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AMERICA'S URBAN PROBLEM/AMERICA'SRACE PROBLEMDavid Rusk aa 4100 Cathedral Avenue NW, #610 Washington, DC 20016-3584 Tel:202-364-2455 Fax: 202-364-6936 drusk@patriotnetcomPublished online: 16 May 2013.

To cite this article: David Rusk (1998) AMERICA'S URBAN PROBLEM/AMERICA'S RACE PROBLEM, UrbanGeography, 19:8, 757-776, DOI: 10.2747/0272-3638.19.8.757

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AMERICA'S URBAN PROBLEM/AMERICA'S RACE PROBLEM

David Rusk 4100 Cathedral Avenue NW, #610

Washington, DC 20016-3584 Tel: 202-364-2455 Fax: 202-364-6936

drusk@patriotnetcom

Abstract: Two factors - sprawl and race - are shaping urban America. Through annexation or city-county consolidation, "elastic cities" capture new suburban development. Elastic cities have growing populations, stronger tax bases, and better fiscal health than growth-constrained "inelastic cities." However, the concentration of low-income minorities, which is greatest in inelastic cities, is the basis for major disparities between cities and many surrounding suburbs. Even highly inelastic cities in "White America" maintain virtual economic parity with their sub­urbs. For many central cities, particularly in the Northeast and Midwest, annexation and city-consolidation are no longer legally or politically feasible. Allied with older, declining suburbs, cities must form new political alliances to get the federal government and, in particular, state governments to change the "rules of the game" regarding regional development. Key policy reforms are regional land use planning and growth management laws, regional tax base or reve­nue sharing, and regional "fair share" affordable housing laws.

For the past half-century, the two forces of sprawl and race have dominated patterns of growth in America's metropolitan areas. In a land-rich continental nation, almost all of America's cities have always grown outward rather than upward. However, if America did not have a race problem, America would not have an "urban problem."

One of the most comprehensive investigations of metropolitan housing patterns has been conducted by the members of the Ohio Housing Research Network, with their find­ings presented in this special edition of Urban Geography. I am gratified that the researchers adopted my concept of elastic and inelastic cities as a useful way of organiz­ing their examination of Ohio's seven largest metropolitan areas. In the face of ubiquitous low-density development, a city's ability to expand its municipal territory by annexation or consolidation directly affects its success or failure in maintaining market share. Elastic cities like Toledo or, more notably, Columbus successfully defend their market share of regional growth. Inelastic cities like Cleveland and Youngstown lose market share, with very adverse social, economic, and fiscal consequences.

It is the issue of race that makes a city's market share so vital. The way different races are sorted into different neighborhoods and jurisdictions by the operation of segregated housing markets is the reason that significant economic and fiscal disparities emerge between inelastic central cities and their surrounding suburbs. This proposition cannot be tested within Ohio's context. Ohio's industrial economy attracted a significant influx of Black residents to every Ohio urban area. There are no metropolitan areas in Ohio without a significant minority population. Thus, there is no control group of Ohio communities available to test the assertion that race is the basis of city/suburban disparities.

757 Urban Geography, 1998, 19, 8, pp. 757-776. Copyright © 1998 by V. H. Winston & Son, Inc. All rights reserved.

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TABLE 1.—THE IMPACT OF RACE ON METROPOLITAN DISPARITIES: CONTRASTING THE CITY/SUBURBAN INCOME PERCENTAGES BETWEEN THE CITY/SUBURBAN INCOME PERCENTAGES BETWEEN WHITE AMERICA AND

DIVERSE AMERICA METROPOLITAN AREAS

Central city elasticity category

Zero Low Medium High Hyper

52 White America metropolitan areas

90% 95%

105% 102% 108%

117 diverse America metropolitan areas

66% 83% 86% 96%

101%

Source: Author's calculations based on 1990 census.

WHITE AMERICA VERSUS DIVERSE AMERICA

Since publishing Cities without Suburbs (Rusk, 1995), I have examined metropolitan areas that I had characterized as "White America" in greater detail. White America is composed of 52 metropolitan areas that have no significant Black or Hispanic popula­tions—that is, less than 2% Black residents and less than 5% Hispanic residents.

Table 1 compares the 1990 average income of city residents as a percentage of the average income of suburban residents, a key measure of economic disparities between metropolitan areas with and without minority populations. The first column breaks these 52 minority-absent metropolitan areas into my standard elasticity categories, which are determined by the territorial expansion of the area's central cities. In "zero-elasticity" metropolitan areas, the six central cities (e.g., Scranton, PA; Binghamton, NY) did not expand their boundaries at all between 1950 and 1990. The 14 "low-elasticity" cities (e.g., Spokane, WA; Sioux City, IA) expanded their territory minimally (an average of 13%). Fifteen "medium-elasticity" cities (e.g., Salt Lake City, UT; Appleton, WI) expanded more significantly (80%). Twelve "high-elasticity" cities (e.g., Boulder, CO; Rochester, MN) and five "hyper-elasticity" cities (e.g., Boise, ID; Redding, CA) were very aggressive in municipal annexation, expanding 278% and 479%, respectively.

What is notable is that even extremely inelastic central cities in White America expe­rienced no significant disparity between average income of city residents and average income of suburban residents. White America's zero- and low-elasticity cities averaged 90% and 95% of suburban income levels, respectively. Furthermore, in White America, the more elastic cities had average incomes that were higher than their surrounding areas (i.e., 102% and 108% for high- and hyper-elastic cities, respectively).

The second column summarizes the results for 117 large metropolitan areas with racially diverse populations, which I term "Diverse America." Though there were sub­stantial variations among individual metropolitan areas, the metropolitan areas in Diverse America averaged 12% to 14% Black and 7% to 12% Hispanic populations in different elasticity categories.

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AMERICA'S URBAN PROBLEM/AMERICA'S RACE PROBLEM 759

Highly segregated housing markets that concentrated most low- and moderate-income minorities in central city neighborhoods characterized the 23 zero-elasticity metropolitan areas in Diverse America. Income levels in 23 zero-elasticity central cities averaged only 66% of suburban income levels. By expanding their city limits modestly (20%), Diverse America's 22 low-elasticity cities succeeded in capturing a modest but positive market share of regional growth. Their city/suburban income percentage narrowed to 83%. As Diverse America's cities move progressively up the elasticity scale, increasing their mar­ket share, the income gap narrowed with their suburbs. The 25 hyper-elasticity cities expanded their city territories fifteenfold, captured half of all metropolitan population growth, and finally achieved income parity (i.e., 101%).

In every elasticity classification, the minority-absent cities of White America were closer to income parity with their suburbs than the minority-present cities of Diverse America. The gap ranged from around 20 percentage points for relatively inelastic cities to half a dozen percentage points for more-elastic cities. In effect, the ability of highly elastic cities in Diverse America to capture so much of their own suburban growth largely offsets the effects of their housing a moderately disproportionate share of their regions' poor, minority households.

