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COASTAL ZONE INFORMATION CENTER ULRF URBAN LAND RESEARCH FOUNDATION The Changing Economic Role of Central Cities CZIC COLLECTION HC ISSUE PAPER SERIES 106.6 .B544 1978 A ULRF Issue Paper The Changing Economic Role of Central Cities By J. Thomas Black Research Division Urban Land Institute AJ U DEPARTMENT OF COMMERCE NOAA C COASTAL SERVICES CENTER 2234 SOUTH HOBSON AVENUE CIIARLESTON SC 29405-2413 Property of CSC 161br=7 co am This paper was funded by a grant from Wo The Urban Land Research Foundation About ULI-the Urban Land Institute The Urban Land Institute is an independent, non- profit research and educational organization in- corporated in 1936 to improve the quality and standards of land use and development. The Institute is. committed to conducting practical research in the various fields of real estate knowl- edge; identifying and interpreting land use trends in relation to the changing economic, social, and civic needs of the people; and disseminating in- formation which can facilitate the orderly and more efficient use and development of land. ULI receives its financial support from member- ship dues, sale of publications, and contributions for research and panel services. Project Staff Director of Publications Frank H. Spink, Jr. Book Editor Holly H. Williams Book Designer Carolyn E. Noe Production Manager Robert L. Helms Production Assistant Patricia E. Thach Recommended bibliographic listing: J. Thomas Black. The Changing Economic Role of Central Cities. Washington: Urban Land Institute, 1978. Metric Conversion Table Meters = feet x 0.305 Kilometers = miles x 1.609 Square Meters = square feet x 0.093 Square Kilomet 'e rs square miles x 2.590 T Cubic Meters cubic feet x 0.028 -Cubic Meter-s cubic yards x 0.765 He_6ta_r&_s acres x 0.405 '(a hectaWis 10,000 square meters) Copyright 1978 by ULI-the Urban Land Institute. All rights reserved. Reproduction or use of the whole or any part of the contents without written permission of the copyright holder is prohibited. Library of Congress Catalog Card Number 78-66446 Printed in the United States of America ii About ULRF-the Urban Land Research Foundation The Urban Land Research Foundation was established in 1970 to seek and administer funds to support research on the use, planning, and development of land. The Foundation is qualified under the Internal Revenue Code as a non-profit research and educational organization. Officers and ULRF Board of Directors President Marshall Bennett Gregory R. Dillon 1. Rocke Ransen Claude M. Ballard, Jr. Chicago, Illinois Beverly Hills, California Montreal, Quebec Newark, New Jersey Temple H. Buell Antony Herrey Robert E. Raymond First Vice President Denver, Colorado New York, New York Hartford, Connecticut Michael F. Kelly William F. Burge Gerald D. Hines Marion G. Smith, Jr. Minneapolis, Minnesota Houston, Texas Houston, Texas Nashville, Tennessee Secretary Glenn W. Buzzard Harold S. Jensen Donald R. Waugh, Jr. N. S. Ridgway, Jr. Milwaukee, Wisconsin Chicago, Illinois New York, New York Los Angeles, California Glen E. Coverdale Benjamin V. Lambert Ex Officio Member Treasurer New York, New York New York, New York Ronald R. Rumbaugh Joseph Straus, Jr. James S. Dailey William E. Leary Washington, D.C Philadelphia, Pennsylvania Hartford, Connecticut Boston, Massachusetts The conclusions and opinions expressed by the author in this paper do not represent the views, opinions, or policies of the Urban Land Research Foundation or of the Urban Land Institute. The authenticity and accuracy of the facts presented herein are the responsibility of the author. Contents Fo rewo rd ........................................................................................ V Introduction .................................................................................... 1 Regional Economic Conditions and Trends ............................................. 5 Metropolitan Economic Conditions and Trends ....................................... 9 Central City/Suburban Shifts and the Changing Role of the Central City ........ 15 Prospects and Public Policy ................................................................ 27 List of Tables 1 Regional Change in Personal Income ........ 5 12 Change in Retail Sales in Selected Central 2 Regional Change in per Capita Income ....... 5 Cities ..................................... 17 3 Jobs per 1,000 Population by Region ......... 6 13 Structural Change in 11 Large Cities .......... 18 4 Regional Employment Shifts ................. 7 14 Change in Service Employment in Selected 5 Comparison of Regional Share of Employment Cities ..................................... 19 to Share of Growth ......................... 7 15 Change in Manufacturing Employment in 6 Change in Distribution of Non-Agricultural Selected Cities ............................. 20 Workers by Industry .............. ......... 7 16 Change in Employment in Ten Metropolitan 7 Change in Total Personal Income in 35 Large Areas and Their Central Cities ............... 21 SMSAs ..................... 10 17 Office Space Expansion in CBDs of Selected 8 Change in per Capita Income in Large SMSAs. 11 Cities ..................................... 22 9 Comparison of per Capita Incomes in 18 Change in Employment to Population Ratios Selected SMSAs ............................ 12 and Unemployment Rates for Ten Central 10 Change in Employment in 35 Large SMSAs .... 13 Cities ..................................... 23 11 Large Central Cities Which Have Expanded 19 Change in Central City Jobs to Resident Labor Boundaries Since 1960 ...................... 16 Force Ratios for Five Central Cities ........... 24 20 Real per Capita Income of Residents for 20 Large Central Cities ........................ 25 iv Foreword This is the first of a series of issue papers designed to raise important land use issues for public dis- cussion and debate. The subject of this paper- the future of central cities in the United States- has been hotly debated for many years. It is a de- bate that has been raised to new prominence by the strain placed upon central cities by recent economic events and announcements of federal urban policy changes. Both the debate and cur- rent federal policies are dominated by some very pessimistic conclusions regarding the viability of central city economies. The author of this paper chooses to challenge conventional wisdom; he is reasonably optimistic about the future of many central cities. We believe that the arguments he presprits are timely and deserve attention. There- fore we offer this paper for those who are willing to look beyond the dreary statistics of central city decline. It must be emphasized that this paper and the pa- pers that will follow are not intended to be defini- tive research reports. Our modest objective is to stimulate decision makers in both the private and public sectors to consider new problems or view- points of special interest. The views expressed will be those of the authors, not those of the Urban Land Research Foundation or the Urban Land In- stitute. We have asked each author to provide only enough evidence to justify serious considera- tion of his or her thesis. We hope that other in- dividuals and organizations will be encouraged to undertake the studies necessary to provide the basis for public policy actions in the future. If this occurs, the papers will have achieved their pur- pose. Donald E. Priest Director of Research ULI-the Urban Land Institute v TAIII It AIR u L I M I-A RAVA UUAUX% -7 'I r IMIL, All 1AXIM -"k xx xx It IT Wl T Ax AN 'w vii... r- r r r v W, "Aw, v %w, ,ww,wv,*W" wv wr ww Wrw*r"www-W;@ w ww.--tt- 6, 7M - t -RA MY I Introduction The changing economic geography of urban areas The Advisory Commission on Intergovernmental in the United States has received a great deal of at- Relations, after analyzing data on 85 central cities, tention in recent years, particularly from those concludes: who are concerned about the economic health of Central cities which cannot reach out to encompass central cities. The changes in the spatial distribu- the growth occurring outside their boundaries are in tion of economic activity have left many central a dangerous condition of decline in economic and cities with economic problems due to a loss of political importance. The relative decline of the business, jobs, income, and a lowered tax base, all economic base of these central cities is proceeding at of which have brought about high rates of un- a faster pace than the relative decline in the income employment. The combination of these factors of city residents as compared to suburban residents .3 has lead to severe governmental problems, as More recently President Carter's Urban and Re- such cities try to maintain public services in the gional Policy Group concluded that: face of a declining base. . . . today some cities are finding it increasingly dif- These problems of course are not new, nor are ficult to fulfill their historical roles. Cities are often they unanticipated. Decentralization of economic unable to afford the services their citizens need. activity and the exodus of the middle class to out- Pollution, poor public school systems, fear of crime, lying areas have been happening for a long time. congestion, high taxes, physical decay, and the need The general and prolonged prosperity of the 1960s for space drive people and industry away from many enabled many cities to survive that period without cities, eroding their fiscal resources and increasing major difficulties. But the general recession and the problem of unemployment .4 economic slow down of the 1970s has as usual hit Some see the decline of the Northeastern and the weakest elements of the economy the hardest, North Central regions as closing out any hope for and too many of these marginal enterprises are the older cities in these regions. As urban re- concentrated in central cities. searchers Sternlieb and Hughes state: The latest round of economic difficulties gives rise A very powerful momentum has built over the past fif- again to the debate over whether or not the old teen years, sweeping employment and population core areas of our metropolises can be moved to- growth away from the older metropolitan centers of ward economic self-sufficiency. Most of the com- the Northeast and North Central states to the newer growth poles of the South and West.' mentary on the subject would lead one to believe that there is I ittle hope except for a few cities in Henry S. Reuss, "To Save A City," Subcommittee on the booming Sunbelt such as Houston and Dallas. the City, Committee on Banking, Finance, and Urban A Congressman finds: Affairs, U.S. House of Representatives (Washington: GPO, 1977), p. 1. The American city is in trouble, deep trouble, and I See Werner F. Hirsch, "The Coming Age of the when the city is in trouble, the country is in trouble. Polynucleated Metropolis," in