GMF Literature Scan for USDN Peer Exchange

USDN Peer Exchange: Legacy and Post-Industrial City Literature Scan Call them post-industrial cities, rust belt, shrinking cities, weak-market cities, or legacy cities; they are all the cities where one sector of the economy, typically industrial, was once a primary economic engine but no longer serves that role Many of these cities’ challenges are shared by other cities, be it a period of disinvestment in urban centers or other disruptive economic changes The terms are not synonymous (post-industrial is just that, while legacy cities or shrinking cites have lost significant part of their population and economic activity and are the worst hit of the post-industrial communities, and weak-market cities have just lost their strong market which once supported them) The commonalities are disruptive economic change and a period where growth is no longer the dominant paradigm In a weak-market city the market is not strong enough to backfill all of the lost jobs, economic activity and wealth New York City, for example, had a very large industrial sector that declined, but it doesn’t show up on anyone’s list as a legacy city, a shrinking city, or a weak-market city because it found new activity (most significantly finance and service) to replace those lost industrial jobs and allow the economy to continue to grow Some post-industrial cities are spectacularly successful, think Pittsburg with its high quality of life, and some are even growing again, while others are still struggling All, however, have a legacy of the loss of a major part of their industrial sector, manufacturing, shipping, or mineral extraction and processing and have infrastructure that was designed to serve some uses that are no longer there Urban core area decline in post-industrial cities is driven by larger economic trends and largescale industrial restructuring In many cities, decline is spread the entire urban metropolitan area In many other cities, however, especially in the United States, suburban flight from urban core areas to suburban areas has exasperated the problem In those cities there may be localized and devastating disinvestment even if metropolitan regions has overall population and economic growth In communities with highly fractured political jurisdictions, the loss of tax revenue and the lack of tax base sharing makes the winners and the losers all the more apparent Planners and sustainability directors embrace the concept of social equity: “Every life has equal value,” Bill and Melinda Gates Foundation, “Black lives matter,” from the Trayvon Martin and then the Ferguson protests, and “These cities matter…legacy cities matter,” Mallach and Scoresone (2011) These seem like different stories, human lives mattering and cities mattering, but they are linked When we talk about equity issues it is hard not to notice that legacy cities, at least in the United States, have far more than their share of poverty and have a higher ratio of people of color, and yet far less of national and state resources than they need As a nation, our commitment to preserving and growing the value of the human capital, the locational benefits, and the infrastructure in post-industrial and shrinking cities is embarrassingly small, harming not only those cities but their region and our ability as a nation to be competitive In the United States, the legacy cities are primarily, although certainly not exclusively, in the Northeast and the Midwest, where the heavy pre-World War II industry was concentrated Yet these areas contain unparalleled education and medical institutions, infrastructure, strong culture, and human capita (Mallach, 2012B) There are four unifying element for the declining and shrinking cities to be successful They need to change physically, to accommodate smaller populations, restore both key institutions and city centers or downtowns as urban anchors, develop change-oriented governance and leadership, and develop stronger urban and regional partnerships (Mallach, 2012B and Mallach & Branchman, 2013) The 110th American Assembly (Mallach, 2012B) stresses the need to revitalize American legacy cities, in part because of the huge sunk investments, the enormous human capital, and because the US needs these communities to be competitive in the global marketplace, among other reasons Legacy cities may have declined, but they have enormous assets The Assembly’s strategy starts with the need for communities to work with all of their citizens to develop an informed vision Such community visions should support strategies based on market realities and local strengths that focuses on human capital, dense urban cores, and a positive investment climate To make this happen, communities must develop civic and governance capacity, with leadership at all levels, strong and transparent institutions, and improved information infrastructure Finally, such visions can only work with supportive partnerships with state and federal governments and regional partnerships The Revitalizing the Legacy Cities of Upstate New York convening (2012) came up with somewhat similar recommendations, but included a specific action agenda crafted to the small and medium size legacy cities in that region Those recommendations include a stronger focus on export economies and international trade and better workforce development and “cradle-tocareer” education, all supported by state government Such efforts need to develop a stronger innovation and entrepreneurial culture, replacing the “can’t –do culture” of line and long time workers The recommendations highlight the needs to focus on getting vacant properties back into productive use and to generally implement smart growth, mixed use, and denser urban uses State government partners need to reform property tax statutes to make it more expensive to speculate in vacant land and easier for cities to foreclose Finally, the recommendations stress that successful cities must be more sustainable, denser, and with strong anchor institutions Many post-industrial cities have population