So many tiny cities are trying to fix themselves

Cities mature. Just more slowly than people. But American cities have distinct life-style stages.

• The pre-urban exurb fetal stage.
• Development of raw land (suburbanization)
• Birth (Incorporation)
• Growth cycle, with impact fees funding infrastructure. 
• First maturity, when all the farms are gone, and development impact fees stop.
• Advent of commerce, as cities realize they desperately need tax revenue. 
• Mid-life, maintaining roads and balanced budgets
• Over-the hill - streets showing wear and tear, retail starting to vacate.

Then there is an inflection point: collapse to a new low-welfare equilibrium, or spark a second wave of growth and development.Sadly, the Dark Side is easier: keep taxes low, fund local roads through special exactions referenda. 

Property values stay solid, but the mix of land value and structure value making up that valuation changes radically, and all the increase is in the land....

Anyway. At some point, all the cities realize their 'downtowns' they relied on for their commercial tax base are junk, the revenue base has collapsed, and they face a whole storm of new financial needs as the now 30+ year old infrastructure (funded with development impact fees) now needs replacing. 

Wholesale replacement is out of the question--the tax costs would be enormous. So cities delay and defer. Road quality declines, public services decline, property values fall, owners shift to renters, average city incomes fall...the path to slum-hood beckons. 

When I hear of  city in this plight, I ask myself: Are these actual historic towns, with brick downtowns, or are these post-70’s suburbs with depreciated strip-mall downtowns? Are these things for sprawl repair?

In either case, the solution is pretty simple: Build housing, at a density commensurate with land values, meaning a 90/10 mix of apartments to condos. Rising pop. increase local demand for goods and services, causing redevelopment and infill. Cities must facilitate this through up-zoning, form-based codes, reduced parking requirements, and mixed use zoning. 

But the places with brick-downtowns have some physical assets to start with, while the strip-mall places just have undeveloped appreciated land.