Brookings: Topics - Sprawl

Confronting Suburban Poverty in America - Release Event and Live Webcast

Mon, 20 May 2013 09:30:00 -0400

Event Information

May 20, 2013
9:30 AM - 11:30 AM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

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In 1965, President Lyndon B. Johnson declared a war on poverty. Back then poverty was largely confined to inner-city neighborhoods and isolated rural areas. Today, the overwhelming majority of America’s poor live not in cities—but in the suburbs of its major metropolitan areas. Yet the paradigm of poverty in America, and the infrastructure for addressing the conditions poor families and communities face, has failed to keep pace with the reality of these changes. The problems of the growing suburban poor are now exacerbated by a weak economy and increasingly limited resources for nonprofits, philanthropies and government at all levels.

As with many challenges facing the nation, metro area leaders are leading the way in the search for solutions—learning how to do more with less and adjusting their approaches to address the metropolitan scale of poverty, collaborating across sectors and jurisdictions, using data and technology in innovative ways, and integrating services and service delivery.

In Confronting Suburban Poverty in America (Brookings, 2013), co-authors Elizabeth Kneebone and Alan Berube, take on the new reality of metropolitan poverty and opportunity in America. Join them, along with some of the nation’s leading anti-poverty experts, including Luis Ubiñas, president of the Ford Foundation, and Bill Shore, founder and CEO of Share our Strength, and leading local innovators from across the country to discuss a new metropolitan opportunity agenda for addressing suburban poverty, how federal and state policymakers can deploy limited resources to address a growing challenge, and why building on local solutions holds great promise.

Laying the Groundwork For Change: Demolition, Urban Strategy, and Policy Reform

Alan Mallach — Mon, 24 Sep 2012 00:00:00 -0400

According to the Census, the total number of vacant housing units in the United States grew by over 4.5 million from 2000 to 2010, an increase of 44 percent. While empty houses are everywhere, they are disproportionately found in many older industrial cities, particularly those that have lost much of their population and job base over the past several decades. Boarded houses, abandoned factories and apartment buildings, and vacant storefronts are a common part of the landscape in large cities like Detroit, Buffalo, and Philadelphia, and a host of smaller cities such as Flint, Gary, and Youngstown.

Many of these vacant buildings will have to be demolished over the coming years. Some may be too far in disrepair to be restored to productive use; in other cases, the demand or the resources for rehabilitation may not exist. Many of these properties are health and safety hazards, blighting their surroundings and devaluing their neighbors’ properties. Still others may need to be torn down in order to make way for new redevelopment important to their cities’ future vitality.

Not all empty buildings need to be demolished: Many can be productively reused, either for the same purpose as before or in new and different ways. At the same time, tearing down those that can’t be reused might not be a high priority, at least in the short term. With limited funds available, localities must be strategic about targeting those demolitions that will most benefit their neighborhoods and residents. Demolition, in short, should not be an end in itself, but rather a step in the process of creating stronger, healthier communities.

The purpose of this paper is to look at demolition in the framework of larger community stabilization and revitalization strategies, and, within that context, to put forth recommendations for how to undertake demolition in the most cost-effective and productive fashion. It conveys three primary messages:

Large-scale demolition, thoughtfully and responsibly carried out, is a necessary step in the process of rebuilding the nation’s distressed older cities. This need is driven by two factors: the macro issue of supply and demand, which has led to a vast oversupply of buildings in many cities, and the more micro issue of how vacant abandoned structures impact their blocks and neighborhoods.
Demolition is a costly, complicated process. Demolition is a complex process involving a variety of steps, activities, and regulatory requirements, each of which adds cost to the final outcome.
Strategic, cost-effective demolition is vital to stabilizing and revitalizing cities and their neighborhoods. Given both the critical need for large-scale demolition in many older communities, the costs associated with it, and the limited resources available, policymakers and practitioners need to be strategic in their decisions about which buildings to demolish, and in what areas—while getting more creative about finding the resources needed to do so.

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Authors

Alan Mallach

Image Source: © Rebecca Cook / Reuters

The Intersection of Place and the Economy

Robert Puentes and Peter McFerrin — Mon, 07 May 2012 00:00:00 -0400

Recent and ongoing policy efforts to increase spatial efficiency at the metropolitan, local, and neighborhood level have focused on interventions such as place-based affordable housing, transit-oriented development, and livability programs. As the nation and its metropolitan areas begin to seek more productive and sustainable sources of economic growth for the future, it is crucial to understand how policies that shape the physical landscape of metropolitan America can help grow economies more attuned to the imperatives of globalization, technological innovation, and production.

In turn, it is equally important to understand how shifts in economic growth impacts the built environment. While these spatial impacts are a product of both national and metro-level macroeconomic factors, public policies that shape urban form can, in turn, shape these macroeconomies.

This paper examines the relationships of urban and metropolitan form with three vital aspects of modern metropolitan economies: globalization and the production of tradable goods and services, technological innovation, and the low carbon imperative. A research agenda follows that derives from the conclusions reached in the previous sections.

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Authors

Robert Puentes
Peter McFerrin

Publication: What Works Collaborative

Image Source: © Rick Wilking / Reuters

The Demographic Lull Continues, Especially in Exurbia

William H. Frey — Fri, 06 Apr 2012 13:23:00 -0400

More than two years after the Great Recession was pronounced dead, there is scant evidence of renewed demographic dynamism in areas that once drove the nation’s growth. This is especially the case in the nation’s "exurbs"—traditional destinations for new homebuyers at the outer edge of the metropolitan frontier. But it is also the case for what were the fastest growing metropolitan areas, whose demographic pulse stopped beating when the housing market crashed and the recession took hold.

These findings emerge from the Census Bureau’s first release of annual sub-national population estimates since the 2010 Census, which permit a longer look at population shifts since the onset of recession. They indicate that, through July 2011, the late 2000s demographic malaise continued. It raises the prospect that we may be reaching a “new normal” about where people decide to locate.

The most pronounced revelation concerns the outer suburbs of metropolitan areas—residential zones that have historically exhibited rapid growth, especially in the mid-2000s. Based on a Brookings classification scheme, Figure 1 indicates that the least dense, outer suburban counties—exurbs and emerging suburbs—registered extremely low growth rates in 2010-2011, continuing a downward trajectory established in the late 2000s.

Exurban growth reached such depths in 2010-2011 that growth in cities and dense, mostly inner suburbs eclipsed it. This is a decided flip from mid-decade, when the latter areas bled migrants to the fast developing urban fringe. It reflects the difficult economic straits now facing would-be home-buyers, many in their twenties and early thirties, who tend to be stuck in place in inner suburbs and cities. It also reflects uncertainty about the future of the housing market and broader economy in far-flung metropolitan locations amid rising fuel prices.

The outer-suburban slowdown is widespread, reflecting pre-recession overbuilding, and current lack of demand in most parts of the country. Each of the 100 fastest growing outer suburban counties during the 2003-2007 boom period grew more slowly in the four years since, and the majority grew more slowly last year than in each of the previous three years.

While not as dramatic as the recent exurban fall, former metropolitan hotspots for growth show few signs of population revival two years post-recession. Las Vegas, Phoenix, and Orlando are prime examples of metro areas whose growth swooned toward the end of the decade as their construction and housing “bubble” sectors crashed (Figure 2). Of the 50 fastest growing large metropolitan areas from 2003 to 2007, 43 grew more slowly in the subsequent four-year period with nearly half registering lower growth in 2010-1 than in each of the three previous years. More diversified metro economies in the Sunbelt such as Austin, Provo, and Raleigh saw slight growth drop-offs, but sustained enough growth to rank first through third from 2007 to 2011.

The silver lining in the new numbers for former growth magnets is evidence of a mini-turnaround in Florida. From 2010 to 2011, Miami, Orlando, and Tampa all gained population from domestic in-migration. Perhaps this positive view for Florida is an omen for other boom areas, although the trend has not yet shown up strongly elsewhere.

The geography of growth in the early 2000s tended to accentuate familiar postwar population shifts to the suburbs, exurbs, and new Sunbelt frontiers. The housing market crash and Great Recession put the brakes on all that. Now other factors are coming into play, including the rising costs of energy and new levels of fiscal austerity for state and local governments. The fact that outer suburban growth has continued to falter two years after the recession ended calls into question whether today’s younger generations will hold the same residential preferences as their forebears. It is possible that the new financial risks they face, along with increased environmental and economic concerns, will change perceptions of where to find their version of the American Dream.

