Growing Competitive Cities

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Growing Competitive Cities
The Brookings Institution
Center on Urban and Metropolitan PolicyBruce
Katz, Director
Presentation to the Fannie Mae Corporation June
14, 2001
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Major Questions

• What are the general trends affecting cities?
• What are the top competitive strategies for
  cities to pursue?
• Where do we go from here?

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I. What are the general trends affecting
cities?
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1. Cities are recovering
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Overall, city population grew during the 1990s
Source U.S. Census Bureau
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The 100 largest cities grew faster in the 1990s
than in the 1980s
Source U.S. Census Bureau
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Overall, central cities gained jobs during the
1990s
Source U.S Department of Housing and Urban
Development, State of the Cities 2000. ..
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Central city poverty rates fell
Source U.S. Census Bureau
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Violent crime fell during the 1990s nationally
Source FBI, Uniform Crime Reports
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2. But the recovery is highly uneven
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But the Recovery is Highly Uneven
Some cities grew, but many cities lost population
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1 1990-2000
Source U.S. Census Bureau
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But the Recovery is Highly Uneven
Some cities gained jobs, but other cities lost
them 1
1 Based on changes between 1993 and 1996.
Source John Brennan and Ned Hill. Where are the
jobs cities, suburbs, and the competition for
employment, Brookings, November, 1999.
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But the Recovery is Highly Uneven
Poverty rates are disproportionately high in many
cities 1
1 Small area estimates are for 1997
Source U.S. Census Bureau
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And violent crime is still high in many cities 1
But the Recovery is Highly Uneven
1 1999 counts for the MSA Baltimore 1998.
Source Federal Bureau of Investigations
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3. Metropolitan decentralization dominates
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The suburbs outpaced cities in population growth 1
1 1990-2000
Source U.S. Census Bureau
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The suburbs outpaced cities in job creation 1
1 Based on changes between 1993 and 1996.
Source John Brennan and Ned Hill. Where are the
jobs cities, suburbs, and the competition for
employment, Brookings, November, 1999.
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Metropolitan Areas Are Decentralizing
Decentralization has had many negative
consequences for areas outside of central cities

• Loss of open space
• Overcrowded schools

• Traffic congestion
• Air pollution

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With decentralization, many cities bear a
disproportionate share of welfare caseloads
Source Katherine Allen and Maria Kirby.
Unfinished Business Why Cities Matter to
Welfare Reform. Brookings, July 2000.
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4. Demographics are changing
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The largest 100 cities experienced strong growth
in minority population during the 1990s.
However, these same cities lost non-Hispanic
white residents
Source U.S. Census Bureau
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This trend was apparent in many cities
Source U.S. Census Bureau
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An influx of Hispanics and Asians has fueled the
growth in big cities over the past decade and
slowed the population decline in cities that
experienced a flight to the suburbs.
Source DVera Cohen. Immigration Fueling Big
U.S. Cities, The Washington Post, March 16, 2001.
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The general population is aging
Source Martha Riche. The Implications of
Changing U.S. Demographics for Housing Choice and
Location in U.S. Cities Brookings,
Forthcoming.
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Age distribution will differ by race and ethnicity
Source Martha Riche. The Implications of
Changing U.S. Demographics for Housing Choice and
Location in U.S. Cities Brookings,
Forthcoming.
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II. What are the top competitive strategies for
cities to pursue?
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Competitive Strategies
Current Strategy
Competitive Strategy
Whats Wrong
Whats Needed
Policies are marginal -Microlending Policies
focus on subsidies -Empowerment zones Policies
are fragmented -Housing/schools Policies are
geographically limited -Workforce/transportation
Focus on the big stuff -Identify reforms with
systemic effect Fix the fundamentals -Land,
capital access, crime Integrate
strategies -Connect systemic reforms Think
metropolitan -Implement reforms beyond borders
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Key Elements

• Understand market and demographic trends in city
  and region
• Recognize assets - identify liabilities
• Re-envision competitive position
• Organize for success

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The Cleveland Example
Organizing for Success
Cleveland Tomorrow Chamber of Commerce
Gund Foundation Cleveland Foundation
Business
Civic/Community
Staffed Public/Private Partnerships
Cleveland State Case Western

Universities
First Suburbs Consortium
Government
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Fix the Basics
Key Elements

• Good schools
• Safe streets
• Competitive taxes and services
• 21st century infrastructure
• Functioning real estate market

