Marketplace Scratch Pad

New and old ghost towns

Scott Jagow Jul 22, 2009

The guy who runs has been on the road recently, traveling from San Francisco to upstate New York. Along the way, he’s been documenting “Recession Lessons.” Lesson #4 — ghost towns.

John Henion stumbled upon Cairo, Illinois by accident:

The main road in Cairo is a lot like any other strip in a poor city. A lot of services and dollar stores, you’ve got a check cashing place, a bar and maybe a liquor store or two. And being a warm summer day there was a lot of life on this strip as well. Young men swapped stories as they polished oversized chrome rims at the car wash, a thrift store had set up tables for sidewalk sales and young mothers and seniors sifted through piles of last year’s fashions looking for gold. On the other side of the street two industrious little girls sold lemonade while a mangy dog panted on the sidewalk beside them.

My first impression of Cairo was that it seemed like a nice place but I was glad I didn’t live there. I was ready to leave. And then I drove one block over.

Right on the levee of the Ohio River was what I can only describe as a modern day ghost town. It was as if a prosperous little downtown area with high-end hotels, restaurants, supper clubs and streets lined with ornate lamps had been abandoned overnight.

It didn’t happen overnight, as John explains. Cairo had race riots in the 60’s and white business owners decided to move away, instead of hiring black employees. Plus, Cairo lost some jobs to companies moving overseas. What’s left is a town where more than a third of the population lives below the poverty line. Amazingly, John found a Maytag repairman:

Me: Hi there, how are you doing?

Maytag Man: What?

Me: I said how are you?

Maytag Man: No. What do you want?

Me: Oh, sorry…I was just curious…I took a wrong turn back by the bridge and I’m just surprised to find this strip of town. It’s like a modern day ghost town….

Maytag Man: (laughing out loud. I couldn’t tell if he was being sarcastic or not. I’d like to believe that I’m just that funny.) That’s exactly what it is! It’s a modern day ghost town! That’s a good one!

Me: So what happened here?

Maytag Man: (gesturing wildly with his hands and speaking very loud.) ALL THE JOBS! THEY WENT TO CHINA!!! THERE’S NO JOBS ANYMORE!

It makes you wonder, if for different reasons, we’re going to see more ghost towns across America. Just think of all those subdivisions and shopping malls that are being abandoned.

John Wasik, author of “The Cul-De-Sac Syndrome: Turning Around the Unsustainable American Dream,” says this:

“The whole premise of the ‘Cul-De-Sac Syndrome’ is we hit a dead end,” he said. “We hit a wall of unaffordability. I want to convey the idea that we are building, selling and developing communities that are not sustainable.”

“Sprawling urban areas with no public transit or connection to a central city … will become ghost towns if high energy prices return and persist,” he writes, adding that both scenarios are likely in a healthy economy.

From an LA Times real estate blog:

A financial analyst fresh from a tour of construction sites in the Inland Empire (east of LA) is warning Wall Street of a “ghost town” where finished homes sit vacant and additional homes are still under construction.

“At several properties, there were a significant number of fully built homes sitting vacant along with a large number of additional homes still under construction,” Sandler O’Neill & Partners analyst Aaron Deer wrote today after touring developments in Corona and Ontario. “At one master plan community, the entire development appeared to be vacant — with the exception of crews working on new construction, it was a ghost town.”

And that was a year ago.

As we talked about a few months ago, cities like Flint, Michigan that don’t want to wind up like Cairo might just tear things down and start over, thinking smaller this time.

If you have any stories from where you are, please share them.

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