INTEGRATED POOR WHITES AND SEGREGATED POOR BLACKS

Since the civil rights revolution, many have claimed that housing segregation is "just economic." That is not the case, as we can see by reviewing some key facts. In 1990, in the country's 320 metropolitan areas, mere were more poor Whites (10.8 million) than poor Blacks (6.9 million) or poor Hispanics (4.9 million). Fifty-four percent of all poor Whites lived in suburban areas, while 67% of poor Hispanics and 77% of poor Blacks lived in central cities. Poverty was much greater proportionally among Blacks (27.5%) and Hispanics (24.5%) than among Whites (7.7%). Combining the higher incidence of poverty among minorities with highly segregated housing markets produced a much greater concentration of the minority poor than of the White poor in poor neighborhoods.

Table 2 summarizes the degree of concentration of poor Blacks and poor Whites in 50 metropolitan areas that I have visited and for which I have analyzed census tract data. The first column lists the metropolitanwide poverty rate in 1989. The second column mea­sures the degree of residential segregation by census tracts, using a dissimilarity index (Harrison and Weinberg, 1992); the higher the number, the greater the degree of racial segregation. The third and fourth columns show the percentage of a metropolitan area's poor Whites and poor Blacks that, in 1989, lived in poverty neighborhoods—that is, cen­sus tracts where more than 20% of the residents fall below the poverty line. The last two columns show the percentage of poor Whites and poor Blacks that lived in high-poverty neighborhoods where the poverty rate exceeded 40%.

Overall, although there were more poor Whites than poor Blacks in these metropolitan areas, 75% of poor Blacks lived in poverty neighborhoods while only 25% of poor Whites lived in poverty neighborhoods. Even more striking was the racial disparity in high pov­erty neighborhoods. Poor Blacks were more than six times as likely to live in high poverty neighborhoods (33%) as poor Whites (only 5%).

In short, in these 50 metropolitan areas, over three of every four poor Whites lived in middle-class neighborhoods while almost three out of four poor Blacks lived in poverty-

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760 DAVID RUSK

TABLE 2.—RESIDENTIAL SEGREGATION AND CONCENTRATION OF POVERTY IN 50 METROPOLITAN AREAS (1990)

Metropolitan area

Gary-Hammond IN Detroit MI Chicago IL Cleveland OH Saginaw-Bay-Midland MI Buffalo NY Muskegon MI St. Louis MO-IL Cincinnati OH-KY-IN Youngstown-Warren OH Dayton-Springfield OH Toledo OH Indianapolis IN Kansas City MO-KS Fort Wayne IN Grand Rapids MI Chattanooga TN Pittsburgh PA Baltimore MD York PA Hartford CT Peoria IL Akron OH Memphis TN-AR-MS New Orleans LA Atlanta GA Utica-Rome NY Columbus OHa

Rochester NY Niagara Falls NY Washington DC Mobile AL Portland OR-WA Lancaster PA Battle Creek MI Reading PA Minneapolis-St. Paul MN-WI Fort Worth TX Nashville TN Oklahoma City OK Richmond VA San Antonio TX Charlotte NC Kalamazoo MP Worcester MA Tallahassee FLa

Allentown-Bethlehem-Easton PA-NJ Athens GAa

Albuquerque NM Gainesville FLa

Unweighted mean

Metro­politan poverty

level (%)

12.2 12.9 12.4 11.8 14.8 12.2 15.3 10.8 11.4 13.8 11.9 13.9 9.6 9.8 7.6 8.3

13.6 12.2 10.1 6.4 7.1

11.8 12.1 18.3 21.2 10.0 12.2 8.5 9.8

10.7 6.4

19.9 10.0 8.0

14.3 8.0 8.1

11.0 11.3 13.9 9.8

19.5 9.6 8.9 8.7

11.7 7.2

12.0 14.1 14.2 11.6

Residen­tial segre­

gation index

90 88 86 85 82 82 77 77 76 76 75 74 74 73 73 72 72 71 71 71 70 70 69 69 69 68 68 67 67 66 66 66 66 64 63 63 62 62 61 60 59 54 53 53 52 52 49 45 39 38 67

% of poor Whites in poverty tracts

23.7 30.9 16.3 37.3 30.0 38.0 27.4 20.4 26.8 33.2 40.8 39.7 25.5 17.5 14.0 26.6 37.3 31.8 23.7 14.3 11.8 27.2 29.9 24.3 41.7 10.6 31.7 26.5 28.1 25.3

7.1 31.2 19.8 4.7

40.7 25.2 24.1 18.2 19.1 34.2 26.9 34.9 9.9

39.6 10.0 19.0 12.3 7.5

34.9 24.6

25.1

% of poor Blacks in poverty tracts

87.2 89.8 82.9 91.0 94.1 91.4 89.6 83.7 72.7 93.0 82.1 84.6 71.6 80.1 60.2 78.9 91.0 79.1 72.3 69.4 78.6 81.5 73.2 78.4 87.0 64.9 74.5 77.4 79.4 76.0 43.5 83.3 56.1 76.2 81.5 82.3 68.4 66.6 75.3 66.1 70.7 62.4 54.1 85.3 85.0 61.0 50.5 50.3 74.9 47.9

75.1

% of poor Whites in

high poverty tracts

5.0 12.6 2.4 9.5 4.3 6.4

10.1 3.3 7.7 9.2 8.5

11.7 1.3 3.9 1.3 1.6 9.5 4.2 4.9 0.0 2.9 5.5

14.0 5.0 6.4 2.1 2.8 7.2 3.0 3.4 0.5 4.2 3.2 1.2 2.3 2.6 8.1 4.0 3.7 7.8 7.7 6.5 0.8 7.5 3.0 3.0 3.8 5.1 3.7 6.8

5.1

% of poor Blacks in

high poverty tracts

25.5 54.2 46.4 41.9 63.6 55.4 48.7 39.8 48.9 52.6 45.3 36.9 21.2 19.7 24.5 22.2 41.9 45.0 33.4 0.0

62.4 43.3 27.3 34.1 49.0 30.3 17.4 37.9 27.1 43.9

6.6 54.7 25.5 31.0 22.7 21.1 33.3 26.2 34.6 21.6 30.8 27.9 21.3 44.5 18.0 22.0 10.6 28.6 14.1 20.9

33.1

aPoverty rates are for families only because of these communities' proportionally high college student populations. Source: Author's calculations based on 1990 census.

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AMERICA'S URBAN PROBLEM/AMERICA'S RACE PROBLEM 761

impacted neighborhoods. White poverty is generally an individual household hardship; Black poverty is a community crisis.

Residential segregation has a greater impact on isolation of poor Blacks than overall economic conditions (at least as measured by the metropolitan poverty rate). In fact, the combination of the residential segregation index, the metropolitan poverty rate, and a regional factor (i.e., differentiating between South and North) explain well over half of the variation in isolation of poor Blacks. I believe that adding a factor for the impact of federal public housing projects would account for much of the unexplained variation.1

Large public housing projects have become the greatest tool of racial and economic seg­regation in the country's metropolitan areas. Almost any high-poverty neighborhood (over 40% poverty) contains a large public housing project whose residents are over­whelmingly Black single mothers and their children — typically, the poorest of the poor.

