Does San Jose Know the Way to Detroit? Let’s Hope Not

Once a beacon of America’s promise, the city of Detroit is burning out. And if San Jose refuses to innovate in ways Detroit could have, it might face a similar future. To understand how, we must first uncover overlooked similarities between San Jose’s present and Detroit’s past.

Once a small fur trading town, Detroit’s population tripled between 1900 and 1920. By 1950, it was one of America’s most important cities. With 1.8 million residents, Detroit possessed the fourth highest population of any U.S. city. Detroit was the epicenter of one of the most essential sectors of our economy—the auto industry. This sector provided an excellent quality of life to those who flocked to work in it. As Detroit ballooned, businesses and their workers expanded into the seemingly endless suburbs.

Does any of this sound familiar, San Jose?

Flash forward to 2013. Detroit is now in free fall. One of the only major U.S. cities declining in population, half of Motown’s residents have permanently skipped town since 1970. The worst hit this summer when Detroit filed for bankruptcy. The city lacks the funds to pay its debts and the employees to provide adequate city services. When Detroiters call 911, the average police response time is 58 minutes. The national average is 11.

The writing was on the wall for decades. Detroit fell prey to mismanagement and corruption. But it also relied too long on a single sector that failed to innovate in the wake of competition and change. Meanwhile, Detroit grew wider instead of taller. As conditions deteriorated, residents abandoned individual homes, multiple blocks and then entire neighborhoods. When I was there in 2001, I observed this disturbing decline.

While San Jose is many missteps away from Detroit’s predicament, I nonetheless worry about its future.

Here in San Jose, we debate pension costs as the main contributor to San Jose’s precarious situation. But there is an elephant in the room that we have been ignoring: Like Detroit, San Jose’s hesitation to innovate how and where it develops jeopardizes its ability to retain top talent and attract emerging businesses.

Similarities between the two cities are the clues leading to this issue. Today, San Jose is 37 square miles larger than Detroit but shares roughly the same population density. Providing city services over such a wide swath of land is arduous; it contributes to Detroit’s 58-minute response times. A Smart Growth America study concludes that denser cities can save an average of 10 percent on such services. With San Jose’s emerging public safety challenges, ensuring cops travel shorter distances is crucial.

Cities expanding in already developed areas can average a 38 percent savings on infrastructure (such as roads and sewer lines) and receive ten times more tax revenue per acre than new suburban developments. Instead of building on untouched land in our Valley’s outskirts, San Jose must back up its new General Plan by doubling down on greater density in its downtown and urban core.

But is there demand for denser communities? In fact, many millennials like me find compact, walkable neighborhoods incredibly appealing. That is why many are moving to San Francisco. And that preference is intertwined with tech companies such as Yelp and Twitter—companies in theory well-suited for San Jose—also choosing to root themselves in San Francisco.

For San Jose, “The Capital of Silicon Valley,” tech companies should be our bread and butter. We cannot afford to lose them. While San Jose could benefit from a more varied economy, it must diversify its communities’ design to reduce costs and entice the next generation of tech companies and their workers to settle here.

San Jose is a tremendous light of economic innovation in our country. However, it must illuminate the path forward by generating more compact, connected communities. If San Jose fails, it could go the way of Detroit. And that is a power outage none of us wants to see.

Alex Shoor works in local government in San Jose and is a 2013 fellow of the Silicon Valley chapter of the New Leaders Council.

13 Comments

  1. San Jose has already failed.  The city’s finances are unsustainable.  Our city council still does not understand that being the bedroom community for Silicon Valley will never bring the riches they thought would come when they declared San Jose “The Capital of Silicon Valley.”

    • This is the true cause of San Jose’s decline.  Incompetent mayors don’t help, but, decisions matter. For example, the Berryessa neighborhood somehow became saddled by the past three council members who did not think it was their job to bring in developers of parks, kids’ playing fields, shopping malls, or fine dining centers.

      There was an assumption that all of Berryessa’s support should go to help downtown grow, and that got a sharp kick in the groin when Santana Row jumped into the ring.  Nevertheless, industry and commercial projects were put on the shelf in favor of housing which cannot support the services it uses with the taxes it generates.  This has caused a decline in the local school district because a large part of its revenue stream is from property owners.

      Lewis, Fernandes, and Reed deliberately suppressed the growth of Berryessa, and indirectly, but deliberately supported the growth of malls and industry and other high tax enterprises in Milpitas and Santa Clara.  They did more to undermine the tax base for the schools and the city in Berryessa than a flood could have done.

      Well, we now have the bedroom community of San Jose that they wanted, but Milpitas and Santa Clara have our sales tax dollars, and homes do not support the services they need.  Sounds like good planning to me.

  2. Oh Alex! Everyone beats around the bush and no one has the guts to say it. A city is s good as its people. Detroit’s population tilted towards crack smoking, gun slinging, and welfare haven.  The makers can carry the takers for
    so long and then they get tired.

  3. With Mayor Reed and City Manager Figone at the wheel leading a jealous low-information voter base   San Jose will be lucky to “get” to Detroit.  The way these two are driving SJ may go over a cliff first.

    SJ isn’t close to the bottom yet – the exodus from SJPD and other city departments continues…

  4. Great article, our public safety will be at a critical stage by the new year if San Jose doesn’t step up.  This coming shift change patrol staffing was again reduced with districts coming out with smaller team from 5 to 4.  The service to the community will suffer no matter what they try to sell you.  I know of at least 70 officers either testing for another agency or looking in to it.  The mayor and city council will shoot them self in the foot watch and see.