Authors

William H. Frey

Image Source: © Rick Wilking / Reuters

Boosting Jobs with the Right Kind of Housing and Transportation Efforts

Christopher B. Leinberger — Wed, 10 Nov 2010 14:39:00 -0500

Last week, President Obama called for “any idea, any proposal, any way we can get the economy growing faster so that people who need work can find it faster.” There is a tried and true idea that has always been used in past recoveries; activate the building of the built environment … but with a major twist.

Comprised of real estate and the infrastructure that supports it, especially transportation, the built environment represents over 35 percent of the assets of the economy, its largest asset class. It was the catalytic cause of the Great Recession, along with most previous recessions, and it is now dead in the water. As a result, the economic recovery is anemic, bumping along at about 2 percent GDP growth, not enough to reduce the historically high unemployment rate, especially among those who have not graduated from college (workers with college degrees, preponderantly in the knowledge economy, have a low 4.6 percent unemployment rate).

As I’ve outlined, along with Patrick Doherty, activating the building of the built environment is required to both increase GDP growth but also put the less educated back to work … the workers who build transportation improvements and housing.

However, the twist is that the market is demanding different transportation improvements and housing than we have been building for the past two generations, highway-based single family housing on the ever expanding fringe of our metro areas. This type of housing was the epicenter of the housing and mortgage crash. What is needed is “alternative” transportation (rail transit, bike, and walking infrastructure), as the two recent rounds of the U.S. DOT’s TIGER grants have provided. In addition, the real estate industry must re-tool to build what the market now wants, walkable development, whether in the central cities or the suburbs. The CEO of one of the nation’s largest homebuilders called me recently saying his drivable suburban business model was broken, it no longer works, but he does not understand how to develop the far more complex alternative.

This is not the whole answer to American economic woes (another major answer is expanding manufacturing and service exports as the president calls for). However, without building the “second half of the transportation system,” redeveloping our cities and transforming our suburbs with mixed-use, walkable development, we will be condemned to years of stagnation. The market wants it; it is more energy efficient, physically healthy, and it will provide over the next generation the same economic turbo-charge the building of the drivable suburbs provided over the past half century.

Authors

Christopher B. Leinberger

Publication: The Avenue, The New Republic

Image Source: © Kevin Lamarque / Reuters

The Next Real Estate Boom

Patrick C. Doherty and Christopher B. Leinberger — Mon, 01 Nov 2010 00:00:00 -0400

What if there were a new economic engine for the United States that would put our people back to work without putting the government deeper in debt? What if that economic engine also improved our international competitiveness, reduced greenhouse gases, and made the American people healthier?

At a minimum, it would sound a lot better than any of the current offers on the table: stimulus from the liberals, austerity from the conservatives, and the president’s less-than-convincing plan for a little stimulus, a little austerity, and a little bit of a clean-energy economy.

The potential for just such an economic renaissance is a lot more plausible than many would imagine. At the heart of this opportunity are the underappreciated implications of a massive demographic convergence. In short, the two largest demographic groups in the country, the baby boomers and their children—together comprising half the population—want homes and commercial space in neighborhoods that do not exist in anywhere near sufficient quantity. Fixing this market failure, unleashing this latent demand, and using it to put America back to work could be accomplished without resorting to debt-building stimulus or layoff-inducing austerity. At least for the moment, Washington has an opportunity to speed up private investment for public good and launch what could be a period of long-lasting prosperity. It is a market-driven way to make the economic recovery sustainable while addressing many of the most serious problems of our time: the health care crisis, climate change, over-reliance on oil from countries with terrorist ties, and an overextended military.

Real estate has caused two of the last three recessions, including the Great Recession we’ve just gone through. That is because real estate (housing, commercial, and industrial) and the infrastructure that supports real estate (transportation, sewer, electricity, and so on) represent 35 percent of the economy’s asset base. When real estate crashes, the economy goes into a tailspin. To speed up the economic recovery now slowly underway, the real estate sector must get back into the game, just as it played a central role in the economic recoveries of past recessions. (Real estate also kept the high-tech recession in the early 2000s from being as serious as it might have been.) The United States will be condemned to high unemployment and sluggish growth if 35 percent of our asset base is not engaged. And hundreds of billions of dollars in potential investment capital is on the sidelines, waiting for the right market signals to be deployed.

We’re unlikely, however, to see a real estate recovery based on a continuation of the type of development that has driven the industry for the past few generations: low-density, car-dependent suburbs growing out of cornfields at the edge of metropolitan areas. That’s because there is now a massive oversupply of such suburban fringe development, brought on by decades of policy favoring it—including heavy government subsidies for extending roads, sewers, and utilities into undeveloped land. Houses on the exurban fringe of several large metro areas have typically lost more than twice as much value as metro areas as a whole since the mid-decade peak. Many of those homes are now priced below the cost of the materials that went into building them, which means that their owners have no financial incentive to invest in their upkeep. Under such conditions, whole neighborhoods swiftly decline and turn into slums. This happened in many inner-city neighborhoods in the 1960s, and we’re seeing evidence of it in many exurban neighborhoods today. The Los Angeles Times reports that in one gated community in Hemet, east of L.A., McMansions with granite countertops and vaulted ceilings are being rented to poor families on Section 8 vouchers; according to the Washington Examiner, similar homes in Germantown, Maryland, outside Washington, D.C., are being converted to boarding houses.

Many hope that when the economy recovers, demand will pick up, inventories of empty homes will be whittled down, and the traditional suburban development machine will lumber back to life. But don’t bet on it. Demand for standard-issue suburban housing is going down, not up, a trend that was apparent even before the crash. In 2006, Arthur C. Nelson, now at the University of Utah, estimated in the Journal of the American Planning Association that there will be 22 million unwanted large-lot suburban homes by 2025.

Meanwhile, the Great Recession has highlighted a fundamental change in what consumers do want: homes in central cities and closer-in suburbs where one can walk to stores and mass transit. Such “walkable urban” real estate has experienced less than half the average decline in price from the housing peak. Ten years ago, the highest property values per square foot in the Washington, D.C., metro area were in car-dependent suburbs like Great Falls, Virginia. Today, walkable city neighborhoods like Dupont Circle command the highest per-square-foot prices, followed by dense suburban neighborhoods near subway stops in places like Bethesda, Maryland, and Arlington, Virginia. Similarly, in Denver, property values in the high-end car-dependent suburb of Highland Ranch are now lower than those in the redeveloped LoDo neighborhood near downtown. These trend lines have been evident in many cities for a number of years; at some point during the last decade, the lines crossed. The last time the lines crossed was in the 1960s—and they were heading the opposite direction.

There are some obvious reasons for the growing demand for walkable neighborhoods: ever-worsening traffic congestion, memories of the 2008 spike in gasoline prices, and the fact that many cities have become more attractive places to live thanks to falling crime rates and the replacement of heavy industries with cleaner, higher-end service and professional economies.

But the biggest factor, one that will quickly pick up speed in the next few years, is demographic. The baby boomers and their children, the millennial generation, are looking for places to live and work that reflect their current desires and life needs. Boomers are downsizing as their children leave home while the millennials, or generation Y, are setting out on their careers with far different housing needs and preferences. Both of these huge demographic groups want something that the U.S. housing market is not currently providing: small one- to three-bedroom homes in walkable, transit-oriented, economically dynamic, and job-rich neighborhoods.

The baby boom generation, defined as those born between 1946 and 1964, remains the largest demographic bloc in the United States. At approximately 77 million Americans, they are fully one-quarter of the population. With the leading edge of the boomers now approaching sixty-five years old, the group is finding that their suburban houses are too big. Their child-rearing days are ending, and all those empty rooms have to be heated, cooled, and cleaned, and the unused backyard maintained. Suburban houses can be socially isolating, especially as aging eyes and slower reflexes make driving everywhere less comfortable. Freedom for many in this generation means living in walkable, accessible communities with convenient transit linkages and good public services like libraries, cultural activities, and health care. Some boomers are drawn to cities. Others prefer to stay in the suburbs but want to trade in their large-lot single-family detached homes on cul-de-sacs for smaller-lot single-family homes, townhouses, and condos in or near burgeoning suburban town centers.