It is not overall urban poverty (a relatively low 11%) that is the challenge. It is the concentration of poverty by race, by neighborhood, and by political jurisdiction that must be overcome. Quite simply, this concentration of poverty poses the toughest political task in American society. There are certainly larger economic forces that have compounded the task — for example, increased global competition and our conversion from a goods-driven to a services-driven economy. But this concentration of poverty by race, neighbor­hood, and jurisdiction is not the result of "natural" or "free-market" forces, but impor­tantly the product of public policies reinforcing private prejudices. Post-war America's metropolitan areas evolved primarily according to the social preferences of the White majority, and the growing isolation of the Black and Hispanic poor in inner-city/inner-suburb ghettos and barrios was the most comfortable "solution" for the White majority.

COMMUNITY DEVELOPMENT: WHERE HAS IT WORKED?

For three decades America's approach to attacking inner-city decline has been "com­munity development." There has been a succession of federal brand name programs — the War on Poverty's community action program, Model Cities, Community Develop­ment Block Grants, community development corporations and community development banks, and now enterprise zones and empowerment communities. The basic underlying philosophy, however, has been the same: keep the Black and Hispanic poor concentrated in ghettos and barrios and provide local groups with federal grants (the "Big Buck" strat­egy) or tax incentives (the "Big Bootstrap" strategy) to raise residents and neighborhoods up out of poverty.

The problem is that these programs have not really worked anywhere. Such anti-pov­erty programs have not reversed the downward trend either for neighborhoods caught in the grip of racial and economic isolation or for central cities that have become more and more the locus of concentrated minority poverty. It is not that community development does not have its successes. Across the country, for example, job training programs have helped hundreds of thousands of persons get better jobs. But most successful participants move away. They leave poverty-impacted neighborhoods for improved housing opportu­nities, safer neighborhoods, and better schools elsewhere. The residents that remain behind are proportionally poorer than ever, and the climb out of poverty becomes steeper and steeper.

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762 DAVID RUSK

At the neighborhood level, majority-Black-poverty neighborhoods almost never escape poverty status. From 1970 to 1990, for example, the number of poverty neighbor­hoods increased in Cleveland from 64 to 147. Within this group, the number of high-poverty neighborhoods (i.e., census tracts with poverty rates between 40% and 60%) grew from 22 to 42. The number of hyper-poverty neighborhoods (i.e., more than 60%) exploded from 1 to 21. The poverty rate dropped significantly in only 6 neighborhoods— and nowhere enough for the neighborhood to escape its poverty status. In metropolitan Dayton-Springfield, the number of poverty neighborhoods expanded from 29 to 53, with high-poverty neighborhoods growing from 4 to 14. Only 5 neighborhoods that were already poor in 1970 saw a significant reduction in poverty levels. All were historic neighborhoods, populated by poor Whites, that underwent strong regentrification. Indeed, in many cities, a resurgence of primarily White middle-class households without children is almost always the force that lifts poor neighborhoods out of poverty. Such neighborhoods are typically either historic neighborhoods whose charm is a magnet for regentrification or neighborhoods located close to booming downtown areas, major hos­pitals, and universities that attract professional households into new townhouses and con­dominiums. Almost invariably, the previous residents (largely poor, minority households) do not escape their poverty status but are pushed out.

What has been the impact of community development on struggling cities? In Cities without Suburbs, I identified a critical "point of no return" for central cities. The point of no return is composed of three statistical milestones: a 20% or more loss of population, a disproportionately by large minority population (typically 30% or more), and most importantly average city incomes less than 70% of suburban levels. There are 24 central cities, including Dayton, Youngstown, and Cleveland, that have passed the point of no return (Rusk, 1995), and, since passing it, not 1 of the 24 cities has subsequently closed the income gap with its suburbs by even a single percentage point from census to census.

Cities past the point of no return are rarely hopeless cases, but they cannot reverse their downward decline solely through their own policies and programs. Such cities are suffer­ing from extreme racial and economic isolation within their metropolitan regions. They cannot end their growing isolation by unilateral actions. Success requires recognizing that the true "empowerment zone" is the entire regional economy and the entire regional society.

FEDERAL POLICIES: FIRST, DO NO HARM

It is my task in this concluding article to suggest policy directions based on the Ohio Housing Research Network's findings and my own observations. The overriding policy goal is simple: to promote racial and economic diversity, balance, and stability every­where. Indeed, if America's metropolitan areas could achieve the same general deconcen-tration of poor Blacks and Hispanics that is experienced by poor Whites, disparities among local jurisdictions would be narrowed significantly and overall poverty among minority residents probably would be reduced substantially. Patterns of metropolitan development and housing markets must be the focal points for reform.

The federal government has had a major role in shaping today's metropolitan areas. In the midst of the current conservative, anti-government mood, perhaps the best that can be realistically hoped for out of Washington today is an agenda based on two principles: (1)

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AMERICA'S URBAN PROBLEM/AMERICA'S RACE PROBLEM 763

echoing the old Hippocratic oath, "Do no harm," and (2) embracing the electorate's appar­ent message, "Spend no more money." Such an agenda might have three principal goals: slowing urban sprawl, leveling the playing field, and ending public housing projects.

Slowing Urban Sprawl

Having examined census data on urbanized areas covering 30 years, I have observed that the faster the rate of urban sprawl compared to population growth, the faster the rate of abandonment of core neighborhoods. Federal grant-in-aid programs for large public works pay a large portion of the bill for urban sprawl.2 With the federal share varying from 75% to 90%, financing sprawl-serving highway construction has been virtually free for state and local government.

Perhaps the most decisive anti-sprawl action would be for the federal government to end federal highway grants completely. However, the Republican Congress has less prob­lem chopping "pork" for central cities (e.g., federal subsidies for city bus and subway systems) than "essential federal aid" for suburbs. Giddy over the unexpected flood of economic-boom-induced revenues, the first major act of the Republican-controlled Con­gress in 1998 was enacting a balanced-budget-busting, $217 billion federal highway bill. How and why should the federal government subsidize future transportation projects in ways that could slow urban sprawl?

A future Congress should amend federal transportation grants to ISTEA-created Met­ropolitan Planning Organizations to analyze the impact of each project on a metropolitan area's residential density, using densities from the most recent census as the baseline. A sliding scale for federal participation should be established. For example, a proposed wid­ening of an urban-aid highway, reaching out to the metropolitan periphery, might promote more sprawl and new residential development at densities 50% below the region's aver­age residential density; federal participation could be reduced from 75% to 25% of total project cost. Conversely, a light rail line might encourage new development in existing communities at 25% above the region's average residential density; federal participation could be increased from 75% to 90% of project cost. The underlying principle would be simple—if state and local governments want more low-density sprawl, they should finance the lion's share of the costs themselves through increased state and local taxes and user fees.3

Leveling the Playing Field

Federal housing finance programs, environmental regulations, and tax laws are riddled with provisions that tilt the playing field in favor of newer suburban areas and against central cities and older suburbs. For example, the Environmental Protection Agency's stringent rules regarding the cleanup of abandoned industrial sites make pristine suburban "greenfields" much cheaper to develop than urban "brownfields." Mayors of many older, industrial cities have targeted the "brownfields" issue for major federal reform.

