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  #1  
Old Posted Jun 6, 2014, 10:36 PM
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Shaking Off The Rust: Cleveland Workforce Gets Younger And Smarter

Shaking Off The Rust: Cleveland Workforce Gets Younger And Smarter


6/05/2014

By Joel Kotkin



Read More: http://www.forbes.com/sites/joelkotk...r-and-smarter/

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In virtually every regional economic or demographic analysis that I conduct for Forbes, Rust Belt metro areas tend to do very poorly. But there’s a way that they could improve, based in large part on the soaring cost of living in the elite regions of California and the Northeast. And one of the rustiest of them appears to be capitalizing on the opportunity already: that perpetual media punching bag, Cleveland.

- The number of newcomers aged 25 to 34 increased by 23 percent from 2006 to 2012, with an 11 percent increase from 2011 to 2012 alone. Most revealingly, half of these people came from other states. When it comes to net migration, Atlanta, Detroit, and Pittsburgh were the biggest feeders for those arriving with a bachelor’s degree, while Chicago, Manhattan, Brooklyn and Pittsburgh sent the most net migrants with a graduate or professional degree.

- The picture of Cleveland that emerges from the Cleveland State University study is a very different one from that to which we are accustomed. Rather than a metro area left behind by the information revolution, Cleveland boasts an increasingly youthful workforce that is among the better educated in the nation. In 2009. notes University of Pittsburgh economist Chris Briem, some 15% of Cleveland’s workforce between 25 and 34 has a graduate degree, ranking the area seventh in the nation, ahead of such “brain centers” as Chicago, Austin and Seattle. Old Clevelanders as a whole will remain undereducated, but likely not the next generation.

- What is driving this migration? Some of it has to do with a 25% expansion of STEM employment from 2003-13, much of it in health care tied to the region’s prestigious hospitals. This has helped spark a healthy increase in per capita income, from $33,359 in 2003 to $44,775 in 2012, a gain of 34%. --- This growth has animated many neighborhoods, not only in the “cool” central cores but in a host of inner and outer ring neighborhoods. This process, note researchers Richey Piiparinen and Jim Russell, is even more evolved in a Rust Belt city that has been on the rise for some time now, Pittsburgh.

- The cost of living in Cleveland is considerably below the national average, not to mention that of the ultra-expensive coastal regions. Indeed, when cost of living is taken into account, per capita income in both Cleveland and Pittsburgh are now well above the national average. Piiparinen and Russell also see a gradual movement of educated young people to other lower-cost, family-friendly places in the Rust Belt, including Indianapolis, St. Louis and Minneapolis.

- These phenomena suggest that Rust Belt cities need to adopt new approaches to economic development. For years, civic boosters in places such as Cleveland fixed hopes on attracting the much ballyhooed “creative class” by building such things as the Rock and Roll Hall of Fame, art galleries, trendy restaurant and even a massive downtown chandelier. This tactic recalls the old lite beer commercials: everything you want in a city, but less.

- Yet, as Piiparinen and Russell point out, this approach simply expands consumption opportunities, and when it comes to consumption, Cleveland, Detroit and Pittsburgh can never top the U.S. capitals of excess: Manhattan, San Francisco, Los Angeles, or even Seattle. It’s hard to see hipsters moving en masse to any of these places without some degree of economic opportunity.

- Piiparinen sees the current migration trends as reflecting “the Rust Belt’s productive economy versus its consumptive economy.” He proposes the focus should be to accelerate talent migration based on economic advantages natural to the region, such as medical services, advanced manufacturing and logistics. These industries have high economic impact. Manufacturing, he traditional core of the local economy, adds 50 cents of GDP for every dollar in output, considerably more than information employment and almost three times the multiplier for retail jobs.

- Despite the hopes to emulate post-industrial Boston, New York or San Francisco, Rust Belt states remain dependent on manufacturing; it accounts for 18 percent of Ohio’s GDP and 14 percent of Pennsylvania’s, more than twice as much as in New York and well above that in California. Increasingly, manufacturing will not provide many jobs for unskilled workers, but rather for trained technicians, certified crafts workers as well as highly educated college graduates. Ohio has established an extensive network of skilled training facilities to fill this need.

