Brookings: Topics - Philadelphia

Energy (and Economic) Transformation Come to the Philadelphia Navy Yard

Mark Muro and Sarah Rahman — Fri, 27 Aug 2010 10:51:00 -0400

We’ve long liked the Department of Energy’s new Energy Innovation Hubs program, with its resemblances to our energy discovery-innovation institutes idea. And we’ve especially liked the plan for the third type of the hubs, which has called for supplementing a powerful research, development, and deployment (RDD) hub focused on energy efficient building technology with an array of additional resources intended to broaden the effort and better connect it to the local economy.

Now, a research consortium led by Penn State and based out of the Philadelphia Navy Yard has won the five-year, $122 million award for a building sciences hub and innovation cluster and it feels like a masterstroke. One of multiple truly inventive proposals from around the country, the winning Philadelphia entry epitomizes the power of a new era of smart, region-centered thinking and action about science, innovation, and regional development in America.

Centered on a new paradigm for doing hard-core translational science, the new Energy Regional Innovation Cluster (E-RIC) initiative has always been noteworthy because it shows the administration moving to complement a narrower research and technology program (the hubs) with a broader view of the real-world process by which truly game-changing, commercial-scale innovation occurs.

Unlike the other hubs, the cluster-oriented building sciences initiative represents an explicit acknowledgment of the powerful role of place, regions, and local industry clusters in the dynamics of innovation and commercialization. In that sense the building sciences hub with its energy regional innovation cluster (E-RIC) strategy has always been important as a marker of the growing recognition in Washington that regions matter and that local innovation clusters are a proven forum for technology transfer, knowledge spillovers, and efficient entrepreneurship. Making the project even more significant is that fact that the award will launch an important piloting of a new, multi-agency approach to federal programming that seeks to align disparate federal funding streams (in this case from six economic development agencies) behind a core development goal.

And yet what is especially compelling about the winning Philly project is the extent to which it places a gritty, physical urban place at the center of its plan. To be sure, the scientific program went through a rigorous review process with experts from the federal government, industry, and academia that vetted the scientific and technical merit of the project and the qualifications of the management team and personnel, which includes scientists from Princeton, Rutgers, the University of Pennsylvania, Drexel, and other institutions. But while the translational science was clearly impeccable, it is equally clear that the Philly Naval Yard’s extremely real and physical urban presence loomed large in the region’s win.

The Naval Yard has, after all, been a focal point of Philadelphia-region revitalization efforts for a decade, ever since the aircraft carrier John F. Kennedy, the last vessel to pass through the works, cast anchor in September 1995. But notwithstanding its sketchy recent history, the Yard offers the energy hub an extraordinary asset because it encompasses a complete, working microcosm of an American metropolitan area under single ownership--perfect for experiments on energy efficiency and how buildings relate to the power grid. The yard’s 1,200 acres, for example, include more than 200 buildings, seven miles of waterfront, and a workforce of 8,000 in more than 100 companies. Among the yard’s buildings, some are old and some brand new, with the inventory including factories, offices, warehouses, and eventually residences. Moreover, the yard has its own unregulated power grid, which will allow further experimentation.

In this sense, that the chosen E-RIC winner happens to be deeply urban, metro Philadelphia is a true affirmation that America’s energy challenges need to be sorted out not just in suburban research parks or controlled lab-campus settings but in the gritty real-world of places, old buildings, longstanding infrastructure, transitioning economies.

For all of these reasons, then, Philly’s energy innovation hub in the building sciences makes for a super-compelling experiment in energy efficiency, regional economic development, and local revitalization all at once.

Authors

Mark Muro
Sarah Rahman

Publication: The Avenue, The New Republic

Image Source: © Tim Shaffer / Reuters

What America's Cities Need

Bruce Katz and Judith Rodin — Fri, 04 Jun 2010 10:02:00 -0400

Cities across America are undergoing massive demographic change, and Philadelphia is no exception. Understanding this change, and effectively managing it, will be key to our national progress and prosperity in this decade and beyond.

A new report from the Brookings Institution, "The State of Metropolitan America," describes a nation that has grown larger, more diverse, more suburban, and more educated in the first decade of this century. These characteristics offer the potential for a tremendous advantage among industrialized nations as the global economy becomes more integrated and more competitive.

The Philadelphia region, for instance, is now home to 92 colleges and universities - more than the renowned concentration of higher education institutions in the Boston area. In our research on the demographic transformation of the nation, we refer to Philadelphia as a "skilled anchor" - one of 19 metro areas, including Baltimore, Rochester, N.Y., and Boston, that have made a transition from manufacturing and shipping to service-based economies. Medical and educational institutions have often driven this transformation, along with specialized manufacturing.

Skilled anchors face challenges, however, due to other trends. While 32 percent of Philadelphia area residents over the age of 25 hold bachelor's degrees, only 21 percent of residents of the city itself have been educated beyond high school.

That is cause for concern, especially as baby boomers begin to retire - most notably in the suburbs, where more than 40 percent of the residents are boomers and seniors. The young people who will take their place in the workforce are not completing college education at the same rate as their predecessors. This is problematic considering that median household income declined during the 2000s, and higher education is closely correlated with higher wages.

Meeting the region's future workforce challenges - that is, connecting residents to high-quality jobs in the education, medicine, life-sciences, and pharmaceutical sectors - will require education policies that prepare all children for successful postsecondary education, so they can build on the economic momentum of the retiring baby boomers.

As part of the national Achieving the Dream Initiative, several foundations are working together to help community colleges in Michigan, Ohio, and Indiana improve completion rates for minority and low-income students who are most at risk of dropping out and not getting the skills and credentials they need to succeed in the workforce.

Other demographic trends represent challenges as well as opportunities. The Philadelphia region's foreign-born population grew by 30 percent in the 2000s, albeit from a relatively small base. Efforts to incorporate immigrants into the mainstream of economic and civic life - such as Philadelphia's language-access policy, its one-stop education office, and the region's emerging Metropolitan Caucus - are all praiseworthy. But more is required.

