The Brookings Institution Metropolitan Policy Program. "Restoring Prosperity: The State Role in ...

84 Pages·2007·2.21 MB·English

The State Role in Revitalizing America’s Older Industrial Cities
The Brookings Institution Metropolitan Policy Program

Restoring Prosperity
The State Role in Revitalizing America’s Older Industrial Cities
THE BROOKINGS INSTITUTION METROPOLITAN POLICY PROGRAM © 2007
Acknowledgements
The Brookings Institution Metropolitan Policy Program is grateful Johnson (William Penn Foundation); John Weiler (F.B. Heron
to the many people who have supported this project with their Foundation); and Hal Wolman (GWIPP). Jeremy Nowak (The
expertise, insight, and resources. Reinvestment Fund), Diane Bell-McKoy (Associated Black
First and foremost, we would like to thank the Surdna Charities), and Sharmain Matlock-Turner (Greater Philadelphia
Foundation for their generous support of this effort. We particu- Urban Affairs Coalition) also provided very helpful advice early on
larly want to acknowledge the tireless contributions of Kim in the development of the project and report.
Burnett, whose knowledge and enthusiasm have helped this proj- We also want to thank Professor Anne Power and her team at
ect grow from a single report to a major organizing and research the London School of Economics (LSE) for stimulating our think-
effort. We also want to express our gratitude to the F.B. Heron ing about the revival of industrial cities. This project has benefited
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N Foundation and the William Penn Foundation for providing addi- tremendously from the trans-Atlantic exchange of innovations
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GE tional funding for this report, as well as the Fannie Mae and ideas our partnership has fostered. We also thank the HM
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LE Foundation, the Ford Foundation, the George Gund Foundation, Treasury and the Office of the Deputy Prime Minister for support-
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NO the Heinz Endowments, the John D. and Catherine T. MacArthur ing our participation in the European City Reformers Group
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AC Foundation, the Charles Stewart Mott Foundation, and the meeting at the LSE in September 2006.
Rockefeller Foundation for their general support of our work. Finally, we want to note that the Metro Program is lucky to be
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The Metro Program also wishes to show its appreciation to part of a fabulous team of people and organizations that are work-
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A Hal Wolman, Kimberly Furdell, Nancy Augustine, and Pamela ing to build an initiative focused on the revitalization of America’s
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RO Blumenthal of The George Washington Institute of Public Policy older industrial cities. This includes, at the national level, Don
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Y (GWIPP), and Ned Hill of Cleveland State University, for develop- Chen and Smart Growth America; Radhika Fox and PolicyLink;
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O ing the methodology used to identify the 65 older industrial cities Matt Kane and the Northeast-Midwest Institute; Alan Mallach and
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A discussed in the report, as well as for collecting and analyzing the National Housing Institute; Ben Starrett, Ann Fowler Wallace,
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OLI much of the data cited throughout. Their work is a vital part of and the Funders' Network for Smart Growth and Livable
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R this project. We thank, too, David Eichenthal (Community Communities; and Paul Brophy (Brophy and Reilly, LLC), as well
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M Research Council); Julie Wagner (Brookings Institution as, at the state level, Lavea Brachman, Gene Krebs, and Greater
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TIO Nonresident Senior Fellow); Jillian Barrick Jones, Rachel Barkley, Ohio; George Hawkins and New Jersey Future; Diane Sterner and
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TIT and Scott Quehl (PFM); and Travis James and Jon Hockenyos the Housing and Community Development Network of New Jersey;
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N (TXP) for their valuable contributions. and Janet Milkman, Todd Vonderheid, Julie Lalo, and Renew PA.
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NG Numerous other people offered important guidance and advice These groups, and a growing number of other organizations, have
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O that helped improve the report as it progressed. First, we are been essential in building support within target states for the
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B grateful to the many people who attended multi-day meetings in agenda presented here, and will be key to the project’s success in
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T Washington, D.C. and Philadelphia to discuss the draft report, the years to come.
including the nonprofit, foundation, government, and business
leaders and practitioners from older industrial cities who shared
About the Author
their wisdom and experience from working in these communities.
Their input was critical to the development of the final product, Jennifer S. Vey, a senior research associate with the Brookings
particularly the policy recommendations. We also want to single Institution Metropolitan Policy Program, is the principal author of
out those who provided written comments on the draft, including this report. Alec Friedhoff, David Warren, and intern Albena
Paul Brophy (Brophy and Reilly, LLC); Cris Doby (C.S. Mott Assenova provided invaluable research assistance to the project.
