California’s Disposable Cities

Writing from Sacramento, Ca., Josh Leon wonders whether the sink-or-swim economic culture is leaving the Central Valley in the dust.

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I write this column from Sacramento, the heart of the Central Valley’s real estate rust belt. The great recession has transformed this traditionally well-to-do city into a place of 11.3 percent unemployment, tent homelessness and newly empty storefronts. Yet Governor Schwarzenegger brings fantastic news from the confines of this milieu. The state’s latest budget will (perhaps) close its whopping deficit without raising taxes, not even on the state’s richest denizens! How? By cutting $9 billion from education, $1.3 billion from low income health care, $850 million from vital social services, and by extracting $4.7 billion from cities and counties. We already knew what the classist architects of all this savagery were going to repeat ad nauseum: The recession! The deficit! The (gasp) state-issued IOUs! So much for shared sacrifice.

There are good things happening in this city, too. More people are using light rail and the exurbs are putting together pockets of walkability. Midtown is far less sleepy than it was only a few years ago. Downtown could be linked to high speed rail by some future stardate. It is nevertheless impossible not to notice signs of the great exodus of the real estate capital that had fueled the construction bonanza here. Freshly built houses and apartment buildings still stand empty. Two-thirds of home sales this March were from bank repossessions. Other central valley cities are hit even harder. Modesto, Fresno and Stockton have the first, second and third worst unemployment rates respectively among the nation’s 100 largest metro areas.

For the past few months I’ve been writing about what in my view is a global consensus that favors dense, mixed use and public transit centered development over the old anti-urban, suburban-centric model of the last century. These policies, the consensus goes, can grease the wheels of a global economy that relies increasingly on urban connectivity, personal mobility and access to ideas. As capital is mobile, so should people be. My problem is that the consensus relies excessively on market pressures to decide where people should live and migrate, and forces cities to deal with the swift vicissitudes of global capital. This city—hopefully temporarily—is on the losing end of what is euphemistically known as a market correction.

The capitalist world has always created winners and losers out of individuals and firms. Now it’s creating them out of cities. In the U.S., geographic inequality has been a glaring feature of the recession. Here in the valley, Modesto’s unemployment rate is 17.5 percent. Salt Lake City’s by contrast is only 5.2 percent. The resiliency of some metro economies is a good thing. The problem is that the bubble-based economy we’ve been building over the past few decades threatens to push some communities into decline at cataclysmic speeds. The decline of Rust Belt cities happened over decades. The Central Valley has been thrust to the bottom of the economic pack in only months.

To hear purveyors of the consensus tell it, capital flight isn’t a matter of public responsibility. It should be accepted as Mother Nature, like tornados or earthquakes or hurricanes. Go live somewhere else if you don’t like the danger of economic obsolescence. But the problems here were very much man made. The central valley is proof that banking and securities deregulation was an awful idea. Sticking with the old fashioned regulated system of lending—what Paul Krugman calls “boring” banking—could have prevented this.

Sacramento has the best and the worst of the new urbanism. It has taken some initiative measures, especially in midtown, to create commercial and residential diversity. Amtrak and light rail are in vogue. It’s trying to bring residents downtown. These efforts are shaping the map here in a good way. More powerful market forces are altering the map in a bad way—in the form of empty houses, condos and storefronts. Not to mention the so-called tent city that rose to national infamy. It’s these forces that governments should provide a semblance of balance against. Instead the state just sent a loud and clear message to cities caught in this storm of capital flight: sink or swim.

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Tags: jobsgovernancelight railsacramentosalt lake city

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