gambler has $10,000 that he must turn into $100,000.  Furthermore, let’s assume that he has identified a casino which will return an average of 102 percent of a wager.  (As most presumably know, a realistic number is 98 percent, which is how casinos stay in business.)

To continue with our analogy, what is the best strategy for the gambler upon entering the casino?  Is it to place the entire $10,000 on a single bet?  Or to place a series of $10 bets?

Although the odds favor the gambler, a single large bet would give away that advantage.  With a single large bet, especially if winning bets are doubled, the gambler would likely soon go bust.  But with many smaller bets, the gambler would almost assuredly build his stake to his $100,000 goal.

Urbanism similarly benefits from many small bets, however frustrating it may be to those who wish to take a big jump into urbanism.

There is another way in which small works better for urbanism.  Urbanism is an attempt to recreate a historic way of building cities, but applied to 21st century technology and sensibilities.  No one has a perfect vision of what that means.  Numerous small projects, acting as crucibles, provide the best laboratory for that effort.  If a project is struggling to find market acceptance, the developer can look to another project a few blocks away for different ideas.  Large, extended scale projects don’t offer that opportunity.

I’ll offer one last thought before closing.  The Cleveland, New Haven, and Boston examples provide models for urban revitalization where the neighborhood has reached bottom.  But the concepts also have application when the bottom is still in the future.  With many cities looking at the possibility of bankruptcy in the not-too-distant future, now might be the best time for developers and neighborhoods group, with support from city hall, to implement these strategies.

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (davealden53@comcast.net)