Generation Y has a different story. The second-largest generation in the country, born between 1977 and 1994 and numbering 76 million, millennials are leaving the nest. They may sometimes fall back into the nest, but eventually they find a place of their own for the first time. Following the lead of their older cousins, the much smaller generation X (those born between 1965 and 1976), a high proportion of millennials have a taste for vibrant, compact, and walkable communities full of economic, social, and recreational opportunities. Their aspirations have been informed by Friends and Sex in the City, shows set in walkable urban places, as opposed to their parents’ mid-century imagery of Leave It to Beaver and Brady Bunch, set in the drivable suburbs. Not surprisingly, fully 77 percent of millennials plan to live in America’s urban cores. The largest group of millennials began graduating from college in 2009, and if this group rents for the typical three years, from 2013 to 2018 there will be more aspiring first-time homebuyers in the American marketplace than ever before—and only half say they will be looking for drivable suburban homes. Reinforcing that trend, housing industry experts, like Todd Zimmerman of Zimmerman/Volk Associates, believe that this generation is more likely to plant roots in walkable urban areas and force local government to fix urban school districts rather than flee to the burbs for their schools.

The convergence of these two trends is the biggest demographic event since the baby boom itself. The first wave of boomers will be sixty-five in 2011. The largest number of millennials reaches age twenty-two in 2012. With the last of the boomers hitting sixty-five in 2029, this convergence is set to last decades. In addition to the generational convergence, the Census Bureau estimates that America is going to grow from 310 million people today to 440 million by 2050.

An epic amount of money will pour into the real estate market as a result of population growth and demographic confluence. To be sure, unemployment and stagnant wages have eroded people’s buying power. Boomers have suffered steep declines in the value of their current homes and 401(k)s, and young people are leaving college with ever-larger student loan debts.

But Americans of all ages have saved and paid off debts since the recession began, and average household balance sheets should be significantly healthier five years from now. In addition, 85 percent of the new households formed between now and 2025 will be single individuals or couples with no children at home; unburdened by child-rearing expenses, they will have more income available for housing (and less desire to spend it tending big backyards).

Most importantly, the very act of moving to more walkable neighborhoods will free families from the expense of buying, fueling, and maintaining the two or more cars they typically need to get around in auto-dependent suburbs. Households in drivable suburban neighborhoods devote on average 24 percent of their income to transportation; those in walkable neighborhoods spend about 12 percent. The difference is equal to half of what a typical household spends on health care—nationally, that amounts to $700 billion a year in total, according to Scott Bernstein of the Center for Neighborhood Technology. Put another way, dropping one car out of the typical household budget can allow that family to afford a $100,000 larger mortgage.

The burgeoning demand for homes in walkable communities has the potential to reshape the American landscape and rejuvenate its economy as profoundly as the wave of suburbanization after World War II did. If anything, today’s opportunity is larger. The returning veterans and their spouses represented approximately 20 percent of the American population at that time; the current demographic convergence—77 million boomers plus 76 million millennials—comprises nearly 50 percent.

In the postwar years, America pushed its built environment outward, beyond the central cities, creating millions of new construction jobs and new markets for cars and appliances—a virtuous cycle of commerce that helped power American prosperity for decades (until, of course, it went too far, leading to the oversupply of exurban development that is acting as deadweight on the current recovery). The coming demographic convergence will push construction inward, accelerating the rehabilitation of cities and forcing existing car-dependent suburbs to develop more compact, walkable, and transit-friendly neighborhoods if they want to keep property values up and attract tomorrow’s homebuyers. All this rebuilding could spur millions of new construction jobs. But more importantly, if done right, with “smart growth” zoning codes that reward energy efficiency, it would create new markets for power-conserving materials and appliances, providing American designers and manufacturers with experience producing the kinds of green products world markets will increasingly want.

In addition to fueling long-term economic growth, the new demand for walkable neighborhoods could provide other benefits. One of the biggest drivers of rising health care costs is the expansion of chronic diseases like obesity, diabetes, and heart disease—conditions exacerbated by the sedentary lifestyles of our car-dependent age. All would be substantially reduced if Americans move into higher-density, transit-friendly neighborhoods in which more walking is built into their daily routine.

The potential environmental benefits are equally profound. A study conducted by the National Resources Defense Council concluded that simply conforming new construction to smart growth standards would reduce carbon emissions 10 percent within ten years, more than half the target set by the president and the stalled climate legislation. Similarly, the U.S. Green Building Council estimates that new sustainable developments could reduce water consumption by 40 percent, energy use by up to 50 percent, and solid waste by 70 percent.

We can reap these economic, health, and environmental benefits if the real estate market is allowed to follow the demand preferences of consumers. But that’s easier said than done. Markets don’t exist in a vacuum. They operate within rules and incentives set by governments. The rules and incentives that guide today’s real estate market were designed, for the most part, more than a half century ago to fit the demands of the postwar-era Americans who were looking for new homes with yards outside overcrowded cities in which to raise their families. For many years the government-insured mortgages provided to millions of GIs were regulated in such a way that they could only be used to buy newly constructed homes, not to purchase or rehab existing homes—an incentive that strongly biased growth away from cities and toward the suburbs. Cheap rural land outside cities became accessible and valuable to developers thanks to the building of the interstate highway system, 90 percent funded by the federal government. Using federal matching grants, suburban municipalities extended water, sewer, and electric lines to new subdivisions, charging developers and homeowners a fraction of the real costs of those extensions. Municipalities also crafted zoning codes, often in response to federal regulations that essentially mandated low-density development.

Today, even though consumer preferences have changed, most of the old rules and subsidies remain in place. For instance, federal transportation funding formulas, combined with the old-school thinking of many state departments of transportation, continue to favor the building of new roads and widening of highways—infrastructure that supports low-density, car-dependent development—over public transit systems that are the foundation for most compact, walkable neighborhoods. When developers do propose to build denser projects, with narrower streets and apartments above retail space, they often run up against zoning codes that make such building illegal. Consequently, few compact, walkable neighborhoods have been built relative to demand, and real estate prices in them have often been bid up to astronomical heights. This gives the impression that such neighborhoods are only popular with the affluent, when in fact millions of middle-class Americans would likely jump at the opportunity to live in them.

To meet this broad new demand, however, requires that entire metropolitan regions work together to chart a common vision for their communities. When that happens, all kinds of Americans, and not just coastal elites, choose walkable, transit-based growth.

Consider the recent experience of Utah, a state that voted 63 percent for John McCain and Sarah Palin. In 1997, in anticipation of the 2002 Winter Olympics in Salt Lake City, a coalition of local CEOs, elected leaders, developers, farmers’ associations, conservation advocates, and urban planners put together a process of public meetings to get citizens involved in developing a strategy to accommodate greater Salt Lake City’s fast-paced growth in a fiscally and environmentally sustainable way. That process, dubbed “Envision Utah,” led to a blueprint for development in the four-county region. The plan largely rejects further suburban sprawl in favor of a “quality growth strategy” of dense walkable neighborhoods built around transit stops.

The first step was the building of a seventeen-mile, twenty-three-station light rail line in Salt Lake City called TRAX. The line was highly controversial; many predicted it would be an underutilized boondoggle. But when the first phase opened in 1999, TRAX proved an immediate hit with the public—eventually some trains became so crowded with riders that their doors couldn’t close. In 2000 and 2006, voters approved tax increases to expand the system, including increased reach to several outlying suburbs, twenty-six miles of new light rail track, forty additional station stops, and eighty-eight miles of heavier commuter rail, reaching as far as Provo. Meanwhile, mixed residential-commercial developments have been constructed around existing stations in places like the formerly industrial suburb of Murray City.

Locally financed transit expansions are also underway in such wide-ranging places as St. Louis, Denver, Los Angeles, Montgomery, Alabama, and Broward County, Florida. From 2004 to 2009, 67 percent of light rail ballot measures passed. In 2008, the election year defined by the financial crisis, 87 percent of transit measures passed. In Seattle, a 2008 measure saw sponsors actually eliminate road funding so that the thirty-four-mile extension of the light rail system would pass.