The Ohio Housing Research Network (1994) itself was the primary source for research supporting the federal government's elimination of most capital gains taxation on home sales in 1997. Removing this obstacle to homeowners' buying down or becoming renters should enhance incentives to move closer in, ease development pressures on the urban

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764 DAVID RUSK

periphery, and strengthen use of existing neighborhoods and infrastructure. The change may well unleash a generation of enterprising couples to buy older homes, fix them up, and, after two years' residence, hopefully sell them at a large (and untaxed) capital gain. This change may do more to revitalize older, distressed communities than empowerment and enterprise zones. Repeal of the tax should also slow the urban sprawl that is gobbling up agricultural land voraciously.

Ending Public Housing Projects

"Public housing projects have become traps for the poorest of the poor rather than a launching pad for families trying to improve their lives," former HUD Secretary Henry Cisneros stated in December 1994, announcing proposals to "totally transform public housing" (Cisneros, 1994, p. 12). Over a three-year transition period, HUD proposed con­verting all project-based public housing subsidies into tenant-based rental assistance. HUD would deregulate more than 3,000 well-performing local authorities, work to reform more than 100 severely troubled authorities, and divest 10 to 15 of the most trou­bled local authorities of their properties and management control. HUD would consoli­date all public housing funds into a Capital Fund and Operating Subsidies Fund. States and localities could opt to receive all housing funds as Housing Certificates. By the third year, all former project-based public housing subsidies would be completely portable Housing Certificates awarded to eligible low-income households. Owned and operated by the housing authorities, the projects would have to compete for the business of eligible low-income households, who would be able to use their vouchers for any rental properties throughout metropolitan areas.

Neither the Congress nor the public housing establishment embraced Cisneros' sweep­ing reforms. However, the Republican-controlled Congress did adopt one of Cisneros' underlying premises—there must be more income diversity among residents of public housing projects. Misguided federal reforms of the 1970s that pushed intact, working-class households out of public housing were reversed. By 1997, the Congress adopted broader income guidelines for public housing eligibility—more liberal than the Clinton Administration's comfort level, which felt that the poorest households' needs would be shortchanged.

Inner-city slums, anchored by large public housing projects, must not simply be replaced by suburban slums, filled with poor households using their vouchers to rent hand-me-down houses or cheap private apartments built for the voucher market. The goal is to assimilate low-income households into standard housing in predominantly middle-class communities. Therefore, it is essential that federal regulations prevent too many voucher-carrying poor households from reconcentrating in older suburban areas. Federal regulations might not allow voucher use to exceed one-third of all rental units in an apart­ment building or might limit their use to neighborhoods where the poverty rate is less than 150% of the area's poverty rate (e.g., if the metropolitan poverty rate is 10%, vouchers could not be used in census tracts with a poverty rate of more than 15%.)

Does sufficient affordable housing exist in suburban areas to assimilate relocated households from inner-city housing markets? Certainly a substantial amount exists; after all, most poor Whites live in suburban neighborhoods. And there are a few communities

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AMERICA'S URBAN PROBLEM/AMERICA'S RACE PROBLEM 765

that have voluntarily mandated mixed-income housing development, such as Montgom­ery County, Maryland.

Here again a shift in federal policy can help. After decades of allowing, even fostering redlining of inner-city neighborhoods, the federal government is redirecting private mort­gage funds toward inner-city areas. The Community Reinvestment Act (CRA) has required mortgage lenders to meet new targets for mortgage and renovation loans in older neighborhoods. The federally chartered secondary mortgage market agencies like Fannie Mae and Freddie Mac must assure that 30% of the lending they support occurs in central cities.

Overall, such requirements have helped level the playing field. However, it is ironic that sometimes meeting CRA goals has resulted in mortgage lenders helping build pri­vate, low-income housing projects precisely where they should not be built: in already poverty-impacted, inner-city neighborhoods. The Community Reinvestment Act and other federal regulations should be amended to allow mixed-income housing in suburban areas, accessible to former public housing tenants from inner-city areas, to satisfy federal targets as well.

This three-part federal agenda is hardly exhaustive. However, if the federal govern­ment reformed the way it does business in urban America through the actions suggested, states and local governments would be motivated to change substantially the way they approach urban issues.

In the near term, unfortunately, the Republican majority's political self-interest is likely to triumph over its market-oriented ideology in the current Congress. Cisneros' proposals to shift most federal housing assistance for the poor from subsidizing govern­ment-run public housing projects to underwriting a national system of rent vouchers tar­geted on private rental housing sounded all the mantras of conservative ideology: choice, competitive markets, private sector, decentralization. However, the allocation of more federal funds for housing vouchers is unlikely. The prospect of hundreds of thousands of poor Black households moving into mostly White suburbs will undoubtedly determine what the Congressional majority practices politically as opposed to what it preaches ideo­logically.

In the long term, though the Congress will support remodeling and diversifying the tenant mix for many older public housing projects, we are likely to see a systematic dry­ing up of federal housing assistance for the poor. In similar fashion, developer-supported, sprawl-creating federal highway aid will be favored over the density-creating reforms that I suggest. This makes the role of state and local governments all the more important in terms of reversing the trends isolating poverty-impacted central cities.

STATE AND LOCAL POLICIES: BEING ONE

Ohio's (and, almost invariably, the nation's) healthiest cities are those that defend their market share of sprawling regional growth through annexation. North Carolina's annex­ation laws constitute, quite simply, the nation's best urban policy. By my analysis, the state boasts the three socially and economically healthiest major metropolitan areas in the country. There are certainly many factors that contribute to their success. North Caro­lina's interstate highways (in particular I-85) link its major cities to major markets like Atlanta and Washington, DC. The state's long-term investment in higher education has

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766 DAVID RUSK

TABLE 3.—EXPANSION OF NORTH CAROLINA'S "ELASTIC CITIES"

City

Charlotte Raleigh Durham Greensboro Winston-Salem

City area in 1950 (in sq. mi.)

30.0 11.0 13.2 18.2 18.8

City area in 1990 (in sq. mi.)

174.3 88.1 69.3 79.8 71.1

Percentage growth in city area

(1950 to 1990)

481 701 425 338 278

Source: 1950 and 1990 census.

yielded big dividends, particularly in the Research Triangle. Being the first state to allow statewide branch banking led directly to Charlotte's emergence as the nation's second largest banking center. But North Carolina's annexation laws, the nation's most progres­sive, have made a major contribution. Since 1959, North Carolina's annexation laws have allowed North Carolina's cities to annex automatically much of their region's growth. Table 3 shows how North Carolina's larger cities have expanded.

Having strong expanding cities benefits entire metropolitan areas and their states in several ways. By providing cities with strong annexation powers, North Carolina dimin­ishes governmental fragmentation and, under the leadership of strong central cities, allows urban areas to compete as more unified regions. These annexation powers have contributed significantly to the major urban areas' success in North Carolina in raising real family income over the last four decades; the state's Big Three rank among the nation's top ten economic performers since 1950.

Cities and suburbs are highly interdependent parts of integrated regional economies whose overall competitiveness is dependent on the health of all parts. The higher the internal disparities by jurisdiction, by race, and by income group, the less competitive the whole region becomes. North Carolina's metropolitan areas have the nation's highest lev­els of racial and economic integration. Expanding cities serve as expanding arenas of opportunity for minority residents. In contrast, independent suburbs around inelastic cit­ies often practice exclusionary zoning to keep out low-income residents, in particular, poor minorities. This results in a growing concentration of poverty in inner-city neighbor­hoods, thus driving up unemployment and increasing family breakdown and welfare dependency, as well as growing addiction and crime levels. The social costs of concen­trated poverty (including the direct impact on state budgets) are very high.

Table 4 compares North Carolina's three largest, highly elastic metropolitan areas with Ohio's relatively inelastic metropolitan areas. Cleveland, Youngstown, and Cincinnati were frozen within their 1950 city limits by surrounding suburbs. Dayton and Akron annexed largely commercial and industrial property. Toledo and especially Columbus have carried out aggressive annexation programs. On a neighborhood-by-neighborhood basis, North Carolina's more unified metropolitan areas (with their highly elastic cities) are much more racially integrated than Ohio's highly fragmented metropolitan areas (with their inelastic cities), which are highly segregated. The ratio of Black family income

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TABLE 4.—COMPARING NORTH CAROLINA AND OHIO METRO AREAS

Metro area (elasticity category)

North Carolina Charlotte (high) Greensboro-Winston Salem-High Point (hyper) Raleigh Durham-Chapel Hill (hyper)

Ohio Cleveland (zero) Youngstown-Warren (zero) Cincinnati (zero) Dayton-Springfield (low) Akron (low) Toledo (medium) Columbus (high)

Metropolitan residential

segregation index

53 61 48

85 76 76 75 69 74 67

Black/White income

percentages

62 65 56

55 50 54 61 54 47 61

City/suburb income

percentages

122 111 103

54 64 82 64 76 72 81

Source: Author's calculations based on 1990 census.

to White family income is generally higher in more-integrated metropolitan areas than in more-segregated metropolitan areas. And North Carolina's elastic cities have average incomes higher than their suburbs (i.e., from 103% to 122%) while Ohio's more-inelastic cities have income levels far below their suburbs (i.e., from 54% to 82%).

With their annexation powers, North Carolina's elastic cities maintain growing tax bases and strong credit ratings. Charlotte, Raleigh, and Winston-Salem have AAA bond ratings; Greensboro and Durham, AA1; High Point, AA. By contrast, Youngstown and Cleveland have low BAA and BAA1 ratings, respectively. Dayton, Akron, and Toledo are all A-rated. Cincinnati and Columbus have AA and AA1 ratings. In fact, of the nation's 117 principal central cities, not a single major city that actively annexed new develop­ment had less than an A rating in the mid-1990s. All low bond ratings (i.e., BAA1 or lower) belonged to central cities without histories of recent annexations.

Fiscally healthy cities can generally pay for what they need from local taxes. Fiscally sick cities are dependent on state and federal aid. For example, elastic AAA-rated Char­lotte was able to acquire the land, clear the site, and build the necessary roads and utilities for its 78,000-seat football stadium for the Carolina Panthers from local taxes. In contrast, inelastic, BAA1-rated Cleveland had to rely on a Cuyahoga County-wide tax package and state appropriations to build a new football stadium for the future replacement Browns.4

The anti-annexation policies of the Northeast and much of the Midwest cripple central cities, balkanize local governance, and intensify racial and economic segregation. Wher­ever possible, state legislatures should liberalize annexation laws along the lines of North Carolina's policies. State statutes should protect annexed property owners against increased taxes without provision of promised facilities and urban services or unwar­ranted intrusions into rural lifestyles, absent significant urbanization. There should be a

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768 DAVID RUSK

presumption, however, that urbanizing areas should automatically be annexed by nearby cities.

In general, a model annexation statute would (1) set forth the standards by which an annexation would be deemed to serve the general public interest and the requirements for extension of municipal facilities and services; (2) authorize annexation to be initiated either by petition of property owners or by resolution of city council; (3) require public hearings and due process; (4) authorize annexation to be consummated by council action alone without approval of either property owners or other governments; and (5) allow affected property owners the right of appeal or enforcement to the state's district courts in the event that proper procedures are not followed or facilities and services are not pro­vided in accordance with the specified schedule.

City-county consolidations are, in effect, a form of super-annexation. Despite their unpopularity with voters (who have rejected such proposals five times for each consolida­tion approved), recently consolidated communities have proved highly competitive eco­nomically and very successful. Indianapolis-Marion County, Nashville-Davidson County, Jacksonville-Duval County, Lexington-Fayette County, and Columbus-Musko­gee County have all outperformed most of their peer communities. After a decade's lull, city-county consolidation is a strategy that is picking up momentum once again. In the 1990s, Athens-Clarke County and Augusta-Richmond County in Georgia and Kansas City-Wyandotte County in Kansas consolidated successfully.

Uniform state laws should be enacted to encourage city-county consolidation. Desir­able provisions would (1) establish a consolidation charter commission by action of city or county government or both; (2) authorize the creation of urban and rural service dis­tricts (with different tax levels) within a consolidated jurisdiction; (3) authorize the inclu­sion of traditional county functions (assessor, clerk, etc.) in the consolidated government; and (4) authorize approval of the consolidation charter by a majority of voters in a single referendum (allowing no single-jurisdiction veto).

Creating highly elastic cities through annexation or city-county consolidation does not eliminate the need for intergovernmental compacts addressing common problems in larger, multi-county regions. However, no set of voluntary, intergovernmental agreements would have yielded the long-term economic, social, and fiscal strength for a Charlotte, Columbus, or Indianapolis that annexations and consolidation brought. Creating elastic, more unified core communities is fundamentally superior.

STATE AND LOCAL POLICIES: ACTING AS ONE

I do not believe that annexation and consolidation are feasible alternatives for many communities saddled with bad state laws and intractable political rivalries. If a region cannot be organized with one dominant government, how can the many local govern­ments be brought to act as one government on issues crucial to the region's economic competitiveness? In addition to market-driven economic changes, key trends affecting inelastic metropolitan areas are (1) declining fiscal conditions of core communities (inner cities and many older suburbs), (2) accelerating urban sprawl (the greater the rate of sprawl, the faster the abandonment of core communities), and (3) increasing segregation of housing markets by income class (with adverse impact on racial patterns). The anti­dotes are regional revenue sharing, regional growth management policies, and regional

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mixed-income housing development. Though there are a number of successful examples of each across the country, the pace-setting models are the Twin Cities fiscal disparities program, Portland's growth management system, and Montgomery County, Maryland's mixed income housing policies.

Regional Revenue Sharing

Vertical intergovernmental revenue sharing is widespread. Throughout the United States the federal and state governments provide almost one-third of all local government revenues. Special purpose districts often serve as quasi-cost-sharing mechanisms for spe­cific services. These would include regional water and sewer authorities, transit agencies, or regional cultural and recreational districts.

However, horizontal revenue sharing between local, general purpose governments is rare. There are examples of negotiated revenue-sharing agreements between two govern­ments. The city of Louisville and Jefferson County, Kentucky, have a multi-year "com­pact" to split local income tax revenues. The city of Rochester and Monroe County, New York, split local sales tax. Akron has entered into several "joint economic development districts" with surrounding townships; into return for extension of municipal utilities to serve new industrial developments located in townships, Akron collects all income tax generated and the townships collect all property taxes. The city of Charlottesville and Albemarle County, Virginia, split the growth in property taxes in return for Charlottes­ville's "no annexation" pledge. And there are numerous examples where county govern­ments collect local option taxes and redistribute them to municipalities under a negotiated formula; Georgia's "local option sales tax" would be an example.

