Healthy Cities Through Cultural Development
Culturally rich cities attract diverse people. People spend primarily where they live, not where they work. Businesses follow people.
July 28, 2006
I've been thinking a lot lately about the economics of cities, the causes of their growth and decay, and the historical record. Actually, I've done this for decades. But lately I've investigated how reinvigorating a city's social/cultural vitality can strengthen its economic vitality.
I see now more concretely that, for a city, actively attracting residents is (perhaps surprisingly) more important than actively attracting employers. Residents draw more local property and sales taxes as well as transfer payments from state and federal government (especially for school and transportation) than companies do. Public, private, and academic entities all appear to agree that people spend primarily where they live, not where they work.
One could say that if all city property were residential and all jobs were outside city limits, it would be just fine. The problem with Syracuse and other cities is that so many people who work in the city live outside the city. And they tend to be the more wealthy. If the social/cultural vitality of the city is reinvigorated, these folks will, on balance, begin to prefer living where they already work and play. The infill of the city's roughly 10,000 vacant residential properties should be a major goal for city agencies.
Does this imply a vision of competition between city and suburbs, leading to a zero-sum game? Not at all. A city's suburbs exist due to, and are largely dependent on, the city they encircle. The problem is the economic imbalance between the city and its suburbs--due largely to a disproportionate amount of tax-exempt city properties and decades of poorly conceived economic development policy (typical of most cities). A strengthening of the regional core (the city) will also strengthen the suburbs.
The city can strengthen by increasing its social/cultural vitality, which in turn will make in-city living more attractive to suburbanites, which will improve the city's fiscal condition, which will allow additional expenditures on making the city a great place to live.
There is actually a strong tailwind brewing to help reverse the flow of population out of the city back to the city. For the last 60 years, pervasive marketing and advertising convinced people that the american dream is a house in the suburbs with a car in the driveway. This was driven by the huge land value differential between city and undeveloped suburbs from which developers profited consistently and handsomely. This continues today, though only for land quite far from the city. Most near suburbs of Syracuse today are more expensive than Syracuse. Even if some suburban tax rates are lower than in Syracuse, the much higher assessment for equivalent physical property results in higher total taxes.
So the property cost differential that once drove the race to the suburbs has now vanished and even reversed. This is the city's economic tailwind. What is left is for the city to begin focusing very hard on increasing it's social/cultural vitality in order to make itself a truly attractive, convenient, and desirable place to live.
Part II: How To Do That
Economically speaking, people bring with them two important qualities: their capacity to work (labor) and their need to consume to sustain themselves (demand). This implies that a group of people, of any number, can create a complete economic unit. It also implies that the economy grows as the population grows, not necessarily because more jobs are available. For example, New York City didn't grow from thousands of inhabitants to millions because millions of jobs were waiting to be filled; immigrants created jobs for themselves and each other in order to fulfill each other's demand.
With that in mind, Syracuse is a well-established, medium-sized city with a long history; it sits at a crossroads in the middle of a wealthy state; and it's economic health and prospects are as good as any other city of it's size. And, although Syracuse may succeed in stimulating it's economy by drawing a major employer, it is also perfectly capable of stimulating it's economy from within. This capacity is often overlooked by policymakers. But it is a more powerful as well as a more healthy and controllable approach than the (often) economic subjugation to large outside business entities.
So, local government would do well to focus its economic development efforts more toward stimulating new and existing small businesses and promoting the establishment of new cultural resources in order to dramatically increase the social/cultural vitality of the city.
The approach I suggest is to create regional concentrations/clusters of cultural resources--much like clusters of high-tech companies or other industries--which together form a regional economic and cultural engine much larger than the sum of its parts. Following are some examples:
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