- Does that mean that Cleveland, or Pittsburgh, are about to experience Houston-like growth? Don’t hold your breath. The weather is too harsh, and the cities too small to compete with the vast opportunities presented by the burgeoning Sun Belt economies. Nor do they rank high as destinations for foreign immigrants, who have provided a boost to many larger local economies but as of yet have not “discovered” the Rust Belt in large numbers.

.....



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  #2  
Old Posted Jun 6, 2014, 11:11 PM
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Looks like the trends are positive.

It's important to the American urban renaissance for the cores of regional centers like Cleveland to return to health, both for the sake of those who currently live there and also for those who want to live in a city but can't afford the high prices of the healthier cities.
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Old Posted Jun 7, 2014, 12:18 AM
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Good job Cleveland!
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Old Posted Jun 7, 2014, 1:51 AM
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I want to disparage the article just because of who the author is, but I am very pleased with the trend discussed.
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Old Posted Jun 7, 2014, 2:00 AM
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At some point the Sunbelt is going to lose its low-cost advantage and there'll be little reason to locate in the South, unless you just prefer the weather.
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Old Posted Jun 7, 2014, 2:22 AM
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This article appears to represent a welcome evolution in Kotkin's thinking... and I'm pleased that he cites a couple of my favorite Pittsburgh-based economic geographers... but he still can't resist a few cheap shots.
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Old Posted Jun 7, 2014, 3:35 AM
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Good news for Cleveland.

I could definitely see the draw for the younger creative class with good schools and excellent hospital for work. More importantly is that Cleveland is a REAL city, grit included. It's not like many southern cities were the downtown are only slightly different from the suburbs both physically and socially.

Cleveland has character, interesting neighbourhoods, good transit, a vibrant downtown, world renowned music scene of all types, and a real urban vibe. It is solidly Democrat which the creative class tend to lean towards and is a generally liberal city It's still a little rough around the edges but has solid bones.
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Old Posted Jun 7, 2014, 3:42 AM
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Great news for my hometown.


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Originally Posted by James Bond Agent 007 View Post
At some point the Sunbelt is going to lose its low-cost advantage and there'll be little reason to locate in the South, unless you just prefer the weather.
Do you honestly think that cost & weather are the only possible reasons people would want to be here? Some of larger metro's are losing their low-cost advantage already, but people and companies continue to flock.

There's this little thing called quality of life, and millions of people have voted with their feet - and continue to do so.
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Old Posted Jun 7, 2014, 4:11 AM
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Originally Posted by atlantaguy View Post
There's this little thing called quality of life, and millions of people have voted with their feet - and continue to do so.
Unfortunately in much of the Sun Belt, comprehensive urban planning is a four-letter word, especially if it follows new urbanist trends. Because of that, some of the big cities in the South are already losing their competitive edge. Sitting in traffic for an hour or two every day erodes the appeal of a huge cheap house pretty quickly, as Atlanta and the big cities of Florida have discovered and as cities like Charlotte, the Triangle, Triad, and Greenville-Spartanburg are discovering, even as they say they don't want to replicate Atlanta's mistakes, and even as they copy them to the letter just as fast as they can. Hell, even people in Asheville bitch about traffic and sprawl... especially people who moved here from places like Atlanta or Charlotte and who don't want their problems following them here.
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Old Posted Jun 7, 2014, 4:37 AM
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Originally Posted by hauntedheadnc View Post
Unfortunately in much of the Sun Belt, comprehensive urban planning is a four-letter word, especially if it follows new urbanist trends. Because of that, some of the big cities in the South are already losing their competitive edge. Sitting in traffic for an hour or two every day erodes the appeal of a huge cheap house pretty quickly, as Atlanta and the big cities of Florida have discovered and as cities like Charlotte, the Triangle, Triad, and Greenville-Spartanburg are discovering, even as they say they don't want to replicate Atlanta's mistakes, and even as they copy them to the letter just as fast as they can. Hell, even people in Asheville bitch about traffic and sprawl... especially people who moved here from places like Atlanta or Charlotte and who don't want their problems following them here.
All very valid points.

The thing is, traffic sucks in every major metro from Coast to Coast. Some of the older/colder places do have public transit options that the large Sunbelt metro's can't match, but not for everyone.

In Seattle for instance, the choices are pretty much limited to a bus at this point in time for the large majority of commuters. I laud them for embracing and utilizing public transit, but Seattle is an outlier when it comes to this. With a couple of exceptions, choice riders reject this option in most large metro's across the country.
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Old Posted Jun 7, 2014, 4:49 AM
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Originally Posted by atlantaguy View Post
All very valid points.

