Changing the Rules of the Game for Metropolitan America

by
David Rusk
Elmer B. Staats Lecture

National Academy of Public Administration
Albuquerque, New Mexico
June 2, 2000

America has become a metropolitan nation.
A century ago almost two-thirds of our people lived in rural areas. Four out of ten worked on farms, producing a quarter of the nation's output. Today 80 percent live in 277 metropolitan areas that account for 85 percent of the national economy. Farmers have shrunk from 40 percent to less than 3 percent of all workers, and agriculture contributes not 25 percent but 2 percent of gross domestic product. We have two million more school teachers and college professors than we have farmer workers.

America's future thus depends on the health and vitality of our metro areas.

Several months ago Fannie Mae polled experts about the top ten influences that have shaped urban America over the past fifty years. The top ten factors were

1. 1956 Interstate Highway Act and the dominance of the auto
2. FHA mortgage financing and subdivision regulation
3. De-industrialization of central cities
4. Urban renewal: downtown redevelopment and public housing projects
5. Levittown (mass production of suburban tract housing)
6. Racial segregation and job discrimination in cities and suburbs
7. Enclosed shopping malls
8. Sunbelt style sprawl
9. Air conditioning
10. Urban riots of the 1960s
The experts were also asked to guess what will be the ten major influences shaping urban America for the next fifty years. Their guess was

1. growing disparities in wealth
2. suburban political majority
3. aging of the baby boomers
4. perpetual underclass in central cities and inner suburbs
5. smart growth initiatives to limit sprawl
6. Internet
7. Deterioration of the "first ring," post-1945 suburbs
8. Shrinking household size
9. Expanded system of "outer beltways" to serve new edge cities
10. Racial integration reflecting increasing diversity of cities and suburbs
There is a curious dichotomy between the two lists. Looking backward, public policies - what I will call "the rules of the game" - dominated the list.

· #1 - the Interstate Highway Act of 1956 spawned 43,000 miles of federally financed superhighways. Interstate highways tied the nation together by a network of super-roads - a continent that was already served by the world's best rail system. But, most fatefully, the interstates ripped up many city neighborhoods and opened up vast tracts of farmland for sprawling suburban development.
· #2 - FHA mortgage insurance - and the whole, long-term, low-interest mortgage system the federal government organized - converted America into a nation of homeowners. Homeownership rose from 40 percent of households in 1940 to 67 percent today. But for the first three decades, the mortgage lenders' manual was "if you're white, you're all right; if you're black, get back." Federal policy red-lined African Americans out of the mortgage market and excluded them from the post-war, home equity boom, the greatest generator of family wealth in history.
· #4 - urban renewal of the 1950s and 1960s rebuilt downtown (with often deplorable architecture) and knocked down both horrific slums and solid, working class neighborhoods. As for the evicted, the poor were warehoused in high-density public housing projects that created greater enclaves of misery than American cities had ever seen.
In hindsight, we can also see how public policies created the conditions for other major influences on metropolitan growth: de-industrialization, suburban tract housing, segregation, shopping malls, sprawl, even urban riots. Only the advent of air conditioning was independent of public policy.

But looking forward, most of the experts' list seems disengaged from any public policy context. Growing disparities of wealth ... aging of baby boomers ... perpetual urban underclass ... deterioration of first ring suburbs ... shrinking household size - they have an aura of inevitable demographic trends or immutable realities of the supposed "free market."

Only two future factors - smart growth initiatives and outer beltways - are clearly grounded in the public policy environment. From today's perspective, most outer beltways will be built, and tough, Oregon-style, anti-sprawl laws will not be adopted. Outer beltways will outsmart Smart Growth.

Have we entered a new era of so-called "free market" determinism? I doubt it. It is hard to think of another sector of our economy more shaped by public policy and more dependent on public investment than land development.

What the list reflects, I believe, is that the experts implicitly expect future metropolitan trends to be shaped by today's rules of the game. Let's examine that proposition for four interrelated future trends: greater racial integration, perpetual underclass in central cities and inner ring suburbs, deterioration of those inner ring suburbs, and growing disparities in wealth.

Racial segregation of American neighborhoods is declining slowly. In substantial measure, this is occurring because in the last half century America replaced one set of rules that imposed segregation and sanctioned discrimination with another set of rules outlawing racial covenants, discriminatory sales and rental practices, and mortgage red-lining.