decline and/or economic decline (hence shrinking city) or have stable none growing populations, but many have turned a corner and are growing Urban decline may be primarily, although not exclusively, in large urban areas, as in Great Britain, or in smaller cities, as in France (Cunningham-Sabot and Fol, 2009), or it may be in both, as is apparent in some US cities For all the discussion about how the Internet setting us free and let people live where they want to, well-educated professionals in both Europe and the United States have been flocking to large and medium cities or clusters where there better employment options, restaurants, service and retail, and intellectual clustering than small cities (Renn, 2013) In Denmark, with a very slow growth rate, the Copenhagen metropolitan region and the Aarhus to Vejle corridor are getting almost all of the growth, and other small cities and towns throughout the country, industrial centers and rural market towns alike, are shrinking (Peder Duelund Mortensen, personal communication) Quality of life and economic opportunities are typically the most important drivers, with the most dramatic growth in the most successful cities and the least growth or decline in less successful cities, often smaller and post-industrial cities (Renn, 2013) Many post-industrial cities have to address huge challenges of fewer jobs, fewer people, less economic activity, more vacant parcels, but on-going fixed costs (e.g., bond debt and pension costs) In most states, a decline in the value of property automatically leads to a decline in property tax receipts This means that the communities that need taxes the most to provide services to a smaller population and to invest in revitalization are the most fiscally stressed with structural fiscal imbalances During the Great Recession, these issues were compounded by losses in revenue at the state level, leading to a reduction in local aid and state transfers to local governments Add to that the huge vacancy rates and decreases in income and spending caused by shrinking populations and economic activities in many post-industrial cities, again leading to less property and other local taxes, and it is truly a perfect storm An accounting of all of these losses in ten small post-industrial cities in Pennsylvania and Delaware is unremittingly depressing, with lower wages, lower property values, lower economic activity, huge structural fiscal imbalances, and inadequate funding of community development needs (Wardrip, 2014) The same story could be told of many legacy small, medium and large cities To make matters worse, of course, the most stressed cities have the highest borrowing costs Wardrip uses seven indicators that can be applied to any city to allow a standardized comparison All the kind of questions that debt rating agencies use: Adequacy of city revenue (taxes, fees, grants, inter-government transfers) to cover expenses (ratio revenue to expenses per capita) This is a measure of solvency, the ability to pay for needed services Adequacy of city rainy day fund (ratio of unreserved balance to general fund revenues) Amount of city debt relative to city assets (debt to asset ratio) Amount of city debt relative to population (net direct per capita debt) Budget dedicated to covering debt (ratio of current debt service to total government expenses) Funding of fund pension obligations (pension funded ratio) Budget consumed by pension (ratio pension and retirement expenditures to general fund expenditures) Legacy cities have, for the most part, a structural imbalance based both on their history and on the way urban finances are structured These issues threaten to leave the cities behind, with little hope for the residents and no economic vibrancy for the nation- a dystopian view for our cities and our nation (Mallach and Scorsone, 2011) Short term solvency requires balanced operating budgets, but if thriving cities also need capital expenditures in infrastructure and large investments needed for the quality of life that residents and investors need as an investment in the future Post-industrial cities, however, tend to have obsolete infrastructure built a long time ago for a larger city that has to be paid for by far fewer residents in a community with lower property values and many vacant properties, creating an unsupportable burden on the remaining and often already struggling residents and businesses The “solutions” often suggested of cost cutting, restructuring, or better management not address the structural issues of fewer people, less economic activity, large amounts of vacant properties, and lower property values supporting the infrastructure of a much larger city Those fundamental issues must be addressed and restructured to help legacy cities thrive (Mallach and Scorsone, 2011) The service sector is growing worldwide, and post-industrial cities are no exception The challenge in weak-market cities is that the service sector is not growing fast enough to replace the lost jobs and economic activity associated with manufacturing Hence the rise in social problems, from unemployment to welfare dependency (Ploger, 2012) The recovery process is almost always a very long process Communities are in recovery when they can report that “the worst is over,” that there is an accepted and consensus new vision, a sense that the future is in our hands, and no longer a population simply waiting for the old good days to return A shared vision may take many different forms (policy statements, statutory plans, aspirational plans, but it is the hope and the shared mission that starts moving communities forward (Ploger, 2012) These visions can be home grown but many cities build on the ideas of prominent scholars For example, Leipzig, Germany (Michael Porter’s viable economic clusters), Saint-Etienne, France (Richard Florida’s creative class and the need for talent, technology, and tolerance), and Bilbao, Spain (Manuel Castell’s networks and hubs in a globalized world) (Ploger, 2012) Such visions are actually implemented through a variety of techniques, with