The Value in Shrinking a City

Intriguing front page article in the Wall Street Journal yesterday titled As Its Population Declines, Youngstown Thinks Small describing a city planning strategy that runs very counter to the norm.  Youngstown has been battered by the closure of most of its steel mills, and has seen its population drop by 50% over the past couple decades.  Entire sections of the city have been abandoned, and most of the remaining residents are older lower income folks.

Most cities in this pickle would be in a panic, doing everything they could to lure new businesses to fill up abandoned buildings, with new employees to fill up abandoned houses.  Tax breaks, lease subsidies, training assistance... the supposed corporate welfare spigot would be wide open.  Unfortunately cities like Youngstown don't have the revenue to provide such incentives.  So they're trying something radically different.

Faced with the devastation of Oak Hill and other depressed pockets of the city, Youngstown is trying an unusual approach: Allow such areas to keep emptying out and, in some cases, become almost rural. Unused streets and alleys eventually could be torn up and planted over, the city says.  Abandoned buildings could be razed, leading to the creation of larger home lots with plenty of green space, and new parks.

Another goal is to wipe away the most obvious blight.  The city estimates it will take about four years to bulldoze the biggest eyesores, including about 1,000 abandoned homes and several hundred old stores, schools, and other structures.

As expected it is a controversial plan.  The communities most impacted are almost definition... and design... the poorest.  But when the city promised not to force anyone to move, public opinion rapidly began to support the program.  The worst areas, the poorest areas, would be the first to be transformed into communities with large parks, large lots, and lots of open space.  But perhaps the largest barrier is simply the novelty of the strategy.

[Plans] like that would be considered blasphemy in most cities, where officials are taught to promote growth and development and fight against population decline.  Accepting that a city is going to shrink goes against controversial wisdom that a bigger city means more jobs, more taxpayers, more revenue, better education, and better services-- in essence, a higher standard of living.  "It's un-American.  It seems like you're doing something wrong if you're not growing," says Hunter Morrison, director of the Center for Urban and Regional Studies at Youngstown State University.

This is a radical plan, and is definitely thinking out of the box.  It's not the first time it's been tried; think of all the concrete monoliths of old East Germany that have been purposely demolished.  In fifteen years Youngstown may be smaller, with large parks and large lots. 

Sounds sort of pleasant, doesn't it?  Perhaps some people would want to move there, start companies there, raise their families there?  The city would have increased value.

What struck me almost immediately was the analogy with the difference in how Toyota and GM think of the concept of "number 1."  GM, at least until recently, was focused purely on sales volume regardless of profit... of value.  Toyota has always been focused on creating value for its customers, which drives profit, and oh by the way happens to create sales volume.  GM execs are starting to focus on the profit side of the equation now that they've been surpassed by Toyota in sales volume, which is a positive sign.

Traditional cities focus purely on population growth believing all good things derive from size.  Youngstown is focusing on value.  If their plan is successful, I believe it will attract new residents, new businesses, and thereby allow the city to provide a higher level of services.

Comments

[Daniel]

Have you read this scary story of Uber Outsourcing at IBM?

[Daniel]

Oops, here's the link

http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html

[Mark Graban]

Ugh. I blogged about IBM and their stupidity (click on my name).

[Mark Graban]

There are many lessons to be learned from Youngstown. My dad's family is from the area just east of there and earlier generations worked in the steel mills, as eastern european immigrants (late 1800's, early 1900's). As a kid, in the 1980's, a visit to my grandparents always included a drive past the rotting empty shells of the closed-down steel plants. Maybe that explains a lot of my motivation and passion for lean.

The whole area is just depressing beyond belief (and this is coming from someone who grew up outside of Detroit).

I don't think there's any "value" from shrinking a city. I don't think there's a Lean lesson other than:

1) don't put all of your city's eggs in one industry's basket

2) don't rely on an industry that is chronically mismanaged (Wikipedia's entry on Youngstown says "Youngstown was forced to redefine itself when the U.S. steel industry shifted production overseas in the 1970s...) Same crap that's hurting towns today, we have to move because of high labor costs, forget the bad management.

It's better to avoid becoming the next Youngstown, Flint (where my mom is from), or Detroit.

I don't find any inspiration in "making the best of a bad situation." The tie to GM and "volume over profit" is tenuous at best.

[Ken Tolbert]

Mark,
I think you missed many of Kevin's points. There is value in shrinking to fit, just like many manufacturers can reduce floorspace after lean improvements. Why provide services - utilities - for unused space? At the same time Youngstown is increasing the value to their customers - their citizens - by adding parks and open space. This will attract future business and new citizens. Should a city like Youngstown simply be relegated to remaining a hollow shell? Future leaders should be cognizant of not putting all the eggs in one basket, but let's not penalize the current citizens for the mismanagement of the past. As far as the GM analogy, yes that was a loose but interesting thought.
Ken

[Mark Graban]

It might be a necessary thing, shrinking the city, but let's be careful about the definition of the word "value." What's happening to Youngstown is rework. It might be a "good" thing, but it isn't value. Parts might be value, but not to the same level that jobs would be. Kevin's incorrect, I think, when he says the city can't afford (doesn't have the revenue) tax incentives. Tax incentives to promote entrepreneurship or jobs don't "cost" money, they are the city saying they won't accept tax revenue that an empty field wasn't generating as it was. Then again, I don't know how successful Detroit's "enterprise zones" have been for attracting new business.