The Wall Street Journal recently printed an article (entiled “Ohio Town Plans for Population Decline“) about Youngstown, OH, located about an hour away from Pittsburgh. Facing the reality of substantial population decline, loss of its tax base, and declining economy, this old steel city has decided to shrink:
Faced with the devastation of Oak Hill and other depressed pockets of the city, Youngstown is trying an unusual approach: Allow such areas to keep emptying out and, in some cases, become almost rural. Unused streets and alleys eventually could be torn up and planted over, the city says. Abandoned buildings could be razed, leading to the creation of larger home lots with plenty of green space, and new parks. …
Another goal is to wipe away the most obvious blight. The city estimates it will take about four years to bulldoze the biggest eyesores, including about 1,000 abandoned homes and several hundred old stores, schools and other structures.
Driving around the outskirts of Pittsburgh I have seen some blighted neighborhoods, left in the wake of the steel industry’s decline. But to raze large neighborhoods and shrink a city seems pretty extreme. Still, someone must be making money during this process. With the declining economy, population flight, house prices must be extremely low, and there must be lots of tax liens on abandoned or foreclosed properties. As can be seen on this map, a large number of houses have unpaid taxes and are subpar. Is it possible to make money in real estate despite all those drawbacks? Is the government paying landowners their land? Seems like speculators would want to flock there to buy cheap homes and wait to be bought out by the government if it were indeed the case.