Why Is It So Hard for Neighborhoods to Recover from Riots?

Broken glass.  Looted stores.  Burned out cars.

They aren't pretty.  But, cleaning them up shouldn't be that hard, right?  Sweep the sidewalk.  Clean the store and install better security.  Call the tow truck.  It certainly sounds easier than cleaning up after an earthquake, where collapsed buildings create toxic piles of concrete, bodies, and burst sewage pipes, streets are littered with downed (and sometimes) live power lines, and clean water is hard to find.   

In truth, though, riots can sometimes take almost as long to 'clean up' as natural disasters.

Why is that?  Why do some areas hit by riots take decades to turn around when the physical damage is, in the wider scheme of things, quite small? 

Riots precipitate disinvestment.  The events themselves don't (always) create that much dammage.  But, they encourage people to disinvest from an area.  People move away.  Others close their businesses.  Squatters fill the empty spaces.  In turn, these decisions encourage people who might come to the area, and invest in it, to look elsewhere.

Let's use a hypothetical example--Jane Doe, who owns a laundromat on a street hit by riots.  She owns her business but rents the storefront from Max Money, a local landlord.  Ms. Doe's store is set on fire by looters throwing Molotov cocktails at police.  A few cocktails miss the mark and land in the laundromat.  Some of Ms. Doe's dryers are damaged in the fire.  The building's facade is also dammaged.  The wood frame around the door and front window caught fire and the glass windows shattered.  The linoleum floor at the front of the store also melted, leaving an acrid, chemical smell in the building.   

Fortunately for Ms. Doe and Mr. Money, the building and the business in it weren't engulfed in flames.  But, there was enough damage that reopening the next day isn't possible.

So, what does Jane Doe do?

Her first decision--should she reopen the business--hinges on several factors.  She needs to find out, for example, if her insurance company will cover the cost of her damaged equipment.  She also needs to know if her insurance will cover fixed costs--e.g. rent--while repairs are being made.  If those costs aren't covered, Jane Doe may have to consult a banker to see if she can get a short term loan.

What Max Money decides to do is also an important factor in Jane Doe's decision.  Jane needs to know if Mr. Max will fix the window, entrance, and floor.  She also needs to know his timeline.  Will he do it quickly?  She may also ask Mr. Max to suspend rent while repairs are made.  And, to cut her some slack while the business gets back on its feet.  Mr. Max, though, may depend on his steady rental income and demand payment. 

Finally, Jane has to want to reopen.  She may be angry at the rioters.  She may also feel threatened/unwelcome in the neighborhood.  She may not know, for example, that the fire was unintentional.  And, as a result, she may wonder if she was targeted by rioters.

Not surprisingly, lots of Jane Does don't reopen businesses in these circumstances.

Then, a bad reputation settles in.  People point and say "That's the place where the riots happened."  Others say, "The people here are prone to riot."  Or "'Those people' can't be trusted." 

The narrative that emerges isn't usually fair.  Collective blame for individual actions.  Amnesia about the actual events that set off the riots.

But, the narrative sticks nonetheless.  20 years later, the neighborhood often looks a lot like it did when Jane Doe left.

I wish a different fate for you Baltimore.  Justice for Freddie Gray, and reinvestment for Baltimore's forgotten neighborhoods.    

     

 

  

What will Negative Net-Migraiton look like in the DMV?

Today's Washington Post has a provocative article about new census data showing that population growth in the region is slowing down.  Most of the slow down is attributed to out-migration rather than birth dynamics.  Basically, more people are moving out of the region than are moving into it.  Population growth hasn't ceased in large part because birth rates are making up the shortfall. 

There is, of course, variation within the region.   Net migration (number of people moving to a place minus the number of people leaving it) is still positive in parts of the region.    DC still has positive net migration.  So, too, do Loudoun, Prince Georges, Montgomery, and Prince William Counties.  However, the city of Alexandria, and Arlington and Fairfax Counties now have negative net migration.

The Post attributes the shift in large part to "sequestration," which led to cuts in government budgets across the board.  Although many municipal leaders hoped the cuts would be restored, most haven't been.  And, Virginia localities, where beltway bandits set up shop, took the biggest hit.

The hand-wringing has already commenced.  Unlike other parts of the country, the DMV has experienced a largely uninterrupted growth spurt, nearly 20 years by some estimates.  Even the recession didn't really slow things down here.  In fact, people who lost jobs in other parts of the country often found work in DC--as was the case with one of the out-migrants profiled in the story.

So, what are the consequences of negative net-migration?  As with most shifts, there will be winners and losers.

Likely winners? 
* The region's commuters might see a small, but measurable improvement on commuter routes.
* So, too, might metro riders.  Metro ridership is already down.  Factors posited to explain the drop include rising prices, poor reliability, packed trains, more telework, and a reduction in the transportation subsidy for federal workers.  Ridership might decrease even more if negative net-migration continues to be a trend.  In fact, most migrants to the area have been public transportation-loving millennials.  If they opt to go elsewhere, then the trains might not be as packed.   
* First time home-buyers might benefit as well.  Inventory has been low since the 2008 recession.  Indeed, many homeowners put off selling their homes, choosing to wait until housing prices rebounded to their bubble (or near bubble) levels.  However, people who lose their jobs, or can't find ones to begin with (see: sequestration) are often willing to take a little less money when they sell. 
* The DMV's middle and lower-income residents.  They aren't complete winners (see below), but a slow down might make things a wee bit more affordable for people without top dollar incomes.  For the last ten years or so most development has been targeted to the luxury market.  If those people aren't coming here, developers of newly built apartments and condos might lower their prices.  Fewer people and somewhat lower prices also eases the displacement pressure the city's low income residents face. 

Likely losers? 
* Municipal Tax Coffers.  Fewer people means fewer people to tax.  And, fewer tax receipts means either tax hikes, or cuts in service.  It's hard to predict where tax hikes or cuts would be focused.  Most likely, though, there will be more cuts than taxes.  And, as a general rule, cuts usually hurt the poor more than the wealthy.
* Home Sellers.  People trying to sell their homes in the DMV have been incredibly lucky when compared with the country as a whole.  The DMV's housing values didn't fall as much as those in many other parts of the country, and they rebounded more quickly as well.  As a result, it's been a sellers market for much of the last 5 years (purchasers at the height of the bubble excepted).  With fewer people churning into the city, it will be harder to sell houses, and probably take more time as well.
* The DMV's Hipster Street Cred.  After years of being described as 'dowdy,' crime-ridden, wonky, arrogant, and type A, the DMV finally started appearing in all those urban top 10 lists.  You know, those lists of the 'Top 10 place to be a hipster,' or the 'Top 10 places to drink craft beer.'  That could change if the millennials decide to head elsewhere.  What's a hipster wonk to do? I guess they can always go back to yakking about policy over decidedly unhip (gasp) pitchers of beer.