some form of public-private partnership becoming a dominant paradigm Such partnerships are very effective, but of course the devil is in the details (Ploger, 2012) Large scale project have been embraced to put a community “back on the map.” These include the Guggenheim Museum in Bilbao (sometimes referred to as the Bilbao effect, the search for the wow project that will transform a community), new metro and new airport in Bilbao, winter Olympics in Turin, Titanic Quarter in Belfast The projects are almost always controversial because of concerns about the investment risk and who actually gains (Ploger, 2012) There have been some great success stories in the United States at both the city-scale (e.g., Providence, Pittsburgh) and at the project scale Europe, dealing with many of the same postindustrial challenges and also often dealing with demographic decline, provides some excellent lessons Although Europe generally has a stronger social welfare system, willingness to spend, and commitment to city center than the United States, making some aspects of regeneration easier, many if not most of the lessons from Europe are useful to the United States First, most American cities should be denser and more compact, providing the interactions that make cities efficient Even in shrinking population cities the urban core areas should be denser, even if there are more parks and open space to absorb decreased populations Second, public space and the public realm should be higher quality, providing the quality of life that residents and investors crave Third, the environment, from parks to clean water and air, needs to be improved Fourth, cities need higher standards of urban design Fifth, urban transit systems need to work better to provide opportunities for urban workforce to work in any newly created projects (Cadell, Falk, and King, 2008) British-funded research examined three continental European partial success stories (Cadell, Falk and King, 2008), with some similarities to American post-industrial cities large and small  Norra Älvstranden in Gothenburg (500,000 people) Sweden, a major shipbuilding yard that closed in the late 1970s and now generates more housing, jobs and living environment than the site ever did as a shipyard, obviously benefiting from being a waterfront area  Kop van Zuid in Rotterdam (600,000 people), the Netherlands, a dock area abandoned when the port moved that has become a vibrant mixed-use waterfront  Roubaix (100,000 people) in the Lille metropolitan area (1.1 million people) in France, a former textile town which became run down with the collapse of the industry in the 1970s, and is similar to some US post-industrial cities where the entire economic engine collapsed Its regeneration effort was likewise broader, focusing on a tax-incentivized Enterprise Zone, and spending to improve housing, the retail core of the city, the public realm, and culture A separate study looked at seven British and European cities (Power et al, 2009 and Power, Ploger and Winkler, 2008), that were previously industrial powerhouses dominated by a few very large firms and industries, with industrial collapse, population decline, and abandoned and decaying surplus market and public housing in the 1970s and 1980s, a similar story line to some of the larger American post-industrial collapses:  Sheffield, England, UK, previously dominated by steel, cutlery, and tools, which largely collapsed with the collapse of coal and steel industries in northern England It is investing in its urban core with a number of building restoration projects and public transit to restore the city center as the center of vibrancy  Belfast, Northern Ireland, UK, dominated by the world’s largest ship building firm, now failed, and exacerbated by the sectarian and political Troubles in Northern Ireland It has built housing and cultural spaces in the neutral (not divided by sectarian divide) former industrial waterfront      Bremen, Germany, previously dominated by two huge building firms, which both closed, with core elements of its former medieval center It has invested heavily in technology and education and in the city center Leipzig, Germany, a former manufacturing center, has restored its dramatic railway station, invested in the city center and in inner city housing, to make the city attractive to live in again Torino, Italy, a former car manufacturing center, with its Baroque city center remaining It hosting of the 2006 Winter Olympics was its big bang investment but at the other end of the spectrum it has invested in business incubators to support start-ups and university spinoffs Saint Étienne, France, an industrial center dominated by arms, bicycle and other manufacturing Its creation of a Design Village as a redevelopment builds on its unique industrial history and its investment in public transit makes it an easier city to navigate Bilbao, Spain, dominated by an industrial working port, with most of the industries and users now closed, with elements of its former medieval city center remaining It has relied heavily on cultural investment; the now much copied Bilbao effect that began with the Guggenheim Museum, the Calatrava Bridge and city center and transit investments The magnitude of the overbuilding of public housing, on the fringes of urban areas instead of in them, is perhaps slightly different than the United States where housing was more scattered and slums and blight effects public housing and to a large degree private housing, but the problems of decaying slums and blight are remarkably similar except for the tenure Most of the cities studied experienced political unrest, for economic reasons in all of the cities, and additional political reasons in Northern Ireland (sectarian and political) and in Spain (separatist movements) Although the nature of the stress is somewhat difference, the political unrest has much in common with racial unrest and violence in the US Likewise, all of the communities, as in the US, were left with a large degree of obsolete and often undesired infrastructure and contaminated public