At the same time, while solutions must be built from the ground up, the Philadelphia region can't go it alone. The federal government can't wait for megacities such as Philadelphia to work out the massive transformation under way by themselves. There are macro-level federal responses to these trends that could and should emanate from Washington.

Among them are comprehensive immigration reform that includes explicit means for improving the integration of new Americans into our society and economy; a revamping of transportation and housing policy that reduces energy-inefficient sprawl, accommodates seniors, and provides access to employment centers; programs to increase postsecondary education for our emerging workforce; and a redoubling of efforts to make work pay for working families, such as the Earned Income Tax Credit.

Over the past decade, between two recessions, Philadelphia has made much progress. Today, the region must capitalize on its hard-earned gains and address emerging challenges with similar conviction.

Philadelphia and America are changing in front of our eyes. Public policy decisions crucial to our health, prosperity, and security need to be informed by what's happening now. We cannot afford to look for our future in the rearview mirror.

Authors

Bruce Katz
Judith Rodin

Publication: Philadelphia Inquirer

Recent Immigration to Philadelphia: Regional Change in a Re-Emerging Gateway

Michael Katz, David Park, Audrey Singer and Domenic Vitiello — Thu, 13 Nov 2008 12:00:00 -0500

An analysis of the growth and characteristics of the foreign-born in the Philadelphia metropolitan area between 1970 and 2006 finds:

Among its peers, metropolitan Philadelphia has the largest and fastest growing immigrant population, which now stands at over 500,000, comprising 9 percent of the population. Between 2000 and 2006, greater Philadelphia’s immigrant population grew by 113,000, nearly as many as had arrived in the decade of the 1990s.
Metropolitan Philadelphia has a diverse mix of immigrants and refugees from Asia (39 percent), Latin America and the Caribbean (28 percent), Europe (23 percent) and Africa (8 percent). The 10 largest source countries are India, Mexico, China, Vietnam, Korea, Italy, Ukraine, Philippines, Jamaica, and Germany.
Immigrant growth in suburban Philadelphia has outpaced the city’s growth, but numerically, the city has the largest population of all local jurisdictions. Outside the city, Montgomery County had the earliest post- World War II suburban settlement of the foreign born and has the largest number of immigrants among jurisdictions, while Chester County saw the fastest growth during the 1970-2006 time period.
Nearly 60 percent of the foreign-born living in metropolitan Philadelphia arrived in the United States after 1990. Although their naturalization rates and educational levels reflect their recentness of arrival, on the whole, greater Philadelphia’s immigrants are doing well on these measures as compared with some other U.S. metropolitan immigrant populations.
Nearly 75 percent of greater Philadelphia’s labor force growth since 2000 is attributable to immigrants. Immigrants’ contributions to the labor force are considerably higher in this period than in the 1990s, when just 36 percent of the growth was due to immigrants.

A long history of immigration to Philadelphia stalled in the mid-20th century and the region became nearly entirely native born. In the past 15 years, however, immigration is emerging again as a prominent feature of life in the region. The varied immigrant groups—high-skilled professionals, refugees, and laborers from a diverse set of origin countries — bring both opportunities and challenges for policy makers, service providers, and communities throughout greater Philadelphia.

Additional Resources:
Philadelphia Immigration Event Presentation, Philadelphia Free Library, November 13, 2008 »

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Authors

Michael Katz
David Park
Audrey Singer
Domenic Vitiello

Metropolitan Pennsylvania

Amy Liu — Tue, 01 Apr 2008 15:30:00 -0400

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. A true economic agenda for the state and its 16 metropolitan areas must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. Amy Liu says an effort has to be made to build upon those assets for the future of the Keystone state and the nation as a whole.

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Pennsylvania Metro Areas' Economic Potential

An Economic Plan for the Commonwealth: Unleashing the Assets of Metropolitan Pennsylvania

Bruce Katz and Amy Liu — Mon, 31 Mar 2008 00:00:00 -0400

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. Thanks to these assets, the six metro areas generate 80 percent of the state’s economic output even though they house 68 percent of its population. A true economic agenda for the state must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. In short, this brief finds that:

To help Pennsylvania prosper, federal leaders must leverage four key assets that matter today—innovation, human capital, infrastructure, and quality places. These assets help increase the productivity of firms and workers, boost the incomes of families and workers, and can help the state and nation grow in more fiscally and environmentally responsible ways.
These four assets are highly concentrated in the state’s economic engines, its metropolitan areas. There are 16 metro areas in the Commonwealth, ranging from Philadelphia, the most populous, to Williamsport, the smallest. The top six metropolitan areas alone generate the bulk of the state’s innovation (80 percent of all patenting), contain the majority of the state’s educated workforce (77 percent of all adults with a bachelors degree), and serve as the state’s transport hubs.
Despite these assets, Pennsylvania’s metro areas have yet to achieve their full economic potential. For instance, Philadelphia and Pittsburgh enjoy strengths in innovation, but they both struggle to convert their research investments into commercial products and real jobs. The Scranton metro area is emerging as a satellite of the New York City region, but it’s hampered by the absence of frequent and reliable transportation connections and inadequate broadband coverage.
Federal leaders must advance an economic agenda that empowers states and metro areas to leverage their assets and help the nation prosper. To that end, they should establish a single federal entity that works with industry, states, and metro areas to ensure that innovation results in jobs and helps businesses small and large modernize. The federal government should strengthen access and success through the entire education pipeline. They should overhaul and create a 21st century transportation system. And they should use housing policy to support quality, mixed-income communities rather than perpetuating distressed neighborhoods with few school and job options.

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Philly's Many Walkable "Center Cities"

Christopher B. Leinberger — Wed, 20 Feb 2008 00:00:00 -0500

WALK SCORE, a new Web site popular with urbanists and environmentalists (walkscore.com), rates places for their walkability—the ease of meeting daily needs on foot.

