Sunday, January 30th, 2011

Indianapolis Must Reinvent Itself Again

Indianapolis has often been referred to as the “Diamond of the Rust Belt,” but its performance goes far beyond just being the best house on a bad block. Yet despite outperforming not just the Midwest, but America as a whole, long term challenges facing Marion County put the region at risk.

Few seem truly aware of how impressive metro Indy’s performance has been. Compared other large metros in the greater Midwest, Indy was #1 for population growth from 2000-2009, growing almost 14%, or close to 60% faster than the US as a whole. It also had positive net domestic migration – people moving in minus people moving out – of over 70,000 people while virtually every other Midwest metro was bleeding people. That’s like the entire population of Fishers packing it up from where ever they lived and moving to Indianapolis. People are voting with their feet in favor of Indianapolis.

Indy was also #1 in job growth, adding 19,000 jobs in that same period while the US as a whole lost them. It is #2 in GDP per capita, the basic measure of economic output per person, trailing only the Twin Cities. It even outranked Chicago, showing that far from the stereotypes of a low end economy, metro Indianapolis is in fact a high value economy.

But despite this great regional story, all is not rosy. In particular, Marion County as a whole is now starting to show signs of the urban struggles we typically associate with the inner city. For example, while its population has continued to grow, it has slowed to a crawl. It lost more than 50,000 people to migration in the last nine years. And it lost almost 60,000 jobs – a huge number. A report commissioned by Mayor Ballard early in his administration noted that three of the four largest townships in Marion County have declining assessed valuation. And the township school districts now largely trail those in the collar counties for graduation rates.

In 1970, Unigov united the old city with what were then its suburbs. But this proved to be less a solution to a problem than a stay of execution. Marion County as a whole now finds itself in the same situation the old city did back then. It is struggling with legacy issues while surrounded by fast growing, brand new suburbs. And this time there is no Unigov in the wings to fix things.

In effect, Unigov bought Indianapolis 40 years to create an urban core environment that would prove demographically, economically, and fiscally sustainable over the long term. Unfortunately, that time is running out and the solution hasn’t yet been found. Indianapolis did completely transform its downtown, an accomplishment worthy of every bit of praise that has been given to it, but that is not sufficient to animate an entire county.

The big problem is not with the old city. Center Township, despite its challenges, has seen an uptick in population after decades of decline and neighborhoods over a wide expanse have seen improvement. The real issues are in the old suburban townships. Their problem is that they are selling and older version of the same basic suburban product as the collar counties, only with higher taxes, more crime, and worse schools.

When you are selling an inferior version of a commodity product at a high price point, it should come as no surprise that there aren’t a lot of buyers. Hence the exodus from Marion County we have witnessed. People can get a shiny new product with no legacy problems just by crossing a border, so that’s what they are doing.

To avoid Marion County failing and taking the region – and possibly even the state – down with it, it must change course to redevelop itself around a different type of product, a more urban one that isn’t available in the collar counties. This will take courage, since it won’t be popular in some quarters, but continuing to fight the collar counties in a commodity suburb game is a game Marion County can’t win.

This column originally appeared in the Indianapolis Business Journal.

Topics: Public Policy, Regionalism, Strategic Planning
Cities: Indianapolis

24 Responses to “Indianapolis Must Reinvent Itself Again”

  1. Rod Stevens says:

    This problem of “first ring suburbs” may be one of the biggest urban problems in America. Myron Orfield of MSP has been writing about this for decades- how the poor are being gentrified out of the center city, and how the older townships and first ring suburbs don’t have the resources to deal with them.

    The real problem is that now foreign countries are doing to these suburbs did to the center city 50 years ago- taking jobs and investment away based on low cost. And the center cities can no longer compete that way. The only way they can is to compete on the basis of adding value. The question is, do they have a combination of sense of place, classic neighborhoods and good schools, or are they simply worn out suburbia? Reinventing these first ring ‘burbs is going to be one of the big issues of the coming decade, if not well beyond that.

