California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
by Daniel Ginsberg
As evinced by the most recent presidential election, the issue of reinvigorating America’s “rustbelt” cities has become central to the hearts of many citizens. Regardless of how this might be executed from a political standpoint, cities like Detroit, Pittsburgh, Chicago, and St. Louis will require significant reinvestment and urban planning to once again reach their full capacity and regain their economic prosperity.
For many, Detroit carries an unfortunate associate with bankruptcy, stagnancy, and general decline: a far cry from its economic heyday in the 1950s and 1960s. Once dominated by names such as Buick, Cadillac, Mercury, and Oldsmobile, Detroit’s thriving auto industry at one point supported a population of 1.7 million. After the 2008 financial crisis culminated with the bankruptcy of the city in 2014, Detroit’s population now stands at a dismal 677,000. With a lack of city workers and an unresponsive city hall, Detroit has found deregulation for urban developers and small businesses an attractive policy measure. The city has introduced “pink zones,” where environmental impact statements and other “red-tape” regulations are removed in an effort to expedite urban revitalization. Depending on the success of the policy measures, other cities hope to use it as a model for incentivizing investment in historically neglected urban zones.
Similar to Detroit, Pittsburgh’s traditional associations with the steel industry and broader manufacturing jobs have made it difficult for the city to adjust to structural economic shifts. Pittsburgh was famous as the home of U.S. Steel, a “necessary” conglomerate of former steel companies in the city and throughout the nation. However, manufacturing in the city has steadily declined since the steel crisis and deindustrialization in the 1970s. Over the last fifty years, the city has lost over 50% of its population, and it was one of the only major American cities to post negative economic growth from 2013-2014. Due to unemployment, the city has struggled to revitalize neighborhoods while avoiding the negative ramifications of gentrification and rising housing prices. One solution has been incentivizing those in the suburbs to move back into the city, pointing out the lack of public transportation and consumers for small businesses in more remote neighborhoods. As a result, the city is better aligned for sustainable growth for the next few years.
While cities like Detroit struggle to address the sizeable amount of old housing projects, dilapidated business districts, and abandoned factories simply needing to be torn down and rebuilt, older neighborhoods have emerged as ideal locations for green sector growth. As part of a broader trend toward sustainable development, new incentives have initiated a positive cycle of environmentally conscious development. Chicago has led the effort in turning nearly 10,000 tons of landfill into suitable building material. Infrastructure spending on new sewage and water systems should stimulate regional construction while preventing the historic spillage of waste into local rivers and the Great Lakes during floods. Abandoned lots have also raised the idea of establishing larger nature preserves, hearkening back to the expansive wetlands and forests of the Northwest Territories.
For the many residents living in cities scattered throughout the historic “rustbelt” of the United States, the worst days of the economic recession are at least eight years in the past. There is no doubt that such cities have immense potential to grow and become models for urban development and municipal environmental reform. However, faced with the prospects of a less activist Environmental Protection Agency and Department of Housing and Urban Development under the new administration, the responsibilities of securing funds for large-scale revitalization will inevitably shift towards local and state governments. It will be a lengthy process, but these cities are truly capable of becoming the “shining cities” of America envisioned by the founders of the past.