Foundation); William Ginsberg (Community Foundation of Greater Alan Berube, David Jackson, and Mark Muro each offered impor-
New Haven); John Hanger (PennFuture); Eric Hoddersen tant suggestions and contributions throughout the final stages of
(Neighborhood Progress, Inc.); Paul Levy (Center City District of the report, and Matthew Fellowes, Chris Leinberger, Robert
Philadelphia); Alan Mallach (National Housing Institute); Janet Puentes, and Howard Wial provided helpful advice along the way.
Milkman (10,000 Friends of Pennsylvania); Joseph Schilling Bruce Katz, in particular, was a critical partner in the development
(Virginia Tech); Gerry Wang, Shawn McCaney, and Andrew of this project and the ideas discussed in the report. ■
Contents
Executive Summary
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I.Introduction
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II.Older Industrial Cities in the U.S.
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III.The Origins and Challenges TE
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of Older Industrial Cities
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IV.Seizing the Moment 34 AL
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V.A State Agenda for Revitalizing America’s ER I
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Older Industrial Cities 44 A’S
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VI.Organizing for Success 64 LIZI
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VII.Conclusion E I
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Appendix 69 Y:TH
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Endnotes 77 G P
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Executive Summar y
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he evidence is clear. On the whole,America’s central cities are
coming back. Employment is up, populations are growing, and
many urban real estate markets are hotter than ever, with
increasing numbers of young people, empty-nesters, and others
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M choosing city life over the suburbs.
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E Unfortunately, not all cities are fully participating of leaders, where great architecture and parks
4 in this renaissance. An examination of the perform- became public goods, and where glistening down-
M ance of 302 U.S. cities on eight indicators of eco- towns grew up within blocks of walkable, tree-lined
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G nomic health and residential well-being reveals that neighborhoods where the middle-class swelled and
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Y P 65 are lagging behind their peers. Most of these thrived. They were, in short, physical testaments to
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OLI cities—and their larger regions—are older industrial the innovation and spirit that shaped the nation and
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N communities that are still struggling to make a suc- its citizens.
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OLI cessful transition from an economy based on routine And so they can be again. This report provides a
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R manufacturing to one based on more knowledge- framework for understanding how to restore prosper-
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N M oriented activities. Some others are simply dominated ity in America’s struggling cities, particularly those in
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TI by the low-wage employment sectors that today char- the Northeast and Midwest. Targeted at state and
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S I comes are largely the same: While many of these Restoring Prosperity: The State Role in
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KIN cities have strong pockets of real estate appreciation Revitalizing America’s Older Industrial Cities
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O and revitalization, on the whole they remain beset by describes the challenges facing these communities,
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HE slow (or no) employment and business growth, low the unprecedented opportunity that exists to leverage
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incomes, high unemployment, diminishing tax bases, their many assets, and a policy agenda to advance
and concentrated poverty—remnants of five decades their renewal.
of globalization and technological change, and the The report underscores three central messages:
dramatic shift of the country’s population away from
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the urban core. 1 Given their assets,the moment is ripe for the
These cities weren’t always in such a tenuous posi- revival of older industrial urban economies.Older
tion. To the contrary, they were once the economic, industrial cities possess a unique set of characteris-
political, and cultural hubs of their respective tics and resources that, if fully leveraged, could be
regions, and the engines of the nation’s economic converted into vital competitive assets. These include
growth. They were vibrant communities where new distinctive physical features—including waterfronts,
ideas and industries were conceived and cultivated, walkable urban grids, public transit, and historic
where world-class universities educated generations architecture; important economic attributes—such as
dense employment centers,
universities and medical
facilities (often referred to as
“eds and meds”), and, for
some cities, proximity to
more economically robust
metropolitan areas; and rich
social and cultural ameni-
ties—like public art, theater,
sports, and museums.