The thing is, traffic sucks in every major metro from Coast to Coast. Some of the older/colder places do have public transit options that the large Sunbelt metro's can't match, but not for everyone.

In Seattle for instance, the choices are pretty much limited to a bus at this point in time for the large majority of commuters. I laud them for embracing and utilizing public transit, but Seattle is an outlier when it comes to this. With a couple of exceptions, choice riders reject this option in most large metro's across the country.
Another advantage the older/colder places tend to have is a street grid. Boston is an outlier in that respect, but even Boston functions better with its dense development patterns than does a place like Charlotte or Atlanta, where the roads, like those of Boston, are basically paved historic cow paths. It's even worse in multi-nodal urban areas like the Triangle, Hampton Roads, and Greenville-Spartanburg, where you have multiple clumps of paved cow paths or, in the case of Hampton Roads, cow paths and all sorts of bays and rivers to add that extra-special touch of mayhem to any attempt at a comprehensive urban area.

What it comes down to is the fact that older/colder cities had the good fortune to develop at a time when dense development was coupled with an intelligent transportation plan. Newer/warmer cities either developed late and ended up with cow paths, or else those that were smart enough to build a grid still ended up too sprawled to make utmost use of it. Then again, I've never been to Houston, Miami, Los Angeles, or Phoenix, so I wouldn't have personal knowledge of how they use their grids, or how much of each urban area is grid versus cow paths. I just know what I read and see on here.
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Old Posted Jun 7, 2014, 5:24 AM
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Another advantage the older/colder places tend to have is a street grid. Boston is an outlier in that respect, but even Boston functions better with its dense development patterns than does a place like Charlotte or Atlanta, where the roads, like those of Boston, are basically paved historic cow paths.
So, so true. In our case, some of the older farm to market roads and Cherokee paths are now serving as major arterials but remain two lanes. Most traverse beautiful residential areas where the homeowners are loathe to allow any widening, and band together and sue at the slightest hint of any plan to do so. This is a huge factor in inside the Perimeter gridlock here. But I can't say I blame them, either. The common feeling among many is that they are willing to put up with it to not destroy the tree cover.

Quote:
It's even worse in multi-nodal urban areas like the Triangle, Hampton Roads, and Greenville-Spartanburg, where you have multiple clumps of paved cow paths or, in the case of Hampton Roads, cow paths and all sorts of bays and rivers to add that extra-special touch of mayhem to any attempt at a comprehensive urban area.
So true, especially re: Hampton Roads!

Quote:
What it comes down to is the fact that older/colder cities had the good fortune to develop at a time when dense development was coupled with an intelligent transportation plan. Newer/warmer cities either developed late and ended up with cow paths, or else those that were smart enough to build a grid still ended up too sprawled to make utmost use of it.
As did Atlanta. The core is on a grid, and we had a wonderful and comprehensive network of streetcars in the city and interurbans to outlaying areas such as Marietta & Stone Mountain. There were also passenger trains to nearby towns that were heavily utilized. These old railroad suburbs are the ones with the charming Downtowns like Norcross, for instance. Now we are finally trying to rebuild an intown streetcar network that will connect with the BeltLine. We'll see how it goes, but we are pretty excited about it (most are anyway, inside I-285).

Quote:
Then again, I've never been to Houston, Miami, Los Angeles, or Phoenix, so I wouldn't have personal knowledge of how they use their grids, or how much of each urban area is grid versus cow paths. I just know what I read and see on here.
I have been to all multiple times, with the exception of Houston. Yes, they are all on giant grids for the most part, including the suburbs. Miami/South Florida has rail ridership that is a fraction of ours, even though they are larger. And traffic is just as bad as here.

Phoenix and L.A. are trying. The LRT in Phoenix is very successful so far, but doesn't hit enough areas yet. The metro there is HUGE geographically, and they also have the heat issue to deal with.

L.A. is making great strides, and is the place I'm most excited about. I go there often, and some of my best friends live there. There has been a total sea-change in attitude there over the past several years regarding transit - but the area is so huge, populated and multi-nodal it will always have bad traffic. If only they had never ripped out the Red Cars.
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Old Posted Jun 7, 2014, 5:48 AM
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I wouldn't say that America has an urban renaissance going on so much that the cities that went almost abandoned for so long are finally seeing a resemblance of life again. Its like going from life support to being able to breathe on your own, not exactly a story of success but at least positive movement.

