Downsizing Cities

To make cities work better, make them smaller

URBAN America is changing, and as has so often happened, the change is largely unplanned. Fields turn into housing developments; housing developments turn into suburban towns; suburban towns grow into cities; commercial strips and malls grow into full-fledged urban centers. Moreno Valley and Santa Clarita, both in California, not even incorporated in 1980, are today among the fastest-growing cities in the country. Forty years ago Mesa, Arizona, was a town outside Phoenix; today, with 325,000 inhabitants, Mesa is bigger than Louisville or Tampa. As for Phoenix, it is now the eighth largest city in the United States, with more than a million people, and makes up only part of a metropolitan area that covers more than 400 square miles.

A metro area—or a metropolitan statistical area (MSA), as the Census Bureau calls it—is defined as a central city of at least 50,000 inhabitants together with adjacent communities with which it has a high degree of social and economic integration. A metro area without a central city must contain at least 100,000 people in all (or, in New England, 75,000, as the term is defined there); major metro areas of more than a million, which in practice always contain central cities, may be designated consolidated metropolitan statistical areas. Although the concept of a metro area was introduced in 1949 as a demographic convenience, the city proper remains a distinct legal entity.

In Cities Without Suburbs (1993), David Rusk, a former mayor of Albuquerque, convincingly demonstrates that those central cities that have expanded their limits to annex suburbs, or that have enough vacant land to accommodate suburban growth, do better than static cities in a number of significant ways. The two Ohio metropolitan areas of Columbus and Cleveland serve as an example. Since 1950 the city of Columbus has been aggressively expanding, and now covers about 200 square miles; Cleveland's area—seventy-seven square miles—is almost unchanged. Although metro Cleveland is comparable in income level and racial composition to metro Columbus, and both metro areas have grown significantly in the past four decades, the present situation of the two cities is very different. Cleveland has fallen behind Columbus in economic growth and job creation; it is more racially segregated; and it has a significantly lower per capita income, more poverty, and a lower municipal-bond rating. The city of Cleveland, despite being the center of a consolidated metropolitan statistical area, is anything but integrated with its surrounding communities. By every measure (income, education, employment, poverty) the city is less well off than its suburbs. The same pattern is repeated across the country in cities like Detroit, St. Louis, and Chicago, which are increasingly isolated—economically and racially—within their metro areas.

CAN old manufacturing cities and their suburbs be unified? Rusk concedes that true metropolitan government is unlikely (the only American metro area with a directly elected regional government is Portland, Oregon) and suggests revenue sharing between rich and poor jurisdictions, metro-wide housing-assistance programs, and economic-development plans. But helping ailing center cities by transferring funds from the suburbs is unlikely to garner much political support.

What is more likely is a federal program, such as the recently created Empowerment Zones, aimed at revitalizing inner-city slums. This is another version of what used to be called urban renewal, or enterprise zones, and it is as unlikely to succeed as its predecessors. Nicholas Lemann made this point forcefully last year in a New York Times Magazine article titled "The Myth of Community Development." "Nearly every attempt to revitalize the ghettos has been billed as a dramatic departure from the wrongheaded Government programs of the past," he wrote, "even though many of the wrongheaded programs of the past tried to do exactly the same thing."

Even if it were possible to expand the tax base of isolated central cities to capture at least some of the wealth of surrounding suburbs, doing so would not solve another problem. A city like Cleveland is not just less dynamic, poorer, and less racially heterogeneous than it used to be; it is also considerably smaller. Since 1970 Cleveland's population has decreased by 33 percent—one of the most precipitous declines of any large city. (During the same period Columbus grew by 17 percent.)

Cleveland is an example of an urban phenomenon that is increasingly common: the shrinking city. From 1970 to 1990 the total population of the 200 U S. cities with more than 100,000 inhabitants apiece increased from 59 million to 64 million—a nine percent growth rate. (The nation's population grew by 22 percent in the same period.) But growth was not experienced equally by all cities. In fact, cities fell into two distinct categories: about two thirds grew vigorously, and the other third actually lost population. Over the two decades the average population decline was 12 percent and the average growth was an astonishing 81 percent. The cities that lost population tend to be the older manufacturing cities; the gainers are newer suburban-style cities, chiefly in the West and the Southwest. The trend has continued; today nine of the twenty largest cities in the country have smaller populations than they did even in 1950, and some cities, such as Boston and Buffalo, are smaller today than they were in 1900.

These and many smaller cities now have what is referred to in the real-estate business as a low occupancy rate. In a shopping mall with a low occupancy rate the owner can decide to refurbish the mall or to offer special leases. If these strategies don't work, in the short run the owner will absorb the loss; in the long run either rents must be raised or the owner will go bankrupt. But if rents are raised too high, more tenants will leave and bankruptcy will only be accelerated.

Like a mall owner, the administration of a city with a low occupancy rate can try to increase its tax base by refurbishing the downtown area to make it more attractive to business. It can organize riverboat gambling and build aquariums and world trade centers. It can stimulate employment by enlarging the public sector. (It cannot, however, create the sort of manufacturing jobs that were the basis for the earlier prosperity and growth of great cities like New York, Chicago, and Philadelphia.) It can also try to balance its budget by raising revenues through higher property taxes, business taxes, and income taxes, and by curtailing services—although these tactics, like raising rent, will eventually only hasten population decline.

The mall owner who has tried everything and finds that there is simply no demand for space has a final option: make the mall smaller. Consolidate the successful stores, close up an empty wing, pull down some of the vacant space, and run a smaller but still lucrative operation. Many cities, such as New York, Detroit, and Philadelphia, don't stand a chance of annexing surrounding counties. Downsizing has affected private institutions, public agencies, and the military, as well as businesses. Why not cities?

TWO things happen when a city loses population. The reason for the first is that although a city is often said to be shrinking, its physical area remains the same. The same number of streets must be policed and repaired, sewers and water lines maintained, and transit systems operated. With fewer taxpayers, revenues are lower, often leading to higher taxes per capita, an overall deterioration of services, or both. More people depart, and the downward spiral continues.

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