Understanding Regional Dynamics: Implications for Social

THE BROOKINGS INSTITUTION METROPOLITAN POLICY PROGRAM

Metropolitan Policy ProgramBruce Katz, Director

The Brookings Institution

Understanding Regional Dynamics: Implications for Social and Economic Justice


There are profound demographic and market changes taking place in the United States

Understanding Regional Dynamics: Implications for Social and Economic Justice

I

These forces are giving cities and first suburbs the best chance to compete in decades

II

But the resurgence of U.S. urban places is incomplete…and presents challenges for social and economic justice

III


There are profound demographic and market changes taking place in the United StatesI


33 mil.

22 mil. 23 mil. 24 mil.

-

5

10

15

20

25

30

35

1960-1970 1970-1980 1980-1990 1990-2000

Millions of persons

U.S. population growth in the 1990s was much stronger than in previous decades

Source: U.S. Census Bureau


34.7%

65.3%Net ImmigrationNatural Increase

Components of population change, 1990-2000

Immigration explains a large portion of this population growth



34 million foreign-born now live in the U.S.; 12 percent of the population

That is the largest absolute number in U.S. history

And highest share since 1930


6% 4% 2% - 2% 4% 6%

<5

85+Male Female

6% 4% 2% - 2% 4% 6%

<5

85+Male Female

1970 2020

Share of Population in Age Groups

As America grows it is also aging



Household formation is also changing:Men and women are delaying marriage

20

21

22

23

24

25

26

27

28

1900 1920 1940 1960 1980 2000

Men

Women

Median Age at Marriage



Families are having fewer children

80%

10%10%

65%

18% 17%

0%

20%

40%

60%

80%

100%

No children 1 child 2+ Children

1976

2002

Births Ever to Women Age 40-44Source: U.S. Census Bureau


The combination of these trends means that the household size is declining

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

1950s 1960s 1970s 1980s 1990s 2000s

Hous

ehol

d Si

ze

Household change, 1950-2000Source: U.S. Census Bureau


All Families w/ children 36.6% 32.8% 28.2%

All Families w/o children 33.7% 35.3% 39.7%


And the share of families with children in the population is declining

1990 2000 2020

Percentage change, Families with children & Projected, 1990-2000Source: U.S. Census Bureau


At the same time, the country is going through a period ofunprecedented economic transformation

22% 19%

32%

11%

0%

5%

10%

15%

20%

25%

30%

35%

Manufacturing Services

19702000

U.S. Employment Shares

Source: Bureau of Economic Analysis

The U.S. economy continues to transition from manufacturing to services


The volume of traded goods and services is growing exponentially

$0

$500

$1,000

$1,500

1990 1992 1994 1996 1998 2000

Exports of Goods

Exports of Services

Imports of GoodsImports of Services

Billions of Constant (2000) DollarsSource: Bureau of Economic Analysis


Globalization is forcing firms to focus on core competencies and outsource routine business activities

Percent of Companies Outsourcing Services, 2000Source: Outsourcing Institute

5%

6%

7%

7%

10%

9%

15%

20%

0% 5% 10% 15% 20% 25%

IT

Administration

Distribution

Human Resources

Manufacturing

Customer Service

Marketing

Transportation


All these changes are placing a high premium on education and skills

Percentage of Workers with a College Degree or Higher, select occupations, 2002Source: National Education and Attainment, National Bureau of Labor

0%10%20%30%40%50%60%70%80%90%

Manage

ment

Arts/m

edia

Busines

s/Finan

ce

Archite

cture/

Engine

er.

Computer/M

ath.

Healthca

re Prac

tione

rsEdu

catio

nLe

gal O

ccup

s.Lif

e sicie

ncesPe

rcen

t with

col

lege

deg

ree

or h

ighe

r


And on continuous innovation

1315

18

02468

101214161820

1998 2003 2006

From R&D to Market

Source: Ned Hill. "Innovation and Economic Development." Presentation to the National Governors Association


$250

$500

$750

$1,000

1993 1995 1997 1999 2001 2003

In the 1990s, steady growth and prudent fiscal policy kept interest rates low, fueling development

Interest Rates DevelopmentConstruction Put in Place (Billions of Dollars)

0%2%4%6%8%

10%12%14%16%

1980 1984 1988 1992 1996 2000

3-Month Treasury Bills


While over the next 30 years, billions of additional square feetis projected to be developed or replaced

By 2030, about half of the buildings in which Americans live, work, and shop will have been built after 2000.