The public, then, has made its desire for transit-oriented growth quite clear, and governments at the local and metropolitan levels have begun to respond. At the federal level, however, the policy machinery remains on autopilot, supporting a sprawl-based growth model that is beyond broken. What we need to do should be obvious: replace old federal rules and incentives that hamper the market’s ability to meet changing needs and preferences for housing with new ones that don’t, thus helping to rejuvenate the American economy. But these new policies will have to be produced in a political environment that, unlike in the postwar years, is hostile to government actions that add considerably to the federal deficit. And they need to be written quickly: the peak of the convergence is only three years away, and the economy needs a sustainable base from which to grow more quickly now.

Throughout human history, transportation has determined the pattern of real estate development, and so the place to begin is federal transportation policy. Fortunately, next year Congress will probably reauthorize the giant transportation law that determines most federal infrastructure spending—which, tellingly enough, is still commonly referred to in Washington as “the highway bill.” This will provide a golden opportunity to change federal policy in several fundamental ways. First, the biases in federal matching grants that favor roads and highways over every other type of infrastructure (sidewalks, bike paths, mass transit, and so on) must end. Second, the grants should be “scored” based on their economic, environmental, and social equity impacts—in particular, on the degree to which proposed transportation projects minimize travel times and distances for residents and enable compact, walkable, energy-efficient, and affordable development. Third, metro areas should be required, and given funding, to do what greater Salt Lake City did: create a blueprint for future growth. Those blueprints should then help guide which specific infrastructure projects get federal funding. In effect, this will shift the power to shape growth patterns away from congressional appropriators and state departments of transportation and to local citizens and local elected officials. And it will help ensure that actual consumer demand drives the process, rather than the current combination of antiquated federal funding formulas, congressional earmarks, and offstage machinations of conventional developers.

Many liberals might want Washington to cover most of the costs of this new infrastructure. That’s unlikely to happen in the current political and fiscal environment. Nor, frankly, is it necessary, or even healthy. Instead, scarce federal dollars should be used to attract private dollars, of which there are plenty. The Investment Company Institute reports that institutional investors are keeping a relatively stable $1.8 trillion in money market funds because money managers see no good long-term investment vehicles. A similar amount is sitting in the coffers of non-financial corporations.

The Obama administration has proposed one way to tap some of these private dollars: create an “infrastructure bank” that would leverage several private dollars for every federal dollar invested to build a project. In return, the bank and private investors would receive, say, a dedicated locally raised future tax revenue source.

Another approach would be to revive a practice from the past. A hundred years ago, virtually every city of 5,000 or more had an extensive network of streetcars. These systems were typically not publicly owned. Instead, real estate developers, often in partnership with electric utilities, built and ran them, even paying municipal governments to rent the right-of-way. The developers made their money not from fares, which barely covered operations, but from the increased land values that the trolley extensions made possible. There’s no reason why similar deals can’t be negotiated today to fund various kinds of mass transit. In fact, the process has already begun in a few places. Developers are helping to pay for the extension of the Washington, D.C., metro rail to Dulles airport, while Microsoft cofounder Paul Allen’s real estate company and other property owners participated in the funding of the streetcar to his substantial property holdings just north of downtown Seattle. The federal government can help make such arrangements much more common by offering partial guarantees of the debt floated to build transit infrastructure.

Another way Washington can encourage walkable neighborhoods is through reforms of Fannie Mae and Freddie Mac. These two government-sponsored mortgage guarantors and underwriters went bankrupt and were taken over by the U.S. government—in large part because they overinvested in homes on the suburban fringe. But in recent years Fannie Mae has been experimenting with an interesting new product: “location efficient mortgages.” Instead of relying solely on credit score and income to determine whether a borrower qualifies for a mortgage, these loans use electronic map systems to take into account how much homeowners will have to pay for transportation. Research by Scott Bernstein of the Center for Neighborhood Technology suggests that location efficient mortgages may have lower default rates than conventional Fannie Mae loans. If that finding proves true, then it makes sense to expand the program, and to apply the same concept to household energy savings: Fannie, Freddie, and HUD’s Federal Housing Administration should factor in the savings from more energy-efficient homes and retrofits. And all these products should be available for more types of construction than just the single-family detached house.

In the past, big shifts in real estate patterns, from suburbanization to gentrification, have often made the lives of the poor considerably worse. To make sure that doesn’t happen as we move toward more walkable communities, federal action will also be needed. The Obama administration took a first step earlier this year by announcing that location efficiency will be a criterion for $3.25 billion in competitive HUD housing grants. That means that at least some walkable developments will be built to include housing for lower-income families, and more can be done along these lines using existing federal housing programs such as the Low-Income Housing Tax Credit.

But the truth is that federal housing policy can make only a modest dent in the affordability problem. As we’ve seen, what really drives development is transportation policy, and so the real lever of change is, again, the upcoming transportation bill. The bill should offer state and local governments a clear choice: if they want federal dollars for light rail and other transit systems, they must ensure that citizens at all income levels reap the benefits. That means changing local zoning codes to mandate that a portion of the housing in transit-oriented developments—say, 15 percent—be reserved for lower-income families. It also means that local jurisdictions need to remove ordinances that act as barriers to affordable housing—an idea long championed by many conservatives, including the late Jack Kemp. For instance, empty nesters ought to have the right to rent out unused bedrooms or turn part of their homes into separate rental units. Doing so is illegal in most municipalities today.

Ultimately, the biggest barrier to affordability is insufficient supply: homes in walkable, transit-oriented neighborhoods cost too much because there are not enough of them to satisfy the growing market demand. What’s needed, then, is a supply-side solution: build more such neighborhoods.

Can a set of policies like these ever get through Congress? After all, Republicans have long been ideologically hostile to mass transit. With their base now predominantly in exurban and rural America, most GOP lawmakers will look with skepticism, even disdain, at proposals to use government in ways that benefit cities and closer-in suburbs that tend to elect Democrats. And many Americans who live in rural or exurban areas feel the scorn that too many educated urbanites express for their lifestyle, and reflect that scorn right back.

Yet, as Utah shows, conservative Americans can rally behind mass transit when all the advantages are pointed out and the hidden costs of sprawl made clear. The threats to family life posed by long commutes and auto dependency are a building issue among evangelical Christians. Conservatives are often among the most acute critics of federal highway subsidies and the way they insulate consumers from the real cost of driving. The late Paul Weyrich, cofounder of the Heritage Foundation, served on Amtrak’s board and was an outspoken champion of passenger rail. As William Lind recently argued in the American Conservative magazine, it was hardly a triumph of free enterprise that America’s convenient and affordable streetcar and passenger rail systems, most of them privately owned, were put out of business by government-subsidized and -owned highways.

In the wake of the Great Recession there is also another huge pocketbook force at work: however they might lean ideologically, the best hope suburbanites have for reversing their depressed home values is for mass transit lines to be extended in their communities. Though not every suburb can be saved in this way, for many it represents the most practical long-term solution to their dilemma.

Ultimately, the strongest argument for these policies—one conservatives and liberals ought to be able to agree on—is that they would allow the moribund real estate market to function again, and in so doing would give the economy a dose of healthy growth. Indeed, assuming that a decisive package like the one above is passed, the private sector, awash in capital, may anticipate the demand about to be unleashed in our markets and start investing in real estate again. That is what happened in downtown Portland, Oregon, when a proposed $50 million streetcar led to $3.5 billion of private-sector development, much of it before the streetcar was built. America will be back in business. And good business is good politics.

But leading the transition to sustainability is also a strategic imperative for the United States. China and India need to figure out how to accommodate 700 million of their countrymen who will leave the villages and enter the cities over the next forty years. That’s more than twice the total American population. China is already building at a pace that will allow it to have 221 cities with more than 1 million residents—the U.S. has nine. The competition for energy and raw materials like copper, lumber, and steel under a business-as-usual scenario is extraordinary and will result only in increased levels of strategic conflict in the decades ahead, as recent congressional hearings on “strategic minerals” attests. By making a decisive shift and embracing sustainable communities, innovative American firms will have the domestic markets they need to develop and deliver the super-efficient products and services that will keep America secure and, through increased exports, help build our economy while reducing our trade imbalance.

Admittedly, the road to sustainability only begins with how we build and rebuild our communities. In addition to the ideas discussed here, there is much more we need to do to address the energy and material intensity of our economy in ways that will lead to better jobs, higher wages, reduced deficits, and greater national security. But at a time when the American people need a plan for long-term prosperity, and because real estate absorbs so much of our wealth, it is essential that we focus on pushing on the door unlocked by our demographic inheritance: the two largest population groups, half of our population, want communities that the market is not delivering due to out-of-date subsidies and policies.

