POSTWAR URBAN AMERICA This book presents an analytical history of postwar urban America as a drama in four acts, with the goal of identifying the demographic, economic, and political factors that gave rise to positive outcomes After a brief transition to peacetime, urban America experienced UREXVWJURZWKIURP XQWLOURXJKO\ 7KHHQGRIWKLV¿UVWDFWZDVDQQRXQFHG\HDUV in advance when riots erupted in the Watts section of Los Angeles in August 1965 There were many signs of trouble brewing in urban areas, and the blizzard of programs that was the Great Society was partly in response to those problems The decline of the major cities and the attendant social problems were all related and reinforced one another during these years Act was a bad time for cities and the people who lived in them, but it did end, and sometime after 1990, the downward spiral that had gripped America’s cities stopped and Act began To be sure, urban America still suffered from many problems, but many things were getting better, not worse—for example, the murder rate in the United States dropped to levels that had not been seen since before the start of the urban crisis in the mid-1960s It was time to focus on what was working and how to keep the momentum of social and economic progress going Unfortunately, however, Act brought a reversal of the hopeful trends of the 1990s, as a relatively small recession in 2001 was followed by a weak recovery Then FDPHWKH¿QDQFLDOFULVLVRIDQGWKHGHHSHVWUHFHVVLRQVLQFHWKH*UHDW'HSUHVVLRQZLWK across-the-board increases in poverty A primary task of this book is to study the major urban areas of the United States to understand why this all happened the way it did The method followed is to identify seventeen XUEDQDUHDVLQWKH1RUWK¿IWHHQLQWKH6RXWKDQGHLJKWLQWKH:HVWDQGWKHQVWXG\WKHP from 1950 to 2010 Most of the chapters present detailed examinations of either the northern urban areas or the urban areas in the South and West during one of the “acts” in the drama—the time periods we call growth, crisis, rebirth, and new century The hope is that this analysis will help stimulate the thinking that is needed to recognize that some urban areas have been more successful than others, that a rebirth did take place in urban America in the 1990s, and that the task going forward is to nurture and enhance the positive forces that can play a role once again John F McDonald is Emeritus Professor of Economics and Finance at the University RI,OOLQRLVDW&KLFDJR86$DQG*HUDOG:)RJHOVRQ'LVWLQJXLVKHG&KDLULQ5HDO(VWDWH (PHULWXVDW5RRVHYHOW8QLYHUVLW\86$ This page intentionally left blank POSTWAR URBAN AMERICA Demography, Economics, and Social Policies John F McDonald First published 2015 E\5RXWOHGJH 711 Third Avenue, New York, NY 10017 DQGE\5RXWOHGJH 3DUN6TXDUH0LOWRQ3DUN$ELQJGRQ2[RQ2;51 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2015 Taylor & Francis 7KHULJKWRI-RKQ)0F'RQDOGWREHLGHQWL¿HGDVDXWKRURIWKLVZRUNKDVEHHQDVVHUWHGE\ KLPLQDFFRUGDQFHZLWKVHFWLRQVDQGRIWKH&RS\ULJKW'HVLJQVDQG3DWHQWV$FW All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, DQGDUHXVHGRQO\IRULGHQWL¿FDWLRQDQGH[SODQDWLRQZLWKRXWLQWHQWWRLQIULQJH Library of Congress Cataloging in Publication Data 0F'RQDOG-RKQ) ± Postwar urban America : demography, economics, and social policies / by John F 0F'RQDOG pages cm Includes bibliographical references and index United States—Population—History—20th century United States—Population— History—21st century Cities and towns—United States—History—20th century Cities and towns—United States—History—21st century Metropolitan areas— United States—History—20th century Metropolitan areas—United States— +LVWRU\²VWFHQWXU\8QLWHG6WDWHV²(FRQRPLFFRQGLWLRQV² ²5HJLRQDO disparities I Title HB3505.M39 2014 307.760973—dc23 2014020149 ,6%1 KEN ,6%1 SEN ,6%1 HEN Contents Preface Introduction xi xiii Part I: Urban America in 1950 Urban Areas of the North The American Economy in 1950 Principles of Business Location in 1950 Urban Areas of the North: Population, Employment, and Earnings New York Chicago Philadelphia and Detroit Boston and Pittsburgh St Louis, Cleveland, Washington, D.C., and Baltimore Five More Urban Areas Indianapolis and Columbus Housing and Housing Programs Conclusion 3 12 14 15 16 16 17 22 Urban Areas of the South before Air-Conditioning Brief Historical Background Urban Areas of the South in 1950 Housing in Southern Urban Areas