Using a common segregation index of 1 to 100 (where 100 equals absolute apartheid), the level of residential segregation in major metro areas in the Northeast and the Middle West improved modestly from a very high 85 in 1970 to a still high 78 by 1990. During the same two decades southern and western regions improved at twice the northern rate - from 79 to 64. Of metro areas with major African American populations the most segregated is Detroit (88), and the least segregated is Raleigh-Durham (48).

But if walls based on race are steadily coming down, walls based on income are going up. Jim Crow by income is replacing Jim Crow by race. From 1970-90, economic segregation increased in three-quarters of our major metro areas. The Milwaukee region (55) was the most economically segregated; the Riverside-San Bernardino region (25) was the least economically segregated.

Let's ask two questions about these trends.

First, what accounts for the disparities between the North and Middle West, on the one hand, and the South and West, on the other? In part, southern and western regions began somewhat less racially segregated than northern regions. In part, during these decades, the Sunbelt outperformed the Rustbelt economically.

But the different ways in which governance was organized regionally played a role. All northern metro areas are organized into "little boxes" - a generally "inelastic" central city surrounded by a myriad of towns and townships and independent school systems. Most southern and western metro areas are organized as "big box" communities - a large, "elastic" central city, few (or no) incorporated suburbs, and large (often countywide) school systems.

An example. Within Wayne County, Michigan, the Detroit Public Schools are surrounded by 35 independent suburban school districts. Charlotte-Mecklenburg County has one, unified, countywide, school district. Detroit-Wayne County's school segregation index: 89. Charlotte-Mecklenburg's index (under a court-ordered integration plan): 22.

Within Wayne County, Detroit, 33 suburban cities, and 10 townships all exercise "comprehensive" planning and zoning powers. The City of Charlotte and Mecklenburg County have a single planning staff and joint planning commission controlling almost 95 percent of the county's land. Metro Detroit's housing segregation index: 88. Metro Charlotte's housing segregation index: 53.

It is the generally unspoken mission of most of those little town councils and little school boards to "keep our town or our schools just the way they are for people just like us" - whoever "us" happens to be. Exclusionary policies rule. And, though they rarely perform flawlessly (or even always consciously), "big box" city councils and "big box" school boards tend to be more inclusionary. Their policies generally are responsive to broader, more diverse constituencies.

Such sharp contrasts in local governance arise from substantially different state laws in the North versus the South and West. These differences are primarily rooted in historical accidents. But they have great implications for metropolitan development because of how courts treat local planning and zoning.

During the 1950s and 1960s, our nation changed the rules regarding race - Brown v. Board of Education, the Civil Rights Act of 1964, the Voting Rights Act of 1965, the Fair Housing Act of 1968, and others. These were, in one sense, the assertion of the interests and values of the larger community (the nation) over a smaller community (the segregated South).

But, as a noted constitutional scholar, Harvard's Gerald E. Frug, has pointed out, while one set of rules have been changed to reflect national interests, another set of rules have been elaborated to enshrine intensely localized interests.

In America today, [Frug writes], suburban power is usually seen ... as a vehicle for the protection of home and family and of private property. This privatized picture of suburban life not only has helped convinced the states to grant [suburban] cities significant power over zoning, education, and resource allocation but has helped persuade the courts to defend their power against attacks by insiders and outsiders alike. Moreover, local government law has enabled [suburban] cities to pursue their own self-interest regardless of the impact on their neighbors because it has adopted a privatized conception of the boundary lines between the central city and its suburbs - and between the suburbs themselves. Like the boundary lines that separate one private property-owner from another, city borders have become a vehicle for dividing us from them, our problems from their problems, our money from their money, our future from their future. Those who can afford it can therefor assure themselves of better schools, safer streets, and more homogeneous neighborhoods simply by moving from one side of the line to the other....
The legal system's decision to build local power on the protection of local autonomy and associate autonomy with private values, in short, has had an unequal effect on metropolitan residents: it has enhanced the power of America's prosperous suburbs at the expense of its central cities. Gerald E. Frug. City Making: Building Communities without Building Walls. Princeton, NJ (Princeton University Press: (1999), pp. 7-8.

The dynamics of "big box" regions versus "little box" regions is a significant part of the answer to my first question about northern versus southern trends in racial and economic segregation.
The second question is why are racial segregation indices generally much higher than economic segregation indices? The answer is that most poor white people are not isolated in high-poverty neighborhoods.

