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Razing the American City?

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Flint, Indianapolis, Little Rock bulldoze neighborhoods they have no money to maintain.

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Many have joked about grass growing in the streets of declining industrial cities.

Flint, Michigan -- once a motor city second only to Detroit -- proposes to take a quantum leap: Bulldoze entire city blocks -- and perhaps entire neighborhoods -- and let the forest return.

The proposal has echoes of government social engineering gone nuts: There are sure to be some long-time residents in now-dilapidated houses filled with family memories who don't want to leave, government be damned.

But Flint's population has dwindled to about 110,000 from the mid-60s, when it was home to about 200,000 people and was expected to grow to 350,000, the New York Times reports.
With the shuttering of most of the General Motors (GM) factories which were once the lifeblood of the town (the company's local workforce has been cut by more than 90%), Flint's plan to shrink might make sense. The city faces a $15 million budget deficit, and police and firefighters are being laid off. Young families with children are fleeing, and several public schools are expected to be closed.

The city now has about 75 neighborhoods and covers about 34 square miles. Concentrating the population in a smaller area would cut the cost of routine services such as garbage collection, street lighting and sidewalk maintenance.

On some blocks, a garbage truck stops once a week to pick up a single bag of trash. Eliminating single pickups could save the city about $100,000 a year.

State law now places foreclosed or abandoned properties into a land bank, making it easier for local government to act. Previously, such properties fell into legal limbo and routinely deteriorated, spreading blight throughout the city.

Other cities, including Indianapolis and Little Rock, Arkansas, have set up similar land banks.

"Shrinkage is moving from an idea to a fact," Karina Pallagst, director of the Shrinking Cities in a Global Perspective Program at the University of California at Berkeley, told the Times. "There's finally the insight that some cities just don't have a choice."

Old industrial cities -- especially those like Flint that were centered on the auto industry -- face what appears to be irreversible decline.

Not that there's much left to tax in Flint anymore, but might high taxes be a factor in Michigan's collapse and the continuing success of sunbelt states? It might be smart for state and local governments to consider reducing the entire tax burden rather than cooking up the latest "new Marshall Plan for cities" - especially when the money to fund such efforts comes out of the pockets of a dwindling population.

Who knows - lower taxes might attract new industries and rekindle growth.
No position in stocks mentioned.
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