The bottom line is this: despite the protests of orthodox adherents to liberal and conservative fiscal policy, it is now possible to unleash latent private-sector demand by implementing reforms that will end our subsidies to sprawl and focus our nation on sustainability. Neither stimulus nor austerity, this approach would provide a new economic engine for America that can set us on a secure and prosperous path for years to come.

Authors

Patrick C. Doherty
Christopher B. Leinberger

Publication: Washington Monthly

Image Source: © John Gress / Reuters

Toronto Takes Off to a Great Walkable North

Christopher B. Leinberger — Thu, 28 Oct 2010 15:59:00 -0400

Just back from a four day trip to Toronto with my University of Michigan graduate students learning about pedestrian-oriented urban development. We toured seven major walkable urban places from downtown to a couple downtown-adjacent places, but especially suburban-located walkable urban places redeveloping old town centers and strip commercial centers.

What did we see? A forest of cranes building 30 to 50 story condominiums, rental apartments, and office towers in these walkable urban places and ground level street life that rivals the best metropolitan areas in the world.

The reason I selected Toronto for the students included the generous invitation of Richard Florida, a beacon for my students for having zeroed in on the knowledge economy and the rise of the creative class.

Another reason to see Toronto is that Canada had much more sober banking practices over the past decade, unlike the U.S., so that their five major institutions, all with headquarters in Toronto, have continued lending. The result is seen in the skyline, reflecting the continued engagement of the built environment, representing 35 percent of the assets of the economy, at work. Canada, like China, India, and Brazil, reasonably painlessly continued to grow through the Great Recession.

While Canadians have some behavioral differences from Americans, their demand for higher density walkable urban development is a look at the future of real estate development in this country. As Patrick Doherty and I write in the Washington Monthly, sustainable walkable urban development is essential to a U.S. economic recovery. No recovery since the Depression has happened without the built environment being engaged. Transportation infrastructure (rail transit, biking, and walking) that supports the higher density walkable urban development the market is demanding is essential if we want the economy to rebound.

Authors

Christopher B. Leinberger

Publication: The Avenue, The New Republic

Image Source: © STRINGER Canada / Reuters

Shaping the Metropolitan Future

Bruce Katz — Tue, 14 Sep 2010 12:55:00 -0400

The National Journal and The Atlantic just published the second supplement in its "next economy" series entitled: "the geography of opportunity."

The lead essay chronicles the ongoing "war over the future" between urban gurus Joel Kotkin and Richard Florida: a contest between suburbs and cities, sprawl, and density, Middle America and the coasts, the metropolis and the megaregion.

What to make of all this? Who is right? Who is wrong?

On one level, Kotkin and Florida are still wrestling over traditional urban planning turf, trying to discern housing, transport, and location preferences of a society growing ever more complex with each passing decade. Brookings’ State of Metropolitan America report released earlier this year showed a nation in the throes of demographic transformation, simultaneously growing, aging, diversifying, and splintering along new cultural and educational fault lines. At the same time, the U.S. economy is slowly restructuring in the aftermath of the Great Recession, tilting gradually away from excessive consumption towards more productive activity.

Against this backdrop, it is simple folly to believe that one "American trend" (e.g., Florida's urban-like density or Kotkin's suburban-like sprawl) is predetermined by the complicated mix of individual and firm choices, overarching economic and environmental imperatives, varied policy interventions, and ever evolving technological possibilities.

If anything, the development patterns within our metropolitan areas will continue to be as multidimensional as the demographic, economic, and other forces that affect place making. In fact, divisions across cities, suburbs, and other parts of metropolitan areas, in form and social composition, are blurring, as seen with trends as disparate as the suburbanization of poverty and the rise of walkable suburban downtowns and villages. At the same time, divisions among metropolitan areas--in age structure, educational attainment and income--are growing, with both old urban and newer suburban metro areas succeeding (Boston, Dallas) and struggling (Detroit, Bakersfield).

If there is any consistent trend, it is the cementing of the larger metropolis as the new spatial form, seamlessly enveloping cities and suburbs, exurbs and even rural towns (or living) at the periphery.

That leads to the second level of the futurist debate, namely the domestic and global competition and cooperation between metropolitan areas rather than within metropolitan areas.

Here we are in new spatial territory, as a new metropolitan map is emerging that defines not the U.S. but our relationship to the world. Networks form the unifying thread of the new map. American metros relate to each other through complex supply chain networks and migration patterns that are based on the endowed assets, distinctive economic clusters and social/cultural histories of individual metros. Likewise, U.S. metros relate to foreign metros through trading relationships and the exchange of goods, services, people, and goods.

The new map defies our conventional way of thinking about the world. Proximity of place to place (say Cleveland to Pittsburgh) only counts for so much in the new world. The essence of what a place does (i.e., what goods it produces, what services it provides) matters more.

Here the analyses of Kotkin and Florida appear to be either too narrow or too broad. Kotkin's juxtaposition of favored suburban metros in the heartland with urban metros along the coasts underestimates, if not ignores, the linkages between communities within these disparate spheres. Metros are not islands by themselves; they are part of broader networks domestically and globally, and understanding those networks is one of the essential keys to success in the new global world. Omaha, Nebraska, for example, an iconic heartland metro, specializes in such sectors as insurance, technology, and architecture, meaning that Omaha’s success is directly connected to firms situated and business generated in places like the Bay Area, 1700 miles away.

At the same time, Florida's focus on megaregions (and the high speed rail that he says should link these places) is overly expansive. It is doubtful whether connecting Cleveland to Chicago is rooted in any economic connections and trading relations that matter today. In a constrained fiscal climate, such cross-metro infrastructure investments will just crowd out the kinds of transformative interventions that are needed within metros (e.g., rightsizing of cities around anchors, multimodal facilities at major logistical hubs, new energy infrastructure).

In the end, Kotkin and Florida, right or wrong, do agree on one central theme: "the power of place.” In a new “Metro Century,” that may be the most important contribution of all.

Authors

Bruce Katz

Publication: The Avenue, The New Republic

Image Source: © Lucy Nicholson / Reuters

Walking — Not Just for Cities Anymore

Christopher B. Leinberger — Fri, 09 Jul 2010 14:57:00 -0400

I just had a debate with Joel Kotkin, whom many consider to be an apologist for sprawl. Surprisingly, there is a convergence between his view of the next generation of real estate and infrastructure development and mine: a constellation of pedestrian-friendly urban development spread throughout metropolitan areas, redeveloping parts of the central city and transforming the inner, and some outer, suburbs. There are certainly differences between the two of us: I happen to see significant pent-up demand for walkable urban development and massive over-building of fringe car-oriented suburban housing and commercial development.

In fact, I see compelling evidence that the collapse of fringe drivable suburban markets was the catalyst for the Great Recession, and the lack of walkable urban development due to inadequate infrastructure and zoning is a major reason for the recovery’s sluggishness. Joel feels the demand for walkable urban development is a fraction of the future growth in households. I think rail transit, biking and walking infrastructure are crucial to make this walkable urban future happen; Joel thinks bus rapid transit is as far as we have to go in the transit world … making cars more technologically efficient is his main answer.

Though, stepping back, Joel and I agree on the main issue, the redevelopment of the central city and the transformation of the suburbs into more human scaled environments, the reason we may disagree on the magnitude of what I think is a structural shift in how we build is the continued use of obsolete terms and data sets.

This happens all the time in social science research. It is best reflected in the story of a drunk who staggers out of a house late at night, dropping his keys near the front steps. He walks the 20 feet to the curb by the street light and starts looking for his keys there. A friend asks him why he is looking there since he dropped them at the front steps. The drunk replies he is looking for the keys by the curb because that is where the light is. Social scientists look for answers where the data sets are, not always where the “keys” are.

