Ghetto… inner city… trendy

Rutger Wentzel
Student number: 361528
Introduction
Twilight zone, hood, central city, ghetto… All are different names of often the oldest parts of
metropolitan areas: the inner cities. Located near the cities central business districts, the inner cities were
once vibrant neighbourhoods for the working class citizens (Mills & Lubuele, 1997). Later, social
problems arose and more and more people moved to the cities suburbs. Resulting in bigger problems
for the old neighbourhoods.
The inner cities were once populated with hard working factory workers. Factories located in the city
were easily reached due to the inner cities geographical location. But starting from the middle of the 20th
century, the demand of employees changed. Factories and manufacturing companies were shut down or
moved to different locations. New businesses started in the areas, but it demanded a higher education of
its employees. A lot of the citizens were not qualified for the new job openings. In the United States,
especially Afro-, and Latin-Americans fell into unemployment and poverty (Gibson, 2004). The inner
city problems became more observable. Failing economies, racial segregation, crime and poor
neighbourhood conditions were the result. The once vibrant neighbourhood became a ghetto.
Solutions?
There has been an ongoing debate about the ways to transform the inner cities into lively neighbourhoods
again. Programmes initiated in the late 20th century failed (Porter, 1995). In order to thrive the inner city,
Porter emphasises location and business development. Social problems are the result of a poor local
economy. When the economy can be improved, the problems will also be tackled. Inner cities must
therefore develop new economic clusters with its own competitive advantages. According to Porter, the
competitive advantages of the inner city are: strategic location, local market demand, integration with
regional clusters and human resources.
Secondly, to improve the economic circumstances, the inner cities disadvantages shouldn’t be further
neglected. Unusable land, high building costs, security costs and bad infrastructure are examples of the
inner cities disadvantages. Porter emphasises that these matters should be addressed directly, instead of
being funded or subsidised and carried out by other parties than the government. The key player for
Porters economic strategy will be the private sector. Other parties like the government, social service
and community-based organizations should take a step back. The new role of the government should be
focussed on supporting the private sector and factors that would improve the economic environment of
the inner city, like infrastructure and crime prevention.
A lot of critique can be found on Porters Model. An important issue is about the creation versus
redistribution of wealth. It is not possible to focus only on the creation of wealth in the inner city without
a redistribution of wealth (Dymski, 1996). Therefore, the government does not have to act in reducing
the wealth redistribution when it focuses on creation. Also, the role of the government should not be
limited. Unlike Porter, Dymski argues that the reduction in government spending will lead to a reduction
in consumer activity in the inner city. The focus should be on strengthening and preserving the current
economy and the creation of new businesses. This must lead to strong autonomous clusters in the inner
city (Dymski, 1996). For the creation of wealth, the government must make sure that there is a structural
financial inflow. Loan funds and investment pools are examples which lead to the creation and later
accumulation of wealth.
Dymski is not the only author who recognizes the importance of the role of the government. Business
leaders and investors often ignore the inner cities because of the poverty. An active government is
therefore essential to push business to locations where they are needed the most (Fainstein & Gray,
1996). When the government is able to target the right companies to settle in the inner city, the benefits
of an agglomeration economy can be developed. Economies of scale will occur, and Porters inner cities
disadvantages can be turned into advantages, like infrastructure and labour pool. Once again, the
government should play an active role. According to Fainstein and Gray this role must go beyond
economic improvement. Problems arise when new companies enter the inner city and consequently
attract skilled labour outside the inner city. The result is that the low skilled citizens will fall back into
poverty. Government intervention should prevent this from happening. The gap between the skilled and
the unskilled citizens is often divided by race. The unemployed citizens are in this case the Afro-
American citizens in the inner cities (Blakely & Small, 1996). An explanation for this problem can be
that there is a mismatch between labour supply and demand. A second explanation is the existence of a
social distance between the Afro-Americans and the economic environment. This is still, unfortunately,
the result of racism. Blakely and Small argue that the unemployed group can only be absorbed in the
economy by large companies, like the government. Again, they critique the passive role of the
government in Porters model. In order to improve the conditions of the inner city, the assumptions of
the problems need to be clear. Some argue that the problems are people-oriented, while others think they
are more place-oriented. Blakely and Small emphasize that both assumptions need attention to help the
inner cities. The government should create new jobs, invest in infrastructure and education and subsidize
inner city residents to improve the inner city for all its citizens.
Invest before you harvest
The role of the government is undeniably very important for the transformation of the inner cities. Porter
is right that the foundation for a good neighbourhood is a good local economy. Therefore, the
government and the private sector must bundle their strengths together. There are some vital factors of
a neighbourhood that need attention before the local economy can expand. Good infrastructure, security,
schools and access to public transportation are examples. This means, in some cases, that the government
must invest a lot, but businesses are not likely to move to areas where the conditions are bad. When
these factors are improved, it is possible to create wealth in the inner city. Unlike Porter, I think that
community-based organizations are very important to build the inner cities economy without losing the
neighbourhoods character. These organizations often have strong relationship with the neighbourhood
and the people who live in it. Together with the government they could find a comparative advantage of
the inner city where the economy can specialize in. The use of community-based organizations will also
lead to the decrease in social distance. Because of this match between businesses and the neighbourhood,
the gap between the unskilled and skilled labour will be smaller. This can hopefully also have a positive
effect on racism and racial segregation.
