Tacloban, the Philippine city ravaged by Typhoon Haiyan last week, appears on the brink of complete abandonment, with the mayor urging surviving residents to flee. Relief supplies are to be found just outside the city, but a range of physical and human obstacles are making it difficult if not impossible to deliver them.
Will Tacloban recover in the long run? Politics will play a role -- can the government afford to subsidize relocation into the area in the same way the United States did after Hurricane Katrina? Geologic considerations might factor in as well. The Leyte Gulf, after all, looks kind of like an upside-down funnel, and Tacloban's location at the narrow part of the funnel poses the same sort of hydrologic challenges as New York's location at an interior corner of the East Coast. There might be some argument for buying out the owners of what remains and starting over in a less dangerous location. But ultimately, rebuilding is a question of economics. Before the typhoon, it made sense for some 200,000 people to live in Tacloban. Will it make sense now?
For some time, the conventional wisdom among economists was that cities bounced back from disasters. Hiroshima and Nagasaki are two data points often cited in support of this view. The atomic devastation of these Japanese cities was different in some respects, however. The bombs targeted the center of town, leaving the outer ring of the metropolis more or less intact. Sufficient infrastructure remained intact in Hiroshima to allow limited streetcar service to resume just three days after the bomb. There was a fundamental logic in taking a devastated landscape in the middle of a sizable suburban ring and making a city out of it.
Most importantly, Hiroshima and Nagasaki were thriving cities before the war. Demand for residence in those cities, in other words, was strong -- and the rational response to a reduction in the "supply" of those cities was to rebuild.
Port-au-Prince, Haiti, is a more current example of the phenomenon. The city was devastated by the 2010 Earthquake, but given the almost utter lack of economic opportunity elsewhere in Haiti -- Port-au-Prince is home to 28% of Haiti's population but over 90% of the nation's manufacturing jobs -- there was no other place for the residents to go. It is the only part of the country with reliable electric service, and possesses the only modern port and air facilities.
A couple of years ago I made the argument that the same dynamics would not take root in cities experiencing decline before disaster struck, thinking specifically of New Orleans post-Katrina but also of some of the German cities affected by firebombing during World War II. When a city is in decline, a certain segment of the population remains there primarily because the housing becomes cheaper over time. Able-bodied workers might leave a city with no jobs, but a family living on disability or social security would not be bothered by a lack of economic opportunity. As the able-bodied leave the city, the houses remain, and the excess supply puts downward pressure on prices. For renters, this is nothing but good news. For owners, the news is not so good, but the disappearence of home equity makes it more difficult to contemplate affording life elsewhere.
When a disaster comes along and destroys the housing stock, the "excess supply" problem is solved, in a somewhat brutal sense, and downward pressure on prices ceases. This is exactly what happened in New Orleans. No longer a cheap place to live, the city remains about 25% smaller than it was in the 2000 Census. The demographics of the city have shifted predictably as well, skewing towards a more affluent population.
Which of these possible trajectories best fits Tacloban? Population statistics indicate that the region has experienced steady growth in recent decades. By regional standards it has been economically prosperous, and its waterfront location brings obvious risks but also certain advantages. In the coming weeks the city may well experience a near-total evacuation along the lines of post-Katrina New Orleans. But if history is any guide that is where the similarity will end.
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