I’m thrilled to see that Detroit has made a comeback in recent years, but the relocation of the automobile industry took a serious toll on the city and its people. Yet the decline in Detroit’s population, and commensurate decline in property values, did not pose a financial stability risk to the United States.
What makes the potential future risk of a population decline in coastal cities different? Second, and a more compelling concern, is the notion that property value declines could occur more-or-less instantaneously and on a large scale when, say, property insurers leave a region en masse.