resources, especially brownfields (hazardous releases) and waterways (hazardous releases and nutrients) As a result, almost all of the communities made investments in workforce training and, with mixed success, in trying to reintegrate marginalized populations Small cities are inherently different than large cities, especially in their ability to galvanize national attention and attract capital In a study of 13 small cities in the Third Federal Reserve District (Delaware, New Jersey and Pennsylvania), however, the outcomes of small heavily industrial cities (over 25% in manufacturing at its peak) looks very similar to that of large heavily industrial cities 13 industrial cities that were dominated by a single industry or business and cities that were much more diversified declined dramatically, with major loss of the existing population (sometimes backfilled by immigrants moving in) and existing economic activity, leaving behind cities with low skill levels, high unemployment, low income, low property values, and much of the remaining economic activity moving away from the central cities to the suburbs Even where significant amounts of specialty industrial activity remains, it tends to be productive businesses with relatively few employees With white flight to the suburbs, and people of color and new immigrants being left behind, the communities are increasingly become poorer minority majority communities (Mallach, 2012A) Some of the small industrial cities Mallach (2012A) examined are “rebounding,” driven in part by locational advantages Some are “declining but stable” with much smaller populations but less of the social deprivations typically associated with precipitous declines Some are “coping” with relatively strong downtowns and the potential to grow economically Finally, some are “struggling,” suffering on most indices of deprivation and few hopeful signs on the horizon For all their uniqueness, post-industrial cities large (Mallach & Brachman, 2013) and small (Mallach, 2012A) have some consistent needs to achieve economic and social stability and health: Regenerate the vibrancy of downtowns and city centers Regenerate neighborhoods throughout cities Repurpose vacant land, as development, parks or other uses, but not simply as vacant land Make cities competitive and the center of economic activity, rebuilding economic, social, and cultural ties within their metropolitan areas Rebuild the middle class, with more economically diverse, skilled, and competitive workforce, built by education and communities of choice that people want to live in, instead of simply being stranded behind in Integrate new immigrant and migrant populations to address racial and ethnic disparities Newcomers bring diversity and new energy, but may add to the racial and ethnic divides and add new strains to already severely stressed communities, unless active integration is encouraged Leverage private investment with city assets, public resources and partnerships Partnerships must provide some real benefits to those with the greatest needs Build and sustain leadership and partnerships at all levels, political, social, economic, cultural, to take control of the narrative and move the community forward Reform state and federal policies to help address the structural imbalances and market failures Post-industrial cities cannot possibly fund all the investments needed, but they can and are using public investments to build momentum and catalyze private investment Private investment may have less immediate trickle down benefits for the most socially marginalized populations, but none of the cities can recover without huge private investments All of the cities are still struggling, but less so than at the time of industrial collapse There are a few common lessons that apply to post-industrial cities (for example, Cadall, Falk & King, 2008; Power, Ploger & Winkler, 2008, Mallach & Brachman, 2013)) First, and perhaps most importantly, the every city, but especially struggling post-industrial cities, need to find their unique niche and culture and build on their own unique assets Every city needs to embrace that they are a distinctive place, and not simply try to create a generic city or adopt the cool approach that worked somewhere else Culture is perhaps the most cross cutting aspect of regeneration, of making a city “cool” and finding its own niche Culture can’t be simply focus on bringing culture to the masses but on finding that unique voice that resonates with the community and gives the community ownership of its narrative It can also be one of the great equalizer in cities that will always have significant economic differences Second, urban regeneration efforts that bring in footloose and wealthy residents and businesses to a revitalized downtown and/or urban waterfront are critical investment that provide jobs and density There are very few, if any, examples of communities that have thrived without these investments At the same time, however, these steps are not enough to regenerate a city to serve the entire population Investments in cities need to always include education and employment skills, from specific work skills to development of entrepreneurial skills, neighborhood revitalization, and clear community benefits for the entire city Community benefits agreements often part of redevelopment projects in the United States and are enshrined in British law (Section 106 Town and Country Planning Act) They are often a part of urban redevelopment in the US, but perhaps not often enough Third, no community can thrive as a sustainable and healthy urban area without a vibrant city center, a place where the community comes together and where economic and social encounters and magnified Fourth, social cohesion and inclusion and the need to view the city as one city, not divided by race, ethnic divides, or geography, requires a wide variety of approaches, from ensuring that all benefit from development, including work force training, to thinking about shared culture and excitement (See for example Derry~Londerry’s One