  2. William says:

    I have this theory that inland American cities rapidly wear out as they grow up – it sounds like someday Indy will enter adulthood and the task of attracting talent, investment, and renewal will start to become a little harder in the unforgiving, hard knock midwest where older, more distinct cities like Cincinnati and St. Louis have already been tested several times over.

  3. Jarrett says:

    Interesting. By the way, I hear some IN politicians are thinking about eliminating townships as a way to save money. Do townships do anything, and if so why do so many states get by without them? Maybe a topic for another post …

  4. The role of townships varies by state. In Indiana, Ohio, and Illinois, they have historically served an major role. Ohio Townships are exclusive jurisdiction general purpose governments I believe. Basically if you don’t live in an incorporated place, you live in a so-called “township”

    Indiana is different. It’s townships are an overlay like counties, but are not general purpose governments. They provide certain specific functions like poor relief and fire service. Eliminating them won’t do much to save money, but these entities are hoarding a few hundred million in cash, plus they are cesspools of nepotism. I strongly support abolishing them.

  5. Chris Barnett says:

    “it sounds like someday Indy will enter adulthood and the task of attracting talent, investment, and renewal will start to become a little harder in the unforgiving, hard knock midwest where older, more distinct cities like Cincinnati and St. Louis have already been tested several times over”

    “Older” Cincinnati was incorporated in 1802; Indianapolis in 1821. The difference in age is trivial two centuries on. The difference in topography dictated more-dense development in Cincinnati; Indianapolis was free from its beginning to spread in every direction because it lacked Cincinnati’s un-glaciated hills and hollows and its great inland river.

  6. Chris, the incorporation date is meaningless. Cincinnati was an early boom town (the first in the country) and it grew up, matured, and even became old when Indy was still a baby, so to speak. The issue is that Cincinnati “got big” much much earlier, like in the mid to late 1800s, compared to Indy’s more steady growth which has only just barely caught up after another hundred plus years.

    That means Cincinnati has accumulated a lot more of the cruft that comes with being old, like inflexible institutions, a bigger ruling class, more unfunded liabilities, etc. That’s the problem, and it’s only now becoming an issue in Indy because it’s taken so much longer for it to grow those problems.

  7. ed says:

    If the region grew by 14% between 2000-9, and assuming the income distribution of the didn’t change appreciably and the population density of the region didn’t change appreciably, then the poor population and the footprint of the poor population of the Indy region also grew by roughly 14% during that period. The question is where can these additional poor people live? You said the inner core is improving, so the poor people are likely somewhat being displaced from the inner core. Moreover the poor still can’t quite afford the full cost of new construction, so they are going to the only place available to them, the older inner suburbs.

    The problem facing the inner suburbs is disinvestment. As the wealthier people relocate to either the inner core or the suburban fringe, investment follows them. If you want to transform the inner suburbs into something more urban, the issue is how do you direct investment into the inner suburbs to make that possible?

    The Portland Metro area is doing it with an urban growth boundary. In California, they are using CO2 regulation (SB 375) as pretext to effectively do the same thing.

    But if you don’t have some sort of mechanism to direct growth inward instead of outward, growth will naturally seep outward because of less political resistance. Cows and cornfields don’t complain and delay development the way that nimbys try to stomp out anything that might create additional traffic problems for themselves. That makes its cheaper to build there.

  8. Ray says:

    As one of those 50,000 who fled Indianapolis for greener pastures, I have to say that Indy is doing a great job. Although it did not succeed in keeping me, the vast majority of the bright young professionals I encountered during my time in the 317 have chosen to stay in the Circle City. Some of the reasons, I believe, are Indy’s burgeoning B2B software industry, its comparatively low cost of living, and its very respectable arts and entertainment scene (decent nightlife in Broad Ripple and Fountain Square certainly doesn’t hurt). However, there is room for improvement; getting rid of townships is a no-brainer and doubling-down on public transit is another. But Indy’s largest problem is much more difficult to solve: its lack of sexiness. If Indy wants to be a world-class city, a hub of technology and innovation, a place for movers and shakers, it will need to shed its dowdy reputation as “a great place to raise a family” and embrace a new identity.