Herrington). Bryce, Small Cities in Transition (Ballinger: Cambridge, 1977). The sickness of our cities shows in its symptoms: los- I Advisory Commission on Intergovernmental Relations, ing population, losing jobs, losing fiscal solvency, los- Trends in Metropolitan America (Washington: ACIR, ing the sense of neighborhood, of community, losing 1977), p. 1. the convenience, safety and attractiveness that was I The President's Urban and Regional Policy Group, A the city's main reason for being.' New Partnership to Conserve America's Communities, March 1978. An economist argues that the central city is al- -1 George Sternlieb and James W. Hughes, "New Re- gional and Metropolitan Realites of America," in Sub- ready dead and that things are not going to get committee on the City, Commiteee on Banking, Fi- better: nance, and Urban Affairs, U.S. House of Representatives, How Cities Can Grow Old Gracefully (Washington: The forces which fostered the growth of the suburbs GPO, 1977), p. 5. and led to the demise of the central city in the post- war period will continue to dominate the near future .2 With pronouncements of this kind from the urban In addition, a survey of the growth in office space experts, one wonders whether economic sound- from 1960 to 1972 in nine metropolitan areas ness will ever be restored to central cities. The found that in five of the nine areas office space pronouncements themselves tend to undermine expansion in the central business district (Cl3D) private investments that might have otherwise oc- equaled or exceeded that added in the remainder curred; thus they add to the problem. Politicians of the area, and that in 1972, seven of the nine and product merchandisers have realized that CBDs accounted for more than half of the total of- image is the critical factor in selling a product, but fice space in their respective metropolitan areas .7 the supporters of the cities have not. Their an- nouncements about declining cities and the prob- ... there are likely to be substantial private investment lems contributing to this decline may bring a few opportunities in continuing office expansion, in office- extra federal dollars, but they also drive away related retail and service businesses, in speciality many more private dollars. Why should any pri- shopping centers, in housin& and in commercial vate investor make commitments to Northeastern activities related to housing. or North Central cities when the entire region is declining, the large metropolitan areas are declin- ing, and the central cities are doing worse. More recently, there have been signs of a re- Despite the conditions and the dire forecast that surgence of demand for middle-income housing things are going to get worse unless something and retail activity in older, formerly depressed major is done (no one has specified what has to central city areas. A 1975 survey of central cities by be done, or whether what has to be done is feasi- the Urban Land Institute found that approximately ble), a distinct minority think that things are not as three-fourths of the central cities over 500,000 in bad as some would lead us to believe, and that in- population were experiencing substantial reset- deed favorable changes are occurring in cities tlement of middle- and upper-income family which may lead to the restoration of economic areas." Subsequent investigations have confirmed self-sufficiency. a significant resettlement of middle- and upper-in- What are some of the favorable signs? The first is come households back into old neighborhoods.9 the tremendous boom in office construction in The increase in office jobs employing a high pro- the downtown areas of central cities. In 1975, an portion of well-paid white collar professionals, the Urban Land Institute report which reviewed recent decline of the manufacturing sector, the out-mi- building activity in downtown areas found: gration of the blue collar labor force, the decline In downtown Philadelphia, 2.9 million square feet of in rural and foreign in-migration, and the reset- office space was added in the past four years and an tlement of older neighborhoods by the profes- additional 2.7 million square feet will be added this sional class all suggest that major central cities year, as the Central Square 1-2-3-4 Market Street, and may be changing, or at least that they have the po- the Federal Courthouse projects achieve first occu- tential for change-from national manufacturing pancy. In downtown Pittsburgh, 3.5 million square centers with a large blue collar population to na- feet of office space has been added since 1970. Den- tional and regional business service, finance, and ver has experienced an expansion of 3 million square governmental centers with smaller populations, feet of new office space in the last two years, with the but a larger number and proportion of middle- majortiy in the CBD. In downtown Detroit, 8 million and upper-income households. square feet of its 11 million total was added in the last 10 years. Downtown Milwaukee is currently ex- periencing its largest office building boom in de- 6Research Division, Urban Land Institute, New Oppor- cades. Downtown Columbus, Ohio, will gain 2.5 mil- tunities for Residential Development in Central Cities, lion square feet of new space over the 1973 to 1974 Research Report No. 25 (Washington: ULI, 1976), p. 10. I Gerald Manners, "The Office in Metropolis," period. Downtown Chicago absorbed about 4.1 mil- Economic Geography, April 1974. lion square feet of new space in 1972-1973 and 8J. Thomas Black, "Private-Market Housing Renovation another 5.3 million square feet is under construction. in Central Cities: A ULI Survey," Urban Land, New office expansion has brought with it an expan- November 1975. sion of retail and service facilities to serve the new of- 9 See Urban Housing Rehabilitation in the United States fices and employees. The story is the same for most (Chicago: U.S. League of [email protected] Associations, 1977), other major CitieS.6 and National Urban Coalition, ' Effects of Private-Market Housing Rehabilitation on Urban Neighborhoods," un- published. 2 This potential for transforming the city has wide- The aim here is not to suggest a resolution to spread implications for both private investment political problems but to explore some of the decisions and public policy. On the private side, it trends which suggest where the economy of the suggests that there are likely to be substantial pri- central city might be headed, how well it can be vate investment opportunities in continuing office expected to play its historical roles, and the impli- expansion, in office-related retail and service cations of these trends in terms of the future businesses, in specialty shopping centers, in hous- economic viability of central cities and related ing, and in commercial activities related to hous- public policy. ing. Because the future economic potential of the On the public side, this potential will force us to Northeastern and North Central cities is caught up make some difficult political decisions at all levels in the question of regional economic vitality, the of government: should the emphasis in economic exploration begins with a look at post-1970 development programs and dollar allocations go economic trends with a comparison of the North- toward increasing essentially white collar down- eastern and North Central regions to the Southern town office jobs and middle-income housing? Or and Western regions. Next, metropolitan area should they go toward retaining and expanding trends are explored to assess the economic blue collar jobs for the current low-skilled labor strength of the large metropolitan economies, force and improving their housing and neighbor- which according to some, have been showing hood conditions? These objectives are to some ex- signs of decline. Finally the focus shifts to recent tent conflicting, as Irving Kristol has noted. economic trends in central cities and examines Any sensible urban policy has to distinguish between their performance as marketplaces, producers of two goals. Do we want to assist our declining cities? goods and services, and providers of jobs and in- Or do we want to subsidize the poor so that they can come for residents. Based on the review of the continue to reside in those cities? These are incom- economic changes which have been occurring, patible intentions-though one can understand why conclusions are drawn regarding future revitaliza- many politicians, in deference to their constituencies, tion prospects for central cities and directions should insist on conflating them. Any policy which which public policy might take to achieve anchors poor people in a declining city-whether it economic development objectives. be by generous welfare payments, subsidized housing or subsidized employment-is bound to be cruelly counter-productive. The kinds of jobs (unskilled for Irving Kristol, "Sense and Nonsense in Urban Policy," the most part) these people can work at are not in The Wall Street Journal, December 21, 1977. See Alex- ander Gans and Thomas O'Brien, "The City: Sandbox, these cities, nor will they ever be again.10 Reservation, or Dynamo?", Public Policy, Winter 1973, Although others, including Secretary of the De- for an earlier presentation of this view. 11 Housing and Development Reporter, April 17,1978, p. partment of Housing and Urban Development, 1,106. Patricia Harris, play down this conflict, responses to the recent announcement of Urban Develop- ment Action Grant awards demonstrate the politi- cal problem. In this case, most of the $150 million in grants went to support the development of downtown office, hotel, and retail facilities. HUD was immediately criticized for not providing more money to support neighborhood projects, and several cities and HUD are being sued by neigh- borhood groups for not giving priority to neigh- borhood projects. In response, HUD's Assistant Secretary for Community Planning and Develop- ment has promised that the next round of action grants will be heavily weighted toward neighbor- hood projects." Given these opportunities and problems, in combination with the politics of economic development, such conflicts are likely to continue. 