Our metropolitan data sets are compiled according to ‘central city’ and ‘suburbs’ classifications and have been for decades, providing longitudinal data particularly prized by researchers. Unfortunately, the concept of dividing the world into city versus suburbs is no longer so relevant. I have been dividing metropolitan places as either “drivable sub-urban,” meaning low density, modular, and dependent upon the car/truck for most trips; or “walkable urban,” meaning at least five times more dense and integrated and dependent upon many transportation modes (transit, biking, and, yes, cars and trucks). Using this distinction, metropolitan New York City has walkable urban places in Manhattan, parts of Brooklyn, Queens, and the Bronx, and in downtown White Plains, Hoboken, Jersey City, Princeton, among many other suburban places. Drivable development may predominate in the suburbs, but probably half of New York City itself is drivable sub-urban; including the majority of Staten Island and possibly half the Bronx and Queens. In the future, assuming Joel and I are both right, this confusion is just going to get worse.

We need move away from 20^th century concepts that confuse the conversation. If I am right, 70 to 80 percent of new development should be in walkable urban places, and my research leads me to think the majority of that development will be in the suburbs.

Authors

Christopher B. Leinberger

Publication: The Avenue, The New Republic

Image Source: © Rick Wilking / Reuters

Job Creation Has Left the Building

Kenan Fikri and Mark Muro — Wed, 23 Jun 2010 09:21:00 -0400

Where are the jobs? That question pervaded last week’s edition of the MetroMonitor index of recession and recovery and is becoming acute in the Intermountain West, where the companion Mountain Monitor reported that that employment actually fell slightly in the first quarter of 2010 in most of the region’s metros.

Nor is the prognosis looking much better going forward. The last dose of federal stimulus is beginning to wear off. The Senate is dawdling on a new lifeline intended to forestall additional state and local government layoffs. And for that matter the housing market is flagging again.

Which is especially troubling news for the Mountain West with its disproportionately large real estate and construction sectors.

In the West, the hope was that the recently expired federal homebuyer tax credit would juice home sales and construction, particularly in these important spring months, and so get the region’s real estate-oriented economy and the nation’s moving again. Then maybe—so the hope went—real estate sectors would carry some momentum through the rest of the year and jump start job creation across the rest of the economy.

Unfortunately, though, it’s beginning to look like things aren’t going to play out that way. Later today the Commerce Department is expected to say new-home sales dropped 20 percent last month. And meanwhile, it’s a big problem that nearly half of the million or so jobs that have been created thus far in 2010 are temporary Census positions, as David Reilly of the Wall Street Journal noted on Wednesday. After all, such short-term spots—as analysts at CreditSights observed in a report last week—simply don’t provide the security necessary to encourage households to take on large purchases, like a home, or to improve works’ chances of being approved on a loan application.

All of which suggests that those hoping for a real-estate-driven recovery in the West and elsewhere may have placed their hopes in a broken growth model and will need to look elsewhere for a true recovery.

How’s this? Well, with migration and consumption down, stimulus beginning to taper, lending still slow, and so many jobs temporary, it’s becoming clear the Mountain metros and others are this time going to need to generate an organic recovery the old-fashioned way: through the creation and exportation of true value.

This is what we’ve been getting at when we keep saying that the next economy will be export-oriented, lower-carbon, and innovation-driven (and associated with such related essentials as strong higher-education, highly trained workers, and thriving industry clusters producing innovative products). No robust housing market revival will take root, after all, until more people have stable, good-paying jobs, a steady income, and a degree of financial security. And to produce those things, metropolitan areas need to get back to the basics of learning and inventing and making and doing.

In this respect, it’s no surprise that Albuquerque and Ogden—two of the region’s most resilient metros through the recession—export fully 13.4 and 12.7 percent of their overall output, respectively. And it’s not very surprising either that two of the nation’s best-educated metros—Boulder and Fort Collins, both anchored by strong research universities—are heavily engaged in Colorado Gov. Ritter’s drive to place that state and its regions at the forefront of the emerging clean energy economy.

The Great Recession has, in short, helped accelerate a long-run reorientation of the economy towards higher value-added activities. This time, plentiful construction and consumption-oriented jobs will come only after the fundamentals that generate quality jobs and real economic value are firmly in place.

Authors

Kenan Fikri
Mark Muro

Publication: The Avenue, The New Republic

Image Source: © Kevin Lamarque / Reuters

The Challenge of Seattle's Emerging Society

Bruce Katz — Fri, 28 May 2010 00:00:00 -0400

Seattle likes to compare itself to its neighbors. On issues from light rail to cycling-friendly streetscapes to the business climate and innovation, Puget Sound residents look to places like Portland and San Francisco and wonder whether the region needs improvement or is doing it better than others.

Generally, those are matters of political and public will, leavened of course with the realities of public finance.

But in the coming decade, the demographic changes that metropolitan Seattle will face should prompt a look at another set of places more like the region than its West Coast neighbors.

Over the 2000s, the Puget Sound region ranked above the national average on measures of growth, educational attainment and racial and ethnic diversity. The Seattle region faces challenges and opportunities distinct from those in the less-diverse Portland area, or the much slower-growing San Francisco Bay area.

New Brookings research instead counts Seattle among a series of growing, highly educated, diverse "Next Frontier" regions like Austin, Denver, and Washington, D.C.

Despite being bookended by two recessions, the past decade surely counts Seattle, like its demographic peers, as one of the success stories of the 2000s.

The region grew by nearly 10 percent from 2000 to 2008. People are moving and immigrating to Seattle and the number of married couples with children is growing — important factors as the baby boomers begin to retire next year.

As in other Next Frontier regions, however, the Seattle area's overall demographic success masks deeper challenges.

On growth, the Puget Sound region has long grappled with issues of sprawl and density. Yet despite these efforts — and increasing public-transit use — the fastest-growing places in the region are on the suburban fringe, increasing commuting costs for the families that settle there and offsetting efforts to reduce greenhouse-gas emissions.

On education, although 36 percent of all Puget Sound-area adults hold four-year college degrees — the 11th-highest rate among the nation's 100 largest metro areas — the rate for whites in the region is now twice as high as for blacks and Hispanics. The region continues to import college graduates from elsewhere while its younger, more racially diverse residents are not attaining at anything close to the levels of their elders.

But as the baby boomers retire, what is bemoaned as the minority educational "achievement gap" will rapidly become a competitiveness gap. The result could be more of what we saw in the 2000s in Seattle — increasing wages for the highest earners and overall, masking the falling wages for those at the low end.

These challenges are not entirely new but they are intensifying as the nation goes through its biggest demographic transformation since the massive immigration of the early 20th century. Over the next 15 years, the United States is predicted to add a staggering 43 million residents, most of them minorities. All signs point to the Puget Sound region remaining on the front lines of that transformation.

To make the most of its demographic potential, Seattle's first order of business should be increasing regional cohesion to address what are increasingly regionwide challenges.

For instance, nearly twice as many immigrants and poor people now live in the metro area's suburbs as in its big cities. Older, larger jurisdictions like the city of Seattle and its nonprofits have valuable experience and institutional capacity to build upon in helping the region's low-income families, and meeting the human-services needs of the children of immigrants.

The Seattle region can also look to its demographic peers for innovative strategies to address its challenges. One model is Denver's regional council of governments, which successfully and with regional agreement built a major light-rail system very quickly. Likewise, despite the long tenure of growth management in the state, there are lessons in the Sacramento region's Blueprint, which provides a comprehensive road map for addressing future growth in a fiscally and environmentally sustainable manner.

Seattle can also lead its peers in confronting its large educational disparities by race and geography common in Next Frontier metros as the Community Center for Education Results is attempting.

Similarly, Seattle already has a head start on many other places around the country thanks to the efforts of groups like OneAmerica (on immigrant and refugee communities) and the College Success Foundation. And like other Next Frontier metro areas, Seattle retains an economic advantage from its built-in stocks of human capital, innovative firms and research institutions, and livable urban core that attracts highly educated workers.

The Puget Sound region has made admirable efforts to capitalize on those strengths, but challenges ahead will require a regionwide commitment to maintain Seattle's rank among the nation's most demographically vibrant metro areas.

Authors

Bruce Katz

Publication: The Seattle Times

Job Sprawl and the Suburbanization of Poverty

Steven Raphael and Michael Stoll — Tue, 30 Mar 2010 00:00:00 -0400

In nearly all metropolitan areas in the United States, jobs have been moving to the suburbs for several decades. In the largest metropolitan areas between 1998 and 2006, jobs shifted away from the city center to the suburbs in virtually all industries. As the U.S. population also continues to suburbanize, larger proportions of metropolitan area employment and population are locating beyond the traditional central business districts along the nation’s suburban beltways and the more distant fringes.

