This isn't so far fetched. Much of the world lives in overpopulated dystopian slums. Kuala Lumpur is covered in walls, spikes and barbed wire. Rio de Janeiro walls off their favelas: https://assets.rbl.ms/14235733/980x.jpg

The question with many cities is the same - is it worth saving? A lot of any city's downfall is often the fault of its older residents. Why do the poor stay? Why do the rich not focus on changing it? Why do communities fail to fix it together?

The obvious answer seems to be moving to somewhere nearby that's cheaper and roomier. But people seem very resistant to this for some reason.