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The Future of National Urban Policy
By Marshall Kaplan, Franklin James
Duke University PressCopyright © 1990 Duke University Press
All rights reserved.
City Need and Distress in the United States: 1970 to the Mid-1980s
Many American cities are suffering from serious economic decline and from the loss of middle-class and affluent families. In some cities the severity of such problems exceeds the capacity of either people or local institutions—business, government, or nonprofit organizations—to adapt to without experiencing significant hardship. In jargon which has come to be widely accepted in the United States, such cities are distressed.
Of course, cities are highly diverse. Some U.S. cities have dynamically developing economies. Some have been able to aggressively expand their municipal boundaries to enclose their suburbs. Some healthy cities, experiencing an economic resurgence, are a cause for hope that today's distressed cities with appropriate support and assistance may recover and regain their competitiveness for people or jobs. However, the healthy places should not distract us from the fact that urban distress has become more widespread and more severe since 1970.
The concept of distress was invented principally to meet national policy demands. The block grant programs created as a result of President Nixon's "New Federalism"—especially General Revenue Sharing and the Community Development Block Grant Program—distributed funds directly to cities and intended to allocate funds in proportion to need, or distress. The demands for need indexes multiplied with the creation of CETA, with the economic stimulus programs of the early Carter years, and with the increased concern with urban economic development programs. Academics and federal agencies responded to those programmatic needs with an efflorescence of indexes, sometimes fine-tuned to reflect particular program objectives and structures.
The continuing relevance of distress needs to be constantly evaluated. The political wisdom of the concept has been marginal at best. Targeting to distressed cities was a principal theme of the Carter urban policy. The articulation of the policy goal in 1978 contributed to an uproarious political debate, the result of which was a standoff that stalled subsequent efforts to target funds to urban distress. The concept has even less political relevance today as a result of the hostility of the Reagan administration to direct federal aid to local governments and its indifference to any special claims distressed areas may have for federal assistance.
It will be argued here that the concept of distress retains its relevance for two basic reasons. First, appropriate conceptual and empirical indicators of distress help chart basic trends in the well-being of cities and their residents. This analytic function offers insight into the priority of urban claims for federal and state resources. Second, distress indicators are useful for evaluating the distributive impacts of federal and state policies, whether they be explicitly urban initiatives or nonurban ones with urban impacts. In this second function, distress is related to the urban impact analyses started during the Carter years.
This chapter aims to provide useful insight into current patterns of urban distress by developing a refined city typology. This typology is used to reexamine urban change during the 1970s and to develop preliminary information on social and demographic trends in various types of cities during the 1980s. The new typology requires only standard census data so that it can be estimated on generally comparable terms in both 1970 and 1980. This permits unique insight into how the severity of city distress changed in individual cities as well as groups of places during the decade. The empirical analysis will focus on big cities with 1980 populations in excess of 250,000. This focus is dictated by resource constraints. However, the patterns of change found among these large cities are not unique. Many smaller communities are undergoing very similar transitions.
It may not commonly be recognized how much distress worsened among America's big cities during the 1970s. The city typology developed here implies that not one big U.S. city was distressed in 1970, yet one in four such cities was distressed, using plausible criteria, by 1980. With respect to trends since 1980 there is a widespread but largely wrong impression that many big distressed cities of the late 1970s have turned the corner and are healing despite the neglect of national urban policy during the Reagan years. The quantitative analysis suggests that urban distress has been lessened in some cities and is worse in others, but there is no strong evidence that city distress has significantly ameliorated on average.
Rationale for the Community Typology
We are focusing on conditions in municipalities—that is, cities. For much of its history the United States left urban problems and urban policies to the states. By and large, states left these problems and policies to local governments: municipalities and, sometimes, counties. For example, until the 1930s local governments had the major responsibility for welfare and education policies designed to help the urban poor. It is only comparatively recently that states and the federal government have assumed much of the local government responsibilities for welfare and school spending.
Similarly, land use controls such as zoning laws and growth management ordinances are major shapers of patterns of urban development, population mobility, and neighborhood change in urban areas. While the legal power to enact such laws lies squarely within the states, states (with the exception of Hawaii) have delegated this responsibility to municipalities and counties.
This heavy reliance on municipal and county governments has made the capacity of these governments to solve their problems a critical concern for national urban policy. Municipal limits are powerful shapers of the nature of urban problems. They delimit the availability and quality of public services and the breadth and height of local taxes. As a result, city limits warp the location decisions of both people and employers. In a nutshell, frequently arbitrary and obsolete municipal boundaries are more important for some types of urban policy considerations than are more economically meaningful metropolitan limits or socially meaningful neighborhood areas.