The popularity of the site is an indicator that how the American Dream plays out on the ground has been fundamentally changing over the last 10 to 15 years.

The Ozzie and Harriet drivable suburban version of the American Dream is being supplemented by the Seinfeld vision of "walkable urbanism." Led by late-marrying young adults and empty-nester baby-boomers, many households are looking for the excitement and options living and working in a walkable urban place can bring. With almost nine of 10 new households over the next 20 years being singles or couples without children, this trend promises to continue.

A recent Brookings Institution survey of the largest 30 metro areas in the country identifies the 157 walkable urban places that play a regionally significant role. It also ranks the Top 30 metros in per capita number of walkable urban places. The Philadelphia metropolitan area ranks as the 13th highest on the number of walkable urban places per capita.

Certainly the many already revived downtowns like those in Denver, Washington, Portland, Seattle and San Diego are the most visible signs of the walkable urban trend. But there are many other places you might not suspect.

This includes the emergence of "downtown-adjacent" places like Chelsea and Union Square in New York, suburban town centers like Pasadena and Long Beach in the L.A. area and even built-from-scratch spots like Reston Town Center near Dulles Airport, 30 miles outside Washington.

A major benefit of walkable urban development is that it keeps and attracts young adults to the metro area, many of whom willingly trade crushing car commutes and high gas prices for lively walkable places to live and work.

Walkable urban places seem to attract the well-educated, the so-called "creative class."

Approximately 26 percent of Americans over 25 have college degree - but 99 percent of the new residents moving to Center City this decade have a college degree.

Walkable urbanism increases the economic development potential of the metro area in the knowledge economy. If many of the Gen X-ers and the Millennial generations do not get this lifestyle, they'll move to New York or Washington, depriving Philadelphia of the entrepreneurs it needs to grow.

Walkable urbanism is also essential to create sustainable places to live and work, reducing greenhouse-gas emissions. It is probable that walkable urban households emit less than half the greenhouse gas as driving suburban households - they walk more and unavoidably share heat with upstairs neighbors.

Center City and Society Hill are the most obvious, though not the only, locations of this trend in the Philadelphia region. The recent emergence of University City around Penn and Drexel, Manayunk and New Hope are other significant walkable urban places in the Delaware Valley.

Missing are additional places in the suburbs, particularly around commuter and subway stations.

Rail transit is crucial for walkable urbanism places to emerge.

The investment has already been made for this comprehensive, if underfunded, rail system. Building high-density, mixed-use places around these stations will fulfill pent-up market demand, promote economic growth, lower greenhouse emissions and even give their suburban neighbors a great place for a restaurant within walking distance.

Over the next few years, Philadelphia metro will no doubt see its ranking in the Brookings survey rise while more households will see their Walk Score numbers soar. Seinfeld is coming to Philadelphia. *

Leinberger is a visiting fellow at the Brookings Institution, professor at the University of Michigan and a limited partner in Arcadia Land Co., which has projects in the Philadelphia and Kansas City areas. His most recent book is "The Option of Urbanism: Investing in a new American dream" (Island Press, 2007).

Authors

Christopher B. Leinberger

Publication: Philadelphia Daily News

Getting the Market Right for Working Families

Bruce Katz — Tue, 14 Jun 2005 00:00:00 -0400

In testimony before the Philadelphia City Council, Bruce Katz outlines the conclusions and policy prescriptions of The Price Is Wrong report, which describes market distortions—from banking and home and auto insurance costs to utility prices—that disproportionately affect low-wage households in the city.

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Bruce Katz

Publication: Philadelphia City Council Committee on Commerce and Economic Development

The Price Is Wrong (Philadelphia)

Bruce Katz and Matt Fellowes — Mon, 04 Apr 2005 00:00:00 -0400

This presentation delves into the higher prices for everyday goods paid by working families, revealing what causes those costs, and recommending a number of policy approaches—such as reducing risks to business, giving consumers more marketplace information, and curbing market abuses—to make the market work better for low-income families, bolstering the ladder to the middle class.

The metro program hosts and participates in a variety of public forums. To view a complete list of these events, please visit the metro program's Speeches and Events page which provides copies of major speeches, PowerPoint presentations, event transcripts, and event summaries.

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Publication: A Breakfast Briefing with Brookings

The Price Is Wrong: Getting the Market Right for Working Families in Philadelphia

Bruce Katz and Matt Fellowes — Fri, 01 Apr 2005 00:00:00 -0500

Thousands of dollars are currently drained from the budgets of Philadelphia's working families through higher prices for everyday goods and services. These higher prices—higher than those paid by better off families for the exact same goods and services—hold back all aspiring middle class families, undermining the city's innovative efforts to combat decades of decline.

This report delves into these higher prices for necessities, revealing what causes these costs, and recommending a number of policy approaches—including reducing risks to business, giving consumers more marketplace information, and curbing market abuses—to make the market work better for low-income families, bolstering the ladder to the middle class.

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Heeding Clinton's Welfare Advice

Margy Waller — Fri, 06 Feb 2004 00:00:00 -0500

PRESIDENT Clinton shared a few ideas about how to next proceed on welfare reform just before he left office in 2001.

His thoughts are worth reviewing as the Senate prepares to take up the reauthorization of the historic 1996 welfare law.

Noting that it had then been five years since the bill had passed, he said, "We need to look and see where it's working and what the problems are."

He identified five issues for policy-makers: Helping the "hard to place" to find work, job-training, transportation, addressing the needs of places with a disproportionate concentration of recipients and reducing recidivism.

Then he went on, saying "one of the great stories of the last eight years is that all of us who thought poor people would rather work than draw a government check for not working were right." But he worried that "people still have to be able, even on modest wages, to succeed at work and at home," citing the need to raise minimum wage and his disappointment that this hadn't happened since 1996.

Finally, he said something few politicians have been willing to say in the context of welfare policy: "we've got to make sure that people who are working, particularly if they're single parents, can do a good job with their kids, because raising children is still the most important job of any society."

