Full Citation

Title: Rethinking Detroit

Citation Type: Working Paper

Publication Year: 2017

ISBN:

ISSN: 0898-2937

DOI: 10.21144/wp17-04

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PMCID:

PMID:

Abstract: We study the urban structure of the City of Detroit. Following several decades of decline, the city’s current urban structure is clearly not optimal for its size, with a business district immediately surrounded by a ring of largely vacant neighborhoods. We propose a model with residential externalities that features multiple equilibria at the neighborhood level. In particular, developing a residential area requires the coordination of developers and residents, without which it may remain vacant even if its fundamentals are sound. We embed this mechanism in a quantitative spatial economics model and use it to rationalize current city allocations. We then use the model to evaluate existing strategic visions to revitalize Detroit, and to design alternative plans that rely on ‘development guarantees’ to yield better outcomes. The widespread e¤ects of these policies underscore the importance of using a general equilibrium framework to evaluate policy proposals. 1

Url: https://www.richmondfed.org/publications/research/working_papers/2017/wp_17-04

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Authors: Owens, Raymond; Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel

Series Title: Federal Reserve Bank of Richmond Working Paper

Publication Number: 17-04

Institution: Federal Reserve Bank of Richmond

Pages:

Publisher Location: Richmond, VA

Data Collections: IPUMS USA

Topics: Land Use/Urban Organization, Other

Countries: