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1 The Brookings Institution Metropolitan Policy Program Bruce Katz, Director Understanding Regional Dynamics: Implications for Social and Economic Justice
2 Understanding Regional Dynamics: Implications for Social and Economic Justice I II There are profound demographic and market changes taking place in the United States These forces are giving cities and first suburbs the best chance to compete in decades III But the resurgence of U.S. urban places is incomplete and presents challenges for social and economic justice
3 I There are profound demographic and market changes taking place in the United States
4 U.S. population growth in the 1990s was much stronger than in previous decades Millions of persons Source: U.S. Census Bureau mil mil. 23 mil. 22 mil
5 Immigration explains a large portion of this population growth Components of population change, % Source: U.S. Census Bureau Net Immigration Natural Increase 65.3%
6 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
7 As America grows it is also aging Share of Population in Age Groups Source: U.S. Census Bureau Male 85+ Female Male 85+ Female <5 <5 6% 4% 2% - 2% 4% 6% 6% 4% 2% - 2% 4% 6%
8 Household formation is also changing: Men and women are delaying marriage Median Age at Marriage Source: U.S. Census Bureau Men Women
9 Families are having fewer children Births Ever to Women Age Source: U.S. Census Bureau 100% 80% % 60% % 40% 20% 0% 18% 17% 10% 10% No children 1 child 2+ Children
10 The combination of these trends means that the household size is declining Household change, Source: U.S. Census Bureau Household Size s 1960s 1970s 1980s 1990s 2000s
11 And the share of families with children in the population is declining Percentage change, Families with children & Projected, Source: 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% Source: THE U.S. BROOKINGS Census Bureau INSTITUTION
12 At the same time, the country is going through a period of unprecedented economic transformation The U.S. economy continues to transition from manufacturing to services U.S. Employment Shares 35% Source: Bureau of Economic Analysis 30% 25% % 20% 15% 10% 22% 19% 5% 0% 11% Manufacturing Services
13 The volume of traded goods and services is growing exponentially Billions of Constant (2000) Dollars Source: Bureau of Economic Analysis $1,500 $1,000 Exports of Goods Exports of Services Imports of Goods Imports of Services $500 $
14 Globalization is forcing firms to focus on core competencies and outsource routine business activities Percent of Companies Outsourcing Services, 2000 Source: Outsourcing Institute Transportation Marketing Customer Service Manufacturing Human Resources Distribution Administration IT 5% 6% 7% 7% 9% 10% 15% 20% 0% 5% 10% 15% 20% 25%
15 All these changes are placing a high premium on education and skills Percentage of Workers with a College Degree or Higher, select occupations, 2002 Source: National Education and Attainment, National Bureau of Labor 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Percent with college degree or higher Management Arts/media Business/Finance Architecture/Engineer. Computer/Math. Healthcare Practioners Education Legal Occups. Life siciences
16 And on continuous innovation From R&D to Market Source: Ned Hill. "Innovation and Economic Development." Presentation to the National Governors Association
17 In the 1990s, steady growth and prudent fiscal policy kept interest rates low, fueling development Interest Rates Development 3-Month Treasury Bills Construction Put in Place (Billions of Dollars) 16% 14% 12% 10% 8% 6% 4% 2% 0% $1,000 $750 $500 $
18 While over the next 30 years, billions of additional square feet is 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 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
19 II These forces are giving cities and first suburbs the best chance to compete in decades
20 First, a definition of cities and first suburbs 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. Nationally 45% of population live in cities and first suburbs Breakdown of U.S. population by type of geography, 2000
21 Demographic changes give cities and first suburbs a chance to compete for new residents and their consumption Young professionals Childless couples Baby-boomers New immigrants Empty nesters Elderly individuals Families with children?