Although we've learned some things about his issues in the three years since he raised them, the legislation pending in Congress falls far short of addressing them.

For example, the most promising option for welfare recipients who have not been able to find a job is transitional work. Transitional jobs are wage-paying community-service placements.

Although the federal funding that community-based providers used to offer this option has expired, Congress so far has failed to include even a small amount of continuation funding for them in the pending proposals.

Sadly, federal policy-makers propose to limit, rather than encourage, training and education options that promote advancement and placement in better-paying jobs for welfare recipients.

And while there is near universal agreement that transportation barriers are a major problem for welfare recipients and other low-income workers, there is shocking lack of attention to the issue. Although some senators have agreed to authorize funding for a promising car ownership aid program, the initiative does not include an appropriation of funding, and has not yet received any encouragement from the Bush administration.

It turns out that long-term welfare cases are located disproportionately in urban areas. Local leaders argue that there is a great need for more flexibility to deal with these recipients who have numerous barriers to work, and note that the pending proposals move in the opposite direction by creating new unfunded mandates.

Many of the long-term recipients are working already; they just are not earning enough to leave the rolls. These parents - as well as those who return to the rolls quickly - need services like training, transportation and child care. But proposed changes to the law would make it harder to fund such things.

And, unfortunately, the minimum wage is still at the 1996 level of $5.15 an hour.

Finally, when President Clinton signed the welfare bill, he said that cuts in supports for legal immigrants had nothing to do with the goals of welfare reform, and he worked to reverse those parts of the law. But proposed reinstatements for immigrants that a majority of senators support are not yet included in this year's legislation.

When they take up reauthorization, senators have a long way to go before they can claim to be the good stewards encouraged by Clinton, who, as he signed the bill, said: "This is not the end of welfare reform; this is the beginning.

"And we have to all assume responsibility. Now that we are saying with this bill we expect work, we have to make sure the people have a chance to go to work."

Five years later, Clinton bravely identified what he thought might be repairable flaws in one of his legacy achievements. Three years later, we're still waiting for the leaders who followed him to act as responsibly.

Authors

Margy Waller

Publication: Philadelphia Daily News

Philadelphia's Campaign For Working Families

Feather Houstoun — Sun, 01 Feb 2004 00:00:00 -0500

On April 25, 2003, with the tax filing season behind them, the staff of the Philadelphia Campaign for Working Families threw a celebratory party for nearly 200 volunteers and sponsors that had been a part of its first-year success.

"More than ten million dollars went to hard working families—we did all that and more," exclaimed Jean Hunt, the executive director. Philadelphia was one of 23 cities nationwide to sponsor a campaign to alert families to the federal Earned Income Tax Credit (EITC) and the availability of free tax preparation services. A newcomer to the EITC effort, Philadelphia had set ambitious goals, and exceeded them.

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Feather Houstoun

Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania

Bruce Katz — Mon, 08 Dec 2003 00:00:00 -0500

This PowerPoint by Bruce Katz, presented to the Pennsylvania Economic League in Philadelphia, illustrates stagnant growth, housing sprawl, and the increasing abandonment of Pennsylvania's cities and older suburbs--trends dimming the prospects for developing a high-wage economy in the state.

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Bruce Katz

Publication: Presentation to the Pennsylvania Economic League

The Sprawl of the Wild: Now Is the Right Time To Revive Our Cities

Bruce Katz and Mark Muro — Sun, 07 Dec 2003 00:00:00 -0500

Pennsylvania's cities, towns, and older suburbs are declining as the state sprawls. Pennsylvania's economy is drifting as it responds incoherently to continued industrial restructuring.

Shouldn't the Commonwealth move to reverse these trends?

"Not now" would be the conventional answer. Uncertain times, goes the conventional wisdom, are no time to try to curb land consumption, rebuild struggling cities, and redirect inefficient development patterns. Do those things now, the cautious warn, and you'll squelch what little growth exists, widen the state's $2.5 billion budget deficit, stir up uncertainty.

And yet, here's another view: Now is precisely the right moment for Pennsylvania to reevaluate its longstanding, wasteful, and economically destructive growth trends and put itself on a more dynamic, efficient course of land-use and development.

The reason is simple: Troubled times like these sharpen the need to shake up the status quo and do more with less, not least because Pennsylvania's unbalanced trends of sprawl and abandonment are incredibly costly and inefficient, as we argue in Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania, a study released this week by our Brookings Institution center.

In good times, of course, sprawl accelerates, prompting public outcry.

In Pennsylvania, for example, growth and development issues emerged as never before in the late 1990s as the region gobbled up more than 800 square miles (nearly 4 acres per new household) of rural and undeveloped land between 1992 and 1997. Driven by single-digit population growth, such land consumption prompted serious dialogue across the Commonwealth (and in this newspaper) over how to protect the state's farmland.

But now that the economy has slowed and tax collections sagged, another rationale for reform has become urgent: the need to jumpstart the state's sluggish economy and reorient the state's wasteful patterns of sprawl and abandonment.

In this environment, the costs of sprawl and abandonment and the potential economic benefits of reform become unmistakable.

On the cost side, our research reveals that the current trend is placing a heavy burden on the state's businesses and taxpayers.

In addition to $1 billion or so in avoidable sprawl-related infrastructure costs over the next 25 years, the spread of neighborhood decline, abandonment, and blight represents an even more serious blow to the Commonwealth's economic health. On this front, Pennsylvania cities—most notably Philadelphia—lost almost $10 billion in aggregate real property value between 1993 and 2000, as housing depreciated and tax bases sagged. Those losses are sapping the state's vitality by depressing municipalities' ability to raise revenue, increasing governments' costs, and increasing tax rates.

As to the economic benefits of reversing these trends, we believe they are substantial—and potent.

Not only would reversing the state's vicious cycles of depreciation and decline generate household wealth and improve the fiscal health of hundreds of cities and boroughs. More importantly, we contend that curbing sprawl and revitalizing the Commonwealth's established centers has the power to energize the state's entire ailing economy.