• By 2030, the nation will need about 427 billion square feet of built space to accommodate growth projections.

• About 82 billion of that will be from replacement of existing space and 131 will be new space.

- Source: Arthur C. Nelson, 2005


These forces are giving cities and first suburbs the best chance to compete in decadesII


First, a definition of cities and first suburbs

Nationally 45% of population live in cities and first suburbs

Breakdown of U.S. population by type of geography, 2000

Cities:

• Cities for this effort are defined as major population areas with a population over 100,000

First Suburbs:

• First suburbs are the “inner-ring” of suburbs that developed before the wave of suburban growth of the past 50 years

• There are 64 first suburban counties identified throughout the U.S.


Demographic changes give cities and first suburbs achance to compete for new residents and their consumption

• Young professionals

• Childless couples

• Baby-boomers

• New immigrants

• Empty nesters

• Elderly individuals

• Families with children?


Single family housing

This growing and diverse population desires a range of choices in housing…

Apartments for rentMulti-family housing

Assisted living


Urban neighborhoods downtown

A range of choices in neighborhoods that are walkable…

Historic neighborhoods

Neighborhoods with mixed density

Single family neighborhoods


A number of main streets

Downtown Big box

A range of choices for shopping


Fixed railWalking and biking

And a range of choices in transportation

Bus Automobile


These changes and choices have already led to a population surge in urban areas

9.8%6.3%

-1.6%-2%

2%

6%

10%

14%

1970s 1980s 1990s

Population Growth in 50 largest cities, 1970-2000



And in first suburbs

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

1950

s19

60s

1970

s19

80s

1990

s20

00s

Pop

ulat

ion

Population in First Suburbs, 1950-2000



These changes and choices have also contributed to the downtown revitalization in cities

Absolute change in population, 1990-2000


02000400060008000

10000120001400016000

Atlanta

Clevela

nd

Denve

r

Seattle

Philad

elphia

Housto

n

Chicag

oPo

pula

tion

chan

ge


And in the core areas of many first suburbs

Percent change in population, 1990-2000


0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%

King C

ounty

, WA

Kirklan

dHud

son C

ounty

, NJ

Gutten

berg

Henne

pin C

ounty

, MN

Brookly

n Park

Fulto

n Cou

nty, G

ARos

well

Perc

ent c

hang

e

First suburb county

Corresponding municipality


01,0

002,0

003,0

004,0

005,0

006,0

007,0

008,0

009,0

0010

,000

11,00

0

Total US

Central City

Suburbs

Non Metropolitan

Population (in thousands)

2000 1990

Source: Paul Jargowsky, “Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s” 2003

The number of people living in high poverty neighborhoods declined during the 1990s

Population of high-poverty neighborhoods by location, 1990-2000


There are also other characteristics that give cities and first suburbs a unique niche

• Density

• Amenities

• Educational and medical facilities

• Multicultural diversity

• Built infrastructure

• Creativity


Density gives them a competitive niche because the rules of the economy have changed

• Average labor productivity increases with employment density

• Density contributes to innovation by attracting young educated workers

• Dense labor markets and high clustering of jobs leads to knowledge spillovers

• Dense local economies are linked to increased patenting

Boston


Urban amenities give them a competitive niche because they attract workers and tourists

Mix of restaurants, services, and retail Entertainment

TourismCultural amenitiesSeattle Art Museum


A concentration of research institutions give cities and first suburbs an advantage in the Knowledge Economy

Purchaser: Redirect institutional purchasing towards local businesses

Network builder: Channel university expertise to increase local business capacity

Real estate developer: Use real estate to anchor growth

Work force developer: Address local/regional resource needs

Employer: Offer employment to local residents

Incubator: Offer services to support start ups

Penn State


Cities and first suburbs also attract artists

27.824321903Pittsburgh

43.261954326Dallas-Ft Worth

51.649373256Seattle-Takoma

58.547833018Minneapolis-St Paul

71.247382767Atlanta

94.732111649Cleveland-Akron

% Change

19901980

Arts employment, Selected metro areas, 1980-1990

Source: “Targeting Occupations in Regional and Community Economic Development, Ann Markusen, October 2002


And they have become multicultural centers

38%

43%

30%

35%

40%

45%

Hispanic Asian

Percent change in population, 1990-2000100 largest cities



Development is also more cost effective since basic infrastructure has already been paid for