Nationally, there are almost twice as many residents of our metro areas who are poor and white as those who are poor and black or poor and Hispanic. Yet poor whites rarely live in poor neighborhoods (where poverty rates exceed 20%). Only one quarter of poor whites live in poverty-impacted neighborhoods; three quarters live in working class or middle class neighborhoods scattered all over our metropolitan areas. By contrast, half of poor Hispanics and three quarters of poor blacks live in poor neighborhoods in inner cities and inner suburbs.

What does this mean? For one thing, if you are poor and white, the odds are three out of four that at your neighborhood school your own child's classmates will be primarily middle-class children. If you are poor and black, the odds are three out of four that your own child's classmates will be other poor children.

This makes a huge difference. A child's family background - and the classmates' family background - are the biggest determinants of success in school.

Concentrated poverty is metropolitan America's core problem - both socially and geographically. Concentrated poverty creates push-pull factors. Push factors - high crime rates, failing schools, falling property values, often higher tax rates - push middle class families out of poverty-impacted neighborhoods in central cities and many older suburbs. Pull factors - safer neighborhoods, better schools, rising home values, often lower tax rates - pull such families to newer suburban areas. But, as I have shown, concentrated poverty is a highly racialized problem. High-poverty black ghettos and Hispanic barrios greatly outnumber the few white slums.

Let me pull together now the four different trends I cited.

Greater racial integration - happening primarily because of civil rights laws, but benefiting principally middle class black and Hispanic families that are moving into suburban areas.

Perpetual underclass in central cities and inner ring suburbs - as middle class minorities move out to the suburbs, poor blacks and Hispanics are left behind, more isolated than ever, with bad schools, few local jobs available, and declining public services.

Deterioration of inner suburbs - many post-war, blue-collar suburbs are more endangered than many central cities. Their modest housing stock is too old to be competitive and too new to be quaint. Their strip shopping centers (even first-generation shopping malls) are closing in the face of competition from super-stores and newer regional malls in the outer suburbs.

Growing disparities of wealth - We now have the most unbalanced income distribution in our history. Regressive Federal tax policies, weaker labor unions, and globalization have all helped skew income distribution. However, the primary factor is that the New Economy rewards higher educational skills more than ever. And educational opportunity is substantially apportioned in America by geography. Where you live governs what kind of educational opportunity you will have. That, in turn, is shaped by metropolitan development patterns.

"If you keep doin' what you've always been doing, you'll keep gettin' what you've always got." To avoid this future, we must change the "rules of the game."

One set of rules that will not be changed is how the North and Middle West are organized formally into "little box" jurisdictions. Townships are not going to be abolished. Multiple school districts will not be merged. Cities and counties will not consolidate. (In fact, the real battle is to help southern and western communities maintain dominant, elastic cities and more unified school systems.)

But if the many local governments cannot become one through formal reorganization, the many local governments can be made to act as one on critical regional issues. And, as Don Hutchinson, president of the Greater Baltimore Committee, has said, "if regionalism isn't dealing with land use, fiscal disparities, housing, and education, then regionalism isn't dealing with the issues that count."

The vital issue is what gets built where for whom? There are three key regional strategies to "act as one" for "big box" and "little box" regions alike.

• To reverse growing concentrated poverty and economic segregation, require regional fair share low- and moderate-income housing.
• To counteract growing fiscal disparities among local governments, require regional tax base sharing.
• To combat accelerating urban sprawl and core community dis-investment, require regional growth management.

Changing key federal policies helps. But in terms of local governments' planning, zoning, and fiscal powers, state governments control the rules. State legislatures must be the target for regional reforms in most circumstances.

Fair share housing would have the greatest impact. It is also the most daunting political challenge. By the calculus of pure political self-interest, tax base sharing might be easiest to achieve, but it has minor impact on a region's core issues. I believe that securing state growth management laws is the primary reform target. (Every state growth management law I have reviewed has a fair-share housing goal on which to build later reforms.)

Anger and frustration over escalating traffic congestion in suburbia is fueling the nation's current anti-sprawl mood. Low density of people leads to high density of traffic. The most common responses are

a) build even more highways, and
b) restrict growth through allowing only large-lot new homes.

Both "solutions" will compound the problems.

The growth management movement must find new allies to achieve the critical mass necessary. Environmental activists and farmland preservationists have traditionally championed growth management laws. New emerging allies include business leadership groups, alliances of declining suburbs, some big city mayors, and faith-based coalitions.

The issues of social stewardship and environmental stewardship are inextricably interwoven. The connecting link is environmentally and socially destructive land development patterns. Winning today's civil right battles as well as today's environmental battles requires changing the same set of rules.

Ultimately, the great challenge of creating livable communities is

Are we going to live together?