Numerous studies show that productivity and overall economic performance may be improved to the extent smart development fosters dense labor markets, vibrant and distinctive downtowns, and a high "quality-of-place." Moreover, we believe that Pennsylvania's numerous cities, rural and urban boroughs, and older townships have a special potential to catalyze growth because they possess assets unavailable elsewhere in the state—outstanding centers of medicine and education; major business and technology clusters; distinctive, human-scaled neighborhoods.

From this perspective, the present moment of fiscal stress and economic challenge looks very much like the right time—not the wrong time—for Pennsylvania leaders to reevaluate counterproductive growth patterns and refocus the state's economic and land-use policies on success.

In fact, we would suggest that the need for economic renewal and enhanced efficiency has grown so obvious across the Commonwealth that the desire for change now holds out promise of overcoming such traditional hurdles as Pennsylvania's deep-set caution and intense localism.

Now, more than ever before, the possibility seems to exist for a new consensus around reinvestment and smarter growth. In many respects, a latent coalition exists may now be cohering that includes fiscal conservatives and business people as well as farmers, neighborhood activists, environmentalists, rural borough residents, suburbanites, and urban mayors.

And so we think that steering the state "back to prosperity' actually represents a doable errand for the Commonwealth—and that the time for action is now.

To that end, the state would do well to seize this moment to move the state beyond the troubled status quo that has resulted from decades of insufficient planning and misguided investment.

What will this advance take? First off, we think state leaders need to promulgate a dynamic new vision of economic competitiveness and development that seeks to leverage the potent assets of the state's older cities and towns into a lasting prosperity for all Pennsylvanians. This vision should explicitly acknowledge that how the state grows physically affects how it grows economically. Above all, the new vision should decisively link the state's desire for economic prosperity to its abiding interest in curbing sprawl and reviving established towns.

Otherwise, the state needs to align its own activities with the new competitive strategy. For too long disparate state agencies have built roads, dispensed business subsidies, and made permitting decisions without adequate regard to a coherent statewide strategic vision. Accordingly, Pennsylvania should move aggressively—and soon—to focus the state's infrastructure and economic development spending on the places and projects that fit the Commonwealth's emerging commitment to efficiency, competitiveness, and reinvestment.

In short, bad times are here, yet they're actually the best time to strike at the economic and land-use malaise of business-as-usual. Shouldn't Pennsylvania make some tough choices and get a move on?

Authors

Bruce Katz
Mark Muro

Publication: The Patriot-News (Harrisburg, PA)

New Report Lays Out an Agenda To Revive Pennsylvania's Economy

Sun, 07 Dec 2003 00:00:00 -0500

Stagnant growth, housing sprawl, and increasing abandonment of Pennsylvania's cities and older suburbs are dimming the prospects for high-wage economic recovery throughout the state, according to a new report released today by the Brookings Institution Center on Urban and Metropolitan Policy.

Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania cites new data on state economic development and transportation spending to suggest that years of unfocused public investment have steered billions of tax dollars to the exurban fringe. Combined with severely fragmented local government and poor planning, these patterns have led to minimal employment and wage growth even though the state ranks among national leaders in dollars spent per capita on economic development.

"Older Pennsylvania is basically subsidizing its own decline, to the detriment of the state's economic future," said Bruce Katz, director of the Center on Urban and Metropolitan Policy. "Cities and older suburbs, home to 58 percent of Pennsylvanians and the driver of 88 percent of the state economy, possess the infrastructure and amenities necessary to attract new businesses and young talented workers. These critical assets, however, are being squandered at the same time residents are experiencing stagnating home values and rising property tax rates."

The 121-page report, accessible at www.brookings.edu/pennsylvania, analyzes current demographic, market, and development trends statewide and statistically profiles eight key metropolitan areas. The report also presents a five-part policy agenda for revitalizing the state economy by steering investment back to cities, boroughs and older townships; leveraging existing infrastructure; revitalizing established neighborhoods; and maximizing the emerging strengths of Pennsylvania's economic future, its health care and education sectors.

"The good news is these trends are not inevitable, and can be reversed," continued Katz. "Budget realities show that Pennsylvania doesn't have another dollar to waste. Now is the perfect time to enact change at the state level to pursue a high-road economic future."

Funding for the report was provided by the Heinz Endowments and the William Penn Foundation. Representatives of the Brookings Institution Center on Urban and Metropolitan Policy are scheduled to present the report at forums in Philadelphia, Pittsburgh, Harrisburg, Erie, Reading, York, Lancaster, Scranton, and the Lehigh Valley today through Thursday.

Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania

Mon, 01 Dec 2003 00:00:00 -0500

This report contends that the economic future of a major rust belt state depends on revitalizing its demographic mix and curbing some of the nation's most radical patterns of sprawl and abandonment. Above all, the study reveals that Pennsylvania's highly decentralized growth patterns are weakening the state's established communities, undercutting the very places whose assets the state needs to compete in the knowledge economy.

Ultimately, the report concludes that these trends are not inevitable, and can be reshaped if the state embraces a dynamic new vision of economic competitiveness that links the Commonwealth's desire for prosperity to the need to revive older cities and towns.

Background Papers: (pdf files)
Reforming the state's brownfields program
The spatial allocation of PA's seven major economic development programs
The spatial allocation of PA's three critical economic development programs
Addressing PA's local government fragmentation

Metropolitan Area Profiles: (pdf files)

Erie
Harrisburg
Lancaster
Lehigh Valley
Philadelphia
Pittsburgh
Reading
York

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Philadelphia in Focus: A Profile from Census 2000

Sat, 01 Nov 2003 00:00:00 -0500

Executive Summary

Across several social and economic indicators, Census 2000 reveals that Philadelphia confronts significant challenges in creating opportunity and prosperity for its residents.