  9. Chris Barnett says:

    Ed, add to your displacement hypothesis the fact that a lot of lower-cost postwar production housing is just junk.

    In the deteriorating parts of Indy, there’s a broad swath of slab-on-grade houses built with plumbing under or in the slab (can’t be replaced when it corrodes), aluminum wiring, early plywood sheathing (now delaminating and rotting), shallow roof pitches (no room in the attic to re-plumb or re-wire), and energy-inefficient metal casement windows. In a lot of cases, if the roof goes bad and major systems fail the best solution is a bulldozer.

  10. jhen says:

    I’ve been curious about how Indy might manage a triage mentality like Chicago. “Save the good, forget the bad.” This is not to say I’m endorsing this plan, but what would happen if Indy was to break up IPS. Broad Ripple and Meridian Kessler could rework their schools and more younger couples might consider staying there instead of moving to Zionsvlle/Carmel/Fisher/Avon/Plainfield. It might stabalize those tax bases and allow Indy to focus on the areas in real need of help.

  11. MetroCard says:

    Aaron, one thing you didn’t touch on was the source of these new residents. Are they coming primarily from Indiana, or from other states? I think this facet would have an appreciable impact on the city’s future.

    What Indianapolis really needs to distance itself from the pack is an infusion of fresh talent. Allowing new blood to come in and develop creative solutions to challenges, as well as being able to think outside of the box, will serve as a catalyst for reinvention.

    The “big thinking” mentality just does not exist here, and it reflects poorly on our civic leadership as a city with so much potential has to constantly deal with wasted opportunities (the canal, mass transit, tolerating mediocre design, etc).

  12. Metro, I happen to have the exact figures. Indeed, Indy does draw on a net basis principally from Indiana. IIRC it has a negative migration balance with the combined rest of the US.

  13. MetroCard says:

    Forbes has put together a migration map showing population losses/gains between counties in 2008. Indeed, most of Marion County’s arrivals seem to come from other counties in Indiana, particularly the industrial northern counties.

    Interestingly, there also seems to be a significant net migration from Los Angeles County (I’m guessing mostly Latinos?).

  14. MetroCard, that’s the data set I’m using, though I have far better tools than Forbes. Among other things, Los Angeles County is by far the most populous county in the United States, so it sends lots of migrants everywhere.

  15. Keith Morris says:

    While the deterioration of the city’s first post-WWII suburban ring is glossed over by the overall changes in population growth in the region, I’m curious about what is being left unsaid about the inner-city itself. It looks similar to Columbus, where large swathes of *those* neighborhoods (the forgotten areas, wrong sides of the track, etc) are continuing their death spiral as homes and commercial structures continue to deteriorate in the thousands and increase their burden on the city. In just a couple such neighborhoods here there was a total of over 6,000 urban residents lost from 1990-2000 and with no serious improvements made there has likely been thousands more lost in the previous decade. We’ve both had decades to turn these areas around into productive and attractive urban areas that provide a higher quality of life not possible in the worn-out first-ring suburbs.

    So not only are we stuck with lackluster 1st-ring suburbs (where in Columbus a good chunk of crime has migrated), which has admittedly been saved in part by immigrants (we can’t depend on them 100% to sustain these areas alone), but we also have large urban neighborhoods which have been allowed to deteriorate even further, ruling them out as livable places thanks to unchecked crime, lack of investment, and horrible public schools (at least in the case of Columbus).

    The bus system is just, I don’t know what to say after seeing this for the first time. The #17 on College Ave between Downtown and Broad Ripple sees the last bus leaving at 10PM or 10:30PM depending on which way you’re headed. Forget heading out to the bars on weekends and depending on the bus in Broad Ripple if you live Downtown and vice versa.

    And I though COTA was bad for only having hourly runs between 10PM and 12AM on weeknights. The one thing I will give Indy is that you can buy sets of 10 tickets in lieu of carrying exact change at all times, but for anyone wanting to use the bus more and a car less it’s a big downer in Indy’s urban quality of life that taking the bus is a daytime-only venture.

