Restoring the urban American dream

In his new book, Boom Towns, Loyola economics professor Steve Walters, Ph.D., explores what’s wrong with many U.S. cities—and how to fix them.

By Nick Alexopulos

A resident of downtown Baltimore, Steve Walters has been fascinated by cities for decades. He’s an urban economist—a scholar who uses economic analysis to try to understand how cities work—who’s spent his career in urban settings, first as a student in Philadelphia and Los Angeles and now as an economics professor at Loyola University Maryland.

His new book, Boom Towns: Restoring the Urban American Dream, is the culmination of the many years of study and thought he’s devoted to helping cities, and their residents, thrive.

Walters’ thesis is clear: sometime in the second half of the 20th century, a lot of once-great American cities stopped acting as the economic and social launching pads that they once had been, which has greatly limited progress for millions of Americans. Detroit is Exhibit A. In Boom Towns, Walters diagnoses what went wrong and prescribes appropriate medicine.

Loyola magazine asked Walters for some background on Boom Towns and a crash-course on how the book’s concepts can be applied to Baltimore.

What inspired you to write Boom Towns?

I started teaching a course in “Economic Problems of Cities” at Loyola back in the ’90s, and gradually it became clear that I had to organize my thoughts and tell my story in a comprehensive way, and try to reach an audience of policy-makers. The goal is to change the way people think about urban policy—and to spread a hopeful message about the future of cities.

What are some of the most critical ills that negatively impact cities, and what solutions do you propose?

The book concludes with 10 guiding principles for policy-makers, but many of these “commandments” have to do with how well public officials respect and protect the property rights of urban residents. Some of the ways in which we’ve done damage to these property rights are fairly well understood. For example, leaders in cities like Baltimore that have over-taxed residential and commercial property know they’ve repelled a lot of vital investment, and that this has damaged residents’ welfare; they’re just having a tough time figuring out how to become competitive again—though Boom Towns presents a politically feasible strategy.

But some of the solutions I offer have to do with preserving subtle, intangible forms of “property”—what economists and sociologists call “social capital.” A lot of social capital, in the form of networks of friends, colleagues, and neighbors, has been destroyed over the decades by programs of urban renewal that focused on bricks and mortar instead of people and relationships. We need to stop making those kinds of mistakes.

What does Baltimore get wrong? What does Baltimore get right?

In addition to its unfortunate tax treatment of physical capital (Baltimore City’s property tax rate is more than twice that of the surrounding county, meaning investors are always just a few miles away from a more favorable climate for projects that can create jobs, enhance wages, and better house citizens), Baltimore’s development bureaucracy is intrusive. I have, uncharitably, sometimes called our approach to redevelopment “Soviet-inspired.” There’s very little anyone can do in Baltimore without involving City Hall as a middleman, and we seem to prefer large-footprint, grandiose projects to more organic, small-scale, entrepreneurial approaches.

On the other hand, City Hall is definitely “open for business”; we know we need to do better, and there are quite a few people working hard to improve the redevelopment climate.

What would a healthier, more prosperous Baltimore mean for Loyola?

Between WWII and roughly 1980, three bayside cities—Baltimore, Boston, and San Francisco—were in virtual lockstep regarding loss of population and jobs and rising poverty, crime, and other problems. Since 1980, Boston and San Francisco have become “superstar cities” (for reasons I discuss in Boom Towns) and Baltimore has continued to struggle. If we reverse our decline, we will be much more appealing to students and faculty as a place to learn, work, and live.

How important is race to any discussion about the urban American dream?

It’s far less powerful than is commonly supposed. Racial bias is a fairly constant feature of American life. It has been present when cities were thriving, and when they were not; it has been present as some cities declined, and little changed when the same cities’ fortunes reversed.

It would be wonderful if we could wave a magic wand and eliminate such bias, but the hopeful message of Boom Towns is that we don’t have to wait for that to happen to do things that will enable cities to, once again, help all their residents prosper economically and socially. A city’s demography is not its destiny; its treatment of its citizens’ property rights, on the other hand, is.

Why do people like living in cities?

That list is too long to include here! And cities are not for everybody. But if you think you don’t like city life, one thing you should keep in mind is that you might like it better if your city was working as it could.

Why do your proposals matter to suburbanites and people in rural areas?

Everyone’s wellbeing is crucially related to the health of cities. In a knowledge-based economy, for example, dense cities are incubators for the ideas and innovations that enhance the quality of our lives in innumerable ways; the denser the city, the more rapid the rate of technological progress. And urbanites have a relatively light ecological footprint; if you care about Mother Earth, you want thriving cities.

And don’t even get me started about culture, the arts, sports, etc.

Who should read Boom Towns and how important is it for the ideas to reach a wide audience?

Anyone who wants to understand how cities work or how to fix them should read Boom Towns. So, sure, if a lot of people do that, they could certainly put pressure on their elected leaders to do the right things by their cities. But my fantasy is that some mayor of Troubled City X will read the book, administer the medicine, and then the residents of City X will start to enjoy a much-improved quality of life… and then the mayor of Troubled City Y will decide to imitate City X, and so on. I can dream…


Boom Towns: Restoring the Urban American Dream was released in August 2014 by Stanford University Press and is available on Amazon. Stephen J.K. Walters, Ph.D., can be reached by email at

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