St. Louis is in a real estate “death spiral.” Can it get out?

Nova Safo, Ariana Rosas, and Alex Schroeder Jun 6, 2024
Heard on:
HTML EMBED:
COPY
A view of buildings in downtown St. Louis. peeterv/Getty Images

St. Louis is in a real estate “death spiral.” Can it get out?

Nova Safo, Ariana Rosas, and Alex Schroeder Jun 6, 2024
Heard on:
A view of buildings in downtown St. Louis. peeterv/Getty Images
HTML EMBED:
COPY

This week, we’ve been looking at some of the ways cities are changing to meet the future of how we work and live. Today, a cautionary tale from St Louis, a city struggling with what some call a “real estate doom loop,” which predates the pandemic. It’s where offices empty out, fewer people hang out downtown, and then more things close.

St. Louis is trying to attract tech jobs, construct more affordable housing, and invest in public transit and greenspace. But census data show the St. Louis metro area lost population again last year.

Glenn MacDonald is professor of economics at the Olin Business School at Washington University in St. Louis, and spoke with Marketplace’s Nova Safo about how St. Louis got here and how it might turn things around. The following is an edited transcript of their conversation.

Nova Safo: So what happened? How did St. Louis get here?

Glenn MacDonald: It started long time ago. You know, St. Louis used to be one of the bigger cities in North America, being at the intersection of major waterways and so on. And that was the main value proposition for St. Louis. The city always had parts that weren’t very safe, and that started to creep more into the downtown. People started to move mainly out West. So it just started in this big cycle, where people started to move out, people really didn’t want to work downtown, and as a consequence, retail found itself, struggling restaurants found themselves struggling, there wasn’t a lot of entertainment. And you know, when people talk about the death spiral, that’s kind of what they’re talking about.

Safo: And what are some of the ways the city has been trying to extricate itself from this spiral?

MacDonald: Well, I think, you know, we’ve been talking about for a long time trying to sort of develop certain parts of the city. But I think all of the success stories that you’ll see of cities revitalizing themselves always find ways for people to live in the main city area. Once St. Louis becomes a safer place to live, then it’ll be easier to get people to live there, it’ll get easier for employers to think about employing people there, restaurants open, and things like that.

Safo: Why has the problem not just downtown, but overall in St. Louis, has been so difficult to solve? Why is it such a tough nut to crack there?

MacDonald: You know, you’ve got 75 years of decay in the downtown area, and people living somewhere else. So it’s just a very stable, entrenched situation that’s really difficult to change. And in particular, it requires a lot of money. Because when you look at the city downtown, the tax base has really eroded. And so the city is in a situation where the finances aren’t terrific. And so if you were to try to turn this around, the thing I would say [the] number one thing you’d have to do is just work on safety, so that people feel that they can go downtown, and live, or work, or go to restaurants and so forth. So I think in order to get St. Louis going, in my opinion, it needs a really significant investment in safety. And then we can work on the other aspects like expanding the Central West End, growing the area around Union Station further, cleaning up the downtown area, and so forth.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.