Sunday, January 24th, 2010
What does a healthy urban core mean to a region? Maybe the difference between success and failure. Here’s a look at urban core and regional job growth for selected cities*, ranked by percentage job growth in the core county from 2001 to 2009.
|City||Job Change – Core||Pct. Job Change – Core||Job Change – Metro||Pct. Job Change – Metro|
Notice a pattern? Clearly, for these cities at least, core county performance is an excellent proxy for overall regional performance. I’m not making a statistical claim here, but the data for these cities is suggestive. I think it also foots with our common sense view. How many thriving metro areas have a core city/county that is going down the tubes? I can’t name one.
The Dynamics of Growth and Decline
It might be easy to dismiss cities like Cleveland and Detroit by simply calling them dysfunctional. But that misses the point. Of course they’re dysfunctional. All struggling cities and organizations are dysfunctional, or they probably wouldn’t be in that state. What’s more, rather than just dysfunction causing failure, which is sometimes true, it’s also true that failure causes dysfunction. As a city (or company or other organization) starts into decline, it fails to attract customers, top talent leaves, and operational and financial issues creep up. In this regard the civic dysfunction noted in places like California is as much as product of decline as its cause.
Growth and decline are both positive reinforcement cycles. During growth, economies of scale drive unit cost efficiencies, and there’s rising wealth to fund investments that generate more wealth. As places like Phoenix and Florida attest, even the raw construction that accompanies growth can generate its own bubble.
Similarly for decline. Scale economics go into reverse, there’s no money to invest, people start fleeing. Harvard economist Ed Glaeser attributes a lot of this to an inelastic housing supply. As people leave, the quantity of houses stays the same, which drives prices down. This scares more people into leaving, attracts poor people, which cause more middle class people to leave, which cause prices to decline further, etc.
The Imperative of Preventing Core Decline
Given these dynamics, it is imperative to prevent decline from taking hold. I identify four basic states of regional growth: Hyper-Growth, Moderate Growth, Stagnation, and Decline. Austin is Hyper-Growth, Portland and Columbus are Moderate Growth, Cincinnati is Stagnation, and Cleveland and Detroit are Decline in this scenario. (Assignment not entirely based on job growth).
I posit as a hypothesis that these states don’t exist as a pure continuum, but rather behave more as discrete quanta, with forces that tend to keep cities in their present state. What’s more, I’d suggest that transitions from one state to another occur as a result of a sort of “punctured equilibrium” that occurs when growth, or more likely decline, in the core reaches a tipping point. Or as Dietrich Dörner put it, “‘Catastrophes’ seem to hit suddenly, but in reality the way has been prepared for them. Unperceived forces gradually eat away at the supports necessary for favorable development until the system is finally unable to resist any longer and collapses.”
Why the core? Because it seems that decline in a region first becomes evident there. The implication is that we should would keep a very close eye on core city and core county demographic trends (population growth, domestic and international in-migration, and educational attainment) and economic statistics (job growth, income growth, output growth). It seems unlikely that core counties are likely to have net in-migration as they are structural exporters to the suburbs. But if they aren’t attractive to international immigrants, are losing jobs, etc. that’s definitely a very bad sign. These negative trends might not be obvious or be ignored because of the stickiness of the current growth state – until it is too late.
For example, even ostensibly healthy cities like Columbus, Ohio might have underlying trends that put it as risk. How likely is it that the Columbus region will be long term successful if Franklin County loses 50,000 jobs per decade? Not very. That’s the city’s tax base slowly bleeding away. And with Columbus very dependent on commuter taxes, that’s doubly true in this case.
Don’t Hate the Suburbs
It might be tempting to view the suburbs as the “bad guy” here. I reject that view. In a growing community, it isn’t reasonable to believe that all the new residents and businesses are going to land in a fixed area. And clearly, despite an optimistic trend towards urban living being back in fashion, the suburbs continue to have a hold on the desires of large numbers of Americans, particularly families with kids.
I want to bring the central city up, not pull the suburbs down. A great city needs great suburbs. That doesn’t mean I don’t think there’s room for regional solutions or other matters. But especially in a struggling region like the Midwest, we need every part of a region to understand its role on the team and bring its “A game”. Pitting city and against suburb is like beggars arguing over table scraps. The real competition is between, not within regions, on a global basis. And even that competition need not be a zero-sum game.
