My latest post is online at Governing. It is called “The Illusion of Growth Economics: Can Cities Like Charlotte Reinvent Themselves?.” I was prompted to write this by an article out of Charlotte discussing how that city was raising property taxes for the first time in 20 years as it became unable to annex new territory yet continued to have capital needs. I reiterate a number of themes I’ve hit here before. Here’s an excerpt:
The transition from thinking about managing rapid growth to thinking like an operator is a tricky one. Even many companies fail to make it. Retailers, for example, frequently fall on hard times when they reach the point where they can no longer simply open new stores to meet financial targets.
Cities that are benefitting from strong growth have the wind at their backs. But it would be naive to assume that they must be doing something better than everyone else just because of that. Places like Chicago and New York were the Charlottes and Houstons of their day, right down to their laissez-faire economies. But they eventually hit the limits of growth and had to wander in the wilderness while trying to reinvent themselves.
This is the mark of a great city. A London or a New York can sustain and reinvent itself across growth cycles. Too many places, particularly our Rust Belt cities, have not met this challenge. When the economy shifted and growth ended, they went into a decline that has not yet abated.
Charlotte may not be at the peak of its growth cycle, but an uptick in taxes should be a cautionary note reminding leader that for cities heavily dependent on raw growth, the punch bowl eventually runs dry.