Conclusion 24 24 25 29 30 Urban Areas of the West San Francisco and Los Angeles Other Western Urban Areas Housing in the Western Urban Areas Conclusion 31 31 35 36 37 An American Dilemma in 1950 The American Dilemma Black Americans in Urban Areas of the North: 1950 Black Americans in the Urban Areas of the South and West: 1950 Conclusion 38 39 44 49 52 v vi CONTENTS Part II: Urban Growth and Prosperity: 1950–1970 The Industrial North and the Great Migration The Economic Boom after World War II Baby Boom Level of Education Increased Incomes New Consumer Products Growth in the Northern Urban Areas Statistical Patterns of Urban Growth Conclusion 57 57 58 58 58 58 60 63 67 The New South Takes Off Major Urban Areas of the South: 1950–1970 Other Urban Areas of the South: 1950–1970 Conclusion 68 68 70 73 Urban Growth in the West Los Angeles and San Francisco Four Other Urban Areas Accounting for the Growth of Western Urban Areas Statistical Analysis of Urban Growth in the South and West Conclusion 74 74 75 76 77 79 Suburbanization: 1950–1970 Suburban Population Growth in the North Suburban Population Growth in the South and West Causes of Suburbanization Employment Location Patterns Employment Location in Metropolitan Chicago Manufacturing Wholesale Trade Employment Central City Employment Employment in Cook County Other Sectors Employment Location in Metropolitan New York Commuting in Detroit Highways and Automobiles Conclusion 80 80 82 84 87 88 88 89 89 89 89 90 92 94 95 Signs of Trouble Ahead Housing Segregation in the North Housing Segregation in the South and West Black Population Growth and Segregation in Chicago Housing Prices and Home Ownership The Poor Pay More Employment Discrimination 96 96 98 101 105 108 108 312 PART V: URBAN AMERICA IN THE NEW CENTURY Rube Goldberg mousetrap contraption When a call comes to the station, a fax paper rolls out of the printer containing the directions to the fire So someone had it rigged where the fax paper pushed over a door hinge with a screw mounted on it The screw touched an electrified metal plate that was wired to the alarm, which completed the electrical circuit The bell rang (2013, p 52) The city of Detroit suffered larger losses of population and jobs than the other major central cities of the North during the 2000–2010 decade Some of the results of these losses were a jump in the poverty rate, a drastic decline in median family income, an increase in the murder rate, and an increase in the percentage of single-parent families to an astonishing 71 percent And surely all these negative effects reinforce one another in, yet again, Myrdal’s (1944) vicious circle CONCLUSION The filing for bankruptcy by the City of Detroit took place at the end of a particularly disastrous decade for the city in terms of its own history Yes, Detroit had been in decline for decades (although the decade of the 1990s provided some reason for hope), but prior to the current period the city had found the ways and means to avoid bankruptcy Withdrawal of support for the City of Detroit by the federal government and the State of Michigan is implicated, but so are declining incomes and tax revenues in nominal terms The vicious circle was at work during the years of urban crisis approximately from 1970 to 1990, but Detroit was not unique in this regard Yes, the urban crisis was very bad in Detroit, but it found ways to avoid bankruptcy The advent of casinos and the wagering tax in 1996 helped for several years, but this source of tax revenue stopped growing In the 2000–2010 decade, the City of Detroit ran out of fiscal ammunition because the economic situation had become much worse Other writers more interested in local politics place blame on local officials For example, Steve Malanga (2013), a senior fellow at the conservative Manhattan Institute, points the finger at Mayor Coleman Young In his opinion The truth is that Detroit was a failed city long before it became insolvent, thanks to the virtual collapse of its municipal government during Young’s 1974–1994 reign as major (2013, p A13) Malanga asserts that Young governed divisively and therefore exacerbated the flight of whites to the suburbs and relied on federal aid that subsequently largely has been withdrawn Young was followed in the mayor’s chair for two terms by State Supreme Court Justice Dennis Archer and then