Well that is on the list of possible consequences of Capitalism, isn't it?
Cities ARE economic engines, that's why they became cities in the first place. People move to them looking for jobs, leaving behind the moribund economies of southern states.
Sometimes trends change - Eerie Canal supplanted by rail and trucking, lower costs, tax incentives & subsidies move manufacturing from NYC, Chicago, Detroit to the South. People get stuck. It isn't as cheap as it used to be to move from place to place.
Places like NYC have economies diversified enough to adapt. Real estate goes up. Rents climb. People become homeless as they're gentrified out of slums now turned Hipster havens. Same with SF and LA - housing prices skyrocket, those who can't afford it end up homeless. So the policies you refer to (albeit overly simplistic) are money producing ones.
Conversely, the town of Pig Scrotum, Arkansas doesn't exactly have a pop of 500 and losing because their Republican goverment has instituted policies which has successfully steered their economy in a positive direction. Young folks are leaving middle America in droves for a reason. Becoming homeless there isn't a problem, keeping homes occupied is. The trend in rural areas is depletion, small towns turn to ghost towns. Then they find out moving to ritzy Santa Monica might not get better than a tent on the beach.
During the Great Recession, poorer states would buy their new homeless a one way ticket to LA or NYC. 10s of 1000s. Bloomberg started putting those new arrival back on buses to send them back, the shelters were overwhelmed.
Same Bloomberg facilitated buildings getting rid of tenants and business so they can be torn down and rezoned and built into sparkling towers for gentrifiers, much of this in Brooklyn. There was this open street market (might've been only on Sundays) operating for decades he had shut down because the new arrivals thought it "unsightly" - guess what skin tone were the folks who sold there were.
How's that for policy?
Thanks to PRs from the South Bronx moving there, Allentown PA has gotten a rebirth since decline began in the 70s because buying a house there now is cheaper than paying rent here.
The bottom line is things change. Here, anyways. Other states - the Red States - not so much. They've been stuck in a rut since colonial times. And there ain't a dang thing those running things there can do a thing about it, as exemplified by the fact that they haven't.