Very many indexes of city "distress," "hardship," "need," and "stress" have been developed during the past decade. This diversity reflects the fact that distress has several dimensions. Peggy Cuciti has argued, for example, that urban distress results from a confluence of socioeconomic hardship among city residents, fiscal inadequacy of public sector institutions, and city growth or decline in economic and/or demographic terms.
These conceptually distinct dimensions of distress are linked through powerful cause-and-effect relationships, however. Great concentrations of people disadvantaged by poverty or structural unemployment can impair local public institutions and in extreme cases can render them incapable of ameliorating people's problems. High taxes, poor services, and concentrations of disadvantaged population can undercut business investment and job creation, thus leading to economic decline. When this occurs, both fiscal and socioeconomic distress are exacerbated. Distress can also obviate the adjustment of individuals to economic opportunities and can encourage destructive adjustments.
The urban typology developed here has two dimensions: resident need, a function of poverty rates, unemployment, and per capita income growth; and population change during the previous decade.
As its name implies, resident need measures the economic resources and status of people in cities. Resident need is similar in concept to Cuciti's "socioeconomic hardship." Resident need is clearly relevant for targeting federal or state resources to cities. Cities with high resident need are appropriate targets for programs, such as employment and job-training assistance, delivering aid directly to disadvantaged people and for programs, such as community and economic development assistance, seeking to help such people through improving the environment in which they live. Resident need also reflects the fiscal capacity of municipal governments because income, sales, and property tax bases are in part a function of the level and distribution of income among city residents.
Population change is inherently a more ambiguous indicator and is more closely related to the problems of places than of people. Population loss can exacerbate many social and economic problems of cities. Out-migrants from cities tend to be of above-average socioeconomic status. The loss of such people reduces both the purchasing power of city residents and the fiscal capacity of cities. Because many costs of running a city are fixed and not readily reduced in the face of falling demands or needs (such as infrastructure reinvestment costs), population loss can increase the costs of services to people and businesses remaining in the city.
At the same time population loss is frequently an element of the adaptation of older, densely built-up cities to contemporary life-styles and technologies. Population and housing loss can permit more spacious conditions for people and businesses remaining in the city.
Because of its ambiguous relationship to the needs of people, city growth and decline are introduced as a second dimension of the typology, independent of resident need. It is to be expected, however, that cities are most distressed when resident need is high and population loss is rapid.
The community typology helps highlight communities which are successfully adapting—that is, declining cities in which resident need is relatively low. The typology also helps identify declining cities where inadequate adaptation is producing severe distress—that is, declining cities with high needs. Differences among these cities may provide useful clues for future policy.
Measuring Resident Need
Resident need combines several indicators to measure the economic well-being of persons in cities: their access to jobs and employment; the adequacy of their incomes to afford decent (above poverty) standards of living; and the pace of improvement in their average standard of living.
In empirical terms resident need is a composite index of three specific economic indicators: poverty rates, changes in real per capita income, and unemployment rates. Poverty rates are among the best and most widely accepted indicators of economic deprivation and are heavily weighted (by 40 percent) in calculating resident need. Change in per capita income is a good indicator of the rate of improvement or decline in the average economic status of residents in a city and was weighted equally with poverty (40 percent). Unfortunately, unemployment rates are not a highly reliable indicator of job shortages or of structural unemployment. Indeed, rapid job growth, immigration, and frictional movement of people among jobs can result in high unemployment in economically healthy communities, whereas high unemployment rates in distressed cities generally mean frequently long-term or structural unemployment among people in need of work. Because of the ambiguities inherent in the unemployment rate indicator, it was weighted lower than poverty or income change: 20 percent.
To measure trends in resident need over time the same general indicators were used to compute the resident-need index for 1970 and 1980. In the 1980 index poverty and unemployment rates are those reported in the 1980 census. Change in per capita income is measured between 1969 and 1979. In the 1970 resident-need index poverty and unemployment rates were those reported in the 1970 census for the cities; changes in real per capita income were measured between 1959 and 1969. To provide a context within which to interpret the findings, the index has been normalized so that a value of 100 indicates resident need in the nation as a whole. This approach facilitates analysis of how the economic wellbeing of residents of these cities has shifted relative to the economic wellbeing of the U.S. population as a whole.
Neither poverty rates nor measures of per capita income have been corrected for geographic differences in life-styles or in costs of living. On average, the costs of living are higher in big cities than in smaller communities or in rural areas. Thus, a given rate of poverty indicates generally greater actual deprivation in a big city than in a small community. A given level of per capita income has on average greater purchasing power outside big cities than inside them. In the 1970 and 1980 analysis big cities where the index took a value of 100 or less were classified as "relatively low" need. Cities where the index took a value of over 130 were classified as having "relatively high" need. Other cities were classified as having "moderate need."