3 rz ZZ is @@ 5; isr of Ile Frig Igo F3 ills Ilif liar 7-51 fill Fall' M71 fur list ins MUM tells 11 if" U931 AWI.T no -111009 @ng lot Jifill 1117g: oll tilt NO 19 glr,-C@ TOM ""Oft 11111, lu@ lilt lot No go 7111C lot fill flu ON 11111117 #1111105 AN 00 fin list all on ON tot $in go Oil lilt gM lot all 4111"t 14" fill "If lot lilt 1") lot lot lilt lot fill On tin R" M" toot tin in, lilt all tin 00 "a NUNN MMM 77UW7M Ill M, IT fig 9 11 S TI I re a 0 an notolil fm an f out an off fit If a" 0 Oft im all .41A Oft no 01 A 0 an no "it OR Ott 4 a" it" tot jw mi wt: of 51 1 "a All; aON no 0" an, tot an iswuni affulff on mt ins fl NO Int 0 Alf a Oft o no of go OR On Oft on f W- oft N4 41 OF Oft no an "a an flu tin it Ott lift "if Ant 'go 11 "if Oft fin tin lift it ills NO lift On $tit -11 If i@ 01 1 on to 10, (@ of till see Vessel 4 Mt to On it Oil fill as, Ili) AN, It lilt all up'tat @00 Sell -1 an i ins an tin Ito OR fill oft 00 tat in" no All $in lilt till '101 pNjW tot Off a flu got 191319*1921SM MW IKE gift tat lift Ito 1111 pow, a Oft no till 1411 "0 staff a list Ito 19 w 19, v at It OF a; In W, a mi vow - - 11 tire 110 1 Oft a" lot all N "till goo" 1-1 an sill; .0f 4 ---ew 4"t2li Z,11! a@, J WX W N w W, ul At IN @W -7 lit =n1rilli rw '10, Regional Economic Conditions and Trends judging from most of the commentary about the As Table 1 indicates, the Northeastern and North recent growth rate of population and jobs in the Central regions gained $274 billion in personal in- South and West, relative to the North Central and come from 1970 to 1976, raising the total personal Northeastern regions, one would think that the income to $720 billion, or 52 percent of the U.S. latter regions, especially their cities, are in a rapid total. Moreover, the so-called Frostbelt accounted state of economic decline and are headed for dis- for 48 percent of the total U.S. increases in per- aster. This is far from the truth. A misleading pic- sonal income over the period, not bad for a "de- ture results from an over-emphasis on relative clining" area. In terms of per capita income, states population and employment growth rates and in the Northeastern and North Central regions under-emphasis on more fundamental measures have much higher levels than states in the other of economic strengths, such as growth in absolute regions of the country, with the exception of amounts of personal income, income per capita, California and Alaska. For the North Central and and jobs per 1,000 population. Absolutely all re- Northeastern regions as a whole, both exceed the gions of the country are growing in i 'ncome, jobs, national average in per capita income, with the income per capita, and population, and the South lagging considerably behind (see Table 2), Northeastern and North Central regions are still although it is true that the South increased its per considerably ahead of the South and equal to the capita income at a slightly greater rate than the West in per capita income. other regions. Table I Regional Change in Personal Income ($ billions) Percent of Total Region 1970 1976 Change U.S. Change Northeast 217.9 338.9 +121.0 21.1 North Central 228.1 381.1 +153.0 26.7 South 215.7 400.2 +184.5 32.1 West 146.6 262.3 +115.7 20.1 U.S. Total 808.2 1,382.5 +574.3 Source: U.S. Bureau of Economic Analysis, Survey of Current Business, April 1977. Table 2 Regional Change in per Capita Income, 1970-1976 Percent Increase Percent of Region 1970 1976 1970-1976 U. S-1 976 Northeast 4,432 6,846 54.5 106.3 North Central 4,025 6,600 64.0 102.5 South 3,422 5,812 69.8 90.2 West 4,194 6,802 62.2 105.6 U. S. 3,966 6,441 62.4 Source: U.S. Bureau of.Economic Analysis, Survey of Current Business, April 1977. 5 in terms of another critical indicator, jobs per Table 3 1,000 people, one finds that the Frostbelt regions jobs per 1,000 Population, by Region, 1970 and are outperforming the Sunbelt regions. In 1976, 1976 the Northeast provided 371 jobs for every 1,000 people, while the South provided only 352 and the Region 1970 1976 West only 355 (see Table 3). Similarly, the North Central region outranked the South and West, Northeast 372 371 with 365 jobs per 1,000 in population. Again the North Central 342 365 South and West are gaining on the North Central South 317 352 and Northeastern regions in this indicator, but West 320 355 they still have some distance to go. Source: Computed from U.S. Bureau of Census and U.S. Bureau of Labor Statistics data. ... the North Central and Northeastern economies are still healthy and growing, providing a high standard of Thus, while changes in the distribution of growth living for the large majority of their residents. have favored the South and West, the North Cen- tral and Northeastern economies are still healthy and growing, providing a high standard of living The changes in employment totals and growth for the large majority of their residents. The rela- shares for each major region of the country for the tive higher rates of growth in the Southern and periods 1960 to 1970 and 1970 to 1976 are pre- Western regions have not meant that oppor- sented in Tables 4 and 5. As can be seen, all of the tunities for economic revitalization of central cities major regions experienced a relatively high rate of in the North Central and Northeastern regions job growth and shared in the general prosperity of have been foreclosed because of regional the 1960s, although the South and West grew economic stagnation or decline. slightly faster than the other regions. Since 1970, however, growth rate differentials have increased, with the South gaining over 4.2 million jobs on a 1970 base of 20.4 million, accounting for roughly 50 percent of the total U.S. increase. The West ac- counted for the second largest absolute increase, overtaking the North Central region as the second fastest growing region. In the Pacific and Moun- tain states, 2.5 million jobs were added to a 1970 total of 11.8 million, accounting for 30 percent of the national increase. But even in the "declining" Northeast, 118,000 jobs have been added since 1970 to its 1970 total of 4.5 million. Actually most of the states in the Northeast did better than this total indicates, but a loss of 380,000 jobs in New York state caused the regional totals to be relatively low. The North Cen- tral region has also continued to gain employ- ment, with an increase of roughly 1.7 million jobs since 1970, accounting for 20 percent of the na- tional increase. 6 Table 4 Regional Employment Shifts, 1960-1970 and 1970-1976 (1,000s of workers) 1960-1 970 1970-1976 Region Total Change AnnualChange Total Change AnnualChange Northeast + 3,044 + 304 + 118 + 20 North Central + 4,116 + 412 +1,671 + 278 South + 6,134 + 613 +4,285 + 714 West + 3,451 + 345 +2,520 + 420 U.S. Total +16,686 +1,669 +8,523 +1,420 Source: U.S. Bureau of Labor Statistics, Employment and Earnings. Table 5 Comparison of Regional Share of Employment in 1970 to Share of Growth, 1960-1970 and 1970-1976 (percent) 1960-1970 1970 1970-1976 Share of U.S. Share of U.S. Share of U.S. Region Job Growth Employment Job Growth Northeast 18.3 26.3 1.4 North Central 24.7 28.1 19.6 South 36.8 28.7 50.2 West 20.7 16.6 29.5 Source: U.S. Bureau of Labor Statistics, Employment and Earnings. Table 6 Change in Distribution of Non -Agricultural Workers by Industry, 1970-1976 1970 1976 Change Major Industry Number Percent Number Percent 1970-1976 (percent) Manufacturing 19,349 27.3 18,956 23.9 - 2.0 Services 32,373 45.6 38,417 48.4 +18.7 Trade 15,040 21.2 17,694 22.3 +17.6 Construction 3,536 5.0 3,594 4.5 + 1.6 Total' 70,920 100.0 79,443 100.0 +12.0 'Total includes mining workers not shown separately. Source: U.S. Bureau of Labor Statistics, Employment and Earnings. 7 z w at 04 55 NOW kw@ "----- ........ OFF Metropolitan Economic Conditions and Trends The economy of the central city is to some degree Tables 7, 8, and 9 show the recent levels and related to the economy of the metropolitan area changes in personal income, employment, and of which it is a part. Income, jobs, sales, and eco- per capita income for the 35 largest SMSAs in the nomic growth potentials of the city are all a func- United States. This group accounts for 43 percent tion of the economy of the area as a whole. With of the non-agricultural employment in the United over 270 metropolitan areas in the United States States and 45 percent of the total personal income and a great deal of variation in their economic in the United States. structure, conditions, and trends, it is a difficult and costly task to analyze each to develop useful Growth in Personal Income generalizations. To simplify matters, the following Table 7 indicates that all of the metropolitan areas discussion of metropolitan economies focuses on except New York experienced real increases in the large metropolitan areas-that is, those with a total personal income from 1969 to 1975. Not sur- population of roughly one million or more. prisingly, the Houston SMSA experienced the The major concern in this discussion is with largest gain ($4.6 billion dollars in 1975 dollars), changes taking place in the overall metropolitan but others also experienced sizeable gains, with 22 economy which may have some effect on the of the 35 adding over $900 million in real personal economy of the central city. The key variables are income and the group experiencing an average market size, jobs, personal income levels, and in- real gain of $1.2 billion. Interestingly, the Chicago dustry mix or economic structure. SMSA out distanced all of the Sunbelt's large met- In spite of the fact that metropolitan areas have ropolitan areas except Houston in this category. accounted for the vast majority of product, job, Even the Boston SMSA, which lost population and and income increases in the United States in re- jobs over the period, experienced a real gain in cent years, many have argued that most of the total personal income of over $1 billion. larger metropolitan areas, particularly the older The Sunbelt metropolitan areas generally experi- Northern ones, are in a state of economic decline. enced higher personal income growth rates than Indeed, if one looks only at population statistics, the nation or the metropolitan areas in the North. this conclusion seems valid. Twenty-six of the 159 Thirteen of the 16 Sunbelt metropolitan areas ex- metropolitan areas with an estimated population ceeded the national average growth rate, while all of 200,000 or more have experienced a net loss of 19 of the Frostbelt metropolitan areas lagged be- population since 1970. Half of the standard met- hind the national growth rates. ropolitan statistical areas (SMSAs) with popula- There is little relationship between the structure tions over 1,000,000 lost inhabitants from 1970 to of the metropolitan economy (that is, the industry 1975. These include Boston, Buffalo, Cincinnati, mix and export base) and the growth in personal Cleveland, Detroit, Los Angeles, Newark, New income. One might expect, for example, that York, Philadelphia, Pittsburgh, Seattle, and St. man ufactu ri ng-oriented areas would perform Louis. The other half, with the exception of more poorly than service-oriented areas. However Miami, Houston, Dallas, Phoenix, Portland, San the Chicago, Milwaukee, Detroit, Pittsburgh, St. Diego, and Atlanta, grew at a much slower rate Louis, and Philadelphia SMSAs, all areas with a than the nation as a whole. heavy manufacturing base, experienced substan- The correlation between population change and tial real gains (over $900 million) in personal in- economic strength however is relatively weak. If come, out distancing some service-oriented met- employment, gross personal income, and per ropolitan areas such as New York, Seattle, New capita income are examined, one finds that on the Orleans, and Nashville. whole the larger metropolitan areas are growing economically, not declining, and that they still dominate the national and regional economies. 9 Table 7 Change in Total Personal Income (constant dollars) in 35 Large SMSAs, 1969-1975 (1975 $) $ millions Metropolitan Area 1969 1975 Change Atlanta $ 8,934 $11,049 $2,115 Baltimore 11,871 12,965 1,094 Boston 23,746 24,762 1,016 Buffalo 7,791 7,835 44 Chicago 46,851 50,307 3,456 Cincinnati 7,841 8,264 423 Cleveland 13,210 1S,333 123 Columbus 5,403 6,040 636 Dallas 13,204 16,244 3,040 Denver 7,022 9,327 2,304 Detroit 29,094 30,336 1,242 Hartford 6,851 7,182 330 Houston 10,976 15,611 4,635 Indianapolis 6,635 7,085 450 Kansas City 7,321 8,279 958 Los Angeles 45,105 47,225 2,120 Miami 7,172 9,255 2,082 Milwaukee 8,422 9,343 921 Minneapolis-St. Paul 12,116 13,246 1,130 Nashville 3,454 4,246 792 Newark 14,439 14,734 295 New Orleans 5,334 6,241 906 New York 72,496 68,272 4,224 Philadelphia 29,218 30,319 1,101 Phoenix 5,023 7,017 1,993 Pittsburgh 13,219 14,359 1,140 Portland 5,755 7,031 1,276 Rochester 6,099 6,412 312 San Antonio 4,105 4,973 867 San Diego 8,040 9,545 1,505 San Francisco 22,080 24,289 11108 Seattle 8,981 9,697 715 St. Louis 13,730 14,650 920 Tampa-St. Petersburg 5,072 7,413 2,341 Washington, D.C. 19,179 23,655 4,475 Source: U.S. Bureau of Economic Analysis, Survey of Current Business, April 1977. Growth in per Capita Income San Antonio-had average per capita incomes below the U.S. average (see Table 8). The older Growth in total personal income has meant a service-oriented metropolitan areas tend to have higher standard of living in all of the metropolitan the highest per capita incomes: Boston, $8,328; areas except the New York area, which suffered a Washington, D.C., $7,843; and San Francisco, reduction in real per capita income from 1969 to $7,763. Several metropolitan economies which 1975. have not performed exceptionally well in other re- The 1975 average per capita income for the 35 spects still provide high levels of per capita in- metropolitan areas examined was $6,475, about come: for example, New York at $7,086; Cleve- $570 above the U.S. average. Indeed, of the 35 land at $6,750; Hartford at $6,777; and Newark at large SMSAs examined, in 1975 only six-New Or- $7,382. leans, Columbus, Phoenix, Nashville, Tampa, and 10 Table 8 Change in per Capita Income in Large SMSAs, 1969-1975 Percent of U.S. Percent Increase SMSA 1969 1975 in 1975 1969-1975 Atlanta $3,857 $6,117 1.04 58.6 Baltimore 3,865 6,067 1.03 57.0 Boston 5,652 8,328 1.41 47.3 Buffalo 3,927 5,903 1.00 50.3 Chicago 4,721 7,204 1.22 52.6, Cincinnati 3,901 5,969 1.01 53.0 Cleveland 4,480 6,750 1.14 50.7 Columbus 3,687 5,608 0.95 52.1 Dallas 4,053 6,363 1.08 57.0 Denver 3,950 6,609 1.12 67.3 Detroit 4,552 6,825 1.16 49.9 Hartford 4,571 6,777 1.15 48.3 Houston 3,755 6,795 1.15 81.0 Indianapolis 4,137 6,175 1.05 49.3 Kansas City 4,053 6,432 1.09 58.7 Los Angeles 4,455 6,800 1.15 52.6 Miami 3,909 6,433 1.09 64.6 Milwaukee 4,210 6,550 1.11 55.6 Minneapolis-St. Paul 4,288 6,533 1.11 52.4 Nashville 3,412 5,638 0.95 65.2 Newark 4,833 7,382 1.25 52.7 New Orleans 3,502 5,703 0.97 62.8 New York 4,862 7,086 1.20 45.7 Philadelphia 4,119 6,320 1.07 53.4 Phoenix 3,617 5,763 0.98 59.3 Pittsburgh 3,805 6,200 1.05 62.9 Portland 4,010 6,499 1.10 62.1 Rochester 4,386 6,603 1.12 50.5 San Antonio 3,181 5,089 0.86 60.0 San Diego 4,083 6,013 1.02 47.3 San Francisco 4,952 7,763 1.32 56.8 Seattle 4,479 6,869 1.16 53.4 St. Louis 4,059 6,183 1.05 52.3 Tampa-St. Petersburg 3,241 5,429 0.92 67.5 Washington, D.C. 4,622 7,843 1.33 69.7 U.S. Total $3,733 $5,903 - 58.1 SMSA 4,031 6,273 1.06 55.6 Non-SMSA 2,899 4,884 0.83 68.5 Source: U.S. Bureau of Economic Analysis, Survey of Current Business, April 1977. The general pattern of change since 1969 has been Growth in Metropolitan that the lower-income metropolitan areas have gained on the higher-income areas. Houston, New Employment Orleans, Pittsburgh, San Antonio, Nashville, In most of the country the increases in personal Tampa, Miami, and Denver were below average income in metropolitan areas have been related to and increased at above average rates, while Bos- growth in employment. Of the 35 largest met- ton, Chicago, New York, Newark, Detroit, Los ropolitan areas, 31 gained jobs over the 1972 to Angeles, and Cleveland were above average in 1976 period, and excluding the New York SMSA, 1969, but grew at less than average rates. This which suffered a loss of approximately 360,000 again reflects regional changes with the lower-in- jobs in the 4-year period, the group accounted for come Southern areas gaining on the Northeastern 33 percent or one-third of the total increase in and North Central areas, although the Northeast- employment in the United States over the period. ern and the North Central metropolitan areas re- The average increase was 42,000 jobs, with the main ahead of the Southern areas. it should be range extending from a 360,000-job loss in the noted, however, that a comparison of actual in- New York metropolitan area to a 258,000-job gain comes may not reveal differences in standards of in the Houston area. Most of the older, large met- economic well-being unless adjusted for cost of ropolitan areas experienced significant gains. living differences. When these adjustments are Chicago gained 58,000 jobs; Cincinnati, 29,000; made to standardize incomes, some major Cleveland, 25,000; Pittsburgh, 40,000; Min- changes occur, as indicated in Table 9. Some of neapolis, 82,000; Milwaukee, 28,000; Baltimore, the higher-income areas (for example, New York 34,000; Los Angeles, 219,000; Columbus, 24,000; and Boston) drop considerably, and some of the Hartford, 21,000; and Detroit, 46,000. Other than lower-income areas (for example, Atlanta, Dallas, New York, the only losses were Boston (20,000 and Houston) rise considerably. In fact, a $6,363 jobs or 1.6 percent of its total) and Philadelphia per capita income in Dallas affords a higher stan- (4,200 or 0.2 percent of its total). Employment in dard of living in material terms than a $8,328 per the Newark SMSA remained constant at 857,000. capita income in Boston, although the standard of living in Boston is still high in comparison with Consistent with other trends, the higher employ- most areas. ment growth rates were in the Sunbelt metropoli- tan areas. Houston again was in first place with an Table 9 increase of 31 percent from 1972 to 1976. Phoenix, Comparison of per Capita Incomes in Selected Dallas, San Diego, Nashville, San Antonio, and SMSAs, Adjusted for Cost of Living Differences' Portland vied for second place honors with gains in the 12 to 17 percent range. Actual per Adjusted per Thus, on the whole, the larger metropolitan areas High-Income Areas Capita Income Capita Income are continuing to expand their employment base, New York $7,086 $6,098 although the New York area is a significant excep- Chicago 7,204 7,062 tion with its major loss in employment. Sixteen of Boston 8,328 6,975 the 19 Northeastern and North Central metropoli- San Francisco 7,763 7,327 tan areas are continuing to gain jobs, while all 16 Low- I n com e A reas in the South and West are gaining. Atlanta $6,117 $6,697 Dallas 6,363 7,028 San Diego 6,013 6,106 Houston 6,795 7,366 A alustments based on the cost of an intermediate stan- d of living fora family of four as determined bythe U.S. Bureau -of Labor Statistics. Source: U.S. Bureau of Economic Analysis, Survey of Current Business, April 1977. 12 Table 10 Change in Employment in 35 Large SMSAs, 1972-1976 (1,000s of jobs) Percent 1972 1976 Change Change Atlanta 712.9 767.3 54.5 7.6 Baltimore 819.5 853.9 34.4 4.2 Boston 1,282.2 1,261.9 -20.3 -1.6 Buffalo 485.3 489.5 4.2 0.9 Chicago 2,945.3 3,003.4 58.1 2.0 Cincinnati 512.0 540.7 28.7 5.6 Cleveland 538.0 862.9 24.9 3.0 Columbus 431.6 455.4 23.8 5.5 Dallas 974.1 1,118.4 144.3 14.8 Denver 561.3 612.5 51.2 9.1 Detroit 1,582.2 1,628.4 46.2 2.9 H a rtfo rd 319.7 340.7 21.0 6.6 Houston 838.8 1,094.4 258.6 30.9 Indianapolis 435.1 463.7 28.6 6.6 Kansas City 526.3 549.9 23.6 4.5 Los Angeles 2,888.1 3,106.8 218.7 7.6 Miami 563.8 585.6 21.8 3.9 Milwaukee 579.0 607.2 28.2 4.9 Minneapolis-St. Paul 825.0 907.1 82.1 10.0 Nashville 277.7 315.8 38.1 13.7 Newark 857.0 857.0 0.0 0.0 New Orleans 395.6 435.5 39.9 10.1 New York 3,950.3 3,591.2 -359.1 -9.1 Philadelphia 1,802.3 1,798.1 -4.2 -0.2 Phoenix 384.3 449.7 65.4 17.0 Pittsburgh 858.1 898.4 40.3 4.7 Portland 409.6 459.9 50.3 12.3 Rochester 371.2 387.0 15.8 4.3 San Antonio 291.6 328.8 37.2 12.8 San Diego 423.6 493.6 70.0 16.5 San Francisco 1,250.1 1,362.3 112.2 9.0 Seattle 506.4 587.9 81.5 16.1 St. Louis 903.4 905.8 2.4 0.3 Tampa-St. Petersburg 379.1 420.4 41.3 10.9 Washington, D.C. 1,258.6 1,363.7 105.1 8.4 Source: U.S. Bureau of Labor Statistics, Employment and Earnings, September 1977. 13 a wx@ 4b loss so* AN 00 a it's 0 at -6 *No It a -0 zkIw ais 0 @t@` !3@ gj. V@@ t I g5i W .i , diple 07, 48 moo- 46b X, a Ft t, Ki RZ, 4t V, - nH IT, :@Izt rF dri 01 WOO T11 23, PQ Wg 41 _UDI z tAv tv I Fir Central City/Suburban Shifts and the Changing Role of the Central City While the overall trends in the metropolitan The increasing independence of the suburban economies are important factors in drawing any economy and population brings into question the conclusions about the future of both thewhole future of the central city as a place to work, shop, and the parts of area economies, these trends and live, and generally as a viable economic unit. conceal major geographical shifts within the met- In the following section, the performance of the ropolitan economy. The major trends of decentral- central city is explored in terms of its traditional ization and cleconcentration of jobs, residents, roles as a marketplace, a producer of goods and and retail and wholesale trade in the post-World services, and a provider of employment for its res- War 11 era have been well documented in other idents, as a basis for evaluating the potential for studies. By 1970, the suburban share of population the city to play a viable economic function. in the larger metropolitan areas far exceeded that of the central city. In the 25 largest metropolitan areas, 62.7 percent of the population resided in ... a significant number [of central cities] are still the suburban ring. in the 1960s, jobs in the sub- growing retail centers.... urbs of the large areas grew by 44 percent, while employment decreased in central cities by 7 per- In discussing the economic conditions and func- cent. tions of central cities one must make a distinction The dispersal of population and jobs away from between those cities which have been able to ex- central cities has been explained by a combination pand their boundaries to capture the suburban of forces and circumstances-some pulling people growth and decentralization which has occurred and businesses out, others pushing people and and those which have not. Of the 85 central cities businesses out. Factors typically cited include with a resident population of more than 150,000 in changes in transportation and manufacturing 1970,16 have been able to capture the major por- technology which have made outlying locations tion of suburban growth since 1960 through an- with inter-city highway linkage more attractive to nexation or city-county consolidation (see Table industry, the rural ethic which plays up the pas- 11). Houston, which already had encompassed toral rural village as the ideal lifestyle and considerable territory, extended its boundaries to clownplays the urban lifestyle, high densities and encompass another 115,000 acres of land. In- congestion in the cities, the in-migration of low- dianapolis extended its boundaries to coincide income rural blacks and whites to the inner city' with those of Marion County, increasing its size by creating problems of blight and crime, federal five times from 44,800 acres to 242,800 acres. policies and programs favoring suburban growth, Nashville and Jacksonville consolidated their the aging of the physical plant of the city, and the jurisdictions with the surrounding counties. development of freeways which provide good ac- cess between suburbs and the city. Whatever the causes in any given situation, a tran- sition has occurred from a city-dominant and sub- urban-dependent structure to a far more complex and sprawling structure with multiple activity cen- ters and far less dependency on the central city for employment, shopping, cultural activities, and a place to live. 15 Table 11 Large Central Cities Which Have Expanded Boundaries Significantly Since 1960 1,000s of acres Percent city 1960 1973 Increase Indianapolis 44.80 242.81 442.0 Kansas City 83.20 202.43 143.3 Columbus 55.68 100.67 80.8 Jacksonville 19.20 490.24 2,447.9 Oklahoma City 205.44 406.84 98.0 Memphis 82.56 166.84 102.1 Nashville 18.56 324.99 1,651.0 Corpus Christi 23.68 110.27 366.7 Fort Worth 89.60 147.13 64.2 Houston 205.44 319.04 55.3 San Antonio 94.72 162.36 71.4 Phoenix 119.68 160.89 34.4 San Diego 124.80 206.65 65.6 San Jose 34.56 93.63 107.9 Sacramento 28.80 60.09 108.6 Albuquerque 35.84 56.06 56.4 Source: Advisory Commission on Intergovernmental Relations, Trends in Metropolitan America (Washington: ACIR, 1977), p. 17-19. While the central portions of these cities may be Role as Regional Marketplace undergoing the same transformation as the cities which have not been able to expand their bound- Clearly most central cities are no longer the major aries, their overall economic conditions and marketplaces they once were. The growth of sub- trends are substantially different and not really urban residential areas and shopping centers comparable. For this reason, we will restrict our aided by the out-migration of a large segment of discussion of central cities to those cities which the middle-income population has resulted in a have not been able to expand their boundaries. substantial downgrading of the retailing function This group includes virtually all of the Eastern and of the central city. By 1972, only three central Midwestern central cities, as well as 'a smaller cities dominated their area in retail sales, New number of cities in the South and West such as At- York, Dallas, and New Orleans, while most other lanta, New Orleans, Birmingham, Los Angeles, central cities accounted for only 25 to 45 percent and San Francisco. of the total market. Of 20 central cities reviewed all were experiencing a decline from 1963 to 1972 in their share of the market, but only half were experiencing a decrease in constant dollar sales. Only Newark, Cleveland, St. Louis, Pittsburgh, and Detroit suffered substantial real losses (12 percent or more). In contrast, Philadelphia, Balti- more, Chicago, and New York experienced mod- est percentage gains, while Atlanta, Denver, New Orleans, and Los Angeles recorded sizeable gains. 16 Table 12 Change in Retail Sales in Selected Central Cities, 1963-1972 1972 millions $ Percent of SMSA city 1963 1972 Percent Change 1972 Atlanta 1,323 1,726 +30.5 43.7 Baltimore 1,719 1,740 + 1.2 38.5 Boston 1,627 1,625 - 0.1 23.8 Chicago 6,560 6,619 + 0.9 41.1 Cincinnati 1,070 1,005 - 6.1 34.6 Cleveland 1,708 1,361 -20.3 31.1 Dallas 1,700 2,453 +44.3 61.1 Denver 1,116 1,318 +18.1 38.2 Detroit 3,062 2,673 -12.7 27.2 Los Angeles 6,682 7,467 +11.7 44.5 Milwaukee 1,432 1,384 - 3.3 46.1 Minneapolis 1,720 1,673 - 2.7 39.8 Newark 884 620 -29.9 15.5 New York 13,963 14,691 + 5.2 60.8 New Orleans 1,037 1,170 +12.8 50.7 Philadelphia 3,227 3;378 + 4.7 33.3 Pittsburgh 1,306 1,099 -15.8 23.0 St. Louis 1,430 1,163 -18.7 23.3 San Francisco 2,888 2,796 - 3.2 36.6 Washington, D.C. 1,885 1,753 - 7.0 23.7 Source: U.S. Bureau of the Census, Census of Retail Trade: 1963 and 1972. Thus, while it is fair to state that the large majority and good regional access for specialty shopping of central cities have lost their dominant role as and entertainment activity. Old downtown retail regional retailing centers, a significant number are stores have already shifted to a community, office still growing retail centers and only a few have suf- worker, and transient market for the most part, fered a severe reduction in retail activity. but with the expansion of office employment in Moreover, a number of recent developments in central business districts and the increased con- central cities indicates that there are opportunities vention business which will be discussed later, there appear to be opportunities to expand the downtown retail activity. The initial success of The Since 1970, however, available data suggest a further Gallery, a new shopping center in downtown major change has occurred. Philadelphia, tends to support this contention.12 The Gallery experienced rental rates of $250 per for central cities to recapture a share of the retail square foot during its first five months of operation (8 market through the development of specialty re- Project Reference File 4, Urban Land Institute). tail areas such as the Quincy Market in Boston, Pike Place in Seattle, and Larimore Square in Den- ver. Private entrepreneurs and city governments are increasingly recognizing that the central city can expand its retail business by taking advantage of historic buildings, choice waterfront locations, 17 Role as Producer of Goods Experience over the 1960s seemed to bear out this conclusion. During this period, virtually all of the and Services older fixed boundary cities lost manufacturing As far back as 1959, the declining role of central firms and jobs, but in many cities these losses cities as producers of goods was noted. Older were more than offset by the expansion of service manufacturing firms in the cities were closing activities. Table 13 shows the structural change in down their factories and new factories were being 11 large cities from 1960 to 1967. In aggregate, built in suburban areas. More recently, the old these cities lost about 150,000 manufacturing jobs factories continue to be closed at a rapid rate with but gained over 500,000 jobs in service sectors new factories opening in the South and West and (transportation, communication, finance, insur- in foreign countries. The early commentators on ance, real estate, business services, health, educa- this change in the central city economy pointed tion, and others). out that while manufacturing was shifting out of the cities, the general trend toward a more ser- vice-oriented economy would mean a new major role for the cities as service centers. Table 13 Structural Change in 11 Large Cities, 1960-1967 1,000s of workers 1960 1967 1960-1967 Total employment 7,900 8,310 +440 Agriculture and mining 17 19 - 2 Construction 302 292 - 10 Manufacturing 1,953 1,804 -149 Transportation, communication, and public utilities 721 710 + 19 Wholesale and retail trade 1,707 1 f725 + 18 Finance, insurance, and real estate 713 780 + 67 Services 1,301 1,538 +237 Government 1,186 1,442 +256 Percentage Distribution Total employment 100.0 100.0 - Agriculture and Mining .2 .2 0.0 Construction 3.8 3.5 -0.3 Manufacturing 24.7 21.6 -3.1 Transportation, communication, and public utilities 9.2 8.9 -0.3 Wholesale and retail trade 21.6 20.7 -0.9 Finance, insurance, and real estate 9.0 9.4 +0.4 Services 16.5 18.4 +11.9 Government 15.0 17.3 +2.3 Sources: M.I.T. Laboratory for Environmental Studies, Alexander Ganz. Based principally on data made available by individual state offices of employment security affiliated with the Manpower Administration of the U.S. Dept. of Labor. In some cases data from the U.S. Bureau of the Census, County Business Patterns, were used. Data published in Alexander Ganz and Thomas O'Brien, "The City: Sandbox, Reservation, or Dynamo," Public Policy, Winter 1973. 18 Since 1970, however, available data suggest a jobs), while St. Louis suffered the largest relative further major change has occurred. From 1970 to loss (15 percent, or roughly one out of every six 1975, the same cities showing an aggregate loss o 'f service jobs there in 1970). The four cities that 150,000 manufacturing jobs from 1960 to 1967 suf- continued to gain service jobs were Atlanta, Den- fered an aggregate loss of 312,000 manufacturing ver, San Francisco, and Washington, D.C. jobs, with all of the cities showing substantial loss- The growth of service jobs in Atlanta, Denver, and es except for Denver. The average loss was 22.4 San Francisco is apparently related to the expan- percent, or slightly more than one out of every sion of regional service activities in rapidly grow- five jobs in 1970. It appears then that the loss of ing regions. The growth in Washington, D.C., is the manufacturing function has greatly accelerated explained by the expansion of central federal gov- since 1970 for most central cities. ernment activity. Most central cities, particularly Denver and probably a few other cities have not those which have not been able to establish them- experienced losses because in the early 1970s they selves as regional service capitals, have suffered a still had outlying industrial land within city bound- dispersal of their service activity which consisted aries and thus were able to capture some of the primarily of local consumer and business services. new plants established on the urban fringe during Whatever the reasons, the post-1970 trends indi- this period. cate that most of our large central cities are not More importantly, it appears that the 1960s trend and can not expect to replace manufacturing job toward an expansion in service activity in central losses with service job gains to maintain their past cities was reversed in the first half of the 1970s. scale of employment (see Table 15). Even Atlanta, Again data are available for only a small group of which gained a substantial number of service jobs, cities, but this group appears to be fairly represen- still suffered a net loss in total jobs. tative of a larger set of cities (see Table 14). in the ten cities for which data on employment by sector are available, six experienced losses in service jobs since 1970-New York, St. Louis, Baltimore, Boston, New Orleans, and Philadelphia. New York suffered the greatest absolute loss (125,000 service Table 14 Change in Service Employment' in Selected Cities, 1970-1975 city 1970 1975 Amount Percent Atlanta 155.4 165.6 + 10.2 + 6.6 Baltimore 147.5 138.9 - 8.6 - 6.1 Boston 354.0 348.2 - 5.7 - 1.6 Denver 109.0 120.7 + 11.7 +10.8 New Orleans 109.5 108.1 - 1.4 - 1.3 New York 2 2,089.3 1,963.8 -125.0 - 6.0 Philadelphia 2 478.1 476.4 - 1.7 - 0.4 St. Louis 140.3 118.5 - 21.8 -15.6 San Francisco 215.9 269.6 + 53.7 +24.9 Washington, D.C. 199.7 206.5 + 6.8 + 3.4 U.S. Total Change +18.7 1 includes employment in transportation pyblic utilities, finance, insurance, real estate, health, business, education, and other services. New York, Boston and Philadelphia figures include government employees also, 2For 1972 to 1976 period. Source: Boston figures furnished by the Research Department, Boston Redevelopment Authority, and New York fig- ures are from U.S. Bureau of Labor Statistics, Employment and Earnings. The remainder are from U.S. Bureau of Cen- sus, County Business Patterns, 1970 and 1975. 