Plan) Fifth, recognize that cities are in competition at all levels Investments that make a specific area more desirable for residents, investors, economic activity, and visitors are great, but cities are in competition and cities need to be restructured to attract capital and economic activity that would otherwise go to other cities and to create wealth that would otherwise not be created Identifying the source of that capital and economic activity and how to attract it is critical Sixth, focus on cooperation and working together Although cities compete, metropolitan regions rise and fall together and need to work together Likewise, within each city, it is critical to build cooperation across city departments and agencies, non-profit/third sector, and private sector Sometimes this will require tax-base sharing, shared infrastructure, or support for regional taxing mechanisms In the United States in particular cooperation is needed for transportation resources that are controlled by metropolitan planning organizations (MPOs) Cooperation is critical at both the metropolitan areas and with state and national entities Seventh, political leadership, civic leadership and engagement, risk taking and community buyin is required for real success If political and civic leadership, very broadly defined across the community, is not at least engaged and involved, projects can only have partial success Buy- in is at every level, from real decision making authority at the city government level to very active citizen engagement and empowerment Eighth, create attractive and balanced residential neighborhoods and ensure that the benefits of economic development are shared throughout the community In almost every American city there is already a renaissance in downtowns and waterfronts, although often that renaissance is very narrow and does not spread out from a narrow geographic area Improving all neighborhoods should be part of any strategy, while understanding that private sector projects are going to focus on those areas with the greatest return so benefits will not be equal Improving neighborhoods must include protection against displacement of those who live in those neighborhoods Part of this is ensuring that investments are not seen as one-time projects but an on-going process and that neighborhoods benefit, for example, from rising tax revenues even if not from initial private sector investments Building political, technical, financial and political capacity so first pebbles in the pond create waves that keep expanding Ninth, and perhaps the greatest success that has occurred in those areas undergoing local renaissance is to invest in high quality infrastructure and public realm, from parks to streetscape to transit Redevelopment and recovery is expensive, although far less expensive than letting a city and its residents go to waste, and requires focus on transit, transport, building stock, and the public realm in all its forms Tenth, a strong focus on sustainable development and community resilience, with attention to environmental, economic, and social resiliency is absolutely critical for cities to work and avoid the next bust cycle Environmental legacies (e.g., flooding risks, polluted water, hazardous waste, noise, light), social legacies (e.g., a workforce with a narrow skill set and often no-longer socially intact) and economic legacies (e.g., concentration of employment in just a few industries and employers and in technologies that are shrinking and not growing) must all be addressed Finally, an all of the above strategy is often needed Invest in big catalytic projects, rebuild waterfronts, developer town centers and downtowns, identify unique cultural and place-making projects, invest in neighborhoods, and invest in people Much of the literature and community experience highlights the potential transformative nature of art and culture in post-industrial cities Art can be transformative and change people’s mental image about their city or someone else’s city Creating art adds to the uniqueness, vitality, and vibrancy of the city The Community Partnership for Arts and Culture (2008) stresses that art can help post-industrial communities rebuild their damaged brand, attract other residents and businesses, add an economic niche, and help property values and the sense of place Postindustrial communities are uniquely attractive to artists and artist-based community development (ABCD) because of the lower cost of living, the abundant, interesting, and affordable work spaces, and the strong arts and culture networks that already exist Although lower rents and available space make it easier for artists, it is still important to ensure that regulatory systems, affordable housing and artists’ space, markets, and community and political support networks all support artists (Community Partnership for Arts and Culture (2008) While the “Bilbao approach” can become a white elephant if not carefully applied, art and culture are clearly a critical part of every success story Art and culture that are generic, however, don’t ring true and can fail to ignite people’s imaginations Communities must build on their own stories They can only thrive by finding their unique history, story, and attribute that attract people to that community (e.g., Renn, 2013; Parker personal communication 2015) Urban renewal, urban redevelopment, and urban regeneration have a mixed reputation Some trace the first urban redevelopment efforts to Robert Moses, the master builder in New York (e.g., Trueman et al, 2013) Yet Moses was narrow-mindedness in his focus on redevelopment and transportation systems, displacing thousands of people from low end but intact neighborhoods in the process Likewise, the urban renewal process of the Great Society Program led to some great urban renewals, but it also led to devastating and massive clearance of intact neighborhoods, in the name of slum clearance, often with no viable plan to replace that housing and destroying vast tracts of urban America in the process Urban redevelopment (as it is used in the US) or