The Philadelphia region continues to decentralize, to begin with, further separating inner-city residents from employment and economic activity. While the population of Center City revived in the 1990s, population loss elsewhere in the City of Philadelphia was widespread. To be sure, Philadelphia actually gained black, Asian, and Hispanic residents in the last decade, many of them new immigrants from abroad. But at the same time it lost 180,000 white residents. Jobs also continued to shift outward in the metro area, and today fewer than 30 percent of the region's workers are employed in the central city.

As the economic strength of the urban core dissipated in the 1990s, Philadelphia's residents struggled economically as well. Household incomes dropped significantly, and the size of the city's middle class declined. Poverty rose, and Philadelphia now has the highest Hispanic poverty rate among the 23 Living Cities. These economic challenges are rooted in the city's low rates of higher educational attainment and adult labor force participation. One area in which Philadelphia remains unique is the high number of residents who own their homes; unfortunately, the city's homeownership rate declined significantly over the decade. At the same time, over 100,000 city households—most with low incomes—struggle to afford rent and the other necessities of life.

Along these lines and others, then, Philadelphia in Focus: A Profile from Census 2000 concludes that:

The Philadelphia metro area continued to decentralize in the 1990s amid slow growth region-wide. Between 1980 and 2000, the City of Philadelphia lost 10 percent of its population. During the same period, the region's suburbs grew modestly, but the locus of that growth shifted far from the core. In the 1990s, neighborhoods in Center City and Near Northeast Philadelphia gained residents, but population loss continued throughout the remainder of the city and in nearly all inner suburbs. Today, only 30 percent of the region's residents live in the central city, and only 30 percent are employed there—most Philadelphia-area workers commute from suburb to suburb.

The city's population is growing more diverse. The transformation of Philadelphia from a majority-white city in 1990 to a "majority-minority" city in 2000 was fueled by modest increases in the city's black, Hispanic, and Asian populations, and a dramatic 180,000-person decline in white residents. International immigrants also contributed to the changing profile of the city and region. The number of foreign-born living in Philadelphia increased by 34,000 in the 1990s, and more than twice as many settled in the suburbs over the same period. Nearly half of Philadelphia's foreign-born are U.S. citizens, and they hail from a variety of world regions, including Southeast Asia, Eastern Europe, and the Caribbean. Still, people of different races and ethnicities tend to live in very separate parts of Philadelphia; the city ranks highest in the nation on segregation between whites and Hispanics.

Philadelphia's population is aging. In most of the 23 Living Cities, people in their twenties and early thirties represent the largest age groups. Philadelphia, by contrast, has nearly as many 35- to 44-year-olds as it does members of younger age groups. In addition, Philadelphia is second only to Miami among the 23 Living Cities in the proportion of residents who are age 65 and over. The aging of Philadelphia's population reflects in part the city's limited success in attracting newcomers—the number of 25- to 34-year-old residents dropped 19 percent during the 1990s. Meanwhile, the city's children are also growing up in more disadvantaged environments, as today most Philadelphia households with children are single-parent families.

Philadelphia residents have relatively low educational attainment, and participate only weakly in the labor market. Only 56 percent of working-age adults in Philadelphia were employed or looking for work in 2000—the fourth-lowest percentage among the 100 largest cities in the U.S. These low levels of work may reflect not only a growing distance between inner-city Philadelphia residents and job opportunities elsewhere in the region, but also the low education levels of Philadelphia's population. Only 18 percent of Philadelphia adults hold a college degree, one of the lowest levels among large U.S. cities. Indeed, below-average rates of educational attainment cut across racial and ethnic lines in Philadelphia, affecting whites, blacks, and Hispanics.

Household incomes in Philadelphia dropped during the 1990s and the middle class shrank. Low- and moderate-income households increased in number in Philadelphia during the 1990s, but the number of middle- and upper-middle-income households (earning $34,000 to $81,000) declined. As a result, the city's median household income dropped over the decade, and ranked in the bottom quarter of large U.S. cities in 2000. In several neighborhoods, more than 40 percent of all residents live in poverty, and Philadelphia has the highest Hispanic poverty rate among the 23 Living Cities.

Philadelphia remains a high-homeownership city, although the rate declined significantly over the decade. Nearly 60 percent of Philadelphia households owned their own homes in 2000, the second-highest rate among the Living Cities. Yet this rate dropped considerably during the 1990s, in contrast to the trend of rising homeownership in cities and the nation over the decade. The weak housing market in many inner-city Philadelphia neighborhoods may also have limited the economic benefits of homeownership. And while rent prices in Philadelphia actually declined over the decade, 100,000 Philadelphia renters have incomes low enough that they pay more than 30 percent of their income on housing.

By presenting indicators like these on the following pages, Philadelphia in Focus: A Profile from Census 2000 seeks to give readers a better sense of where Philadelphia and its residents stand in relation to their peers, and how the 1990s altered the city, its neighborhoods, and the entire Philadelphia region. Living Cities and the Brookings Institution Center on Urban and Metropolitan Policy hope that this information will prompt a fruitful dialogue among city and community leaders about the direction Philadelphia should take in the coming decade.

Philadelphia Data Book Series 1
Philadelphia Data Book Series 2

Vacant-Property Policy And Practice: Baltimore And Philadelphia

John Kromer — Tue, 01 Oct 2002 00:00:00 -0400

Both Baltimore and Philadelphia are classic examples of cities in which vacant land and buildings are visible manifestations of enduring economic disinvestment and decline. While improvements in both cities' downtowns have attracted more visitors during the past decade and have generated high-end residential development in or near the downtown areas, conditions of blight and deterioration in many neighborhoods have worsened during this period. In response, the new mayors in both cities have committed to change local government policy and programming related to vacant-property acquisition, conveyance, and development. This paper reports on extensive case studies of Baltimore and Philadelphia, conducted through research, interviews, and local discussion panels. It provides an in-depth review of local policies and practices regarding vacant properties that might help urban leaders respond to this complex issue.