  5. A City Council in bed with the unions year after year, recklessly signing away their future financial solvency with promises of gigantic pension and health benefits. It finally caught up with Detroit. With the continued compliance of the low-information voters it’ll get us too.

    • You can blame benefits/unions/pensions all you want, but nearly any educated manager will tell you that employee costs in a service organization are largest “expense.”

      The real fiscal mismanagement occurred with discretionary spending: Redevelopment, Airport remodel, golf course purchases/development, Hayes Mansion/hotel,  Convention Center remodel/upgrades… and now continues with the pursuit of the A’s.

      Despite the partially real (but mostly imagined, due to amortization) shortfalls from employee benefits, the BILLIONS of dollars never spoken about RD debt are actual, real and 100% the result of politicians.  Stop deflecting the malfeasance of our Elected on the working class.

    • Do you know that the RDA debt dwarfs the pension issue in San Jose.  Let’s discuss and shed some light on the council’s and mayor’s relationships and giveaways with developers.

    • Ahhh Galt… like I was saying.  You can continue to blame the unions even though the facts in San Jose do not support your position.

      RDA debt is over $4billion.  Unions had nothing to do with creation of that debt. That Was Reed and the Council buying property at the top of the market with borrowed money then scheming to give that land to real estate developers.

      You don’t listen now and you didn’t listen then… a few short years ago before the financial crisis hit world wide San Jose’s Retirement system was fully.

      Not bad for what is essentially an investment fund RUN ENTIRELY BY the people with the biggest stake in its success – the union members who someday will depend on that fund for their pensions.

      What did Reed, Constant and other see? What did they convince the STOOOOOOPID voters of? They convinced you and people just like you that the pool of money in that fully funded and profitable pension system was sitting idle and going to waste on a very small number of people who could never possibly use all the money in the fund.

      The first thing they did after they created a little envy in your mind was convince you that you needed to vote to change the City Charter and get a City COuncil member and several “civilians” ( hand picked by council appointment of course) on the Retirement system board of directors. That plan was intended to add enough people to the board that HAD NO STAKE IN THE FUND’s PERFORMANCE that there would be a majority voting block to override the stakeholders position.

      the Mayor thought by establishing a majority allied with his wishes he could tap into that pool of pension money help COVER GENERAL FUND DEFECITS.

      See a pattern with this Mayor and COuncil?  need to unload old campaign war chests? Ask the COuncil to change campaign donation laws.  NEed money to balance the general fund? change the charter with the intention of tapping the pensions…  When the markets crash and the pension fund becomes underfunded blame the pension fund for the City’s financial crisis and divert the public’s attention away from the real cause ($4BILLION in RDA Debt) and enact pension reform…

      How is that pension reform working out? not so well the debt is still there, the number of employees paying into it AT A HIGHER RATE has decreased due to retirements, layoffs, employees leaving this City for jobs elsewhere and the INABILITY on the City’s part to hire enough replacements. 

      Any word from the IRS on approving that Second Tier opt-in system that Reed has you convinced is in place???? There are some retirement systems who have been waiting 23 years for that same opt-in provision to be approved – it simply doesn’t exist and likely NEVER WILL grow a pair and ask Reed why he lied to you!

      …and guess what? The RDA debt is several hundred times larger it is still there and growing and there is NO PLAN TO ADDRESS IT!!!

      so complain all you want about the unions and the greed you suppose exists and continue to allow yourself to be fooled by Reed and Company.

    • Pension Obligations make up less than 5% of San Jose’s Budget. Pension reform is needed , but make no mistake , Pensions are NOT bringing this city to its Knees. That would be a Mayor , who lies ,cheats, and has his own agenda. One of witch is NOT Public Safety .
          No City in California is like Detroit . Detroit has 1 maybe 2 industries , that it solely depends on . most cities in California have more than 3or 4 industries . The Problem in San Jose is the absolute Mismanagement of of this city . Just look at how many dept. heads are needed right now .Just look at how long some of those positions have been vacant. Just look at how long it will take to fill those positions.The WeePee CeePee , has had to contract for outside services. Paying more than city employees would have received.
          This City is NOT Broke by any means , its just to busy hiding and funneling funds to pet projects .

  6. The crime, lack of jobs, and poor schools drove people out of Detroit. Detroit is not the only large midwestern city with a job loss as a major industry left the area.  The result is that people of means leave the area and flee to the suburbs.  It’s a pattern that’s been repeated in many cities.

  7. First you wrote:

    Flash forward to 2013. Detroit is now in free fall. One of the only major U.S. cities declining in population, half of Motown’s residents have permanently skipped town since 1970.

    Then you wrote:

    Today, San Jose is 37 square miles larger than Detroit but shares roughly the same population density. Providing city services over such a wide swath of land is arduous; it contributes to Detroit’s 58-minute response times. A Smart Growth America study concludes that denser cities can save an average of 10 percent on such services.

    If Detroit has lost half its population since 1970, you’d have to believe that Detroit’s population density used to be much higher than it is now.  So are you now going to argue that people leaving Detroit is the reason that things got bad there?  Most people would argue that things got bad, and that caused people to leave.  If that’s the case, things didn’t get bad, because the population density was too low.