Revitalization fads like casinos, tax breaks, creative class, New Urbanism seldom work

Two professors, Gary Sands of Wayne State University and Laura Reese of Michigan State University, have completed new research that calls into question almost all of the economic development tactics that Rust Belt cities have thrown at decline over the years, including casinos and programs aimed at luring the so-called creative class. They found little or no relationship between those trendy investments and broader community-wide economic growth.

Instead, they suggest a back-to-basics strategy: Invest in good schools and public safety, and don’t bet on the trendy stuff.

Just run a good basic city,” Reese said in an interview. “That is more strongly connected to growth than all of those economic” tactics. Sands, who is Reese’s husband as well as co-author, added, “Absolutely, If you don’t have the basics you’re not going to get anywhere.

Their research, tentatively scheduled to be published in 2017 in a book called “Roads to Prosperity,” could heat up a long-simmering debate about what works in urban redevelopment. These questions never die, even after decades of arguing about them.

For their research project, Sands and Reese culled economic growth statistics for midsize Canadian cities, including Windsor. They looked hard at casino gaming, programs to attract creative-class workers, the stylish New Urbanism development projects and more. They combed the economic data for links that would tie any of the tactics to broader community economic growth.

Their verdict: Almost none of it worked. The projects may have been successful in themselves, but they contributed little or nothing to overall regional economic growth.

Among specific findings: Attempts to build a revival by attracting creative-class workers didn’t seem to work, or at least it was hard to see a correlation in the data on growth, in part because it’s so hard to define “creative class.” As Sands and Reese write, “There is no relationship between improved economic health and any of the creative-class indicators.”

The same goes for a casino strategy. “Whether in the city center or in a farm field along the interstate, none of the casinos examined appear to have attracted significant additional investment in surrounding areas,” they write.

Immigration did seem to go hand-in-hand with economic growth, they found.
Note from Storm: If you’ve read my books, or my recent Strategic Guide, you’ll know that I’ve long decried the trendy, gimmicky approaches that this study reveals to be largely wastes of effort and money.

For instance, in my first book, The Restoration Economy (Berrett-Koehler, 2002), I applauded the restorative principles claimed by the then-emerging architectural marketing gimmick called “New Urbanism”. But in my second book, Rewealth (McGraw-Hill Professional, 2008), I lamented the fact that those principles seldom translated into reality. New Urbanism designs were usually just a new excuse for sprawl and destructive, sterile, hyper-commercial “urban renewal”.

That’s not to say that all “brand name” practices are simplistic, useless, or destructive fads. “Main Street” programs, “Complete Streets” programs, and “EcoDistricts” are all legitimate and productive modes of repurposing, renewing, and reconnecting our existing natural, built, and socioeconomic assets.

Repurposing, renewing, and reconnecting are the core activities that are revitalizing the future of our decrepit built environment, our depleted natural environment, and our fragmented world. Any time you want to determine whether some hot new development trend offers solid value, simply evaluate it according to those three principles.

The most important factor in community revitalization is confidence in the future. This new study emphasizes the importance of good governance, which might be the single most important factor in creating the local confidence that attracts and retains residents, employers, and investors.

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