I'm no political conservative, but I've mentioned this several times now in multiple topics: taxes are prohibitive in these rust belt cities. I don't place the blame on politics, because few people realize a lot of these heavily taxed suburbs of northern cities are quite Republican in nature, and they want the special school districts that aren't consolidated with other local communities, which in turn fuels higher taxes. Conservatives tend to be big on these types of environments, despite national rhetoric of lower taxes and less government.

I don't think its winter snow that these cities have a harder time with as Kotkin indicates (the summers are just too nice for that to be the main factor), its the fact that in a place like Buffalo (at least in suburbs like Tonawanda or Amherst) a home worth a mere $150,000 will easily have taxes of $4,500 while in Charlotte, Atlanta, Nashville, or Raleigh you'll pay around $1,000-1,500 in property and education tax depending on the locality. Taxes are literally 25% of what the Rust Belt average is.

This is uncalled for, and again its not a typical liberal-conservative issue. The tax rates in the city of Buffalo - a liberal area - are about half of any of the outlying Republican towns. These smaller towns want separate schools and fire services, and they're paying a premium for it. A progressive governor in New York, Andrew Cuomo, has taken this issue seriously and passed a property tax cap to address it while previous Republican administrations ignored it. It isn't the conservatives who are for lower taxes to make this region competitive. Conservatives elsewhere in the country would find it surprising to realize the lowest property taxes in New York are places like New York City proper and Buffalo proper (property taxes in Buffalo are about 50% of what most of its suburbs have), its high taxes come from suburbs and rural areas with more conservative leadership.

States like Georgia, Tennessee, etc. were controlled by Democrats for decades - over a century in many cases - and have competitive tax rates. Republicans may preach low taxes, but they haven't done anything to make economies and local governments more competitive, which is desperately needed in the Rust Belt to lower these punitive tax rates.

I'm not a conservative, but tax rates are absolutely holding development back in certain regions. And none of the traditional liberal-conservative political stereotypes hold true as to why things are the way they are.

And its the high suburban taxes that are killing Rust Belt cities' growth. Most development still occurs in suburbs, and if the Rust Belt suburbs are going to have taxes 400-500% higher than the sunbelt, they'll never "come back". You'll never have Buffalo and Erie County consolidate into a singular government, or Cleveland and Cuyahoga County, or Pittsburgh and Allegheny county form singular, metropolitan forms of government and cut these duplication of services and lower taxes. In the south, even when governments aren't officially consolidated, they unofficially combine services such as you find in Charlotte-Mecklenburg County. This streamlining of government creates lower taxes. And ironically its typically progressives that advocate it, as unorthodox as it sounds.

Last edited by Dr Nevergold; Jun 7, 2014 at 6:06 AM.
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Old Posted Jun 7, 2014, 5:52 AM
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Check it out hauntedheadnc re: L.A.

http://www.metro.net/about/library/a...-concept-maps/

Now that we have thoroughly derailed a thread about Cleveland, I am proud to point out that Cleveland was the first U.S. city to link their Airport to Downtown by rail.
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Old Posted Jun 7, 2014, 5:59 AM
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Originally Posted by Dr Nevergold View Post
I wouldn't say that America has an urban renaissance going on so much that the cities that went almost abandoned for so long are finally seeing a resemblance of life again. Its like going from life support to being able to breathe on your own, not exactly a story of success but at least positive movement.

I'm no political conservative, but I've mentioned this several times now in multiple topics: taxes are prohibitive in these rust belt cities. I don't place the blame on politics, because few people realize a lot of these heavily taxed suburbs of northern cities are quite Republican in nature, and they want the special school districts that aren't consolidated with other local communities, which in turn fuels higher taxes. Conservatives tend to be big on these types of environments, despite national rhetoric of lower taxes and less government.

I don't think its winter snow that these cities have a harder time with as Kotkin indicates (the summers are just too nice for that to be the main factor), its the fact that in a place like Buffalo (at least in suburbs like Tonawanda or Amherst) a home worth a mere $150,000 will easily have taxes of $4,500 while in Charlotte, Atlanta, Nashville, or Raleigh you'll pay around $1,000-1,500 in property and education tax depending on the locality. Taxes are literally 25% of what the Rust Belt average is.