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Authors

John Kromer

Building a Competitive Philadelphia: Pennsylvania Biotech Association

Bruce Katz — Wed, 10 Oct 2001 00:00:00 -0400

This presentation was given by Bruce Katz to the Pennsylvania Biotech Association. It examines the major trends affecting Philadelphia including the city's uneven recovery, the metro area's sprawl, the changing demographics, and the region's assets. The presentation proposes 5 policy reforms to make the city and metropolitan area more competitive.

View the complete Powerpoint Presentation—(823 KB)

The Urban Center hosts and participates in a variety of public forums. To view a complete list of these events, please visit the Urban Center's Speeches and Events page which provides copies of major speeches, powerpoint presentations, event transcripts, and event summaries.

Authors

Bruce Katz

Publication: Presentation to the Pennsylvania Biotech Assocation

The Bottom Line ... and Beyond: Financial Plans Guided Philadelphia and New Haven to Recovery

Scott Quehl — Thu, 01 Jun 2000 00:00:00 -0400

In 1992, Philadelphia had no cash to pay its bills. The city faced a $200 million deficit in a $2.4 billion budget, its credit rating had been reduced to "junk bond" status, and its suppliers had long gone unpaid. Philadelphia was deferring investments in infrastructure to fund day-to-day operations. One-time remedies to plug ever-expanding holes in the city?s budget were used up. Immediate triage was needed simply to stabilize the government?s operations.

Some 175 miles away, New Haven was in similar straits. Its general fund had had a deficit for four years in a row, and its credit rating stood one level above junk bond status. The city's budget imbalances and economic outlook kept New Haven from borrowing from capital markets at reasonable interest rates. A cash shortfall was delaying vendor payments, and assets that were supposed to be self-supporting were draining general fund dollars.

By 1999, Philadelphia had a budget surplus of $205.7 million. Fitch IBCA rated the city's credit at a solid BBB+. That same year New Haven had a surplus of more than $17 million and credit ratings of BBB+/A(3). Both cities had invested in infrastructure, expanded services, and cut taxes.

How did it happen?

Three Steps to Financial Recovery

The recovery of both Philadelphia and New Haven began with a strategic financial and management plan. The plan defined the size and causes of the fiscal problem, set recovery goals, and identified specific solutions, while establishing each city's credibility and taking the policy initiative.

Next, leaders in both cities cut costs and increased non-tax revenue according to strategies laid out in their respective financial plans. They saved millions of dollars through improved revenue collection. They opened certain services to competition with private providers. They put in place work force initiatives that brought costs in line with revenues while maintaining fair compensation. And they managed their debt, cash, and risk more effectively.

Finally, city leaders focused on strengthening their cities' competitiveness to stimulate their economies. Rather than raising tax rates and cutting services?measures that can balance budgets in the short term but ultimately erode a city's underlying economic base?they took advantage of fiscal stability to reduce taxes and improve basic services, as well as pursuing well-targeted development projects in areas of comparative advantage, such as culture and entertainment.

Strategic Financial Planning

Both Philadelphia and New Haven began their recovery with five-year strategic financial plans. Words like budget, financial plan, and audited financial statement typically lack inspirational punch. But both cities translated these words into tools to build credibility and point the way to results. They used conservative assumptions to project the gap between the budget deficits that would result if trends continued unchanged and the fiscal target set for each year in their financial plans?a target consisting of budgetary balance, funding for capital improvements and key services, and tax cuts.

In Philadelphia, city leaders captured people's attention by showing that unless the financial plan were adopted, budget deficits would grow from more than $80 million a year in 1991 to more than $300 million a year by 1996. The result of the accumulated $1.4 billion deficit would have been bankruptcy. Mayor Ed Rendell took a firm stand against tax increases or cuts in services. A quarter of Philadelphia's population had already disappeared over the past 40 years. Nineteen tax increases between 1981 and 1992 had made Philadelphians the most heavily taxed residents of any major city in America. Crime was considered high, schools poor, and basic services no longer working.

In New Haven, Mayor John DeStefano's strategic financial plan focused on eliminating the structural budget deficit while strengthening schools. The plan also emphasized stimulating economic growth through tax reductions, revitalizing neighborhoods, and promoting the city's role as a regional center for arts and entertainment. Like Philadelphia, New Haven had lost large shares of its businesses and people. Infrastructure was crumbling. Tax rates were among the highest in the state.

Without the chief executive's dogged commitment to implement it, a fiscal recovery plan is little more than a report that gathers dust on bookshelves. Once Philadelphia's first five-year plan had been published, the mayor made it plain that results were expected. Every quarter, departments had to report to the mayor's office and to the public on the progress of implementation. At the end of the plan's first year, the city published a second plan in parallel with its budget, describing where the city stood, what had been accomplished as against what had been expected, and what would be done next. Philadelphia has produced nine such plans in nine years, including one for fiscal 2000.

Cutting Costs and Increasing Non-Tax Revenues

Many things in government cost more than they should?over time, hundreds of millions of dollars more. For every excessive cost or dollar forgone, there is a reason. As happened in Philadelphia, the priority given to high-profile capital projects can reduce investment in tax collection systems to the point that tax payment records are kept on 3" x 5" index cards. Or as was the case at one municipal airport, piecemeal development of a city's job classification system can require three employees to change a light bulb.

Both Philadelphia and New Haven included new strategies to address these issues in their strategic financial plans. By the end of the fifth year, Philadelphia had accumulated $1.2 billion in non-work force savings. In its first plan, Philadelphia used competitive contracting to trim $27 million in costs from its operating budget for tasks ranging from cleaning city hall to managing nursing homes. The city also opened city responsibilities up to outside competition. City leaders invited employees to propose how they would carry out those responsibilities and then convened a committee to weigh employee proposals against those from private firms. The committee selected commercial vendors 46 times and retained services in-house 4 times. The 1,000 employees who lost their old jobs as a result were given first hiring preference for new ones, usually with comparable compensation.