In contrast, local multi-jurisdictional revenue sharing is very rare. All known examples are based on sharing revenues derived from incremental growth. In 1972, 14 townships created the Inter-municipal Tax Sharing Account to share revenue from development of the Meadowlands sports complex in Hackensack, New Jersey. The program distributes approximately 40% of the growth in property tax revenues. In 1992, Montgomery County, Ohio, and 29 towns and cities joined together in the Economic Development/ Government Equity (ED/GE) Plan. In return for eligibility to participate annually in a $5 million county-provided economic development fund, local jurisdictions pool and redis­tribute about $600,000 per year in pooled property and income taxes (about $1 of shared revenue per resident per year).

The Twin Cities Fiscal Disparities Plan is the nation's most significant multi-jurisdic­tional tax-base sharing program with about 150 times the revenue impact of the voluntary ED/GE program. The Fiscal Disparities Plan was enacted by the Minnesota legislature in 1971, but court challenges delayed its implementation until 1975. The Twin Cities Met­ropolitan Council has described the plan's rationale succinctly:

From a regional perspective the Twin Cities is one economy. Large commercial-industrial developments tend to concentrate in a few locations, drawing workers and clients from a market area that is larger than the city it is located in. Access to these concentrations, primarily highways, is a prime determinant of where these developments locate. Cities with such access are the ones most likely to get com­mercial-industrial development.

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Since the property tax is the primary source of local government revenues, certain types of development—office space, headquarters buildings, up-scale housing—are attractive because they typically generate more revenue than it costs to serve them. Not all cities can expect to attract such development, but most participate in financ­ing the regional facilities serving these developments. The ideas underlying tax-base sharing is to allow all cities to share in the commercial-industrial development that is, to a large extent, the result of the regional market and public investments made at the regional and state levels. (Metropolitan Council, 1991, p. 2)

The law requires all taxing jurisdictions in a seven-county area, including 187 cities, villages, and townships, to contribute 40% of the increase in the assessed value of com­mercial-industrial property into a common pool. (A community's pre-1971 assessed val­uation is exempted.) The pool is then redistributed among all 187 local governments based on each community's population and how each community's per capita market value of property (fiscal capacity) compares with the region-wide per capita value. A community with fiscal capacity below the regional average receives a relatively larger distribution from the shared pool of tax base, and a community with above-average fiscal capacity receives somewhat less.

In 1998, me annual fiscal disparities fund totaled $410 million, almost 30% of the region's total commercial-industrial property tax collections. Some 137 communities were net recipients, while 49 were net contributors. Over the years, the net contributors have consistently been the Twin Cities' wealthiest suburbs, such as Bloomington, Min-netonka, Eden Prairie, Edina, and Plymouth. Giant shopping malls, office towers, garden­like industrial parks have sprouted vigorously along the interstate highways that cut through these suburbs or adjacent to the suburban Minneapolis-St. Paul International Airport.

Major recipients have been St. Paul, many older inner suburbs in Hennepin and Ram­sey counties, and virtually all towns and villages lying well beyond the suburban beltway. Fueled by its downtown office boom, from being the largest net recipient in 1980, Minne­apolis itself became the second largest net contributor by 1990. However, with the deval­uation of its downtown office buildings over the last three years, Minneapolis (by 1995) has become the second largest net recipient once again.

The tax-base sharing program is successfully reducing fiscal disparities. The Citizens League annually publishes a study of the plan. Its 1995 study found that, among the 56 communities of 3,000 or more households, the ratio of richest-to-poorest community in fiscal capacity is 4 to 1 under the plan. Without the Fiscal Disparities Plan, that ratio would be 17 to 1.

Regional Growth Management

Twelve states now have growth management laws. The most effective is in Oregon where legislature adopted the Senate Bill 100 (the Statewide Land Use Act) in 1973. The coalition that pushed the successful adoption of the landmark law was driven principally by environmental concerns over logging in eastern Oregon and, of greatest concern, loss of farmland in the Willamette Valley to suburban sprawl around Portland. Surviving

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handily three statewide referenda to repeal it, the law has remained substantially in its original form to the present.

The state legislature established 14 overriding, statewide land use goals that must be met by all local governments. Goal 14 requires that each community establish an "urban growth boundary" in a perimeter around each city. Land within an urban growth boundary must be zoned to be sufficient for 20 years of growth. Outside an urban growth boundary, however, land is reserved exclusively for farming and forest industries or parks and natu­ral areas.

Defining the Portland area's urban growth boundary and regional land use and trans­portation policies to achieve it is the responsibility of Portland Metro, the nation's only directly elected regional government. Although Metro's "Regional Framework Plan" is broadly defined to permit local variation, all local plans must conform to the adopted regional plan. The whole regional plan is ultimately subject to approval by the Oregon Land Conservation and Development Commission for conformance with statewide goals.

One key measure of a growth management program is its success in controlling land consumption. From 1960 to 1990 the Portland area's urbanized population grew 80% while urbanized land grew only 103%—roughly a 1 to 1 ratio.5 During the 1980s, when Portland's urban growth boundary was fully in effect, urbanized population grew faster (14%) than urbanized land (11%). During the 1990s, as the area's economy has boomed, new development has consumed much of the remaining undeveloped land with the region's 342 square mile Urban Growth Boundary. Metro has designated another 28 square miles as "urban growth reserve" for possible future expansion. If adopted, over the next 40 years, Metro's plan would anticipate providing new homes for a 50% increase in population with only a 7% increase in urbanized land.

Critics argue that urban growth boundaries artificially inflate land costs, thus reducing housing affordability and inhibiting economic development. However, in the Portland area, relative housing costs went down for much of the period since implementation of Portland's Urban Growth Boundary and its Metropolitan Housing Rule.

The Housing Rule required local municipalities to achieve at least 50% multi-family or attached single-family units in new construction and set minimum target housing den­sities.6 A joint study by the 1000 Friends of Oregon, an environmental group, and the Home Builders Associations of Metropolitan Portland found that, for the 1985 to 1989 study period, the Housing Rule increased development of multiple-family housing (1,000 Friends of Oregon, 1991). Overall, multi-family development was 54% of all new hous­ing in the region from 1985 to 1989. Prior to the Housing Rule, multiple-family housing (apartments, rowhouses, duplexes) represented only 30% of the region's planned, 20-year supply of new housing.

The study also found that the lot size (and resultant price) on new single-family hous­ing had been lowered. About two-thirds of new homes were built on lots smaller than 9,000 square feet compared to an anticipated average lot size of 13,000 square feet prior to the Housing Rule era. The study found that homes on large lots (larger than 9,000 square feet), on the average, cost twice as much as homes on small lots (smaller than 7,000 square feet). In addition, during the five-year period, the study found that if the same amount of development had occurred under pre-Housing Rule densities, an addi­tional 1,500 acres (an area over two square miles) would have been consumed. Owing to the savings in land use realized, an additional 14,000 housing units can be built within the

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Urban Growth Boundary. In terms of affordability, the study found that 77% of the region's households could afford to rent the median-priced two-bedroom apartment; 67% could afford mortgage payments on the median-priced two-bedroom home; and 43% could afford the median-priced three-bedroom home. "Without state-mandated housing policies," the 1991 study concluded, "[local] zoning would exclude low and moderate income housing from some communities, and the Portland area would likely be suffering from the same 'affordability crisis' other fast-growing areas are now experiencing" (1000 Friends of Oregon, 1991, p. 2).