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Fix the Basics Land
The Philadelphia Story

• In 1999, Philadelphia had 30,900 vacant
  residential lots
• The city had 36 abandoned structures per 1,000
  residents compared to an average of 2.6
  nationally
• Responsibility for vacant properties was divided
  between 15 public agencies
• Insufficient resources for demolition, site
  preparation, and brownfield remediation
  compounded problem

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Fix the Basics Land

• Philadelphia Neighborhood Transformation
  Initiative
• A 1.6 billion dollar 5 year program to remove
  blight from Philadelphia neighborhoods.
• Reform of the city's delivery systems.
• Build 16,000 new houses and demolish 14,000
  buildings.
• Rehabilitate 2,500 properties.
• Creation of a Philadelphia Land Bank.
• Clearing of 31,000 vacant lots in the first year.
• Facilitation of neighborhood planning in a
  citywide context

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Key Elements

• Fixed institutions
• (universities and hospitals)
• Employment clusters
• Downtown
• Waterfront
• Cultural institutions/parks

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Build on Assets Tech Clusters
The Seattle Story Seattles Portion of Tech Jobs
Seattle as of
Region 1995 1998 Biotech 48 55
Electronic/Computers/Instrument 13 10
Software/Services/Internet 17
20 Telecommunications 36 32 Total 23
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Build on Assets Tech Clusters

• The Seattle Story
• Seattles Successful Strategies
• Invest in human capital
• Invest in physical capital
• Invest in quality of life and amenities
• Streamline city planning, permitting, and other
  services
• Apply information technology in the private
  sector

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Build on Assets Waterfront
The Milwaukee Story
Milwaukee Downtown Plan Catalytic Projects for
the City of Milwaukee ANA Associates, Princeton,
NJ
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Build on Assets Waterfront
The Milwaukee Story
Milwaukee Downtown Plan Catalytic Projects for
the City of Milwaukee ANA Associates, Princeton,
NJ
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Build Family And Community Wealth
Key Elements

• Income and work supports
• Asset building
• Neighborhood markets
• Mixed-income communities
• Access to capital

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Build Family Wealth Income Support
The Earned Income Tax Credit Has Increased
Substantially
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Build Family Wealth Income Support
Billions of Dollars of EITCs Flow into Cities
1 Calculated by assuming that at least 10 percent
of EICs go unclaimed (See Scholtz 1994).
Source Data from 1998 are from Internal Revenue
Service, E-File Demographics. 1997 data are
from Internal Revenue Service, Zip Code Files.
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Build Community Wealth
Vaughn Public Housing (St. Louis)
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Build Community Wealth
George L. Vaughn Residences at Murphy Park (St.
Louis)

• 402 units of economically integrated public
  housing
• - 30 at market rate
• - 15 tax credits
• - 55 public housing

• 45 million
• - public housing funds
• - first mortgage funds
• - tax credits
• - corporate donations
• - private equity

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Key Elements

• Metropolitan governance
• Land-use reform
• Transportation reform
• Access to metropolitan opportunity
• Urban reinvestment

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Governance
Georgia Georgia Regional Transportation Authority
(1999)

• Ohio
• The Clean Ohio Fund (2000)

Land-Use
Transportation

• Maryland
• Smart Growth-Neighborhood Conservation Act of
  1997

• California
• Fair Share Affordable Housing Law

Metro Access
Urban Reinvestment

• New Jersey
• The Rehabilitation Subcode of 1998

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The New Metropolitics
Central City
Older Suburb
Retail
Housing
Schools
Newer Suburb
Rural Area
Quality of Life
Conservation
Congestion
Farm Preservation
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III. Where do we go from here?
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Competitive Strategies
Primary Responsibilities
FEDERAL
STATE
LOCAL
Know, Fix, Build
Build Wealth
Metro Growth
- Manage economy - Income redistribution -
Homeownership - Regulatory oversight
- Schools - Crime - Downtown
- Land use - Governance - Transportation
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Competitive Strategies
What Can Local Leaders Do
Know The Context

• Tailor strategies to market reality

Fix The Basics
Support school and land reform
Build on Assets
Support sectoral strategies for economic growth
Build Family and Community Wealth

• Link residents to financial institutions
• Support mixed income housing

Support metropolitan research and coalitions
Influence Metropolitan Growth
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www.brookings.edu/urban