Understanding the association between employment decentralization and the suburbanization of poverty is important because of the continued growth of the suburban poor. In 2005, the suburban poor outnumbered their city counterparts by almost one million. And during the first year of the recession that began in 2007, suburbs added more than twice as many poor people as did their cities.

The suburban poor face unique disadvantages. These include concentration in inner-ring, disadvantaged, and jobs-poor suburbs; overreliance on public transportation, which often provides inferior access to and within suburban areas; and spatial mismatch between where the suburban poor live and the locations of important social services.

An analysis of data on the location of people and jobs in the 50 largest U.S metropolitan areas in 1990 and 2006–2007 finds that:

The poor are more suburbanized in metropolitan areas with greater employment decentralization. Overall, the poor are generally less likely to live in suburbs than the non-poor (55.8 percent versus 70.9 percent). Metropolitan areas with both high suburbanization of poverty and job sprawl are somewhat larger and lie mostly in the South and West, including Atlanta, Miami, San Francisco, Seattle, and Orlando.
Poor whites and Latinos are more suburbanized than poor blacks in metro areas with high job sprawl. This disparity is most marked in metropolitan areas with higher poverty rates, indicating that in such regions, poor blacks may be less able to suburbanize in response to the outward movement of jobs than other groups.
Metropolitan areas where jobs decentralized more over time experienced greater suburbanization overall, but not among the poor. This suggests that the outward movement of jobs in metropolitan areas in recent years does not by itself explain suburbanization of the poor during this time. Rather, other related factors may have propelled the decentralization of both the poor and jobs—such as lack of reverse commute public transit, or negative aspects of central cities.
Within suburbs, the poor generally live in communities that have somewhat below-average numbers of jobs. About 68 percent of all suburban residents live in areas with above average numbers of jobs compared with 62 percent of the suburban poor. Even lower shares of black and Latino suburban poor live in jobs-rich communities, particularly in higher-poverty metropolitan areas.

Together, these findings suggest that employment decentralization is a driver of the suburbanization of poverty. However, the responsiveness of the poor to the outward movement of jobs, particularly racial and ethnic minority poor, does not appear to be as strong as that for the population as a whole. Policies designed to minimize the frictions that limit broader access to jobs-rich suburbs, such as providing more incentives for multifamily housing, reevaluating existing zoning laws and development impact fees, using more housing vouchers in new suburban locations, and enforcing fair housing laws in suburban areas could go a long way toward easing mobility for the poor and enhancing their labor market outcomes.

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Steven Raphael
Michael Stoll

Pikes Peak as “Megapolitan” Space: A Federal Agenda for Prosperity in the Colorado Springs Metro Area

Robert E. Lang, Amy Liu and Mark Muro — Tue, 07 Apr 2009 00:00:00 -0400

Each year Colorado College holds the State of the Rockies Symposium to release an impressive report card grading the Intermountain West region on a variety of attributes. This year the event focused on megapolitan areas—combinations of two or more regions into a single economic, social, and urban system. Headlining the event was the Brookings Blueprint for American Prosperity paper, “Mountain Megas: America’s Newest Metropolitan Places and Federal Partnership to Help them Prosper.” Amy Liu and Mark Muro of the Metro Program, and Robert Lang of Virginia Tech delivered keynote addresses on how Colorado’s Pike’s Peak region relates to the Front Range “mega”.

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Publication: Colorado College State of the Rockies Symposium

Job Sprawl Revisited: The Changing Geography of Metropolitan Employment

Elizabeth Kneebone — Mon, 06 Apr 2009 00:00:00 -0400

An analysis of the spatial location of private-sector jobs in 98 of the largest metropolitan areas by employment reveals that:

Only 21 percent of employees in the top 98 metro areas work within three miles of downtown, while over twice that share (45 percent) work more than 10 miles away from the city center. The larger the metro area, the more likely people are to work more than 10 miles away from downtown; almost 50 percent of jobs in larger metros like Detroit, Chicago, and Dallas locate more than 10 miles away on average compared to just 27 percent of jobs in smaller metros like Lexington-Fayette, Boise, and Syracuse.
Job location within metropolitan areas varies widely across industries. More than 30 percent of jobs in utilities, finance and insurance, and educational services industries locate within three miles of downtowns, while at least half of the jobs in manufacturing, construction, and retail are more than 10 miles away from central business districts.
Employment steadily decentralized between 1998 and 2006: 95 out of 98 metro areas saw a decrease in the share of jobs located within three miles of downtown. The number of jobs in the top 98 metro areas increased overall during this time period, but the outer-most parts of these metro areas saw employment increase by 17 percent, compared to a gain of less than one percent in the urban core. Southern metro areas were particularly emblematic of the outward shift of job share with a 2.6 percentage-point decline in urban core job share and a 4.8 point gain in the outermost ring, outpacing the 98 metro average (a 2.1 point decline and a 2.6 point gain, respectively).
In almost every major industry, jobs shifted away from the city center between 1998 and 2006. Of 18 industries analyzed, 17 experienced employment decentralization. Transportation and warehousing, finance and insurance, utilities, and real estate and rental and leasing showed the greatest increases in the share of jobs located more than 10 miles away from downtown.

Amid changing economic conditions—expansion, contraction, and recovery—during the late 1990s and early 2000s, employment in metropolitan America steadily decentralized. The spatial distribution of jobs has implications for a range of policy issues—from housing to transportation to economic development—and should be taken into account as metro areas work to achieve more productive, inclusive, and sustainable growth and, in the near term, economic recovery.

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Elizabeth Kneebone

Land Banking as Metropolitan Policy

Frank S. Alexander — Tue, 28 Oct 2008 12:00:00 -0400

Executive Summary
Stressed by the catastrophic mortgage foreclosure crisis and the long-run decline of older, industrial regions, communities around the country are becoming increasingly burdened with vacant and abandoned properties. In order to alleviate the pressures on national prosperity caused by these derelict properties, the federal government needs to advance policies that support regional and local land banking for the 21st century.

Land banking is the process or policy by which local governments acquire surplus properties and convert them to productive use or hold them for long term strategic public purposes. By turning vacant and abandoned properties into community assets such as affordable housing, land banking fosters greater metropolitan prosperity and strengthens broader national economic well-being.

America’s Challenge
During the mortgage crisis of the past two years, the nation has seen the number of foreclosures double, and almost 600,000 vacant, for-sale homes added to weak real estate markets. In older industrial regions, chronic economic and population losses have also led to vacancies and abandonment. When left unaddressed, these problem properties impose severe costs on neighborhoods, including reduced property values and tax revenues, increased arson and crime, and greater demands for police surveillance and response. Eight cities in Ohio, for example, were forced to bear $15 million in direct annual costs and over $49 million in cumulative lost property tax revenues due to the abandonment of approximately 25,000 properties. Such negative consequences drain community resources and prevent cities and towns—and the nation—from fully realizing productive, inclusive, and sustainable growth.

Limitations of Existing Federal Policy
The Emergency Assistance Act in the Home and Economic Recovery Act of 2008 is the first to express recognition of land banking in federal legislation, but it has several weaknesses. The act lacks clarity regarding the scope and target for the allocated funding which may hinder effective policy implementation in the short term. Moreover, as an emergency response to the immediate mortgage crisis, it does not sufficiently address the concerns of land banking in the long run. In particular, the act’s $3.92 billion does not come close to meeting the costs associated with the two million foreclosures projected by the end of 2008 and the local revenues lost from vacant and abandoned properties.

A New Federal Approach
Federal policy needs to support effective and efficient land banking. In the short term, the federal government should deploy the Emergency Assistance Act with local and regional flexibility for determining funding priorities. Over the long term, the federal government should implement a new, comprehensive federal land banking program that would:

Capitalize local and regional land banking by providing sufficient funding to support the several million properties in the process of foreclosure or those that are already vacant and abandoned
Incentivize local and state code and tax reform to ensure that land banking is not hampered by outdated rules and procedures
Advance regionalism by encouraging new inter-jurisdictional entities to align the scale of land banking authorities with the scale of metropolitan land issues

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Frank S. Alexander

Ohio must Build on its Strengths by Customizing Development Strategies for Each Region

Lavea Brachman and Bruce Katz — Sun, 19 Oct 2008 12:00:00 -0400

Ohio mirrors the nation in its struggle with critical issues: the economy, global warming, rising gas prices and the disruptive forces of globalization. As calls for national change abound, the time is ripe for policy reform at the state level as well.