Moreover, older industrial
cities are still important cen-
ters of regional identity,
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inspiring a sense of pride and place, which, while needed to thrive. It has helped spark a resurgence AR
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often abstract, can be the first seed from which to in many downtowns and inner-city neighborhoods, U
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nurture the momentum for change. even in cities that continue to struggle with broad V
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After decades of painful economic restructuring, economic malaise. And it demonstrates the potential C
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the time is now for these cities to seize upon new for all cities to reverse the vicious cycle of decline of E
trends and attitudes that have begun to revalue their the past several decades and realize a brighter eco- 5
special qualities. Major demographic shifts—robust nomic future. S
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immigration, an aging population, and changing fam- CI
ily structures—are altering the size, makeup, and ●2 States have an essential role to play in the RIAL
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locational choices of the nation’s households, to the revitalization of older industrial cities,but they U
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benefit of the cities that offer the opportunities and need a new urban agenda for change.The revital- R I
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amenities these groups seek. Economic trends—glob- ization of older industrial cities necessarily starts with L
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alization, the demand for educated workers, the local leaders, who must develop and articulate their A’
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increasing role of universities—are providing cities own vision for success, and the means by which to ERI
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with an unprecedented chance to capitalize upon realize it. But they can’t go it alone. In order for G
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their economic advantages and regain their competi- cities to reach their true economic potential, their LIZI
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tive edge. And forward-thinking political leaders and states must engage—on multiple fronts. States estab- VIT
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constituencies—businesses, local and state elected lish the rules under which local governments must N
officials, major foundations, and key environmental operate, deciding the form of taxes and fees that LE I
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and community organizations—are speaking more municipalities can impose on residents and busi- E
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eloquently and more often about market-based urban nesses, as well as the structure of local governance. S
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development, reflecting these groups’growing aware- States help design the physical skeleton of metropoli- T
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ness of the nexus between city revitalization and tan areas, by helping determine how and where major RI
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competitive, sustainable metropolitan growth. capital and infrastructure projects get built. States OS
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The impact of these forces is already apparent. The help shape the quality of regional economic growth, G
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1990s brought a sea change in how urban areas are through their substantial investments in K–12 educa- ORI
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viewed—as places in which to invest, conduct busi- tion, higher education, and economic development. RE
ness, live, and visit. This has resulted in the turn- Finally, states create the opportunity structure for
around of many cities—from Chicago to low- and middle-income residents, by administering
Chattanooga—such that they are once again innova- myriad federal- and state-funded social programs that
tive, competitive, high-quality communities where impact families’ability to improve their incomes and
their residents have the choices and opportunities build wealth.
All told, cities are in large part creatures of
states, therefore state actions—and inactions—
have an enormous effect on their overall well-
being. Unfortunately, over the past half century
state policies and practices have generally not
been favorable to urban areas. At best, these com-
munities have been treated with benign neglect,
with state programs and investments focused pre-
dominately on managing urban decline, as opposed to and support expanded transit links and cross-
stimulating economic recovery. At worst, state poli- regional cooperation to enhance the economic
cies and investments have actually worked against connectivity between metropolitan areas.
cities, facilitating the migration of people and jobs •Transform the Physical Landscape. Third,
(and the tax base they provide) to the metropolitan states need to recognize and leverage the physical
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AR fringe, while reinforcing the deterioration of the core. assets of cities that are uniquely aligned with the
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U Ultimately, states have the potential to help restore preferences of the changing economy, and then
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VE prosperity in the nation’s older industrial cities—if target their investments and amend outmoded
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C they make revitalizing urban economies the central policies so as to help spur urban redevelopment.
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E element of urban policy. This requires that states States should focus their resources on upgrading
6 focus their investments, overhaul outdated and coun- crumbling infrastructure in cities and older areas;
M terproductive policies, and experiment with innova- provide support for major projects—such as
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N “urban agenda” that cuts across what are typically policies that encourage, rather than inhibit, the
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OLI separate and siloed policy areas. Such an agenda management and marketability of vacant and
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R should have five primary objectives: underutilized urban properties.
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N M •Fix the Basics. First and foremost, states need to •Grow the Middle Class. Fourth, states need to
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TI ensure that older industrial cities are safe, fiscally improve the economic condition of low-income
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TI healthy communities where children are provided older industrial city residents. This requires that
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S I the same opportunities as their suburban counter- states invest in state-of-the-art vocational training
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KIN parts. This means implementing policies and pro- systems that give residents the skills they need to
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HE reduce crime; improve neighborhood schools and the work benefits they deserve to make work pay;
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the instruction that takes place within them; and and help low-income families to build wealth and
create a competitive cost climate for families and assets through programs and legislation that
businesses. reduce the costs of being poor.
•Build on Economic Strengths. Second, states •Create Neighborhoods of Choice. Finally, states
need to do their part to help older industrial cities need to ensure that cities have strong, healthy
understand and cultivate their unique economic neighborhoods that are attractive to families with
attributes so as to foster a “high road” economy. a range of incomes. This requires that state hous-
To this end, states should help cities reinvigorate ing subsidies be flexible enough to be used to
their downtowns; invest in industries—eds and build a mix of unit types at varying prices through-
meds, culture and entertainment, advanced man- out metropolitan areas; that they appropriate
ufacturing, small businesses, and others—that resources to help localities leverage the market
play to cities’and metropolitan areas’strengths; potential of under-served urban neighborhoods;
and that they enact historic preservation, building on, state budgets—evidence, to be sure, of money
code reform, and other programs that help main- well spent.
tain and stabilize homes and communities.
