How declining cities can reverse their fortunes - The Globe and Mail
The correlation between lower taxes and high growth rates in some metropolitan areas in the US is spurious at best. While it may be true that metros with the highest population growth had a slightly lower average tax rate of 9.4% (against 10.6% for the lowest population growth metros), one cannot ignore the fact that the high growth metros are located in the US Sunbelt.
It is, therefore, not the lower tax rates, as Cato Institute would have us all believe, but the cheap air conditioning and oversupply of new housing that enabled rapid growth in metros located in the US Sunbelt.
Professor Edward Glaeser of Harvard University in 2007 observed that while the metros located in the Sunbelt have experienced above average increase in housing supply, the price of new housing increased at a slower pace in the Sunbelt than the rest of the US, which is indicative of an oversupplied housing market.
Furthermore, seven out of 10 highest population growth metros, reported in the Cato Institute’s paper, are located in States with the highest foreclosure rates, i.e., Nevada, California, Arizona, Georgia, and Florida.
"Why Are Some Cities Growing While Others Are Shrinking?," Cato Journal, 31, 2 (Spring/Summer 2011), 285-303.