Cincinnati and Urban Economics

I'm visiting my grandmother in Cincinnati for New Years Eve and the city has been making me think hard about my urban economics class. My cousins who live here were telling me that mall after mall has closed down. They mentioned one mall in particular that could be "a zombie movie set." The Ponderosa Steakhouse had a diminished clientele, consisting, it appeared, of retirees and those most likely to suffer from structural unemployment (and me, unfortunately).

Yet Cinicinnati has a beautiful natural setting, great housing stock, and is the home to Proctor and Gamble, Great American Insurance, and a few banks. What's dying isn't the downtown, its the suburbs, and not all suburbs. Mason, OH is a fast growing satellite city with good schools and many offshoots of the big businesses. Its neighbor, Sharonville, would have gotten a rail stop had the new idiot not been elected governor. It still might, if local rail advocates can convince the city to apply for funding on its own.

I suppose it's also not entirely true to say that downtown isn't dying. It is losing population and has a school system that is up against some seriously unfriendly social dynamics. Moreover, it's suffering from clogged transportation arteries--highways and freight capacity-- and some really stupid planning decisions, like separating downtown from the river by the Fort Washington highway trench and the removal of the streetcar system. On the other hand, they are beginning to look at other cities and recognize these mistakes, and may even bring back the streetcar. So let's call downtown in critical, but not terminal, condition.

The suburbs, on the other hand, the ones fueled by the construction of the highways, populated by white flight from downtown, and based around the malls and office parks, are unlikely to recover, for a number of reasons. One, gas prices are likely to rise over time, increasing the cost of that particular kind of suburban lifestyle. Two, the decline of malls likely signals a market readjustment due to an oversupply of retail. Once a new equilibrium is reached, even if an economic resurgence restores demand, it likely won't look the same. Increasingly, newly vibrant economic districts are happening in places with higher densities and more mixed use development. Three, the population with the wherewithal to do so is relocating to the suburbs with jobs, like Sharonville and Mason, leaving the populations in other suburbs less attractive to businesses as an employee base. Four, the land use pattern in the suburbs does not lend itself to easy realignment with popular smart growth principles.

In other words, Cincinnati is undergoing many of the same changes that we were asked to discuss on our urban economics final, the one where nearly every paper got the same comment: But what happens to the suburban houses and retail?? No one could answer it.

I still don't really know. My guess is that change is sticky and the towns won't really die, unless Cincinnati's economy loses P&G and gets no one else for a century. Instead, buildings will lie vacant and for sale, as will houses, like my grandma's condo. Grass will grow over empty patches where malls were demolished (in an attempt to reduce the property value, or as projects are attempted and fail). Eventually, if the other towns continue to find economic success, in part based around their greater capacity for resilience and adaptation, they will annex or spill over into the "dead" suburbs, rebuilding and repurposing them and absorbing the populations, likely to needed larger amounts of social services than the residents of the more successful towns.

Additionally, as they lie dormant, those who hold property will see their assets depreciate significantly. It may, in places like Cincinnati that are undergoing significant demographic and landuse shifts, be prudent for the local government to purchase and hold onto the land and houses until there is a use for them. Yes, they will be taken off the tax rolls, resulting in a loss of revenue, but I would wager that in many cases, the tradeoff makes sense. I would say do that only for those who cannot afford the lost assets (the elderly, families, and small businesses, NOT national chains or mall developers). It will minimize the long-term economic impacts of the temporary dead zones, and increase the likelihood (assuming a semi-enlightened government, a risky thing to do in Cincinnati) of them eventually being planned and utilized in a way that will make them more resilient in the future, and keep the great housing stock in place.

Well, it's officially 2011 as I write this! Happy and healthy new year to everyone!