By the mid-1990s, an affordability crisis had indeed arisen as Portland's superheated economy helped fuel a rapid escalation in regional housing costs. Portland's cost-of hous­ing rose from 96% of the national metropolitan average in 1990 to about 110% by mid-decade. However, growth management supporters argue that other booming Western regions without urban growth boundaries (e.g., Albuquerque, Denver, Salt Lake City) experienced similar run-ups in housing prices. Intel and other high-tech companies were investing $13 billion in new plants in the Portland area. New workers flooded in, partially holding down wage increases, while housing supply could not expand fast enough to meet sudden demand. Portland's current affordability crisis is only temporary, growth manage­ment proponents contend, until the construction-driven boom recedes. By limiting peripheral growth, however, Metro has helped redirect investment back into older city and suburban neighborhoods. Post-war, blue-collar suburbs like Gresham and Milwaukie are experiencing major economic revival.

The most dramatic example, however, is Albina, the city of Portland's poorest neigh­borhood. Built as a community for lumber-mill workers, Albina became home to many of the region's African American families in the post-war years. By 1990, the area was 35% Black and had several sections where poverty rates exceeded 30%. In the next five years, however, total property value in Albina almost doubled from $1.4 billion to $2.6 billion (The Sunday Oregonian, September 8, 1996, p. A1). Over $135 million in governmental investment (CDBG funds) helped prime the pump. However, driven by regional market demand, it was private investment that had the greatest impact. In effect, Portland's "inside game" (neighborhood redevelopment) succeeded because it controlled the "out­side game" (peripheral sprawl).

Most of Albina's African American residents are homeowners. They benefited from what few Black homeowners anywhere experience—a doubling of their homes' real val­ues. Albina's sudden prosperity, however, has put the squeeze on many low-income White and Black renters, who are slowly being pushed out by rising rents and re-conver­sion of old homes from multiple apartments back to single-family homes.

In 1997, Metro adopted a number of new policies to promote more construction of affordable housing. Faced with pleas from local municipalities and homebuilders for time to develop their own voluntary plans, the Metro Council deferred for one year adopting a mandatory, inclusionary zoning ordinance patterned on Montgomery County, Maryland's longstanding, mixed-income housing requirements.

In light of its strong land use controls and housing policies, the Portland area could have achieved more to prevent poverty concentrations and mainstream more poor house­holds. The region's housing segregation index was 66 (particularly disappointing), yet only 20% of poor Whites and 56% of poor Blacks lived in poor neighborhoods (below national averages). In fact, applying dissimilarity measurements to the issue of segrega-

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tion of poor households (regardless of race), metropolitan Portland had the fourth lowest poverty segregation level (27) of the 100 largest metropolitan areas. The year 2000 census will document dramatically, I believe, further substantial improvements in racial and eco­nomic integration in Greater Portland.

Mixed-Income Housing

At the time of its enactment in 1973, Montgomery County's Moderately-Priced Dwelling Unit (MPDU) policy was believed to be the nation's only mandatory inclusion-ary zoning ordinance. The county government's policy requires builders of 50 or more residential units to set aside 15% of the units for low- and moderate-income tenants or buyers.7 To compensate developers for providing below-market priced housing, the county allows a density increase or 'MPDU bonus' of up to 22% above the normal den­sity for the zone. The density bonus both maintains builders' profit margins and counters constitutional concerns about an unconstitutional taking of property by requiring that 15% of the units be sold or rented at below-market rates.

Both buyers and renters are subject to maximum income limits set by the county Department of Housing and Community Development (originally 80%, now 65% of the county's median household income). Rent limits are controlled for 20 years. Sale and resale prices for MPDUs are controlled for 10 years. The county's revolving Housing Initiative Fund recaptures a portion of profits from the first resale after expiration of price controls. MPDUs must be sold to individual purchasers. By county ordinance, however, one-third of the MPDU units may be purchased by the county's Housing Opportunities Commission to be used as "deep subsidy" rentals for low-income households. A 1989 amendment allowed nonprofit organizations, certified by the county, to purchase an addi­tional 6.6% of the MPDU units in any project for rent to additional low-income house­holds.

Through 1997, complying with the policy, private homebuilders constructed 10,110 affordable housing units, including 7,305 sale units and 2,805 rental units. In the face of some limitations on funds available for purchase, over the years the Housing Opportuni­ties Commission purchased 1,500 units (nonprofits own another 38 units). The MPDU program has been the Housing Opportunities Commission's largest source of scattered site rental units for public housing families. Over five recent years (1992 to 1996) devel­opers working under the MPDU policy built 123 new rental units and 1,599 new sale units. Of the new homes for sale, 8% had one bedroom, 23% had two bedrooms, and 69% had three bedrooms. Average sales price was $83,706 in 1996—a bargain in a county where the median housing value was $208,000 in 1990.

Turning to the characteristics of MPDU home purchasers, 41% were White, 22% Black, 28% Asian, and 7% Hispanic. Average household income was $26,497; only 4% of purchasers even approached the program's income ceiling of $39,900 for a family of four.

When the MPDU program was being debated, a common anxiety expressed was that mixing low- and moderate-income housing (or rather low- and moderate-income house­holds) into higher-income neighborhoods would drive down the price or dampen the appreciation of the higher-end housing. In 1988, a major homebuilder studied the relative appreciation of home values from resale records for single-family homes and townhouses

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in 20 comparable subdivisions throughout the county (Berry and Co., Inc., 1988). Ten had MPDU properties; 10 did not. The study found that resale values in MPDU communities averaged an annual 14.3% increase, while non-MPDU communities averaged only a 10.3% annual appreciation.

The resale values in MPDU communities neither went down nor increased at a slower rate than in non-MPDU communities. In addition, county officials noted that there were no noticeable social problems in MPDU communities. Addressing why MPDU-commu-nity resale values rose faster than non-MPDU community values, the study noted that, because of MPDU communities' larger size (i.e., a minimum of 50 units), they were more likely to offer amenities like swimming pools, clubhouses, and tennis courts, which were typically not offered in smaller developments. These amenities may be one factor that contributed to higher appreciation rates for MPDU communities.

The study concluded mat "clearly this study demonstrates that on average the exist­ence of MPDUs in a community does not slow home appreciation rates as compared to communities without MPDUs" (Berry and Co., Inc., 1988, p. 2).

What is most important about the MPDU policy and the county government's other housing assistance programs is the degree to which low- and moderate-income housing is spread around the county. In 1995, 3.4% of the county's housing supply was publicly assisted housing; 14 of the county's 18 planning districts had between 2% and 6% assisted housing. Perhaps the best illustration of the geographic diversity of the county's rental properties for low-income households is that as a homeowner itself, the county housing authority pays annual membership dues to almost 200 private homeowner asso­ciations in Montgomery County!