  16. MetroCard says:

    Great analysis, Keith. It’s as if “urban” is a dirty word around these parts. And yes, IndyGo is beyond embarrassing (you can probably tell by my name that I’m a fan of mass transit).

    Indianapolis is truly between a rock and a hard place in regards to the quality of urban life. The issue is just now beginning to take prominence, but I really think it’ll become a pressing matter within the next 10-20 years or so.

    I like to think of the city as a donut, with a healthy downtown, mediocre central city (with some exceptions) and strong suburbs. People desiring a truly suburban lifestyle often find themselves in the collar counties; meanwhile, those who are more urban minded remain concentrated downtown–and the end result is a large swath of blighted prewar neighborhoods and decaying inner suburbs. And if the city continues to lose talent to other cities (or cannot attract enough immigrants), then there’ll be no incentive to improve and no catalysts for redevelopment.

    An upgrade in infrastructure requires a significant initial investment, but the city certainly stands to benefit over time, as it would become tremendously more attractive to both newcomers and urban-minded locals alike. Truly urban living need not be a “niche” for up-and-coming cities in the 21st century.

  17. Keith, in Indy there are definitely vast tracts of old city area where the housing stock is basically unsalvageable. As cdc has pointed out many times, these are cheap plywood shacks on a slab with the plumbing and such embedded into the slab along with other problems that make the houses almost physically impossible to rehab even were there any market demand.

  18. MetroCard says:

    One thing I forgot…

    It’s no surprise that the city’s most urban neighborhoods turn the corner first. Lockerbie, St. Joseph, the Old Northside, etc have all seen significant investment, and that momentum is creeping into other neighborhoods like Herron-Morton, Fall Creek Place, Mapleton-Fall Creek, etc. What little “old school” urban infrastructure Indianapolis has exists in these neighborhoods, and it’s spectacular that residents have stepped up to the plate and begun to recognize and appreciate the types of resources they have.

  19. Kurt L says:

    Most of those “unsalvageable” housing units were likely constructed as a stopgap measure, in order to meet an immediate demand, and have far outlived their intended lifespan by 40 years or so.

    The problem is, no one wants to take up the challenge of a wholesale redevelopment of such areas (which, I’ll admit, would be a pretty daunting challenge).

  20. Chris Barnett says:

    Kurt, I wouldn’t call it “stopgap”. I’d say that a mix of economic, political, and social factors (tax incentives for homeownership, VA and FHA loans, and the baby boom) conspired to create the world of “production building” in the 1950s.

    I don’t think the buyers realized they were getting a product that wouldn’t last as long as the homes they grew up in. “Modern” trumped everything in 1950.

  21. Kurt L says:

    Well Chris,

    You certainly may be correct that the buyers didn’t know their new homes weren’t intended to be as long lasting as they might have hoped. Still, I think the developers hadn’t intended for their projects to last more than 20 years.

    It wasn’t just the post-WWII homes that were built that way, though. I think that there was some kind of paradigm shift in home building starting soon after WWI.
    It was probably some combination of cost and the increased demand for (what amounted to) suburbanization. That change was reduced from 1929 until 1946, then picked up again with a vengeance.
    In fact, the current housing volatility is probably still tied to the same trending begun with the post-WWI movement of people away from the urban core begun some 90 years ago.

  22. Chris Barnett says:

    Kurt, most of the changes in building technology post WWI were things we’d all agree are “improvements”: elimination of knob & tube wiring, improved plumbing, block instead of brick for basements, elimination of balloon framing, use of “brown board” as the base for plaster instead of lath.

    Post WW2, though, some of the changes aren’t obviously better. Breaker panels replacing fuse boxes, and copper replacing galvanized pipe are clearly better. Drywall replacing plaster; plywood and composition board replacing solid pine in subfloors and sheathing? Maybe not so much.

  23. John says:

    Interesting quote from RFK about GDP per capita on Streetsblog:

  24. John says:

    Interesting quote from RFK about GDP on Streetsblog:

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