What Is Economic Blight?

Economic blight is the visible and physical decline of a property, neighborhood, or city due to a combination of economic stagnation, population decline with residents and businesses leaving the area, secular decline in real incomes, and the cost of maintaining the quality of older structures. These factors tend to feed on each other, with each contributing to an increase in the occurrence of the others.

Key Takeaways

  • Economic blight is a process of long-term decline in economic performance in a geographic region, accompanied by significant decay of large sunk-cost investments and increase in negative social phenomena. 
  • Economic development tends to occur as a process of agglomeration of economic activity in cities and regions around core industries. When technological change or long-term trends turn against the core industry, economic blight can set in.
  • Economic blight is popularly associated with cities in the U.S. Midwest known as the Rust Belt, but it occurs in other urban and rural areas as well.

Understanding Economic Blight

Economic blight is a process of deindustrialization and depopulation, usually associated with structural change in the economy. Historically many cities and regions have grown and developed as an initial smokestack industry, major commercial hub, or other core industry attracted immigration and the agglomeration of service sector and commercial activity. When, through technological development or changing trade patterns for example, the original business or industry that provided the basis for development in an area goes into long-term secular decline, then the development process can regress. However, even though the jobs and the people in an area may leave, the heavy industrial capital, infrastructure, and cultural remains are left behind. This is the essence of economic blight. Population, incomes, and employment fall amidst large, underutilized, and decaying sunk-cost investments such as empty factories, crumbling highways, or abandoned mines. People associate the term "economic blight" with buildings that are in disrepair and other problems related to residential flight, such as property abandonment, graffiti, violent crime, drug trafficking, and the presence of street gangs.

Economic blight affects many metropolitan areas in the U.S.. For example, Rust Belt cities, such as Baltimore, Cleveland, Detroit, and Flint (Michigan), have all suffered significant population declines over the decades, which has led to problems with economic blight in a number of their neighborhoods. Cleveland was the nation's fifth-largest city in 1920, behind New York, Chicago, Philadelphia, and Detroit, and a major hub of U.S. manufacturing. A significant decline in manufacturing jobs over many years largely contributed to Cleveland becoming the 20th-largest city by 1980, then to the 45th-largest city by 2010. By 2016, median home values in Cleveland were among the lowest of all major U.S. cities, and its poverty rate among the highest. The city has battled for many years with economic blight.

Perhaps not surprisingly, many cities with economic blight, including Detroit, Flint, Baltimore, Toledo, and Youngstown (Ohio), also are among those with the highest percentage of abandoned homes.

Not all economic blight is in urban areas, however. It also occurs with the decline of small towns where large employers have left for good. For example, economic blight is an issue in many towns in West Virginia and Kentucky, where mining employment has decreased substantially over the decades.

Successes in Fighting Economic Blight

A handful of Rust Belt cities have done a better job staving off economic blight than others. Most notably, Pittsburgh, which also has suffered from population decline over the decades and has some blighted neighborhoods, has managed to diversify away from steel and attract jobs in the healthcare and technology industries. More recently, Pittsburgh also has become a major hub for robotics and artificial intelligence. This is partly due to the number of universities in and around Pittsburgh, including Carnegie Mellon University, the University of Pittsburgh, and Duquesne University.

Detroit, while not yet a success story, also has made significant strides in cleaning up its economic blight, spending hundreds of millions to tear down abandoned homes within its borders. Detroit has arguably adopted the most aggressive programs to fight economic blight anywhere in the U.S.