Search for Utopia (or the what is the city’s best interest) Banfield – sum of all individual interests Tiebout – optimum size Peterson – economic interest –Exporting Land (use value v. economic value) Labor Capital

PETERSON: What should a city do to promote the city’s interest Land Use –Parks vs. Casino Labor –Skilled workers v. Unskilled workers Capital –Lower taxes or invest in human/physical capital

Free Market v. Government Regulation What is Peterson hinting at? Zone laws to keep out lower classes Government subsidies of business infrastructure What is the appropriate role of government?

Promoting Economic Interests The political science literature suggests that most cities are adopting Peterson’s philosophy. Yet this philosophy leads to cities competing with each other Richard Wade’s article examines city behavior in the 19 th Century (Pittsburgh, Lexington, Louisville, St. Louis, Cincinnati)

How do cities compete? Advertising Tax abatements Subsides Infrastructure (roads, canals, schools, communications) Zero-sum game There are winners and losers Is this bad?

Self-Interest Local economies less important than regional economies (or maybe even national economies) Competition also means less likely to work together in regional issues (we’ll get to this in another lecture).

Why the decline in Downtown? Fogelson –Decentralization –Residents moving to the suburbs –offices and shops follow

Revitalizing Downtown How do we do it? Tourism? Manufacturing? Local Entertainment? All of the above?

Urban Entertainment: Early Years: Central Park, Swimming Pools, Etc. Later Years: Stadiums, Shopping Malls Services for Visitors Museums, symphony Supply and Demand, or Elite Manipulation?

Should Las Vegas Build a Stadium to attract a Professional Sports Team? What would be the benefit? What would be the cost?

What about more gambling? What does Gazel say? Must include negative costs Local gambler Noncasino visitor Government (spending) Crime Gambling addiction

Does it pay off? Ripple effects of spending (Magnifying effect) Cannibalization Social Costs Government costs (not estimated?) “with few exceptions, many state and local economies in the United States have, most likely, experienced net monetary losses due to casino gambling” Why? Because they ain’t like Vegas baby!

Do we even want to revitalize downtown? Its dirty Noisy Crime ridden Edge cities are better, cleaner, safer

Not just downtown areas in decline Flint, Michigan in the 1980s (downtown areas and outlying areas) Overlooked is the fact that many suburbs also had suffered during this period. Among 554 well- established suburbs in the 24 most populous metropolitan areas, 405 suburbs had declined in median family income, as compared with the entire metropolitan area, from 1960 to Even more striking, given the frequency and extent of city decline, 112 suburbs, or 20 percent, had declined in relative income at a rate faster than their central cities.

Do we always want growth? How do we get more economic growth? Add more people Add more business What does Paul Peterson say? Export more goods Import less But not all cities can do this

Effects of growth What are the effects of growth Traffic Pollution Rising housing prices (is this good?) Crime More jobs, more tax revenue More spending (education, health, etc.)

Does anyone want to slow growth? San Francisco San Diego Los Angeles Las Vegas? We don’t call it slow growth anymore, we call it responsible growth

Who are these slow growthers? Commuters Nativist residents Nativist businesses Environmentalists –Land –Resources (especially water) –Quality of life