19 Table 15 Change in Manufacturing Employment in Selected Cities, 1970-1975 1,000s of workers Percent city 1970 1975 Change Atlanta (Fulton County) 71.7 50.6 -29.4 Baltimore 105.1 78.0 -25.8 Boston 63.5 50.3 -20.8 Denver 47.9 48.0 + 0.2 New Orleans 32.3 25.6 -20.7 New York 675.8 544.2 -19.5 Philadelphia 237.8 165.5 -30.4 St. Louis 132.6 93.7 -29.3 San Francisco 58.9 43.5 -26.1 Washington, D.C. 24.0 18.7 -22.1 Total 1,449.6 1,118.1 -22.4 Source: Boston figures furnished by the Research Department, Boston Redevelopment Authority, and New York fig- ures are from U.S. Bureau of Labor Statistics, Employment and Earnings. The remainder are from U.S. Bureau of Cen- sus, County Business Patterns, 1970 and 1975. The poor performance of central cities in attract- While the overall economy of most central cities is ing and maintaining service activity is particularly continuing to shrink due to decentralization of the striking when one compares their experience to manufacturing and retailing functions and, more that of the nation as a whole, which experienced recently, the service function, most cities are ex- an 18.7 percent increase in service employment periencing a significant expansion of office activity from 1970 to 1975. Of the four cities with expand- in their downtown areas. A recent study of central ing service sectors, only one, San Francisco, ex- business district office space found that almost all panded service employment at a faster rate than of the large central cities had experienced sizeable the nation. It is clear then that central cities gen- gains in downtown office space since 1970. Data erally do not have the locational advantages for on 20 central cities (see Table 17) indicate an aver- most service activities that they were once thought age increase of 27 percent over the period. to have. With the recent expansion in office activ .ity, downtowns have remained the dominant concen- ... the development of new C1113-oriented rapid transit tration of office activity in metropolitan areas. On systems in a number of large metropolitan areas ... an average the large central cities contain approx- should reinforce the downtown office expansion imately 40 percent of the metropolitan office trends.... market. New York, Washington, D.C., and Dallas have heavier than average concentrations of downtown office activity, while Los Angeles, De- Consequently, overall performance of most cen- troit, and Cleveland have below average concen- tral cities relative to their metropolitan areas has trations. declined, as Table 16 indicates, for the ten cities There have been a few studies which analyzed the discussed above. In 1970, these central cities ac- reasons for the expansion of downtown office counted for 49 percent or roughly half their met- functions in the face of general cleconcentration ropolitan area's employment on an average. By and dispersal of economic activity. The most im- 1975, the average central city share was down to portant reason appears to be that central corpo- 43.1 with nine of the ten losing in relative share of rate offices, financial institutions, and the more employment. Only San Francisco managed to in- specialized business and consumer services, all of crease its share, but even there only a slight gain which have been expanding generally, continue to of less than 1 percent was made. 20 Table 16 Change in Employment in Ten Metropolitan Areas and Their Central Cities, 1970-1975 1,000s of workers Change Area' 1970 1975 Amount Percent Atlanta-SMSA 614.1 741.3 +127.2 +20.7 Central City 372.7 345.7 - 27.0 - 7.2 Percent in Central City 60.7 46.6 --m 14.1 Baltimore-SMSA 806.0 841.2 + 35.2 + 4.4 Central City 367.2 310.0 - 57.2 -15.6 Percent in Central City 45.6 36.9 - 8.7 Boston-SMSA 1,297.9 1,259.8 - 38.1 - 2.9 Central City 575.7 521.1 - 54.6 - 9.5 Percent in Central City 44.4 41.4 - 3.0 Denver-SMSA 479.7 598.1 +118.4 +24.7 Central City 305.0 357.0 + 52.0 +17.0 Percent in Central City 63.6 59.7 - 3.9 New Orleans-SMSA 373.8 425.4 + 51.6 +13.8 Central City 226.2 208.3 - 17.9 - 7.9 Percent in Central City 60.5 49.0 - 11.5 New York-SCA 2 6,675.8 6,311.0 -364.8 - 5.5 Central City 3,743.6 3,287.8 -455.8 -12.2 Percent in Central City 56.1 52.1 - 4.0 Philadelphia-SMSA 1,794.6 1,780.5 - 14.1 - 0.8 Central City 919.4 810.8 -108.6 -11.8 Percent in Central City 49.1 45.3 - 3.8 St. Louis-SMSA 898.0 898.6 + 0.6 + 0.1 Central City 376.1 303.2 - 72.9 -19.4 Percent in Central City 41.8 33.7 - 8.1 San Francisco-SMSA 1,254.7 1,331.8 + 77.1 + 6.1 Central City 401.9 433.9 + 32.0 + 8.0 Percent in Central City 32.0 32.6 + 0.6 Washington, D.C.-SMSA 1,171.2 1,336.8 +165.6 +14.1 Central City 549.3 577.6 + 28.3 + 5.2 Percent in Central City 46.9 43.2 - 3.7 'Figures forAtlanta, Baltimore, New Orleans,,St. Louis, and San Francisco do not include government orself-employed workers. 'Standard Consolidated Area. Source: Boston figures are from the Research Department, Boston Redevelopment Authority. New York and Philadelphia figuresarefrom U.S. Bureauof Labor Statistics, Employment and Earnings. Denver figures are from the Office of Policy Analysis, City and County of Denver. The remainder are from U.S. Bureau of the Census, County Business Patterns. 21 Table 17 Office Space Expansion in CBDs of Selected Cities, 1970-1975 millions of square feet Increase City 1970 1975 Amount Percentage Atlanta 17 21 4 24 Baltimore 8 10 2 25 Boston 34 45 11 32 Chicago 63 84 21 33 Cincinnati 12 13 1 8 Cleveland 11 15 4 36 Dallas 21 24 3 14 Denver 8 11 3 38 Detroit 18 22 4 22 Los Angeles 33 42 9 27 Milwaukee 9 11 2 22 Minneapolis 10 13 3 30 Newark 14 14 0 0 New York 240 290 50 21 New Orleans 6 10 4 67 Philadelphia 34 43 9 26 Pittsbu rgh 22 26 4 18 St. Louis 17 20 3 18 San Francisco 26 37 11 42 Washington, D.C. 54 71 17 31 Average Percent Increase 27 Source: Regional Plan Association, New York value central locations because of the benefits of in the city. Recent studies of office expansion in face to face contact among the professionals and New York City indicate, however, that while some managers and the economies in the agglomeration corporate headquarters have been relocated to of different high-grade and specialized service and suburban areas, they still rely on firms in the city other business and financial activities. Also, space for banking, legal services, accounting, advertis- cost and tax differentials between central core lo- ing, and marketing, and that expansion in these cations and suburban locations are less critical to corporate service activities more than offsets loss- office functions in general, because they amount ses due to headquarter moves. Moreover, while to a very small proportion, generally less than 10 the office market in downtowns was depressed percent, of operating costs. following the 1974-75 recession and the overbuild- Some have questioned the strength of the forces ing of downtown office space in the early 1970s, keeping and expanding offices in downtowns, recent reports from most central cities indicate a pointing to (1) the corporate movements from continuation of the office expansion of earlier New York City and to a lesser extent from other years. Reports are that Chicago has ten major of- cities, (2) the development of large office com- fice buildings under construction or announced plexes in the suburbs which may at some time which will add approximately 6 million square feet of office space to its inventory, and that Boston, reach the critical mass necessary to support the San Francisco, Cincinnati, New York, Los Angeles, specialized services now concentrated in Washington, D.C., and most other central cities downtowns, and (3) trends toward the relaxation are experiencing new office construction activity. of branching restrictions on banks and other fi- nancial institutions which have forced them to stay 22 The dynamics of the overall urban economy are making Role as Provider of jobs it increasingly difficult for the central city economy to and Income for Residents support its labor force. Cities are by definition political entities; their economic performance is very much a political is- Also, the development of new CBD-oriented rapid sue. The major local political issue related to the transit systems in a number of large metropolitan economy of the city is how well the local economy areas, such as in San Francisco, Washington, D.C., is serving central city residents, that is, is it provid- Atlanta, should reinforce the downtown office ex- ing adequate jobs and income for its residents? pansion trends by improving regional access to Performance of the resident support role can be a downtowns. Possibly more important is the problem when the economy of the city is declin- change in image of downtowns brought about by ing faster than the labor force, when structural the tremendous investment in the late 1960s and changes result in the creation of new jobs which early 1970s. New office buildings, public plazas, the existing labor force is ill-suited for, and when convention centers, hotels, and restaurants have population shifts result in the concentration of the made downtowns more exciting and aesthetically poor, dependent, and low-skilled population in pleasing places to work and visit and have gener- central cities. ally added an air of prosperity and activity. The available data indicate that the city economies are not fulfilling their residential support role very well. For the ten large central cities shown in Table 18, nine experienced unemployment rates higher than the national average in 1976, and eight Table 18 Change in Employment to Population Ratios and Unemployment Rates for Ten Central Cities, 1971-1976 Employment-Population Unemployment Ratio city 1971 1976 Change 1971 1976 Change Baltimore 53.4 48.9 -4.5 7.9 10.3 +2.4 Chicago 57.0 52.0 -4.0 5.5 9.0 +3.5 Cleveland 51.1 55.2 +4.1 11.8 9.5 -2.3 Dallas 65.1 64.5 -0.6 4.9 4.9 0.0 Detroit 52.0 44.6 -7.4 10.0 13.1 +3.1 Milwaukee 56.6 57.4 +0.8 6.0 8.7 +2.7 New York 52.6 48.3 -4.3 6.7 11.2 +45 Philadelphia 53.7 44.6 -9.1 5.5 11.3 +5.8 St. Louis 51.3 48.5 -2.8 7.3 12.8 +55 Washington, D.C. 66.0 59.1 -6.9 3.7 9.1 +5.4 United States 56.6 56.8 +0.2 5.9 7.7 +1.8 Source: U.S. Bureau of Labor Statistics, Geographic Profile of Employment and Unemployment, 1971 and 1976. 