July 8, 2020
AliExpress WW
The COVID-Crisis Could Bring A New Era Of Decline For American Core Cities

The COVID-Crisis Could Bring A New Era Of Decline For American Core Cities

AliExpress WW

Posted by Ryan McMaken through the Mises Institute,

AliExpress WW

Production Company 7-Sigma made headlines when he decided to leave Minneapolis as a result of the company’s plant burning. “They don’t care about my business” 7-sigma owner Chris Wyrobek old woman Star tribune, After more than 30 years in the city, the company does not remain, and not one of the company’s fifty jobs.

But the cost of becoming victims of protests is just one of many reasons homeowners and businesses can become aware of life, and business in central cities has lost its luster. The constant threat of new business locks, new riots, tax increases, and unsuccessful schools can encourage many Americans to flee to the suburbs again, as their parents and grandparents did.

This goes far beyond the fear of a disease that many reporters have suggested is behind the observed beginning of an exit from cities. Yes, many of the upper classes left the city because of their mountain houses and yachts for “health reasons.” But these people are relatively few, and their thinking is ridiculous. They can afford to drop everything and leave the city for the night.

But more serious consequences are likely to feel like middle class Homeowners and business owners conclude that they would simply prefer to avoid decrees and neglect by mayors and city councils in central cities who do not think about issuing “stay home” orders that destroy jobs while at the same time allowing unrest and vandalism freedom of action.

Real value for cities is likely to appear over time. This will take the form of families and shopkeepers who decide that it is best to move their business ten miles down the road to a neighboring city that will actually do something with the rebels. This will take the form of families who decide that their next home will be a little further from city mayor dictators who have the most difficult hands to enforce bans and shut down businesses. This will come in the form of potential new business owners, and homeowners will decide never to buy property to start a business in central cities.

The decline of cities in the middle of the century

Perhaps we are seeing something reminiscent of what happened in the major central cities of America in the 1970s and 1980s. Many Americans have come to the conclusion that these cities have become uninhabitable, and crime is inundated. Many came to the conclusion that these were places that were very unfavorable for doing business. And they left. (Forced connectivity for “integration” was also a factor.)

In some cases, dramatic events occurred that illustrated this trend. In the late sixties in New York there were several strikes of urban workers. Transit and sanitation in the city became a disaster. The power outage in New York in 1977 ended in riots that prompted many companies to pack up and never come back. Many households followed.

But for the most part, cities have witnessed an outcome that took many years and gradually deprived of finance and tax revenues of large cities. Detroit’s neighborhoods collapsed. By the mid-seventies, New York was moving from one financial crisis to another.

“Nearly half of the major cities lost at least 10 percent of their cities.” according to the fed Kansas City :

St. Louis, Cleveland, Buffalo and Detroit were down more than 20 percent. Huge plots of urban land remained virtually deserted.

More than half of the major cities lost their population from 1950 to 1980.

Of course, there were other factors at work. Central cities were often hit hardest when the old rust belt fell into disrepair after the region was destroyed by unions and city and state laws that made business in the region inefficient and uncompetitive. Business owners and employees who had real ambitions or an entrepreneurial spirit had every reason to leave the region.

City centers built on the old manufacturing working class have not recovered.

The situation today is a little different. During the 1990s, major cities began to recover from a downturn in the middle of the century, and many officials and intellectuals in these areas began to grow the so-called ” creative class“(also known as” bohemian bourgeoisie “) With the idea that young artists, engineers, architects and technical workers can be convinced to move to urban centers and revitalize the local urban economy. This seems to have worked in many cases.

But in 2020, in America, the heyday of a new techno-city may end.

Civil unrest

The case of the closure of Sigma-7 in Minneapolis is the most famous case of hostility of central cities to enterprises within their borders. We do not hear about many small, less visible enterprises that will not open after the riots. In other cities, such as Chicago, city authorities are now begging retailers not to leave the city.

Meanwhile, a number of small businesses that are now located in the CHOP zone in Seattle are suing the city for abandoning the business on a whim of the left group.

As reported NBC’s local affiliate, local businesses have been threatened and harassed by bosses of the protest zone against the capture of Capitol Hill in the city. The city authorities, the plaintiffs concluded, essentially left these enterprises to the new “government”:

The decision of the city subjected the enterprises, employees and residents of this region to significant material damage, public safety dangers and the inability to use and access to their property.

Minneapolis and Seattle are not the only cities with the prospect of ongoing civil unrest. With forty million new jobless claims registered in recent months, the United States is experiencing an alarming period of high unemployment. Many of the most affected workers will be low-income populations living in major cities. This will not help the prospect of a quick return to a calm urban environment.

Uncertainty mode

As government and media experts emphasize the rise in reported cases of COVID-19, the prospect of resuming locks is also threatening. This is a threat at the state level and in many suburban authorities. But experience convincingly suggests that those political jurisdictions controlled by political leftists are likely to cover the longest and toughest restrictions. In many states, such as Texas and Colorado, as well as in California and Pennsylvania, local governments in big cities are more enthusiastic about blocking than in neighboring regions and state capitals. “Uncertainty of the regime” – uncertainty as to which laws governing the assassination of businesses may be adopted by the government in the future — there are more in central cities.

Business owners probably remember this. In the medium and long term, business owners and potential business owners will seek areas where the risk of hard locks is less.

Takeoff trend “Work at home”

If the tendency to work at home continues, the main cities will lose one of their main attractions, namely, the possibility of shorter travel to work for those who can afford housing near employment centers. Even if daily trips are just reducedSay, with a three-day schedule – the cost of a house in the suburbs decreases sharply. Without having to sit in traffic jam five days a week, more expensive urban homes, as well as the congestion and crime of urban centers, are becoming much less attractive.

Tax cuts and urbanization

On top of that, this will lead to a significant reduction in city budgets in the form of COVID locks. tax revenues destroyed, All cities and states will be affectedbut if the most productive taxpayers leave the main cities, it is these areas that will feel the main deficit of income. In other words, a shift in labor productivity towards suburbs and small cities will also destroy the budgets of big cities and the budgets of school districts. This will only encourage companies and families to stay away in even greater numbers. Families will seek to avoid school districts and fall into disrepair, and employers will not want to become part of the declining tax base, where politicians often see tax increases as a way out.

The beginning of a trend?

It all takes time to play. Yes, we began to see that those who have the means are already leaving the big cities. New York Times reported numerous former New Yorkers who had left for neighboring regions. time asks “is New York worth it?” and points to a “pandemic to send young New York packaging.”

Meanwhile, some real estate agents report a “crazy rush” wealthy shoppers to get out of downtown and into the suburbs of San Francisco. These are only the first participants. Exiles of more modest means will come later. No wonder that San Francisco average one-bedroom apartment rents down 9.2 percent in May compared to last year.

But this remains a small percentage of the total population. Most homeowners, families, and business owners need time to move their business, sell their property, and be sure that the time has come to move on.

However, all this should not be interpreted as a trend away from the metropolitan areas as a whole. There seems to be a small risk that a large number of Americans will leave metro areas for rural villages and cities. Some will be. But most will notice that the subway still has most of the jobs, most cultural institutions and most health services. which can not It should be said that the main cities have a monopoly on these resources. In recent decades, suburbs and small cities are increasingly becoming places where a variety of sports teams, museums, conference centers, hospitals and much more are located. The subway is still a good place to be. But old cities? Not so much.


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