22 This growing and diverse population desires a range of choices in housing Multi-family housing Apartments for rent Single family housing Assisted living
23 A range of choices in neighborhoods that are walkable Urban neighborhoods downtown Neighborhoods with mixed density Historic neighborhoods Single family neighborhoods
24 A range of choices for shopping Downtown Big box A number of main streets
25 And a range of choices in transportation Fixed rail Walking and biking Bus Automobile
26 These changes and choices have already led to a population surge in urban areas Population Growth in 50 largest cities, Source: U.S. Census Bureau 14% 10% 6% 2% 6.3% 9.8% -2% -1.6% 1970s 1980s 1990s
27 And in first suburbs Population in First Suburbs, Source: U.S. Census Bureau Population 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000, s 1960s 1970s 1980s 1990s 2000s
28 These changes and choices have also contributed to the downtown revitalization in cities Absolute change in population, Source: U.S. Census Bureau Population change Atlanta Cleveland Denver Seattle Philadelphia Houston Chicago
29 And in the core areas of many first suburbs Percent change in population, Source: U.S. Census Bureau Percent change 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% King County, WA First suburb county Corresponding municipality Kirkland Hudson County, NJ Guttenberg Hennepin County, MN Brooklyn Park Fulton County, GA Roswell
30 The number of people living in high poverty neighborhoods declined during the 1990s Population of high-poverty neighborhoods by location, Source: Paul Jargowsky, Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s 2003 Non Metropolitan Suburbs Central City Total US ,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 Population (in thousands)
31 There are also other characteristics that give cities and first suburbs a unique niche Density Amenities Educational and medical facilities Creativity Multicultural diversity Built infrastructure
32 Density gives them a competitive niche because the rules of the economy have changed Density contributes to innovation by attracting young educated workers Average labor productivity increases with employment density Boston Dense labor markets and high clustering of jobs leads to knowledge spillovers Dense local economies are linked to increased patenting
33 Urban amenities give them a competitive niche because they attract workers and tourists Mix of restaurants, services, and retail Entertainment Seattle Art Museum Cultural amenities Tourism
34 A concentration of research institutions give cities and first suburbs an advantage in the Knowledge Economy Employer: Offer employment to local residents Incubator: Offer services to support start ups Penn State Work force developer: Address local/regional resource needs Real estate developer: Use real estate to anchor growth Purchaser: Redirect institutional purchasing towards local businesses Network builder: Channel university expertise to increase local business capacity
35 Cities and first suburbs also attract artists Arts employment, Selected metro areas, Cleveland-Akron % Change 94.7 Source: Targeting Occupations in Regional and Community Economic Development, Ann Markusen, October 2002 Atlanta Minneapolis-St Paul Seattle-Takoma Dallas-Ft Worth Pittsburgh
36 And they have become multicultural centers Percent change in population, largest cities Source: U.S. Census Bureau 45% 40% 43% 35% 38% 30% Hispanic Asian
37 Development is also more cost effective since basic infrastructure has already been paid for Estimated cost savings by community prototype Source: Real Estate Research Corporation, 1974 $20,000 $16,000 $12,000 $8,000 Utilities Roads/Streets Public Facilities Schools Recreation $4,000 $0 Low-Density Sprawl Low-Density Planned Sprawl Mix Planned Mix High-Density Planned Community Prototypes (10,000 units)
38 III But the resurgence of U.S. urban places is incomplete and presents challenges for social and economic justice
39 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
40 Despite city growth, population is decentralizing in nearly every U.S. metropolitan area Selected cities and suburbs, population growth % 40% 44% 37% City Suburbs Source: U.S. Census Bureau 30% 22% 20% 16% 19% 18% 10% 6% 4% 7% 9% 0% Atlanta Chicago Denver Memphis Top 100
41 Some cities continue to experience population decline Population growth, Source: U.S. Census Bureau 15% 10% Hartford city, Connecticut Baltimore city, Maryland St. Louis city, Mis souri Philadelphia city, Pennsylvania Top 100 Cities 10% 5% 0% -5% -10% -4% -15% -13% -12% -12%
42 Major federal and state policies continue to facilitate sprawl Subsidized housing policies reinforce concentrated poverty Transportation funding is still geared toward highway expansion The fiscal playing field is uneven between older and newer communities Governmental fragmentation reinforces the growth of newer communities
43 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, % 15% 19% 17% Source: Current Population Survey, % 9% 9% 5% 0% Central City Suburbs
44 But the number of people living in high poverty neighborhoods declined during the 1990s Population of high-poverty neighborhoods by location, Source: Paul Jargowsky, Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s 2003 Non Metropolitan Suburbs Central City Total US ,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 Population (in thousands)
45 In many cities, the physical landscape has not yet capitalized on downtown assets East St. Louis, Illinois
46 The resurgence of urban places presents challenges for social and economic justice Urban recovery places pressures on housing prices The decline in city poverty is accompanied by the rise in First Suburban poverty There is a mismatch between the skills of low wage residents and the knowledge jobs being created in cities Cities are more focused on attracting young professionals than on growing a middle class
47 Urban recovery places pressure on housing prices Hot markets have led to skyrocketing real estate values in urban areas across the country Metro Area Los Angeles San Diego Las Vegas Boston Providence Washington, DC Miami Peak 3-Year Rise in Home Prices 53% 55% Source: FDIC, % 38% 46% 40% 45%
48 Increased First Suburban concentrated poverty accompanied a decline in city poverty 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2.7% 4.7% 6.6% 8.4% Tracts with 20% poverty rate Percent of Census tracts in First Suburbs with poverty rates of 20%, 30%, and 40% or higher, Source: Brookings Analysis of U.S. Census Bureau data; Geolytics Neighborhood Change Database (NCDB) Tracts with 30% poverty rate Tracts with 40% poverty rate
49 Spatial mismatch means that city residents do not have equal access to the city s knowledge jobs Baltimore spatial mismatch, 2000 City's share of metro's total employment City's share of metro's knowledge economy jobs Share of jobs located in Baltimore City that are knowledge economy jobs Share of city residents who work in knowledge economy jobs Source: U.S. Census Bureau 0% 15% 30% 45%
50 Cities are more focused on attracting young professionals than on growing a middle class
51 A new urban agenda is needed that transforms the economic, physical, and social landscape of cities and older suburbs
52 The New Competitive Cities Agenda 2 Build on Assets 3 Create Neighborhoods of Choice 1 FIX THE BASICS 4 Grow the Middle Class 5 Influence Metropolitan Growth
53
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