The MPDU program has long since become part of the normal business climate for private builders in Montgomery County. During times of soft housing markets, for exam­ple, some builders have even constructed MPDU allocations (for which there is always strong demand) in advance of their market rate housing, bridging the slump in the market. It is also clear that the MPDU policy and scope of the county's housing programs have helped the county accommodate—even encourage—a remarkable social transformation. In 1970, Montgomery County had the look of a classic suburb—wealthy and White (92%). By 1990, Montgomery County had a "rainbow" look—12% Black, 7% Hispanic, 8% Asian. By 1996, some 22% of school children in the county were poor enough to qualify for free and reduced price school lunches. However, Montgomery County had succeeded sufficiently in preventing concentrations of poverty that not one census tract in the county had a poverty rate reaching the 20% level. Moreover, while economic segrega­tion increased in almost every major urban area in recent decades, economic segregation in Montgomery County remained at a relatively low—and stable—level.

THE MISSING INGREDIENT: POLITICAL WILL

The previous sections have outlined successful policies that are breaking down juris­dictional, racial, and class divisions in some communities. What are lacking are not exam­ples of success. The issue is political. The real question comes down to what sort of a society highly fragmented regions want to be in the 21st century. If the citizens of a region want to continue to be deeply divided by race, economic class, and political jurisdiction,

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then none of these strategies examined can be of more than academic interest to a handful of good government reformers.

The nation's most active legislative struggle over regionalism is occurring in the Min­nesota legislature. The driving force is a strong coalition of legislators from Minneapolis, St. Paul, and their older blue-collar suburbs. Recognition of their common interest has transcended traditional city-suburban animosities and even party lines. Though racial divisions are deeper in many urban areas than in the Twin Cities area, the same case for common economic and political interest can be made for most of the country's inelastic cities and their older, inner suburbs.

Perhaps this, in the final analysis, is the greatest significance of the work of the Ohio Housing Research Network. These papers demonstrate that ever-outward patterns of peripheral development and core abandonment endanger not only inner cities but also many inner suburbs. Unmanaged urban sprawl turns today's winners into tomorrow's los­ers. That recognition may yet unite Ohio's declining central cities and their troubled older suburbs into the essential political alliance. The recently formed First Suburbs Consor­tium links Cleveland's older suburbs like Euclid, Lakewood, and Shaker Heights in an anti-sprawl coalition. It is the first major response in Ohio to the Network's constant prod­ding. In April 1998, the Consortium convened a conference of several dozen of Ohio's "mature suburbs" to organize a statewide lobby for changing the regional "rules of the game."

Racial and economic diversity, balance, and stability are ultimately the best formula for sustained regional success—in Ohio and throughout our nation—in the coming cen­tury. Though scholarly in tone, the Network's continuing research may become the Com­mon Sense of a 21st century revolution in metropolitan governance.

NOTES

1Paul Jargowsky (1996) concurs generally with the four factors that I have cited as having major impact on the degree of concentrated poverty in different metropolitan areas. He notes, however, that regional economic trends over the previous two decades probably play the most important role in explaining the degree of concentrated poverty by 1990—a fact that I acknowledge but have not tried to analyze here. From 1956 to 1996, for example, the federal government spent $652 billion (in 1996 dollars) to

build highways and beltways compared to $85 billion to subsidize urban bus, light rail, and subway systems. A shift to full marginal cost financing of all new infrastructure by new commercial and residential

development would further encourage greater utilization of existing roads, water and sewer capac­ity, schools, etc. As mayor of Albuquerque, I helped institute the city's first utility expansion charge in 1978. However, we opted not to charge homebuilders the full marginal cost of expanded water and sewer capacity—just the first 5 years of debt service on 15-year utility bonds. In effect, after 5 years, the "newcomers" became part of the long-term utility customer/taxpayer base. The U.S. Office of Technology Assessment called for "full cost pricing policies for peripheral develop­ment" (OTA, 1995, p. 20) in its last report before the 104th Congress cut off its own invaluable analytic arm. 4In similar fashion, zero-elastic Baltimore City lured away the Cleveland Browns by, in effect, fis­cally annexing the entire state of Maryland. State appropriations paid the full $200 million cost of Baltimore's new stadium for the re-christened Ravens—just as the state paid the full cost for Oriole Park at Camden Yards, the wonderful, new "old-style" baseball park. Revenue-strapped Baltimore

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City was fiscally incapable of building new stadiums either to anchor the Orioles or to steal back the Browns (to replace their beloved Colts, heisted in 1984 by highly elastic Indianapolis). By contrast, during the 30-year period, the average for 213 urbanized areas was a 47% growth in

population and a 107% growth in land—more than a 2 to 1 ratio. Ohio's 13 urbanized areas experi­enced only a 13% growth in population, and a 64% growth in land used—almost a 5 to 1 ratio. 6Portland's minimum target, for example, is 10 housing units per buildable acre. Most suburbs aim for 6 to 8 units per buildable acre. The rule's premise is that higher density development (on smaller lots) will result in more affordable housing. In reality, the rule's goal is to reaffirm past building practices. At the time of the Housing Rule's adoption, the average built lot metro-wide was 5,700 square feet; under then-current zoning, the average anticipated lot size for new homes was 13,000 square feet. 7The law applies to all construction served by public water and sewer systems, normally in devel­opments of at least two housing units per acre. The requirements do not apply to much lower den­sity developments, based on well water and septic tanks, which both county zoning policy and high land costs discourage.

LITERATURE CITED

Berry, W. L. and Co., Inc., 1988, A Comparison of the Appreciation Rates of Homes in Montgomery County Communities with and without Moderately Priced Dwelling Units (MPDUs). Report. Available from William L. Berry and Co., Inc., 6701 Democ­racy Boulevard, Suite 400, Bethesda, MD 20817.

Cisneros, The Honorable H. G., 1994, Reinvention Blueprint. Washington, DC: U.S. Department of Housing and Urban Development.

Harrison, R. J. and Weinberg, D. H., 1992, Racial and Ethnic Segregation in 1990. Wash­ington, DC: U.S. Bureau of the Census.

Jargowsky, P. A., 1996, Poverty and Place: Ghettos, Barrios, and the American City. New York, NY: Russell Sage Foundation.

Metropolitan Council, 1991, Fiscal Disparities. Discussion Paper. Available from Metro­politan Council, 230 East Fifth Street, St. Paul, MN 55101.

OTA (Office of Technology Assessment: Congress of the United States), 1995, The Tech­nological Reshaping of Metropolitan America. Washington, DC: U.S. Government Printing Office.

Ohio Housing Research Network of the Ohio Urban University Program, 1994, The IRS Homeseller Capital Gain Provision: Contributor to Urban Decline. Report. Cleve­land, OH: Cleveland State University Levin College of Urban Affairs.

Rusk, D., 1995, Cities without Suburbs. Second edition. Washington, DC/Baltimore, MD: Woodrow Wilson Center Press/Johns Hopkins University Press.

1000 Friends of Oregon and The Homebuilders Association of Metropolitan Portland, 1991, Managing Growth To Promote Affordable Housing: Revisiting Oregon's Goal 10: Executive Summary. Portland, OR: 1000 Friends of Oregon.

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