If we start taking an antagonistic point of view towards the suburbs, especially in regions like the Midwest and South with strong suburban traditions and little political demand for pro-urban policies, we’re just asking to fail, practically speaking.
I think we need to focus on maintaining core vitality, without worrying that the suburbs are growing too. Even Austin has most of its growth in the suburbs, but the core county is still growing as well. Portland has moderate core decline, but that may be a temporary state due to its under performance in the recession. And Portland has the problem of being on a state border, which leads to tax and policy arbitrage with nearby Washington – a tough challenge. Still, the policies Portland has put in place has kept its core significantly more healthy than those of the Midwest. As long as the core stays strong, that’s a good thing.
And, of course, as these numbers show, perhaps the best way to boost the suburbs is to boost the core.
What’s Your Policy?
So how do we keep our urban cores successful over the long term? That’s a tough challenge. Frankly, it’s a nut America hasn’t cracked, other than for the tier one global cities, and even there, the story is very overplayed.
On the one side are those that cite high costs and poor services in the city. The recipe here is cutting costs, improving schools, and reducing crime. But as readers of my blog know, this, by itself, will never save the core. Cut costs and taxes? By all means, let’s be as efficient as possible. But we’ll still have higher taxes than the suburbs. Reduce crime and improve schools? Sign me up. But no matter what, the city will still fail to measure up to the average suburb. Cities are structurally higher cost and and structurally weaker providers of education, public safety, and some other services than the suburbs. This strategy, by itself, isn’t enough.
On the other hand, promoters of urbanist solutions du jour – light rail, bike lanes, “green” projects, stadiums, etc – often fail to make the case for how their projects will actually change the game. Rather, they rely on cookbook policy and talking point advocacy.
What’s more, success is often measured by eye candy rather than hard data. For example, people visit Chicago and gawk at the skyscrapers and crowds without considering that the area tourists and even many residents see is only a tiny part of the city or region. People visit Portland and see crowded street cars and sidewalks in the Pearl District, but discount job growth if they even consider it. I can read urbanist blogs all day long and rarely ever come across the word “job”, unless it is some reference to the green economy.
That’s not to say that Portland or Chicago are failures – far from it – but the impression given by visiting or a glowing magazine article is certainly not the whole story.
The Way Forward
For me, I think the first imperative is still to convince people of the importance of the urban core to overall regional (and state and national) success. Too many people still don’t get this. Our cities are still often resented more than loved. As they are often home to the upscale amenities, high end jobs, and may wealthy residents, this reinforces the notion that they are already privileged, when as the data above shows, this is really not the case. And of course, cities are often Democratic strangleholds, which makes Republicans take a skeptical view of pro-urban policy. It’s a hard argument to make, but we’ve got to figure out how.
We also need to remember the importance of the basics. Things like costs, taxes, regulatory policy, crime, and schools do matter. We simply can’t take our eye off the ball here, or ignore costs. We need to remember that sustainability includes demographic, economic, and fiscal sustainability.
On the other hand, cities do have to offer a differentiated product. They can’t try to out suburb the suburbs. That’s a sucker’s game. Rather, they do need to strengthen their core urbanity, make diversity into an asset, and find ways to make targeted investments that are aligned with an urban strategy, tailored to the local context, and for which we think we can generate good ROI.
It’s a tough balancing act and a hard challenge, one we haven’t figured out yet. But we’ve got to go beyond dogma and ask the tough questions. Because if we fail to keep our urban cores healthy, we’ll end up in a place we really don’t want to be. I plan to keep exploring how we get to a better place in this blog.
Related from the Columbus Dispatch: When will Ohio’s economic plunge end? (Answer: When its urban cores return to health)
Post Script: Suburban-Only Job Growth
Lest someone thing I’m trying to disguise the suburban-only growth, here it is for the cities in question. Note that other than Portland, the rankings don’t change.
|City||Suburban Job Growth||Percentage Suburban Job Growth|
* Data is from the Quarterly Census of Employment and Wages, Q1-2001 to Q1-2009, which was the maximum year over year range available for easy download from the BLS at the time I started pulling data. I originally intended to include all my Midwest metros, but the BLS took the database offline for multiple days in the middle of my queries. This isn’t the first time that happened. Their database query uptime is highly suspect, so caveat emptor if you ever need BLS data.