Though leaders in Phila-delphia and New Haven stressed non-work force cost-saving initiatives, they could not ignore work force costs, which typically account for 60?70 percent of a city's discretionary spending. The year before Philadelphia's near fiscal collapse in 1992, per-employee costs had jumped 8.3 percent, compared with an inflation rate of 3.5 percent. In earlier decades, Philadelphia had resorted to sweeping layoffs to bring personnel costs within its means. As part of the five-year plan, however, the city took a more targeted approach to its collective bargaining strategy, aiming to preserve jobs and provide competitive compensation and time off, within the city's fiscal means. As detailed in the box on page 32, Philadelphia was able to avoid more than $590 million in personnel costs over the first five years of recovery?a projected $184 million in fiscal 2000 alone.

New Haven used innovative tax collection, debt management, and privatization to expand investments in services and cut costs. Many of these initiatives are summarized in the box on this page. New Haven's work force strategy reduced the rate of salary increases from 4.5 percent at beginning of the DeStefano administration's term to 1.6 percent through 1997. The city and labor agreed to shift municipal employees from traditional indemnity health benefit programs to a managed care health benefit system, avoiding about $49 million in projected spending. As the city's fiscal prospects improved, the four-year agreements signed in fiscal 1997 averaged wage increases of 2?3 percent a year.

Beyond the Bottom Line

Effective management is a key component of financial stability, but it can take a city only so far. For fiscal recovery to be sustained, the city's economy should grow. Fiscal stability is one condition for economic growth. Another is a mix of services, amenities, taxes, and regulations that provides enough value that residents and businesses decide to stay, to come, and to invest.

Philadelphia cut its wage and business privilege taxes in 1995 and has continued reductions through fiscal 2000, saving taxpayers $315 million, even as taxes in surrounding suburbs have inched higher. The city expanded library and after-school reading programs. It more than doubled its homeless housing units, invested tens of millions in park and street improvements, and added nearly 1,000 officers to its police force. Its economic stimulus investments reached $6.5 billion in January 2000.

New Haven has cut property taxes since 1996, so that its rates are now comparable to those of many surrounding communities. The city is also redesigning its regulatory system to streamline administration, while cutting paperwork and fees for its businesses. Services are showing much improvement. Crime has been cut in half since 1992. New Haven has invested $489 million in 20 new schools. The number of school dropouts is down, and test scores are reported up across the board.

New Haven and Philadelphia have reached beyond the bottom line to strengthen economic competitiveness and improve services to give people better chances at improving their lives.

Authors

Scott Quehl

From Choice to Action: Pathway for the Next Mayor of Philadelphia

Joyce A. Ladner — Sun, 07 Nov 1999 00:00:00 -0500

Sometimes the pundits and pollsters make predictions on elections, and the citizens cast votes that prove them wrong. Such was the case this week, when John Street defeated Sam Katz in the mayoral election in Philadelphia. It was a race watched closely around the country because its outcome says a lot about the fate of America's cities.

As a former member of the District of Columbia financial control board, I saw this contest as crisis election, one that was in some ways similar to the election of our mayor, Anthony Williams.

Everyone around the country is looking for a city that can act as a laboratory of urban reform—a city representative of the nation's present and future, in which all the bright ideas of urban reformers can be tested and weighed. Philadelphia has many of the marks of such a city, and Street's challenges are those of many an American mayor.

All the elements of a modern-day urban coalition—working-class whites, blacks, liberals, traditional machine politicians and unions—are present in Philadelphia. Philadelphia represents the kind of diversity likely to be the face of governance for our cities in the early part of the next century. The next mayor will have the opportunity to get this coalition to work together and lead this diverse city through its difficulties.

Certainly, the election just past was an encouraging sign that civility can persist in the midst of diversity. Katz and Street must be applauded for the way they conducted their campaigns. They dealt with substance over slogans, and they took the high road on volatile issues like race and class. In so doing, they were able to maintain civility, clarify the issues, and produce a more united Philadelphia. Political campaigns in other cities should take notice.

Philadelphia, again like other cities, has an uneasy relationship with its richer, less diverse surrounding suburbs. Suburban sentiments drove much of the debate over the wage tax and the school system. Street can't afford to alienate the suburbs. Suburbanites may not vote, but they do come to work in the city, and their tax and leisure moneys help the city go.

Many are watching to see how John Street manages the many claims that immediately will be made on him by his constituencies. Every interest group that supported Street (and some that did not)—the unions, blue collar white voters, a significant number of white liberals, a whopping 94 percent of the black voter turnout, school activists, you name them—will declare that a part of that victory belongs to them. The challenge for Street, as for the mayors of many contemporary cities, is to choose which promises to make and which to avoid making.

Speaking of promises, three Street should keep are those he made to reduce the wage tax, reform the public schools and help the neighborhoods.

The citizens will expect the mayor to reduce the wage tax, which is thought partly responsible for 150,000 residents fleeing the city in the last decade. Reducing the wage tax will provide an incentive for many to stay in the city and for others to think about moving back. At the same time, the mayor has to find ways to make up for the revenue shortfalls the cut may create.

Street should work to build relationships in Harrisburg on funding public education. He can't do much otherwise. He can also send a signal by appointing the best people to sit on the school board. Take a look at how Chicago Mayor Richard Daley dealt with school governance when the Illinois legislature turned the schools over to him. The results are reasonably impressive. He must also find a way to raise teacher pay to be competitive with salaries in the suburbs, and reducing class size.

And Street must focus on rebuilding the neighborhoods. Tourists who visit Center City are impressed. Even the Republican National Convention will hold its meeting in this fair city. But outsiders find a completely different city when they wander out to the neighborhoods, where the blight is as bad as that in inner cities across the nation. That's where many of the working-class whites and blacks who rushed to John Street's aid in the rain and wind on election day live, day in and day out. Keeping promises to these residents will be critical.

It seems tough, but challenges very much like these face many mayors today. Street can learn from them, and they from him. Perhaps Philadelphia's new mayor can make this the laboratory of urban reform that everyone is looking for.

Authors

Joyce A. Ladner

Publication: The Philadelphia Inquirer