Detroit's Pink Zones, China's Special Economic Zones, and the upper and lower bounds on critical mass.
Detroit is following in China’s footsteps. From the WSJ:
Developers and designers complain that, like many cities, Detroit’s onerous and outdated rules make it too difficult to rebuild or repurpose long-neglected retail areas. To try to reduce those obstacles without a time-consuming and expensive rezoning process, the city is proposing a handful of “pink zones,” whereredtape will be cut to help small developers and entrepreneurs open new businesses and revive aging commercial strips. The goal is not to eliminate zoning but to ease some of the constraints faced by new projects, like minimum-parking requirements orenvironmental-impactreports.
This model of development, reducing red tape but only in certain geographic areas, reminds me of China’s special economic zones. From ThoughtCo:
Since 1979, China’s Special Economic Zones (SEZ) have been beckoning foreign investors to do business in China. Created after Deng Xiaoping’s economic reforms were implemented in China in 1979, Special Economic Zones are areas where market-driven capitalist policies are implemented to entice foreign businesses to invest in China.
These zones were successful not only because they changed the rules, but also because they provide a strong focusing power. If you were someone who wanted to do business in China in the 1980s, your choice was clear, go to one of the special economic zones. This concentrated all of the economic activity rather than spreading it out across all of China, and concentration is the key to what makes geographically-dependent things (like cities) valuable.
What’s also interesting about these policies is that they are examples of experiments that do better when kept smaller rather than larger. This is partly because a critical mass of concentration is necessary for the changes to be effective. Choosing 8 cities rather than 4 would have spread out the influx of investment, and probably would not have been as effective. Similarly, reducing red tape across all of Detroit seems unlikely to spur much development in a city that is already avoided by many developers.
This means that for an experiment like this, there is a tradeoff between keeping it small enough to achieve critical mass, and large enough to achieve critical mass. The conventional wisdom only recognizes the minimum threshold of critical mass, not the maximum threshold.