by Kwame Kilpatrick Kilpatrick was elected in 2001 and served until he was indicted for obstruction of justice in 2008 He was convicted on twenty-four federal counts that include mail fraud and racketeering David Bing, the former NBA star, succeeded Kilpatrick in 2009 and found a city government near bankruptcy Malanga allows that “while Young was not directly responsible for the public pension obligations that led to the city’s bankruptcy, his poor governance and hostility toward the middle class drove the tax base away” (2013, p A13) If that is true, Young was governing in a manner that is distinctive Effective central BANKRUPTCY IN DETROIT 313 city mayors should wake up in the morning and, I believe, ask themselves, “What can I today that will hold the middle class in the city, and what can we that will attract more middle-class residents?” Richard J Daley and his son Richard M Daley each served as mayor of Chicago for more than two decades For all their faults, I believe that both mayors of Chicago named Daley asked themselves these questions virtually every day On the other hand, individual officials may be a different matter The situation in Detroit is not without hope The three major American auto companies have survived and are making profits As seen in Tables 22.7 and 22.8, employment, both in manufacturing and in total, has increased between 2010 and 2012 Furthermore, a recent book by Katz and Bradley on innovative economic development policies and projects in urban areas finds “an innovation district in the unlikeliest of places” (2013, p 131) That unlikely place is downtown Detroit The leader in this transformation is Dan Gilbert, founder of Quicken Loans (and owner of the Cleveland Cavaliers of the NBA) He brought some 7,000 employees to downtown Detroit and purchased at least fifteen buildings in the area Although his efforts followed the efforts of other groups such as the Kresge Foundation, Invest Detroit, the Detroit Downtown Partnership, and the Detroit Economic Growth Corporation, Gilbert seems to have induced others such as Blue Cross Blue Shield of Michigan, Compuware, and DTE Energy to follow Also, several tech start-ups have emerged All these businesses can be built around the four major downtown anchors: Henry Ford Hospital, Detroit Medical Center, Wayne State University, and the College for Creative Studies (colloquially called “meds and eds”) As Katz and Bradley (2013) note, this sort of combination of meds, eds, and tech has been successful in several other cities Is a major transformation of Detroit under way that will save the city? The last two chapters of this book not provide much reason to be optimistic NOTES The debt figures from Orr (2013) for 2012 are in rough agreement with the figures provided by the State of Michigan Department of Treasury (2012) for 2011 High-poverty census tracts are defined as poverty rates of 40 percent or more See Jargowsky (1997) 23 Urban Areas of the South and West: 2000–2010 The experiences of the urban areas of the South and West, although quite varied, were in general different from those of the urban areas of the North The twenty-three urban areas examined in this chapter grew in population by an average of 19 percent, and their central cities grew by a mean of 11 percent Fourteen of the twenty-three metro areas had higher total employment in 2010 than in 2000 Nearly all the central cities added land area On the other hand, the housing market bubble and crash existed in strongest form in the urban areas of the West and Florida And nearly all the central cities suffered significant declines in median household income Of course, New Orleans is a special case because of the disastrous hurricane in 2005 Basic data for the twenty-two metro areas and their central cities are provided in Tables 23.1, 23.2, and 23.3 The following text uses data from these tables and some other sources THE MAJOR URBAN AREAS OF TEXAS This discussion of the individual urban areas is organized in this chapter by geography We start with the four major urban areas in Texas: Dallas–Fort Worth, Houston, San Antonio, and Austin The population of the Dallas–Fort Worth “metroplex” increased by 23.4 percent from 2000 to 2010, but because of the deep recession, total employment in 2010 was only 3.7 percent greater in 2010 than in 2000 Employment in manufacturing