Consolidation is coming. Call 'em what you will—edge cities, exurbs, satellite cities—these shelters of those who could flee urban centers are hitting the skids nowadays. As the financial crisis expands, major cities can also expand by taking over other urbanized areas, both incorporated or unincorporated.

As the Wall Street Journal recently reported, there is a raging battle between cities and their home states over funds for everything from schools to redevelopment as states try to plug budget gaps. This will lead to a reorganization of power between cities and states.

Another thing is certain. We are experiencing a profound crisis in financialization. How exactly cities will lift themselves up with little help from what now appears to be a hollowed-out, corrupt lending system is a mystery. Help will have to come from state and federal sources with the aid of re-regulated banks (fortunately with more strings attached than in recent years). How it gets distributed will create new geographies of American cities. Again, this is a question of power and design as it falls on state governments to make tough decisions about redrawing internal borders and wielding a combination of carrot-and-stick measures. The plus side could be better governance, sound policy, redistributed property taxation, and better land-use decisions. Urban designers can step in here to provide ideas for well-designed transport connections, new infrastructures, ecological corridors and regional open space conservation AND creation, to name just a few items. In fact, it's a time to rethink the city itself.

One of the more arcane aspects of so-called sprawl is that it usually does not expand the official boundaries of an established city (with some exceptions like San Jose). Technically, America's older cities have not expanded since the 1930s*. But sprawling urban regions have (both around old cities and not). Cities used to incorporate land feverishly in the nineteenth century. Not anymore. Will that change?

As I write this little prediction, two more San Francisco Bay Area cities are leaning towards following the example of Vallejo into bankruptcy (read more). In the Wall Street Journal a policy analyst is quoted as proposing that: "distressed cities could turn to county governments to take over some services. But with many counties also hurting financially, that option is limited. Another option: Cities could dissolve themselves, she says. But dissolution also involves county officials taking over city services and orchestrating a recovery, and lenders would still be left holding the bag for debts." (That's exactly what the Sacramento Bee is editorializing for in the case of Isleton).

But what happens after dissolution? Will counties with little experience managing urban problems actually want these cases? Consolidating with other areas to incorporate as new cities or joining an established one can help spread the tax burden over coming years and pool brain resources. Of course, that's exactly what a lot of these "cities" have repeatedly rebelled against (as what happened in California with Prop 13). But do they really have a choice, given the fiscal problems that counties themselves are having?

Foreclosing on these entities can mean a lot of things and there is some debate on how widespread the 'bankrupt municipality' phenomenon will be. Even without declaring bankruptcy, in tough financial times joining forces might be the only way of persuading skittish lenders to float municipal bonds, and states actually have the power to force annexation.

Some might see no chance of this happening any time soon. Of course, my prediction is optimistic, taking what looks to me like a given and encouraging the seizing of small opportunities. I am assuming that there is still some hope for America's cities (and social justice); that even in the current climate we can still hold onto an idea like 'the city. But let's not dilude ourselves. There are more unknowns than knowns at this turning point. I'm still assuming that American urban capitalism will chug along, and if that worries you (as it does me), then we better figure out ways of being utopian realists. Lest we forget, New York annexed the five boroughs only a few years after the panic of 1893, a utopian proposition like no other.