$0

$4,000

$8,000

$12,000

$16,000

$20,000

Low-DensitySprawl

Low-DensityPlanned

Sprawl Mix Planned Mix High-DensityPlanned

Community Prototypes (10,000 units)

UtilitiesRoads/StreetsPublic FacilitiesSchoolsRecreation

Estimated cost savings by community prototypeSource: Real Estate Research Corporation , 1974


But the resurgence of U.S. urban places is incomplete…and presents challenges for social and economic justiceIII


The resurgence of U.S. urban places is incomplete

Decentralization remains a dominant growth pattern

A portion of U.S. cities continue to decline

State and federal policies remain anti-urban

The legacies of institutional racism and concentrated poverty persist

Other structural barriers to revitalization remain


4%

19%

7%9%

44%

16%18%

6%

37%

22%

0%

10%

20%

30%

40%

50%

Atlanta Chicago Denver Memphis Top 100

City Suburbs

Despite city growth, population is decentralizing in nearly every U.S. metropolitan area

Selected cities and suburbs, population growth 1990-2000Source: U.S. Census Bureau


Some cities continue to experience population decline

Population growth, 1990-2000


-13% -12% -12%

-4%

10%

-15%-10%

-5%0%5%

10%15%

Hartford city,Connecticut

Baltimore city,Maryland

St. Louis city,Missouri

Philadelphiacity,

PennsylvaniaTop 100

Cities


Major federal and state policies continue to facilitate sprawl

Subsidized housing policies reinforce concentrated poverty

The fiscal playing field is uneven between older and newer communities

Transportation funding is still geared toward highway expansion

Governmental fragmentation reinforces the growth of newer communities


Source: Current Population Survey, 2002

19%

9%

17%

9%

0%

5%

10%

15%

20%

Central City Suburbs

1990 2002

Poverty rates in central cities have declined over the 1990s, while poverty rates in the suburbs have increased slightly

Poverty rates for central cities and suburbs, 1990-2001


01,0

002,0

003,0

004,0

005,0

006,0

007,0

008,0

009,0

0010

,000

11,00

0

Total US

Central City

Suburbs

Non Metropolitan

Population (in thousands)

2000 1990

Source: Paul Jargowsky, “Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s” 2003

But the number of people living in high poverty neighborhoods declined during the 1990s

Population of high-poverty neighborhoods by location, 1990-2000


In many cities, the physical landscape has not yet capitalizedon downtown assets

East St. Louis, Illinois


The resurgence of urban places presents challenges for social and economic justice

Urban recovery places pressures on housing prices

There is a mismatch between the skills of low wage residents and the knowledge jobs being created in cities

The decline in city poverty is accompanied by the rise in First Suburban poverty

Cities are more focused on attracting young professionals than on growing a middle class


Peak 3-Year Rise in Home Prices53%55%43%38%46%40%45%

Urban recovery places pressure on housing prices

Source: FDIC, 2005

Hot markets have led to skyrocketing real estate values in urban areas across the country

Metro AreaLos AngelesSan DiegoLas VegasBostonProvidenceWashington, DCMiami


0.0%

1.0%

2.0%3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

1970 1980 1990 2000

Increased First Suburban concentrated poverty accompanied a decline in city poverty

Source: Brookings Analysis of U.S. Census Bureau data; Geolytics Neighborhood Change Database (NCDB)

Percent of Census tracts in First Suburbs with poverty rates of 20%, 30%, and 40% or higher, 1970-2000

2.7%

4.7%

6.6%

8.4%

Tracts with 30% poverty rate




Spatial mismatch means that city residents do not have equal access to the city’s knowledge jobsBaltimore spatial mismatch, 2000


0% 15% 30% 45%

Share of city residents who work inknowledge economy jobs

Share of jobs located in Baltimore Citythat are knowledge economy jobs

City's share of metro's knowledgeeconomy jobs

City's share of metro's total employment


Cities are more focused on attracting young professionals than on growing a middle class


A new urban agenda is needed that transforms the economic, physical, and social landscape of cities and older suburbs


Grow the Middle Class

4

FIX THE BASICS

1

Build on Assets

2

Influence Metropolitan Growth

5

Create Neighborhoods

of Choice

3

The New Competitive Cities Agenda


www.brookings.edu/metro

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Understanding Regional Dynamics: Implications for Social