fell from 353,000 to 251,000 (down 29 percent) The racial composition of the metropolitan area changed somewhat over the decade in that the Hispanic population increased from 18.6 percent to 27.5 percent The increase in the population of this group (634,000) accounts for 52 percent of the population growth in the metropolitan area The Dallas–Fort Worth area did not participate in the housing market bubble and crash The Case-Shiller Home Price Index peaked at 125.70 in August 2006, fell to 112.63 in January 2012, and recovered to 132.30 as of August 2013 In real price terms, the peak housing price index in 2006 is an increase of only percent over the January 2000 index Texas laws prevented most of the lax lending that contributed to the housing market bubble in other metro areas not in Texas The population of the combined central cities of Dallas and Fort Worth increased from 1.724 million to 1.939 million (up 12.5 percent), in part because the land area of the two cities increased by percent The relatively weak employment growth compared to population growth for the metro area translated into some significant economic problems for the central cities The poverty rate increased from 17.2 percent to 21.1 percent, and the number of people living in high-poverty areas increased from 68,000 to 134,000 Median household income in the central cities fell in real terms by 10.3 percent The housing vacancy rate increased from 6.7 percent to 10.7 percent 314 Metro Area 5,162 4,715 1,317 4,248 1,052 5,008 1,576 1,712 2,396 1,267 1,312 1,223 1,330 1,250 1,645 16,374 4,124 3,044 2,179 2,814 3,252 1,376 1,736 6,372 5,947 1,168 5,269 1,128 5,565 1,672 2,143 2,783 1,427 1,590 1,634 1,758 1,716 2,134 17,877 4,335 3,440 2,543 3,095 4,193 1,951 1,975 Metro Population, 2010 1,724 1,954 485 416 243 362 234 1,145 303 224 545 276 541 657 186 3,695 1,176 563 555 1,223 1,321 478 895 Central City Population, 2000 Sources: U.S Bureau of the Census and Bureau of Labor Statistics Dallas–Fort Worth Houston New Orleans Atlanta Birmingham Miami Norfolk San Antonio Tampa Greensboro Nashville Raleigh–Durham Charlotte Austin Orlando Los Angeles San Francisco–Oakland Seattle Denver San Diego Phoenix Las Vegas San Jose Metro Population, 2000 Metropolitan Population and Employment: 2000–2010 (in 1,000s) Table 23.1 1,939 2,099 344 420 212 399 243 1,327 335 270 601 404 731 790 238 3,793 1,196 609 600 1,307 1,446 584 946 Central City Population, 2010 2,761 2,251 618 2245 517 2,158 720 745 1,148 643 698 694 770 673 910 6,724 2,127 1,648 1,211 1,194 1,578 698 1,044 Metro Employment, 2000 2,862 2,528 519 2,270 492 2,190 735 843 1,112 596 734 772 805 770 1,002 6,523 1,884 1,644 1,194 1,232 1,690 804 855 Metro Employment, 2010 353 232 45 207 53 134 65 56 90 136 93 83 109 83 53 885 179 213 87 121 161 20 251 251 217 32 143 35 76 52 44 58 80 60 61 66 48 38 641 117 167 61 93 111 20 154 Metro Metro Manufacturing, Manufacturing, 2000 2010 315 17.2 20.7 27.9 24.4 24.7 28.5 19.4 17.3 18.1 12.3 13.3 11.5 10.6 14.4 15.9 22.1 11.3 19.4 11.8 14.3 14.6 15.8 11.9 8.8 Source: U.S Bureau of the Census Dallas–Fort Worth Houston New Orleans Atlanta Birmingham Miami Norfolk San Antonio Tampa Greensboro Nashville Raleigh Charlotte Austin Orlando Los Angeles San Francisco Oakland Seattle Denver San Diego Phoenix Las Vegas San Jose Central City Poverty, 2000 21.1 21.5 25.7 23.2 27.3 27.7 17.1 19.2 19.2 18.4 18.2 15.1 15.0 18.5 17.3 20.2 12.3 19.6 13.2 18.8 14.6 20.3 14.9 11.7 Poverty, 2010 23.9 25.0 66.7 61.0 73.2 19.9 43.6 6.5 25.3 37.1 26.7 27.5 32.5 9.8 26.1 10.9 7.6 35.1 8.3 10.8 7.6 4.8 10.1 3.3 African American, 2000 22.7 23.7 60.2 54.0 73.4 19.2 43.1 6.9 26.2 40.6 28.4 29.3 35.0 8.1 28.1 9.6 6.1 28.0 7.9 10.2 6.7 6.5 11.1 3.2 African American, 2010 Central City Poverty and Racial Composition: 2000–2010 (percentages) Table 23.2 33.8 37.4 3.1 4.5 1.8 65.8 3.8 58.7 19.3 4.4 4.7 7.0 7.4 30.5 17.5 46.5 14.1 21.9 5.3 31.7 25.4 34.1 23.6 30.2 Hispanic, 2000 39.2 43.8 5.2 5.2 3.6 70.0 7.2 63.2 23.1 7.5 10.0 11.4 13.1 35.1 25.4 48.5 15.4 25.4 6.6 31.8 28.8 40.6 31.5 33.2 Hispanic, 2010 38.1 30.8 26.6 31.3 25.5 11.8 47.0 31.8 51.0 53.6 64.0 60.3 55.1 52.9 50.8 29.7 43.6 23.5 67.9 51.9 49.4 55.8 58.0 36.0 White, 2000 33.7 25.6 30.5 36.3 21.1 11.9 44.3 26.6 46.3 45.6 56.3 53.3 45.1 48.7 41.3 28.7 41.7 25.9 66.3 52.2 45.1 46.5 47.9 28.7 White, 2010 316 18 