This is uncalled for, and again its not a typical liberal-conservative issue. The tax rates in the city of Buffalo - a liberal area - are about half of any of the outlying Republican towns. These smaller towns want separate schools and fire services, and they're paying a premium for it. A progressive governor in New York, Andrew Cuomo, has taken this issue seriously and passed a property tax cap to address it while previous Republican administrations ignored it. It isn't the conservatives who are for lower taxes to make this region competitive.

States like Georgia, Tennessee, etc. were controlled by Democrats for decades - over a century in many cases - and have competitive tax rates. Republicans may preach low taxes, but they haven't done anything to make economies and local governments more competitive, which is desperately needed in the Rust Belt to lower these punitive tax rates.

I'm not a conservative, but tax rates are absolutely holding development back in certain regions. And none of the traditional liberal-conservative political stereotypes hold true as to why things are the way they are.
Excellent post, Brandon.

My condo is valued at around 210, and the taxes are $1300 - with full City services. We were recently annexed by Chamblee, but were formally unincorporated DeKalb. Services went up, taxes went up marginally.
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Old Posted Jun 7, 2014, 6:02 AM
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^I didn't get finished editing, you'll have to re-read. LOL
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Old Posted Jun 7, 2014, 6:12 AM
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^I didn't get finished editing, you'll have to re-read. LOL
Just saw it. You hit the proverbial nail on the head.
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Old Posted Jun 7, 2014, 6:16 AM
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Buffalo is interesting because you can see the difference it makes vs Ontario. Canada typically has high consumption taxes (sales taxes are by far and away higher than America, the higher GST is how they fund health and other services), but property taxes in Ontario - the actual mill rate - is about half of what you see in Buffalo. A $300,000 condo in Toronto might fetch $2,000 in taxes (if that), in Buffalo that condo would literally have several times that. I shopped for condos and homes in the two regions enough to know the difference is stark, Toronto has a fraction of the property tax and condos are popping up all over.

An economy cannot grow when its strangled to this level. I just recently lost my job and I opted not to stay in Buffalo partially because of this cost of living quotient. I feel well versed on the topic.
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Old Posted Jun 7, 2014, 6:25 AM
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Buffalo is interesting because you can see the difference it makes vs Ontario. Canada typically has high consumption taxes (sales taxes are by far and away higher than America, the higher GST is how they fund health and other services), but property taxes in Ontario - the actual mill rate - is about half of what you see in Buffalo. A $300,000 condo in Toronto might fetch $2,000 in taxes (if that), in Buffalo that condo would literally have several times that. I shopped for condos and homes in the two regions enough to know the difference is stark, Toronto has a fraction of the property tax and condos are popping up all over.

An economy cannot grow when its strangled to this level. I just recently lost my job and I opted not to stay in Buffalo partially because of this cost of living quotient. I feel well versed on the topic.
Yep, I'm very familiar with the GST! And I have to admit I'm addicted to all of those shows on HGTV from TO. I used to live in Mississauga/Port Credit for a brief time years ago.

And so sorry to hear about the turn of events - I was confused by your Nashville location. I'm glad you're there during exciting times, though.
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Old Posted Jun 7, 2014, 6:32 AM
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Thank you, its still fresh and the move isn't over yet, I'm still in Le Buff for another week until moving is complete. Anyway, the point remains that the Rust Belt needs a remake if its to come back, and I don't yet see that happening. Taxes and consolidation of services is a small portion of the story.

I don't think most people on here who aren't from this region or have lived in multiple regions understand the breadth of the problem. If you own a $250,000 property in suburban Buffalo, the taxes are somewhere between $6,000 to $8,000 per year. Part of why property values here are low is because no one can afford the taxes if value went any higher. In other regions you might have people paying $4,000 in property tax, but the values of the homes are much, much higher. The rate of tax is still lower than this region.

The other issue these cities face is infrastructure and upgrades needed. These cities had infrastructure built for populations about double the current size of people, sometimes more in certain cases. When you have a fraction of the population to fund infrastructure redevelopment, it really does take some federal or state intervention to fund projects to equalize the difference. These cities can't take these tasks on their own, they don't have the tax base to do it. You can't exactly decommission a water system for an entire portion of a city when there are still people and property there. You have to invest and make upgrades regardless. Places like Detroit have water systems in areas where pipes are literally a hundred years old and in dire need of replacement.

Its a very, very complicated situation these cities have.
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