When the conditions and popularity of the inner city increases, the government should be aware of its
original intentions. The process of gentrification can make the inner city into a costly place to live. More
people are willing to locate to the inner city, which will result in an increase in property prices. The rents
of houses invested by the private sector will increase and in the end be unaffordable for the locals.
Because of the increasing prices, the original inner-city citizens are forced to move to another part of
the city where the prices are lower. This could be an explanation of a new suburbanization trend we see
today. The government can intervene in this process. They can subsidize the inner-city residents in the
form of social homeownership or rental (Blakely & Small, 1996). Although Blakely and Small argue
that gentrification is unlikely, I think the process is inevitable. The government must insure that the
moving people will not end up in other less developed parts of the city where the social problems can
again come to exist.
Although Porters model and its critiques are published in the mid 1990’s, the problems of the inner cities
are nowadays still relevant. This is also the result of the past economic crisis, which not only the inner
cities lead into trouble, but also the suburbs and the rest of the United States. Governmental funds for
infrastructure, schools and healthcare were downsized. Especially in the inner cities, the problems were
more severe. A problem facing inner cities today for example is that between 12.1-28% of the youth do
not attend school (Patterson, 2015). This is a problem that will negatively affect many more factors in
the future. Besides poor neighbourhood conditions, the social distance and racial inequality became
larger (Goldsmith & Blakely, 2010). Before this happened, there was a new suburbanization trend going
on. This time, more middle-class Afro-American citizens moved to the cities suburbs. Although this is
obviously a positive effect, it also means that the conditions in the inner cities did not have changed.
Apparently, wealth redistributed along its citizens and the wealth creation did not occur. Leaving the
remain inner city citizens in isolation and more poverty.
There are also inner-city neighbourhoods which revitalized very well. Harlem in New York City is such
an example. The once called ‘capital of black America’ has changed from a poor, unsafe neighbourhood
to a thriving dynamic part of the city (Zukin, 2009). The racial segregation is in this part less present,
because all races are living together. There are still problems though, a lot of the Afro-American citizens
still live in poverty. Because of the gentrification, local stores disappear from the streets to make room
for large chain stores. The locals were just not able to afford the rising real estate prices.
Katendrecht
In the city of Rotterdam, the Netherlands, we can find
the inner-city neighbourhood called Katendrecht. The
transformation of Katendrecht is in a lot of ways similar
to Harlem in New York City. In the 60’s and 70’s,
Katendrecht was well-known for its nightlife and
prostitution as well as its crime and poverty. At the end
of the 20th century, the municipality of Rotterdam began
to tackle the problems in Katendrecht. An important
problem of Katendrecht was its geographical location.
With the expansion of the Rotterdam harbour,
Katendrecht became a peninsula. The government
decided to build a new bridge to link Katendrecht with
the ‘Kop van Zuid’ in the north. The funny nickname
Figure 1. Location of Katendrecht in Rotterdam
(Google maps, 2018) called ‘Hoerenloper’ (whore hopper) reminds the
citizens to the old days. Citizens could now more easily
walk into the city centre. Also, the government invested in crime prevention and poverty, which resulted
in a much safer place to live. The neighbourhood was even ranked twice as the safest neighbourhood in
Rotterdam. Katendrecht was once full of old warehouses. Community-based organizations and the
municipality transformed one of the warehouses into a local food market. This was the beginning of a
new wave of opening restaurants, cafés and food stores. Katendrecht is now one of the most popular
neighbourhoods in Rotterdam. The private sector has also an advantage in the neighbourhood. Because
of the vacancy of warehouses and the presence of building lots, investors have a lot of opportunities in
Residential investments. But also in Katendrecht there are still problems to be solved. The new
employment that derived with the revitalization does not match with the local citizens (de Kruif, 2016).
Trying to close this gap is still an issue for the municipality of Rotterdam.
Conclusion
Nowadays, the problems of the old ghettos are maybe less severe, but problems still exist. Inner cities
must be aware of its competitive advantages as well as their disadvantages. The government, private
sector and organizations should bundle their strengths to revitalize the inner cities. Examples have
shown that all three have their advantages to make it work. The government must first focus on the
primary factors of the inner city. Safety, education and infrastructure are important examples. The
private sector has a task to move into the inner city and to drive the economic activity. This can be done
with the help of community-based organizations in order to maintain the relationship between the
businesses in inner city and the local citizens. In this way the wealth in the inner city can be created and
accumulated. We have seen new suburbanization trends that show we are in the right direction. But
problems like poverty are still present in the inner cities. Maybe, the revitalization of the inner cities will
not solve that problem.
References
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