11.8 42 32 32 18.2 18.8 7.4 12.5 9.4 13.0 9.4 11.8 4.9 11.3 14.9 7.0 20.0 6.4 5.8 4.4 11.5 8.2 2.1 11 12.8 51 22 19 17.0 14.0 6.0 8.0 7.4 9.1 3.5 7.8 4.8 7.6 7.7 6.0 23.0 3.1 9.7 2.2 8.0 7.6 2.1 68 83 97 69 32 83 34 45 30 42 40 11 446 21 21 14 37 66 63 134 186 38 68 30 70 21 60 32 24 28 15 30 265 8 11 21 29 103 30 High-Poverty High-Poverty Population, Population, 2000 2005–2009 (in 1,000s) (in 1,000s) 29 30 25 23 24 47 22 25 23 16 19 12 15 17 18 33 19 26 10 21 17 23 22 22 High School Dropout, 2000 (%) Sources: FBI, Jargowski (2003), Kneebone et al (2011), U.S Bureau of the Census Dallas–Fort Worth Houston New Orleans Atanta Birmingham Miami Norfolk San Antonio Tampa Greensboro Nashville Raleigh Charlotte Austin Orlando Los Angeles San Francisco Oakland Seattle Denver San Diego Phoenix Las Vegas San Jose Central City Murder, Murder, 2000 2010 (per 100,000) (per 100,000) Central City Social and Economic Conditions Table 23.3 25 26 16 13 17 32 15 20 15 13 15 12 14 13 26 14 20 15 14 20 18 18 High School Dropout, 2010 (%) 34.5 33.0 54.7 59.0 54.7 44.0 46.0 33.0 43.0 38.0 39.0 27.0 33.0 31.0 47.0 32.4 31.8 42.4 30.7 35.4 27.9 32.0 32.4 21.9 One-Parent Family, 2000 (%) 36.4 38.0 57.1 53.0 63.4 48.4 49.4 38.9 45.2 44.8 Na 36.5 37.7 32.6 60.4 48.0 26.2 31.5 27.7 35.8 28.4 38.0 36.2 23.5 One-Parent Family, 2010 (%) –10.3 –10.8 1.9 –2.1 –11.6 –4.5 2.2 –10.1 –5.4 –21.6 –12.9 –16.1 –16.2 –10.5 –11.4 +1.0 –2.2 –5.4 +0.2 –10.9 +3.2 –12.7 –9.0 –13.3 Change in Real Median Household Income (%) 317 318 PART V: URBAN AMERICA IN THE NEW CENTURY Population growth in metropolitan Houston was 26.1 percent from 2000 to 2010 Job growth was stronger than in Dallas–Fort Worth at 12.3 percent; manufacturing employment declined by only 6.5 percent The increase in the Hispanic population from 1.353 million to 2.099 million accounts for 61 percent of the population growth in the metropolitan area The city of Houston added 7.4 percent to its population Strong population growth combined with metropolitan employment growth that was 13.8 percent less than metropolitan population growth produced economic problems for the central city, however The poverty rate edged up from 20.7 percent to 21.5 percent, but the number of people living in high-poverty areas more than doubled from 83,000 to 186,000, and real median household income fell by 10.8 percent The percentage of single-parent families increased from 33.0 percent to 38.0 percent Housing vacancies in the central city increased as well, from 7.7 percent to 12.3 percent The story of San Antonio in the 2000–2010 decade bears some similarity to the stories of Dallas–Fort Worth and Houston Metropolitan population increased by 25.2 percent, and total employment in 2010 was 13.2 percent greater than in 2000 San Antonio has relatively few manufacturing jobs (just 7.5 percent of total employment in 2000 and 5.2 percent in 2010) The population of metro San Antonio is more heavily Hispanic than Dallas–Fort Worth or Houston (50 percent in 2000), and the growth of this group accounts for most of the population growth of the metropolitan area The Hispanic population grew from 863,000 to 1.158 million, which equals 68 percent of total population growth The central city population increased by 15.9 percent in part because the city expanded its land area by 13 percent, but economic problems in the central city resembled those in Dallas–Fort Worth and Houston The poverty rate increased from 17.3 percent to 19.2 percent, and the number of people living in high-poverty areas increased from 45,000 to 60,000 The decline in real median household income of 10.1 percent was virtually equal to the decline in the two larger Texas cities The housing vacancy rate increased from a low 5.9 percent to 8.5 percent On a positive note, the murder rate in San Antonio is quite low for a major central city at 6.0 per 100,000 in 2010 (down from 7.4 in 2000) The Austin metropolitan area continued its rapid population growth by adding 37.3 percent Its population of 1.716 million makes metro Austin half again larger than the New Orleans or Birmingham metro areas The increase in the Hispanic population of 210,000 accounts for 45 percent of this population growth Total employment in 2010 was 14.4 percent larger than in 2000, and employment grew another 6.9 percent from 2010 to 2012 Manufacturing employment declined