Cities, Growth and Amazon

I've been spending time the last couple years in downtown Nashville, where the most common street sign is either the first or the second one below. 

It's nearly impossible to walk or drive two blocks in any direction without having to maneuver around at least one of these. 

Nashville is booming, thanks to its three big industries:  county/pop music, healthcare and state government.  The Economist reported last year that 81 people were moving into the metropolitan area each day; others say the number is higher.  Home prices are increasing, and so is construction of apartment buildings and townhouses and, farther out, single-family homes.  

In addition, the city is playing a huge game of infrastructure catchup.  Its population, 174,000 in 1950, has blossomed into an MSA (metropolitan statistical area) population of 1.8 million as of last year.  Traffic is pretty bad, and while there is talk of a five-spoke light-rail system, there is no plan to fund such a thing, whose buildout would take perhaps 20 years.

This of course is the sort of problem cities would love to have.

Where Tower Cranes Are

One rough measure of the health of a city is the number of tower cranes employed on major construction projects in its area.  Recently the Nashville Business Journal crowed about the number of tower cranes here -- 28 -- and ran this national map. Only New York, Chicago, Los Angeles and Seattle had more tower cranes.  If you've read about rents in those areas, you won't be surprised.

Actually, the map is now inaccurate.  One tower crane that had been working just down from our Nashville building was dismantled last month.  The process took a week and closed all traffic on the entire block.  Next month, the new 45-story tower of apartments and condos will open.

Where Tower Cranes Are Not

The US population is shifting.  Some cities like Nashville are attracting new residents.  Other cities have been shedding population for decades.  

Here are a few of those population losers.

--Detroit.  Its population crested at almost 1.85 million in the 1950 US Census and then dropped more than 60 percent by 2010.  Since then, another 50,000 people have left, leaving 672,000 people to maintain a built infrastructure designed for many more. 

--St. Louis.  Its 1950 population was more than 850,000 but is now below 320,000.  As is the case in other cities, residents seem to have relocated to surrounding suburbs.  

--Memphis. For most of its history, Memphis had twice as many residents as Nashville.  Its metro area population now trails Nashville's by 500,000, and the trend seems to be continuing. 

-- Cincinnati -- 300,000 residents in 2010, down from more than 500,000 in 1950.

    

-- Cleveland -- 400,000 residents in 2010, down from 900,000 in 1950.

I could go on about Buffalo and Akron and other cities, but you get the point.

Amazon

Recently Seattle-based Amazon has announced plans to build a second, equal-sized headquarters facility somewhere else in the country.  Every city and town in the Midwest and East craves this business, and for good reason:  Amazon estimates it will need 50,000 employees to staff the new facility, with an average compensation level of $100,000 a year.  

Cities and states are being invited to submit proposals next month, which sounds similar to a professional sports team hinting that it might move its franchise to a city in exchange for a locally financed arena.  We'll see if that analogy holds up. 

Nashville, a go-getter kind of town, naturally wants the Amazon headquarters.  When civic leaders talk of bidding for the project, they fret that the Tennessee legislature's failure to enact a suitably progressive transgender bathroom bill could hurt the city's chances.

More to the point, I would think, is the fact that Nashville is crowded already.  Home prices are expensive relative to local incomes, and traffic, especially for commuters, is very congested and getting worse.

Many commenters have offered free advice to Amazon about where to locate its new operation.  CNN, for instance, suggested these eight cities:  Atlanta, Pittsburgh, Toronto, Dallas, Austin, Boston, San Jose and Washington, D.C.

The selling points for these places, CNN argued, were good schools and large populations of high earners.  In effect, the recommendation was to choose a city that already is winning and to make it even richer.  

(There are people who like Amazon because it has lowered vegetable prices at its recently acquired Whole Foods stores and because its workers are paid well.  

         I'm less sanguine.  It's not that Amazon has demolished the traditional bookstore trade, or that it is doing much the same for retail generally, or that it appears set to try to control the grocery business, or that its founder has bought one of the most politically influential newspapers in the country.  My problem is that Amazon, a company based on algorithms, has done all of these.  To me, this looks like a prima facie case for the expansion of the definition of antitrust. But I digress.) 

If I were advising Amazon, I would encourage it to set its new headquarters in a hollowed-out city like one of the ones I described above. 

Here's what's in it for Amazon:

   -- Those cities have infrastructure -- road systems, empty schoolhouses, underused airports, cargo rail tracks and, in many cases, abandoned intracity railroad tracks waiting to be used again for new urban transit development.
       An influx of Amazon employees -- and Americans generally are happy to move for good job opportunities -- would make use of these and would appreciate the opportunity to buy or rent homes in a location where prices have not yet been bid up to unaffordable levels.

  --  Those cities also have largely empty central business districts and abandoned industrial sites ripe for repurposing and available at lower cost than similar sized, less well-located properties in Atlanta or Boston or Washington, D.C.  

  -- Amazon could show itself to be a good corporate citizen by demonstrating how a city of the industrial past can be turned into a successful city of the future.   

        It might also inspire Alphabet (Google) to abandon its plan to build a totally new techie-enabled city and to focus instead on updating an urban area that could be a showcase for a new kind of redevelopment.  

        Maybe even Facebook would decide to adopt a company town (although I personally would prefer not to live there.)  

Conclusion

Our country has cities that are thriving and cities that are not.  It also has big companies with grandiose plans for controlling larger portions of the economy.

In the US, we admire people who change their lives and succeed when the odds are against them.  Maybe it's time to show our struggling cities a similar way to change their destinies.

If big companies like Amazon took an interest in such projects, they would gain broad respect and the country might regain some of its now-tattered can-do spirit.  

I don't see any downside to this idea.