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A COLUMN BY MICHAEL J. HICKS

Immigration could save vacant housing and bolster withering cities

Tuesday, October 2, 2012 - 12:01 am

Dozens of cities throughout the Midwest are awash in an excess supply of housing. Indeed, it is hard to find an older city from western New York to Iowa that does not have several neighborhoods of hastily constructed homes built shortly after World War II and are now derelict. Muncie, Gary, South Bend, Terre Haute and a dozen more Hoosier cities bear this burden. In each of these cities, as many as one in seven homes are abandoned. In many neighborhoods, several times that number of homes will become vacant or fall into decrepitude over the next generation. It is, quite honestly, a large-scale collapse seen before only in some Western ghost towns and mining villages in Appalachia. What then can we do?

In many places, the direct application of the bulldozer is needed. Many of my historically minded friends cringe at this option. They argue rightfully that these communities have many of the attributes that new urbanists contend are the savior of cities. They are small, densely packed places, with easy walking access to city centers. The problem is that real estate markets value these places less somewhat enthusiastically, often at zero value, and it is markets, not urban theorists, who set value.

In other places, the bulldozer is inadequate to the task. For example, even if Muncie could find the $20 million in bulldozing costs it needs, this would still leave an unsustainable urban footprint with huge areas that are in need of urban services but are paying little or no taxes. It is a dilemma for which I see only one answer: immigration.

Of course immigration is not a new prescription, and most of these cities have seen one or more waves of immigrants in the last century. But the size and scope of these new immigration requirements are outside living memory and so require some frank discussion.

No new business employing U.S. citizens will heal our problems of urban decay in many Midwestern cities. Cities in the roughly one-third of Indiana counties seeing population loss cannot attract new families to many of these neighborhoods. The unvarnished truth is that a business that pays well enough to induce an American family to relocate will pay enough for these families to seek out or build homes in neighborhoods with good schools, desirable housing and attractive amenities. There are no shortages of cornfields on which to build, and Midwestern workers are willing to drive long distances for a better quality of life.

However, many of these broken communities are still an improvement upon housing conditions in much of rest of the world. So, what Muncie, Gary, Terre Haute and South Bend need (if they seek to avoid the bulldozer) is an influx of workers from poorer countries. We need more, not less immigration, and it must include families, which will bring with them the social fabric that has torn so deeply in these Midwestern towns. This will shock many, but it is not half as shocking as a future of decline and decay.

Michael J. Hicks is director of the Center for Business and Economic Research and associate professor of economics at Ball State University.