urban regeneration (as it is used in Europe) is typically far better than those urban renewal processes of the 1950s and 1960s There remains a bias, however, towards big exciting projects in urban centers over multiple local-serving projects in local neighborhoods and serving residents in outlying areas If a project is to be successful, the identity of place, the urban streetscape, and the promotion of physical, mental, and social wellbeing have to reinforce each other and serve those who live, work, shop, and play It is this connection that is most often missing in post-industrial city redevelopment (Trueman et al, 2013) A project without the rich soul of the city is not contributing to urban health Other communities have focused on neighborhood revival, for example Baltimore, Philadelphia, and Pittsburg as a way to directly improve the lives of many as the building blocks of a community The effect may be better living conditions but not necessary any improvement in fundamental social-economic and racial segregation (Ploger, 2012) Skills training is often a part of response The challenge is that providing specific training is eminently doable and effective when a specific job identifies a need or to attract new employer, but providing a new full new skill set and approach can be more difficult (Ploger, 2012) Urban redevelopment and regeneration often is driven by economic models of what may help restore the city economically When the benefits of a project are not spatially distributed throughout a community and is not serving inequities in the greater community, however, it raises questions of whether public dollars are going to benefit a limited audience with our addressing the needs of all the residents (Agness et al, 2014) Agness assess projects that are helping small post-industrial cities rebound (Bethlehem and Lancaster, Pennsylvania, and Wilmington, Delaware), evaluating to what extent development is equitable development with a fair distribution of benefits Arguably, any project that rebuilds a community adds jobs, community economic activity, and wealth creation So many redevelopment projects have cleared intact neighborhoods, social systems, and buildings in the interest of some greater good, creating a healthy cynicism The 10 best approach is to consider equity from the beginning of a project, with honest accounting, assessing, and monitoring (Agness et al, 2014) This does not mean that all projects need to serve all communities or that Not in My Backyard (NIMB) parochial focus is reasonable It does mean, however, that objectives should include a “first no harm” and complete transparency In planning circles, one of the earliest advocates of such “equity planning” was Norman Krumholz, who as Cleveland’s planning director (1969-1979) coordinated the Cleveland Policy Planning Report, a plan focused on concepts of advocacy and equity without the typical spatial focus of most plans at the time The plan was required reading for many a planning student and helped promote an equity focus It did not, however, lead to more desperately needed investments in Cleveland The never ending tension is planning circles remains how to promote equity and encourage investments that strengthen the economy, jobs, and produce wealth With income inequality growing the United States, the focus on equity is perhaps on the rise again in planning circles One approach (Agness et al, 2014) to assess equity is to evaluate three areas, inclusive and progressive community leadership, economic security and opportunity, and stable and supportive quality of life, using indicators that they created for the project Other approaches are to use existing indicators developed by third party assessment tools (e.g., STAR Communities assessments) or other assessment tools (Feiden with Hamin, 2011) Not surprisingly, Agness found that the projects examined (high-end waterfront improvements in Wilmington, casino at the former Bethlehem Steel site in Bethlehem, and arts as a catalyst for downtown placemaking) had varying degrees of equity benefits, and perhaps less than some other alternative strategies They did not examine, however, the amount of public investment and leveraging of private investment for these projects versus alternative projects that might have greater equity benefits Therein lies the tension Trickle-down economics usually has very little trickle, but it may have great transformative benefits in creating new investments, and those little trickles hopefully add up Some argue that there is a distinction between urban redevelopment (US term) or regeneration (European term) and urban renewal Redevelopment or regeneration makes urban centers sustainable and resolves fundamental structuring challenges of market failures, job loss and disinvestment Renewal, on the other hand, focuses on the facelift, usually downtown or on waterfronts, that is not usually equitable, with genetrification, expensive and exclusive development, privatization of public space, making urban areas less hospital to the poor, and no change in the quality of life of those left out of the new private economic engine Making highly desirable areas desirable again will attract wealth and young creative professionals, but it will actually reduce the diversity of the city, gentrify desirable areas, drive up the price of housing, and not fundamentally help a city restructure Redevelopment and regeneration, on the other hand, add to the economic diversity of and diversity of uses in a city and provide a more fundamental restructuring (Granger, 2010) 11 13% of urban regions in the US (and far more individual cities within urban areas) and 54% or urban regions in the European Union have lost population (Wiechmann and Pallagst, 2012) While many cities have experienced a hollowing out of their downtown while populations grow in the suburbs, shrinkage in entire urban areas indicates more fundamental population shrinkage Driven in the United States by economic and migration patterns and in Europe by economic and demographic changes, the effects are the same (Wiechmann and Pallagst, 2012) Several researchers (Wiechmann and Pallagst, 2012 and Cunningham-Sabot and Fol, 2009, among others) argue that the growth-centered planning paradigm has been dominant for so long that it is sometimes difficult for communities to shift their thinking to a “shrinking smart” paradigm In Germany in particular, until a decade ago the focus was on growing shrinking areas, even in the former East Germany where most cities have been shrinking rapidly since reunification In the US, they argue, the stigma of shrinking cities makes it hard to shrink smart Pittsburg, for all its successful focus on shrinking gracefully, also employed at traditional redevelopment strategy (e.g., Pittsburg’s south side), trying to attract growth even in a shrinking time Youngstown, Ohio, has accepted that it will be a smaller city and it should focus on quality of life, not growth Perhaps a shrinking gracefully (or first admit you have a problem) is the real challenge Jenita McGowan, Cleveland’s Chief of Sustainability, refers to it as upside down economics Not the upside down economics that the newspapers discuss, where total Wall Street bonuses were double the salary of all full-time minimum wage workers in the United States (Anderson, 2015), but an upside down economics where the kind of great urban growth that is private-sector driven in many communities will not happen naturally without help In a world of upside down economics and a dramatically smaller populations, Cleveland struggles with how to keep critical urban densities in its urban core, while accepting lower density, urban gardening, and restored natural areas in other neighborhoods, using its sale of tax-foreclosed properties through a cityrun land bank as one of its stronger tools (Krohe, 2011) Some communities have committed to the graceful shrinkage Youngstown Ohio, for example, has a specific goal of being a “smaller, greener, cleaner” city (Krohe, 2011) So much so that it has become part of the circuit of planners traveling internationally to explore solutions for postindustrial cities (I first heard of Youngstown’s efforts from a Rotterdam planner at a conference in Pittsburg.) The focus on preventing blight (Krohe, 2011) is a key part of shrinking gracefully, but even cities not shrinking so gracefully (e.g., Cleveland and Detroit) have put demolition of abandoned units high on their list Unlike the urban renewal periods were intact, albeit desperately poor and bad housing stock, were demolished to make way for the better (that often never came), this demolition is removal of slums and blight that are not going to be restored Baltimore’s “Selling City Owned Properties Efficiently” focuses on putting reclaimed lots back into the private market, but being strategic so that the lots don’t end up being held 12 speculatively while investors simply wait, while doing nothing to address blight Likewise, Cleveland has focused on thinking about where lower density works and where it does not (Krohe, 2011) The cautionary tale, however, is that while communities can’t live in the past and must be ready for change, we are not always good at predicting the future, and such predictions can lead to policies that make undesirable futures come true In 1976, New York City was 7.5 million people, with abandoned and failing neighborhoods and predictions that those neighborhoods would die and the city could shrink to below million Some advocated a large clearance project to remove intact buildings to avoid abandonment (Shiffman, 2005/2006) Fortunately, those policies were not adopted and the city is now million In many communities in the United States, cities are either not shrinking or not shrinking as fast only because of immigration into those communities Ironic that in some areas there is antiimmigration feelings when that immigration is one of the most important pieces preventing the cities from further shrinking and generating economic activity, especially in the core and street car suburbs The issues are very well studied (for example, the “Shrinking Cities International Research Network” or the work by the German Marshall Fund) The issues in smaller and medium size cities have received less attention in the literature, even though that is where a majority of the population lives (Gosalvez & Horta, 2011) As in the studies discussed earlier, experiences in Europe’s rust belt can provide lessons for the United States In Germany, 19 cities in Saxony-Anhalt worked to highlight the “less is future” experiences of small and medium size cities Different opportunities in each city, but common lessons: First, shrinking populations require changes to the physical structure of the cities, reuse in new less growth focused ways of available space Second, shrinking populations allow a better balance between natural and human-built systems than when the cities where industrialized Third, shrinking cities must embrace a paradigm that they cannot simply grow their way out of their challenges and educational and cultural opportunities Fourth, historic preservation projects are critical for community integrity and uniqueness, but absent strong growth pressures these cannot be totally private-sector driven Finally, maintaining and enhancing the unique identify if critical (Gosalvez & Horta, 2011) The Ruhr Valley, Germany’s coal and steel heartland, has much in common with the coal and steel regions of the Midwest The decline of those industries, in raw production, as extraction and manufacturing was shipped overseas, and in jobs, as jobs have been increasingly mechanized and automated, is devastating Stakeholders can become “locked-in” on doing things the old ways, unwilling and unable to accept a fundamental change (Hospers, 2004): “Economic lock-in” that freezes economic structures and makes it hard to switch from historically successful strategies Communities often want new investments to bring back failing industries, employees are not trained to engage in new skills needed in the market place, and entrepreneurial spirit to search for new approaches is lacking 