23 of the ten experienced increases in the rate of un- Table 19 employment since 1971. The average unemploy- Change in Central City Jobs to Resident Labor force ment rate for the ten cities was 10.7 percent in Ratios for Five Central Cities, 1970-19751 ,1976, compared to 7.7 percent nationally. While Change the unemployment rate increased by 1.8 percent- city 1970 1975 1970-1975 age points nationally, it went up an average of 3.1 percentage points in the ten cities. The ratio of the Baltimore 99 91 - 8 number of city residents employed to the total New York 107 102 - 5 population declined in most cities with the in- Philadelphia 110 114 + 4 crease in unemployment. St. Louis 152 147 - 5 Washington, D.C. 158 169 +11 Moreover, unemployment rates are high in central cities despite the fact that most central cities have Time-series data on both numberof jobs and persons in favorable jobs to labor force ratios (see Table 19), labor force are available for only the five cities shown. and in fact, central city unemployment rate trends Source: Research Division, Urban Land Institute appear not to be highly correlated with the change in the number of jobs. Washington, D.C., for example, gained about 30,000 jobs from 1970 to percent compared to a 17.3 percent increase for the 1975, yet unemployment increased from 4.8 per- total work force over the same period. The same cen'tto 7.6 percent despite a decline in the resi- result accrued in the 1970 to 1973 period, when dent labor force of over 7,000 people. In Philadel- out-migrants from central cities increased their phia, the labor force declined faster than jobs (a earnings by 25.0 percent, whi le the average in- loss of 80,000 jobs but 97,000 people from the crease for the entire work force was only 21.6 per- labor force), yet unemployment still increased cent. from 5.5 percent to 9.7 percent. While the overall The failure of central cities to provide adequate loss of jobs no doubt has some relationship to jobs for their residents is related to their failure to total employment of central city residents and un- keep up with the rest of the country in personal employment rates, the structural shifts in central income. From 1960 to 1973, real per capita income city jobs (i.e., the proportionate decline in blue increased by about 51 percent nationally. For 20 collar jobs and proportionate increase in white large central cities, the average increase was 24 collar jobs), and the out-migration of those mem- percent, or less than half of the national increase bers of the labor force who find it easier to obtain (see Table 20). Even cities doing well in terms of jobs than those left behind, probably account for production and jobs, such as San Francisco, Den- the much greater increase in unemployment rates ver, and Washington, D.C., failed to keep pace than can be explained by changes in the number with the nation. Those cities with per capita in- of available jobs. Indeed, the experiences of comes above the national average in 1960 Washington, D.C., and Philadelphia suggest that (Chicago, Denver, Los Angeles, New York, San significant increases in service jobs, or a tighten- Francisco, and Washington, D.C.,) dropped below ing of the center city labor market due to out- the national average in 1973. On the whole, then, migration of a large segment of the labor force, the large city economy is not performing its resi- will do little to reduce unemployment rates in cen- dent support role very well, and given the struc- tral cities in themselves. tural changes occurring in the city economy with The dynamics of the overall urban economy are the shift in the distribution of jobs toward white making it increasingly difficult for the central city collar occupations, it is unlikely that performance economy to support its labor force. Fortunately in this area will improve in the foreseeable future. most central city resident-workers are adapting to the changes by moving to locations where suitable U.S. Bureau of Economic Analysis, Survey of Current jobs are available. From 1%7 to 1976, a net total of Business, October 1976 and February 1978. some 760,000 workers migrated out of the large central cities to smaller cities, suburban rings, or rural areas. On an average these out-migrants im- proved their earnings considerably by moving. 13 The typical large central city out-migrant in the 1967 to 1970 period increased his earnings by 27.2 24 Table 20 Real per Capita Income of Residents for 20 Large Central Cities, 196OA973 constant 1973 dollars Percent city 19601 1973 Change Atlanta 2,908 3,903 34.2 Baltimore 2,806 3,595 28.1 Boston 2,886 3,678 27.4 Chicago 3,448 3,984 15.5 Cincinnati 3,072 3,657 19.0 Cleveland 2,791 3,160 13.2 Dallas 3,337 4,432 32.8 Denver 3,421 4,560 33.3 Detroit 3,015 3,817 26.6 Kansas City 3,272 4,012 22.6 Los Angeles 3,914 4,569 16.7 Milwaukee 3,165 3,809 20.3 Minneapolis 3,336 4,141 24.1 Newark 2,695 2,964 10.0 New York 3,468 4,309 24.2 Philadelphia 2,820 3,678 30.4 Pittsburgh 2,922 3,618 23.8 St. Louis 2,708 3,292 21.6 San Francisco 3,904 4,762 22.0 Washington, D.C. 3,618 4,901 35.5 Total U.S. 3,341 5,041 50.8 1 1960 income figures adjusted by 1.504 to convert them to 1973 dollar equivalents. Source: U.S. Bureau of the Census, Current Population Reports, Series A 25 and Census of Populations 1970. 25 TM r 77 Lk. IF J4 vv if `41 40 it il d LL Prospects and Public Policy The continuing economic growth of the older For most cities therecent trends clearly indicate a predominantly manufacturing areas in the North general shrinkage in overall economic activity in Central and Northeastern regions, despite a major the foreseeable future. This does not mean, how- shift in growth rates, suggests that at least there is ever, that central cities will become completely more potential for the older cities of these regions dysfunctional. Many manufacturing plants depen- than one would expect from reading most articles dent on existing rail system and waterfront loca- on urban economic problems. Based on post-1970 tions will find it desirable to remain in their pres- trends, the regional economies, with the excep- ent locations. Cities are also becoming more tion of New York, can be expected to grow in jobs adept at serving the needs of existing industry; we and personal income, thereby creating new can therefore expect to see the retention of a sig- employment and business opportunities. As a nificant share of manufacturing activity in cities. general rule, growth rates will be greater in the metropolitan areas of the South and West, al- Most central cities have retained other assets which though some of the Northeastern and North Cen- blend well with the expansion of the city's role as a tral areas will grow by larger amounts than some highly specialized business and finance center. areas of the South and West. In any case, in the large majority of metropolitan areas there will be opportunities for business expansion, new firms, In the face of national declines in manufacturing more jobs, and higher pay. employment, however, the key to economic via- What this means for the large central cities is bility for most cities will lie in the service sector. somewhat mixed. The transition of large met- While cities are experiencing a weakness in their ropolitan area economies from manufacturing to ability to retain and attract the more common service activity has continued in the 1970s. While business and consumer services, there are defi- the experience of the 1960s indicated that this nitely opportunities for expanding the specialized transition meant economic expansion of the cen- service and office functions associated with CBD tral cities, the available evidence indicates that in locations. These activities have been expanding in the 1970s, a large proportion of central cities have recent years in most cities in spite of their general lost their power to attract a substantial share of economic, social, and fiscal problems, indicating service sector expansion, although a small propor- that there is considerable strength in this move- tion of the central cities are displaying consider- ment. Although some cities have focused a por- able strength in this area. Apart from Washington, tion of their economic development activities on D.C., which has grown substantially because of strengthening this function, more often cities have federal government expansion, other cities which emphasized industrial development activities in have experienced service sector expansion such as their economic development programs. San Francisco, Atlanta, and Denver have become Much can be done to nurture the financial and regional administrative, service, and finance cen- specialized service functions in cities through im- ters in growing regions. This trend reinforces the provements in downtown access, circulation, and notion that the continuing transition to a service parking, assistance in land assembly for new proj- economy will benefit some of the large central ects, and assistance in the creation of support cities more than others, and that those cities facilities (such as conference centers, hotels, and which have established or can establish them- restaurants). The recent proposals of President selves as major regional service nodes will do Carter for policies favoring central city invest- much better than those which have not or can not. ments and locations for federal offices would be helpful if implemented. 