Measuring City Growth and Decline
The community typology uses population change rather than employment or economic change to divide cities into growing, declining, or stable places. Population change is useful for this purpose because it is highly correlated with other potential indicators (the correlation coefficient between job change and population change between 1970 and 1980 in the seventy-four cities with population in excess of 200,000 was almost 0.90); and high-quality population estimates are provided frequently, permitting regular updating of this component of the typology.
The cities were ranked according to population growth. Three general groups were defined: decreasing population: Cities that lost 10 percent or more of their population between 1970 and 1980; stable population: Cities whose population gain or loss between 1970 and 1980 was less than 10 percent; and increasing population: Cities that gained population by 10 percent or more between 1970 and 1980.
A 10 percent population change in only a decade represents a rapid rate of change. Nevertheless, 60 percent of large central cities showed population losses or gains of more than 10 percent from 1970 to 1980. This gives some indication of how rapidly population change is proceeding in the nation's central cities. Exactly the same categories were used in describing population change between 1960 and 1970.
Cities by Type in 1980
Table 1.1 lists the fifty-six biggest American cities by their levels of resident need in 1980 and the pace of their population growth or decline over the previous decade. Table 1.2 summarizes the results of applying the city typology to the fifty-six biggest cities in 1980.
The diversity of these big cities is apparent. One in four is classed as having decreasing populations and relatively high levels of resident need. These high-need, declining cities are located in all major regions of the United States. However, not all high-need cities experienced population loss during the 1970s. Five high-need cities had reasonably stable population levels during the 1970s. They include Miami, Memphis, and New
Orleans, southern cities with relatively high poverty rates. One high-need city experienced marked population growth: El Paso. Population growth in El Paso is significantly boosted by high levels of natural increase and immigration of Hispanics with low earning power. The data suggest that several of the twenty cities experiencing rapid population losses may be adapting somewhat successfully to change. Four such declining cities showed moderate (rather than high) levels of resident need in 1980. Two—Minneapolis and St. Paul—showed low levels of resident need.
Excerpted from The Future of National Urban Policy by Marshall Kaplan, Franklin James. Copyright © 1990 Duke University Press. Excerpted by permission of Duke University Press.
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Table of Contents
Introduction—A Response to Urban Distress: Challenge and Opportunity,
Federal Aid and Cities: Tales of Two Cities,
Whither or Whether a Comprehensive Federal Urban Policy,
Can We Forge a Comprehensive Urban Policy?,
The Book: Responding to Distress,
Part 1: Urban Need and Distress—A Broad Overview,
1 City Need and Distress in the United States: 1970 to the Mid-1980s,
2 The New Anatomy of Urban Fiscal Problems,
Part 2: Urban Problems—A Microscopic Look at Key Areas of Concern,
3 Reengaging State and Federal Policymakers in the Problems of Urban Education,
4 Urban Poverty: Where Do We Go from Here?,
5 Rental Housing in the United States: A Focus on Metropolitan and Urban Areas,
6 Urban Infrastructure and City Budgeting: Elements of a National Urban Policy,
7 Boston—An Urban Policy Prototype or a Continuing Urban Policy Problem?,
Part 3: Developing a Comprehensive Urban Policy—Maximum Hopes, Minimum Results,
8 National Urban Policy: Where Are We Now? Where Are We Going?,
9 Chasing Urban Policy: A Critical Retrospect,
10 Policy Liberalism, National Community Liberalism, and the Prospects for National Urban Policy,
11 American Neighborhood Policies: Mixed Results and Uneven Evaluations,
12 The Rise and Fall of National Urban Policy: The Fiscal Dimension,
13 A Nonurban Policy: Recent Public Policy Shifts Affecting Cities,
Part 4: Institutions and Institutional Capacity,
14 HUD in the Nineties: Doubt-ability and Do-ability,
15 Who Gets the Jobs in the New Downtown?,
16 The Shifting Focus of Neighborhood Groups: The Massachusetts Experience,
17 Building a New Low-Income Housing Industry: A Growing Role for the Nonprofit Sector,
Part 5: Looking to the Future: A Set of Nonurban Urban Policy Initiatives,
18 Has America Lost Its Social Conscience—And Can It Get It Back?,
19 Eliciting an Effective and Necessary Urban Policy Response,
20 Urban Policy in the Nineties and Beyond: The Need for New Approaches,
About the Editors and Contributors,