Recently, to address this process, a bipartisan gathering in Columbus brought together more than a thousand people and a docket of state leaders, including Gov. Ted Strickland and Lt. Gov. Lee Fisher.

The summit, a joint effort of the Washington-based Brookings Institution and Columbus' Greater Ohio, marked an important milestone for the "Restoring Prosperity to Ohio" initiative, launched nine months ago with the goal of reinvigorating the state's competitiveness through a focus on its core cities.

A preliminary report identified 32 communities representing Ohio's historic core and assessed their economic potential.

Big demographic, economic and environmental forces are buffeting the nation, its regions and its cities. They are rewriting the rules that drive prosperity. They are redrawing the map, assigning enormous value to a relatively small number of assets - innovation, human capital, infrastructure and quality of place - and rewarding those communities where these assets come together. The top 100 U.S. metropolitan areas take up only 12 percent of the nation's land mass, but harbor nearly two-thirds of the population and generate 75 percent of gross domestic product.

In Ohio, as elsewhere, this means that there is no one economy, but rather, a network of local and metropolitan economies that relate to each other, the nation and the world in new, sophisticated ways.

These metropolitan engines are more than twice as densely populated as the state overall, fostering the mix of institutions and amenities that range from health facilities like the Cleveland Clinic to attractions like the Rock and Roll Hall of Fame and Museum.

Ohio's best chance to alter its trajectory is to leverage assets where they are found - in metropolitan regions. Ohio's cities and core communities need to find and redefine their places within a metropolitan or regional economy. Places long thought separate - city, suburb, exurb and rural area - are inextricably linked.

Ohio's core communities are defined as those whose 1950 population was at least 15,000 and whose county population share was at least 20 percent at that time. These communities house many assets that can drive their success in a metropolitan economy. For instance, they contain seven of the state's 11 research universities and half of the state's hospitals.

Yet, Ohio's core communities vary widely in size, in demographic composition, industry, regional character and economic resilience. An assessment of these places must account for the reality that while many of the core communities will continue to anchor their regions, some have lost prominence over time and will need to adapt to a new role and downsize responsibly.

The report found that Ohio policies stack the deck against core communities, systematically favoring the growth of new places over the redevelopment of older ones and failing to leverage the assets in these places in any coherent way.

Strickland, Fisher and Ohio's legislative leaders recognize the tectonic shifts in today's economy and are taking steps to enhance Ohio's ability to compete globally and chart the path to a different energy and environmental future.

Yet, the current administration is saddled with a longstanding legacy of weak governance. At a time when the economy rewards places that collaborate, Ohio's structure of government perpetuates wasteful competition between neighboring jurisdictions. Ohio's cities are weaker than they should be, undermining the ability of the state to attract and retain innovative firms and talented workers.

A competitive communities strategy would change that equation.

Rather than spreading resources thinly like peanut butter, this strategy would take stock of the real assets in core communities, set ambitious goals for the state and then align state policies and programs to meet those objectives.

Rather than pursuing one-size-fits-all solutions, this strategy would enable the state to identify and build on the key assets that drive prosperity in the places where they occur. Where assets are not present or sufficient, this policy would help places adjust and adapt.

Rather than encouraging communities to compete against each other, this strategy would empower jurisdictions (like the more than 100 municipalities in the Cleveland metro) to collaborate to compete. The Northeast Ohio region's Fund for our Economic Future process is an innovative effort that typifies such a collaborative strategy.

Cleveland's route to prosperity will not be the same as Dayton's, Akron's or Findlay's. But Ohio's core communities will thrive, if they can recognize their role in a larger region and build on the assets that drive prosperity.

Authors

Lavea Brachman
Bruce Katz

Publication: The Cleveland Plain Dealer

A Restoring Prosperity Case Study: Akron Ohio

Larry Ledebur and Jill Taylor — Wed, 17 Sep 2008 12:00:00 -0400

Part of the larger Northeast Ohio regional economy, the Akron metropolitan area is composed of two counties (Summit and Portage) with a population of just over 700,000, and is surrounded by three other metropolitan areas. Akron is located approximately 40 miles south of Cleveland, 50 miles west of Youngstown, and 23 miles north of Canton. The Cleveland metro area is a five-county region with a population of 2.1 million. The Youngstown metro area includes three counties, extending into Pennsylvania, and has a population of 587,000. Canton is part of a two-county metropolitan area with a population of 410,000.

The adjacency of the Akron and Cleveland Metropolitan Statistical Areas (MSAs) is an important factor in the economic performance of the Akron region. The interdependence of economies of the two MSAs is evidenced by the strong economic growth of the northern part of Summit County adjacent to the core county of the Cleveland metropolitan area. This part of Summit County beyond the city of Akron provides available land, access to the labor pools of the two metropolitan areas, and proximity to the region’s extensive transportation network.

Although affected by economic activity in the larger region, the fate and future of Akron and its wider region are not solely determined by events in these adjacent areas. While sharing broad economic trends with its neighbors, the Akron metro area has been impacted by a different set of events and has shown different patterns of growth from other areas in Northeast Ohio.

This study provides an in-depth look at Akron’s economy over the past century. It begins by tracing the industrial history of the Akron region, describing the growth of the rubber industry from the late 1800s through much of following century, to its precipitous decline beginning in the 1970s. It then discusses how the “bottoming out” of this dominant industry gave rise to the industrial restructuring of the area. The paper explores the nature of this restructuring, and the steps and activities the city’s business, civic, and government leaders have undertaken to help spur its recovery and redevelopment. In doing so, it provides a series of lessons to other older industrial regions working to find their own economic niche in a changing global economy.

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Authors

Larry Ledebur
Jill Taylor

A Restoring Prosperity Case Study: Chattanooga Tennessee

David Eichenthal and Tracy Windeknecht — Wed, 17 Sep 2008 12:00:00 -0400

Chattanooga a few years ago faced what many smaller cities are struggling with today—a sudden decline after years of prosperity in the "old" economy. This case study offers a roadmap for these cities by chronicling Chattanooga's demise and rebirth.

Chattanooga is located in the southern end of the Tennessee Valley where the Tennessee River cuts through the Smoky Mountains and the Cumberland Plateau. The city’s location, particularly its proximity to the Tennessee River, has been one of its greatest assets. Today, several major interstates (I-24, I-59, and I-75) run through Chattanooga, making it a hub of transportation business. The city borders North Georgia and is less than an hour away from both Alabama and North Carolina. Atlanta, Nashville, and Birmingham are all within two hours travel time by car.

Chattanooga is Tennessee’s fourth largest city, with a population in 2000 of 155,554, and it covers an area of 143.2 square miles. Among the 200 most populous cities in the United States, Chattanooga—with 1,086.5 persons per square mile—ranks 190th in population density.2 It is the most populous of 10 municipalities in Hamilton County, which has a population of 307,896, covers an area of 575.7 square miles, and has a population density of 534.8 persons per square mile.

With its extensive railroads and river access, Chattanooga was at one time the “Dynamo of Dixie”—a bustling, midsized, industrial city in the heart of the South. By 1940, Chattanooga’s population was centered around a vibrant downtown and it was one of the largest cities in the United States. Just 50 years later, however, it was in deep decline. Manufacturing jobs continued to leave. The city’s white population had fled to the suburbs and downtown was a place to be avoided, rather than the economic center of the region. The city lost almost 10 percent of its population during the 1960s, and another 10 percent between 1980 and 1990. It would have lost more residents had it not been for annexation of outlying suburban areas.

The tide began to turn in the 1990s, with strategic investments by developing public-private partnerships—dubbed the “Chattanooga way.” These investments spurred a dramatic turnaround. The city’s population has since stabilized and begun to grow, downtown has been transformed, and it is once again poised to prosper in the new economy as it had in the old.

This report describes how Chattanooga has turned its economy around. It begins with a summary of how the city grew and developed during its first 150 years before describing the factors driving its decline. The report concludes by examining the partnerships and planning that helped spur Chattanooga’s current revitalization and providing valuable lessons to other older industrial cities trying to ignite their own economic recovery.

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Authors

David Eichenthal
Tracy Windeknecht