27 Most central cities have retained other assets 75 percent of central cities over 250,000 in popula- which blend well with the expansion of the city's tion were experiencing significant private-market role as a highly specialized business and finance housing renovation in formerly deteriorating center. Major regional institutions, including med- areas. More recently (1977), surveys of recent in- ical centers, colleges and universities, museums, migrants to older neighborhoods in Washington and performing art theatres have remained for the and Atlanta have been conducted." The study of most part in central cities. This is reflected in the the Virginia Highlands neighborhood in Atlanta results of a recent survey of public attitudes to- found that new migrants are generally young (me- ward cities conducted in January 1978 which indi- dian age 26.8 years), married, extremely well edu- cates that the large majority of U.S. residents view cated, employed in high-status professional occu- cities (rather than suburban areas, small towns, or pations, with high incomes. They chose the Vir- rural areas) as offering the best employment op- ginia Highlands neighborhood because of its prox- portunities, the best medical care, the best col- imity to downtown, the low cost of the housing, leges and universities, the best cultural attrac- and their preference for old houses and city living. tions, and the best entertainmen t.14 The recent movers into the Capitol Hill area of The presence of cultural attractions, good enter- Washington, D.C., have similar characteristics. tainment, and an expanding highly educated pro- More than 75 percent possessed graduate de- fessional work force downtown is a situation ripe grees, the median age group was 30 to 34 years, with opportunities for creating middle- and and more than three out of four households upper-income residences in the city. The potential earned over $25,000 in income. They moved to market for such housing in central cities is being Capitol Hill to be close to work, because they felt clearly and forcefully demonstrated in those cities their investment in a Capitol Hill house would ap- which have experienced the most rapid and the preciate substantially, because of the favorable strongest transition to the high-grade service and price of housing there relative to other locations, administrative functions-Washington, D.C., At- and because of the historical and architectural lanta, and San Francisco. The young and highly character of the area. educated professionals that form the work force for the expanding jobs in downtown offices have The continued loss of manufacturing jobs, retailing shown a strong proclivity for residing in the city. jobs, and lower-grade service jobs from the city has In Washington, all of the residential areas within a created and will continue to create economic problems 2-mile radius of the downtown office area are for this class [ lower-skilled residents 1. under strong pressure for housing from this group. Areas that were almost exclusively low- income and experiencing abandonment and de- The extensive resettlement of older areas by mid- clining housing prices in 1965 are now undergoing dle- and high-income households in Washington, renovation and rapid price escalation. In these D.C., Atlanta, and San Francisco is indicative of areas, houses that were traded for $12,000 to what can occur in most central cities as a result of $20,000 in 1970 are now selling unrenovated for the expansion of the high-status jobs in downtown $50,000 to $90,000. San Francisco is experiencing areas. Such resettlement provides obvious bene- the same phenomenon in the extensive Victorian fits to cities in the form of an increased tax base, Crescent which wraps around its downtown. The increased consumer buying power, physical im- close-in Atlanta neighborhoods are all experienc- provements, and a labor force which can attract ing resettlement by the higher-income more economic activities which have a greater propen- highly educated households that work in sity for central city locations than activities such as downtown. There have been few attempts to mea- manufacturing geared to a blue collar labor force. sure the extent or nature of the trend, which post-dates for the most part the 1970 census; HUD NEWS (U.S. Dept. of Housing and Urban De- however, a ULI survey of central city planning velopment), March 23,1978, agencies, building officials, and real estate broker 11 Donald S. Bradley, "Back to the City?," Atlanta associations in 1975 indicated that approximately Economic Review, March-April 1978, and Dennis Gale, "The Back-to-the-City Movement Revisited," (Occa- sional Paper Series, Department of urban and Regional Planning, George Washington University, Washington, D.C., 1977). 28 While extensive middle- and upper-income reset- It seems likely that federal subsidy programs tlement of older formerly low-income residences is which provide incentives to manufacturing firms occurring in several cities without any sort of sig- which expand employment for central city work- nificant government assistance to the movers-in or ers will have only a marginal impact on economic movers-out, government could play a useful role opportunities for the lower-skilled labor force and in facilitating this process. In most cities, the out-migration. competition for the older houses in ciose-in The loss of manufacturing jobs is more likely to slow neighborhoods is very weak. If anything, housing down for two reasons. First, the tremendous loss abandonment is a problem. In such areas, cities during the recent recession has reduced the base with federal assistance could aid in resettlement in most cities to the point that at past rates the ab- by offering incentives (acquisition and rehabilita- solute number of job losses will be lower. Second, tion loans, tax abatements for renovation, and so the firms still left in the city probably have sur- on), by funding renovation demonstration proj- ects, by actively marketing such areas to the mid- vived as a result of some advantage in their loca- die-income market (as Seattle, Boston, and Balti- tion. In any case, the only way to expand jobs in more are now doing), and by promoting the his- the cities, particularly manufacturing jobs for the toric character of older areas. lower-skilled work force, is likely to be through massive subsidies. The support for the middle-income household re- The argument for bringing jobs to the people is settlement into older formerly declining areas is generally founded on the premise that the major- vastly important to providing residential support ity of the poor and uneducated, especially blacks, for the economic sectors of the city that show are relatively immobile or do not have equal ac- growth potential (office and speciality retail in par- cess to jobs in suburban locations due to lack of ticular), but it is also important in reversing the affordable housing, lack of public transportation, general negative image of the city as a place to and racial discrimination. The record of rural to live. In those cities that have experienced sub- urban and South to North migration of the poor stantial renovation and resettlement of previously whites and blacks along with the recent reports of declining areas, the image of the city has changed out-migration of whites and blacks in large num .- greatly; this reversal must have an effect on busi- bers from the Northeast (about 1 million whites ness and residential location and investment deci- and 147,000 blacks moved out of the Northeast sions. At some point residential renovation may from 1975 to 1977 16) lead one to question whether be more important in this regard than additional there is a lack of mobility for most of this popula- downtown commercial investment because the tion. Moreover, housing opportunities for blacks former contrasts more dramatically with previous in suburban areas have increased dramatically in trends and demonstrates that the city can be a de- recent years as evidenced by the higher annual sirable place to live and work for many people of growth rate for the black population in suburban middle and upper incomes. areas than for whites (4.4 percent compared to 1.8 The trends at work in central cities are definitely at percent since 1970), although the absolute num- odds with the needs of many of the current low- bers are still relatively small." er-income, lower-skilled residents. The continued loss of manufacturing jobs, retailing jobs, and U.S. Department of Commerce News, March 10, lower-grade service jobs from the city has created 1978. and will continue to create economic problems for The Washington Post, March 4,1978. this class. As in the past, many will leave the city in pursuit of better opportunities elsewhere. As a re- sult the population of most cities will continue to shrink for some time and housing demand in most areas of our cities will continue to weaken. Fed- eral and local government efforts to "conserve" neighborhoods, except in resettlement areas, are likely to be severely undermined in most areas by the economic and population dynamics at work. 29 The attempt to keep or increase jobs for the cur- force-will hold many people in the city who rent blue collar labor force in the city can also be could be self-supporting elsewhere, and who questioned on the grounds that a large proportion would prefer to be elsewhere, but find that be- of current city residents would prefer not to live in cause of the subsidies, it more beneficial to stay in the city. A recent Gallup poll found that over a the city. Cities then find themselves locked into third of current central city residents would prefer the costly and depressing role of caretakers of the to live elsewhere, with lower socio-economic poor-a role which has had a devastating effect on status blacks expressing the preference as often as cities so far. The lost opportunity costs of such whites.18 A separate and larger survey conducted a policy in terms of precluding attention to efforts at the beginning of 1978 revealed similar prefer- which would create more economically balanced ences, except this time, 35 percent of the city central cities are substantial. The cities do have an dwellers said they definitely or probably would expanding role as high-grade service, administra- move i n the next two o r th ree years to a subu rban tive, and cultural and entertainment centers, and or rural location-47 percent, almost one-half of potentially as a place of residence for an economi- the city black population indicated a preference cally balanced population. Public policies and for a residential location outside of the city. programs could do a lot more to assist cities as a Given the expressed preference for a very large whole, and those adversely affected by the ad- percentage of current city residents, including justments taking place, if the changing role of cen- blacks, to move out of the city, and the relocation tral cities is recognized and if public actions ac- of jobs suitable for the current population out of commodate these changes. the city, it seems very unlikely that the federal and 18 The Washington Post, March 24,1978. local governments' current efforts to gild the ghetto will be successful. It would probably be more helpful to cities as a whole, and the poor and unemployed, for the federal government to devote a substantial portion of its urban assistance funds to providing families and individuals who are unemployed or threatened with unemploy- ment in the near future assistance to relocate in areas of better opportunities. The opposite policy-the subsidization of the city's labor 30 I @ @ 3 6668 00002 5017 1 0@-'