13 “Institutional lock-in” when businesses, politicians, workers, and other stakeholders fight to preserve the old-ways and resist change For example, in when higher education was suggested as a way to restructure, “What we need…are muscles, not brains.” “Cognitive lock-in” when local stakeholders are waiting for the legacy businesses to come back, convinced it will, while those on the outside are uninterested in doing business in or visiting an area with pollution and a unidimensional economy and workforce In the Ruhr Valley, success wasn’t possible until there was a realization that a different approach was needed and a “neo-industrialization,” looking at building on the skills and capacity to identify new industry, kicked in, but not trying to change radically into an approach with no local precedent The vision for the city became “strengthen what is strong, invest rather than subsidize and initiate pilot projects in public-private partnerships.” These new industries became possible by capitalizing on new opportunities (Hospers, 2004): Service sector, with the grown of service sectors everywhere in western economies and the demand for new services to meet the needs of the existing economy Industries that could capitalize on the need of the Ruhr Valley, from environmental sector first to clean the environment and renewable energy, to meet the demands of the remaining heavy industry Both industries grew to meet the local demands and then capitalized on those skills for export Tourism, capitalizing on both a much cleaned environment and the heritage of the area Of course, much of the above presupposes that there is a consensus for moving forward Yet that is often not the case The period of some of worst decline of traditional coal and steel and other heavy industries came at the tail end of some of the worst race riots in the United States, where parts of central cities literally burned and there was one of the largest periods of white flight to the suburbs, hardly a situation where there was unanimous consensus for rebuilding inner cities The resurgence in 2014 and 2015 of reactions against police led violence with community violence has shown that these divided cities and lack of understanding have certainly not left us forty years later Northern Ireland post-industrial cities had much of the same divide In Northern Ireland it was sectarian and political, but ultimately it was also a fight between working class families on who would get the limited resources during a post-industrial period of severe economic collapse The model for peacekeeping recovery is typically sustained dialogue, whether driven by a deliberative outside imposed process or an organic community driven process It was this process that led to the rebuilding of Derry, Northern Ireland’s central city after years of violence heavily damaged that area and virtually ended all investment Diametrically opposed individuals and groups coming together to build trust and shared projects (Acheson and Milofsky, 2011) Elements of this are at the heart of some of the most successful efforts in the United States Shared purpose and trust building are a critical part of the process Ultimately, without huge public subsidies, redeveloping commercial properties in legacy cities has to make sense as a business deal Government partnerships and aid can tip the balance and broaden the projects that make sense a bit, but they can’t totally remake the marketplace 14 What public projects can is create a perception and a reality of change and help investors and communities understand that they are at the tipping point As in any urban project the usual source of funding applies Private sector projects are usually driven by a combination of equity financing and bank and pension fund loans Public private partnerships can take almost unlimited forms, from the public sector providing land and buildings and below market value to a range of local government loan and grant funds, often using CDBG pass-through funds Other government funding includes New Market Tax Credits, EPW Brownfields funding, Economic Development Administration grants, and both affordable housing and historic preservation federal tax credits Foundation and corporate largesse is important for many community projects and the latest form of funding, crowd source funding, is growing Finally, the host of local options, which varies from state to state, such as Business Improvement District (BID), Special or Betterment Assessments and District and/or Tax Increment Financing (DIF and TIF) (Epping & Brachman, 2014) In any redevelopment, the most important first steps are developing a clear community vision and consensus Redeveloping Commercial Vacant Properties in Legacy Cities (Epping & Brachman, 2014), is possibly the best step-by-step manual for what follows the vision and consensus when working with vacant commercial properties It takes planners through the steps from understanding properties, markets, challenges, and unique attributes, to creating a strategy and market analysis, to implementing the strategy Vision first, then action 15 Credit and Disclaimer This scan was made possible by a German Marshall Fund of the United States Urban and Regional Policy Fellowship and an Urban Sustainability Network Directors Peer Exchange Grant The findings and conclusions, however, are strictly those of the author and not of the German Marshall Fund or USDN References Acheson, N., & Milofsky, C (2011) Derry exceptionalism and an organic model of sustained dialogue In R A Lohmann, & J Van Til (Eds.), Resolving community conflicts and problems: Public deliberation and sustained dialogue (pp 167-167-185) New York: Columbia University Press Agness, B., Dahlgren, M., Devyatkin, E., Debold, R., Farina, D., Freeman, J., Wolf, D (2014) In Steinberg H (Ed.), Small legacy cities, equity, and a changing economy Philadelphia: PennDesign, University of Pennsylvania Anderson, Sarah (2015) Off the Deep End: The Wall Street Bonus Pool and Low Wage Workers Institute for 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