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 Urban Growth

By John Kilpatrick 

The Growth and Decline of American Cities by D T MacRoberts is a paper that is vitally important to the issue of the arena. It can be found at http://www.hal-pc.org/~macrobts/city319b.html. The author is one of the great geniuses of this century. For over 20 years he was director of research for a major oil company. He also has papers on relativity theory and he has several books on biology.

I showed this paper to some friends and one said that politicians would ignore it because it used race as a variable and another said they would not understand the article. It seems that a brief explanation of the paper is needed. I visited MacRoberts because of his papers on relativity theory. I was interested in the nature of light. He told me that only a fool would be interested in the nature of light when we don't even have any direct evidence that light exists. From his comments about race in the paper I am certain he feels the same way about race. The fact that we can divide people into groups and say a person looks more like one group than another does not constitute direct evidence of race. MacRoberts was a very practical man who said that the only thing the mind was capable of doing was determining that if I do A then B will happen. A genius is a person who can take a very complex situation and reduce it to utter simplicity. MacRoberts determined that urban leaders basically wanted two things. They wanted the city to grow and they wanted the people to prosper economically. I think that this is what the proponents of the stadium mean when they say they want to keep young professionals. They see young professionals as a tool for, and a measure of, economic prosperity and growth. MacRoberts asked, "How can I know if building an arena promotes growth and prosperity?" First, he needed measures of growth and prosperity. Growth was easy. He could see how the ratio of the cities' population changed relative to the nations' population using census data. Prosperity was more difficult. There are numerous measures of prosperity. He found that the best indicator of prosperity was the designation "white". For MacRoberts this is an economic designation and has no racial connotation or meaning. He says that it is a census bureau category and he neither knows nor cares what it means. It correlates very well with wealth or prosperity.

With these concepts it is easy to build a spreadsheet to take three measures for a city for each census. The spreadsheet computes normalized scores of relative size and relative prosperity for the city. These three measures are total national population, total city population and white city population. An X-Y graph is then plotted with relative size on the horizontal axis, relative prosperity on the vertical axis and each point representing a census year. The city starts at the bottom left with low prosperity and low population. If it is one of the few cities that grows the population and prosperity increase toward the upper right. Eventually the growth stops and reverses. At this point the curve is still going up but it starts going back to the left. About 20 years later the prosperity stops increasing and starts decreasing. Now the curve starts moving back toward the lower left where it started. This curve makes an elliptical shape. This curve is extremely sensitive so that if the city took any effective action to change its prosperity or its growth this would be very obvious. It turns out that all of over 200 cities look essentially the same. Neither arenas nor any other change have had any effect. It seems that some kind of natural law is controlling the situation.

I have been to several meetings about the arena and have heard anecdotal evidence supporting both sides. By this I mean a speaker would say I visited city A and the arena totally revitalized the downtown or I lived in city B and the arena was a disaster. This type of data is almost useless in deciding where to visit and it is totally useless for deciding to spend somewhere around $700 million. MacRoberts' research clearly answers the question. Arenas may be beautiful or ugly and they may help certain special interest groups and hurt others but they do not promote growth or general prosperity.

The book, "Who Rules America Now," says that the purpose of city government is to maintain the value of the downtown property owned by the wealthy in the area. Most of what we hear of Louisville government is these efforts. With all this effort why do cities seem so helpless to change their destinies? Downtown areas have a problem because the buildings and infrastructure age and are expensive to maintain. They normally depreciate and lose their value. As homes age and the city foolishly builds public housing downtown, you end up with the lowest class of people living downtown. A Louisville policeman told me he hated working downtown because after dark no one is there except criminals and prostitutes. I have been robbed at gunpoint near the Galleria. Parking is a major problem. For shoppers there is much less variety and higher cost downtown than in other areas. Because the cost of downtown property is artificially supported, new business cannot afford to move downtown. With no jobs the middle class leaves.

This is aggravated by the fact that government takes about half of everything produced with taxes. This does not include the cost of paying taxes and following regulations. So many permits are required to open a business that there is a special agency to help people get the permits and you can bet they do not understand it either. Small businessmen have told me they spend two full days every week filling out forms for various government agencies. Taxes and endless regulations destroy the middle class and this along with normal depreciation destroys the city.

I understand that for politicians to stay in power they have to use taxes from the middle class to support downtown. See the young professionals pushing for the stadium who think it will help their businesses. The stadium may temporarily help a few restaurants and other special interests, but it will further destroy Louisville 's efforts to be a major city. Mark Twain said that when Armageddon came he would move to Louisville because everything happens there 20 years late. Arenas have failed everywhere they have been tried and so now some of Louisville 's leaders think they can make an arena work. The problems may be insurmountable but following paths that are proven to lead nowhere is certainly foolish. The natural course of a market economy is for wealth to change hands. Letting the downtown property find its natural value might help by reducing downtown property cost. Reducing the burden of taxes and regulation might help. The cost of replacing old infrastructure seems insurmountable but these are the problems that have to be solved. Downtown has to be cost competitive with less developed areas. Squandering money on arenas and other items that are proven ineffective exacerbate the problem.

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