Dr. Mike Walden
North Carolina Cooperative Extension
My wife and I recently spent a long weekend in New York City celebrating our wedding anniversary. It’s amazing how time flies: This is number 34, thank you!
New York City — or simply “the City” to native New Yorkers — conjures up both negative and positive feelings. We’ve visited the City many times (my wife was born in New York, although not in the City). It is crowded, busy, noisy and confusing. People can be pushy, partly because if you don’t push ahead, someone else will. But we’ve found most New Yorkers to actually be polite and helpful.
On the up side, the City has everything virtually anytime. As the Sinatra song says, New York City literally never sleeps. It’s a place people move to in order to seek their fame and fortune. Some succeed; many don’t. It’s always been that way.
Two things have always struck me about the City every time I visit. One is how young it is: There are 20- and 30-somethings everywhere, and they always appear to be on the move. In the morning they’re scurrying off to work, and in the evening they’re out with friends for a good time. The youth in the City gives it a lively, upbeat and optimistic feel.
The other is how much the City changes. Older buildings are always being torn down and new ones constructed. Depressed neighborhoods get revived while others face new competition.
It is this element of change where New York City can perhaps provide lessons for other areas, including North Carolina. In particular, the transformation of many of the City’s challenged neighborhoods illustrates strategies some of our urban and even rural areas might use to spark an economic revival.
On our recent trip, my wife and I took a walking tour of Brooklyn, one of the five boroughs of New York City. The western part of Brooklyn on the East River across from Manhattan – and near the famous Brooklyn Bridge – was originally lined with manufacturing buildings and firms. However, the general decline in traditional manufacturing and the replacement of water shipping with trucking sent the area into an economic depression. Two decades ago the most common sight from the Brooklyn Bridge was of abandoned and deteriorating buildings signifying a dying community.
Yet today the area couldn’t be more different. The “DUMBO” (Down Under the Manhattan Bridge Overpass) neighborhood of Brooklyn is alive, well and prospering. Old manufacturing buildings have been refurbished into lofts, offices, small manufacturing spaces and retail space. The area has one of the highest concentrations of tech firms in the City. The waterfront has been turned into a beautiful park with spectacular views of the Manhattan skyline.
How did this happen? Local experts say that when the community was down on its luck and everything was seemingly going bad, struggling artists and new entrepreneurs started to give the area a second look as an alternative to the rising rents and costs of Manhattan. Rents were cheap, costs were low and space plentiful in Brooklyn. Owners of the deteriorating buildings were willing to take almost anything in rent just to put some money in their pockets. Then, once the initial newcomers thrived, word-of-mouth spread and the Brooklyn economic renewal took off. Brooklyn – and specifically “DUMBO” – is now one of the trendiest and hottest neighborhoods in the City.
North Carolina certainly has communities that need reviving – both in cities and in rural areas. Are there any pointers New York City can give?
I think there are two suggestions. First, conditions can get so bad that they are really good. I know this sounds contradictory, so here’s what I mean. When land, rent and other costs are cheap, people with a vision can see these as opportunities. They can see the affordable costs as a way to “buy low” before costs rise. Once the pioneers show it can be done – meaning the neighborhood can work – others will be attracted, and economic conditions will improve.
So a struggling community should showcase how a business person’s dollar will go farther in their neighborhood compared to the high-priced alternatives. Getting a bargain can be their selling point.
The second point addresses the roles of the private sector (business) and the public sector (government). My reading of the success stories of turnaround neighborhoods is that the private sector has to take the lead, but the public sector has an important supporting role. Businesses look at the long run, so they have to be convinced their balance sheets make sense over many years before they’ll invest in a community.
But once there’s a critical mass of businesses that have made the investment, government can encourage further private investment by making infrastructure commitments. In Brooklyn’s case, the government built parks, improved roads and sidewalks, and designated some buildings as historic sites to preserve the character and tradition of the neighborhood.
Change is a constant. Yet change is hard to predict. You decide if the “Big Apple” has some lessons about community improvement that we in the South should import.
Dr. Mike Walden is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide column every two weeks.
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