Moving a real reform agenda for older industrial
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3 The overall benefits of city revitalization—for cities will naturally be an organic process that will
families,for suburbs,for the environment,and demand the patience, flexibility, and commitment of
ultimately for states—are potentially enormous. many and diverse actors working within and across
Not only do states have the power to positively affect political boundaries. Most importantly, it demands
urban economies, but they also have a strong ration- that cities, regions, and states organize themselves
ale to do so. With over 16 million people and nearly for success:
8.6 million jobs, older industrial cities remain a •At the local level, city leaders, with support from
vital—if undervalued—part of our economy. These their states, must make the competent, clean,
cities contain billions of dollars of sunk and ongoing transparent, and technologically savvy administra-
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state investments in urban infrastructure such as tion of government operations and services their AR
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roads, transit, sewer and water systems, and public highest priority, with the goal of creating a U
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facilities. State funding for urban school systems, healthy and receptive climate for business growth VE
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community colleges and public universities constitute and retention. At the same time, they must also C
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a large and growing portion of state budgets. And work to build strong coalitions of innovative E
states invest substantially—year in, year out—in the thinkers, actors, and stakeholders to develop and 7
low- and moderate-income families who live in cities, implement a competitive, long-term strategy for S
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through a myriad of social programs. Yet most state revitalization. CI
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governments have paid little attention as to how •At the metropolitan level, cities and suburbs need RI
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much, and to what end, they are spending on cities to work together to bolster opportunities in, and U
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and their residents, and how they could be getting the marketability of, their regions as a whole. R I
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more bang for their buck. States should promote such collaboration by pro- L
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The above agenda offers a new approach to state viding resources to first-suburb coalitions, A’
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urban policy that, in the end, will substantially regional workforce alliances, and metropolitan ERI
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increase the return on state investments, in manifold planning organizations working across local G
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ways. Restoring prosperity in older industrial cities boundary lines, and by enabling the consolidation LIZI
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will lead to a reduction in unemployment and of governmental functions that are clearly VIT
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poverty, a rise in incomes and wealth, and an regional in scope. N
improved quality of life for urban families. Restoring •At the state level, urban leaders must band LE I
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prosperity in older industrial cities will increase the together across cities and regions to advance a E
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jobs, amenities, and housing choices available to state reform agenda like the one presented here. S
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suburban residents, enhance the regional market for State leaders, for their part, need not only to T
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business location, raise both urban and suburban engage in specific policy reforms, but also to look RI
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property values, and improve the overall competitive- for ways to reorganize their programmatic initia- OS
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ness of metropolitan areas. And restoring prosperity tives and agencies so they can be more effective G
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in older industrial cities will increase their attractive- for the families and communities they are ORI
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ness as places in which to live and work, leading to designed to serve. RE
a more efficient use of land, a decrease in energy For the first time in many decades, there is reason
consumption, a reduction in harmful emissions, and to be truly optimistic about the future of America’s
more sustainable regional growth. Ultimately, this all older industrial cities. Advancing beyond hope, how-
adds up to stronger, healthier, more productive cities ever, requires a vision of the possible—and the will to
and regions that are a boon to, rather than a drain achieve it. ■
I. Introduction
W
alk around Baltimore, Maryland and you are likely to
see the black and yellow “I love city life” bumper
sticker pasted on cars and inside store windows. In a
Rust Belt city in a largely suburban nation, this mes-
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I In four words, it sums up why many city dwellers ization now being enjoyed by so many other urban
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have chosen a lifestyle that, for over a half century, areas around the nation.
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Americans have broadly disavowed. While the slogan But as the bumper sticker suggests, these cities are
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P less traveled. It pays tribute to the undervalued—part of the economy,
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ET And in some small way, it might Ohio and Pennsylvania. They also
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ON even portend a shift in how we as a have a range of other physical,
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NS This report is about Baltimore. It’s also about aged, can serve as a platform for their renewal. In
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G Buffalo and Bridgeport, Scranton and Saginaw, fact, major demographic and economic trends are
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O Providence and Pittsburgh, and 58 other “older presenting these cities with their best chance for a
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B industrial cities” that share a similar set of economic comeback in decades, with changing household
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T challenges. Typically labeled as “distressed,” “declin- structures, globalization, and technological advances
ing,” or “weak,” for the past several decades the per- causing a revaluation of the density and diversity
vasive image of these cities has been one of empty that sets urban areas apart from newer suburban
downtowns, deteriorating neighborhoods, and strug- communities.
gling families. Still grappling to overcome the painful Older industrial cities are already experiencing
legacy of severe industrial decline some of the benefits of these changes: Many of
and population loss—forces that their downtowns are seeing a new influx of private
have had a particularly severe investment, as are some of their neighborhoods,
impact on much of the with new residents, new buildings, and new firms
Northeast and Midwest—these providing new life to city streets, and new revenues
cities simply haven’t seen the for city bank accounts. But in the face of wide-
widespread economic revital- spread economic malaise, these pockets of recovery