from 83,000 in 2000 to 48,000 in 2010 (down 42 percent), which partly accounts for the slow employment growth relative to population The city of Austin added 20.2 percent to its population mainly by adding 18.4 percent to its land area The central city experienced the same problems as did the other three Texas cities; the poverty rate increased from 14.4 percent to 18.5 percent and the number of people living in high-poverty areas increased from 11,000 to 30,000 Real median family income fell by 10.5 percent between 2000 and 2010 On the positive side, Austin maintained its low murder rate (4.9 per 100,000 in 2000 and 4.8 per 100,000 in 2010), and, as of 2010, only 14 percent of adults in Austin had not graduated from high school Population growth for the central city did not mean a tight housing market, however The housing vacancy rate was a very low 3.5 percent in 2000, and it increased to 8.3 percent in 2010 URBAN AREAS OF THE SOUTH AND WEST: 2000–2010 319 To summarize, all four major metro areas in Texas experienced significant population growth, but employment growth fell well short of the population growth rate Growth of the Hispanic population was the major factor in total population growth in all four metro areas All four central cities experienced roughly the same set of economic problems: increased poverty rate and real median household income decline of slightly more than 10 percent THE METRO AREAS OF THE SUNSHINE STATE Three metropolitan areas in Florida—Miami, Tampa, and Orlando—are being followed in this book All three increased in population by more than 10 percent, and all three central cities added population as well Metro population growth for all three was dominated by growth in the Hispanic population And all three participated in the housing market bubble and crash, with the result that housing vacancy rates in 2010 were high According to the Case-Shiller index, metro Miami had the largest housing price increase of any of the twenty urban areas included in that index The index reached 280.87 in December 2006 and then fell to 137.47 in November 2011 (a drop of 51 percent) The housing vacancy rate in the city of Miami stood at 14.0 percent in 2010 (up from 7.8 percent in 2000), but that does not count the housing under construction that was not completed The Case-Shiller index since increased to 170.41 in August 2013, which means that real housing prices at that time were up by 25.5 percent over 2000 Why was Miami ground zero for the housing market bubble and crash? Clearly, the previous rapid growth of population had something to with it, although Dallas–Fort Worth had similar population growth and avoided the bubble and crash In fact, population growth in metro Miami slowed down from 2000 to 2010 to 11.1 percent compared with 21.4 percent in the 1990s Furthermore, the growth in the Hispanic population of 609,000 accounts for 109 percent of the total population growth This group might not have been prepared to be home owners at that time What is more, total employment in 2010 was just 1.5 percent greater than in 2000 as manufacturing employment fell from 134,000 to 76,000 In addition, the lax home loan procedures discussed in Chapter 20 were at work in Miami, but not so much in Dallas–Fort Worth In short, the optimistic expectations of home builders and lenders were dashed It is somewhat surprising that the city of Miami did not experience worse economic and social problems The population of the city increased by 10.2 percent even though land area did not increase The poverty rate was a relatively high 28.5 percent in 2000, but it actually declined slightly to 27.7 percent in 2010 The population living in high-poverty areas declined from 83,000 to 70,000, and real median household income fell by only 4.5 percent One factor at work surely was the large decline in the percentage of adults who had not completed high school, a drop from 47 percent to 32 percent If Miami was ground zero for the housing bubble and crash, Tampa was just off center The Case-Shiller index topped out at 238.09 in July 2006 and then crashed to 123.91 in February 2012 (down 48 percent) Population growth in metro Tampa was 16.2 percent, and “only” 52 percent of that growth was the result of the increase in the Hispanic population Total employment did not grow from 2000 to 2010, but declined by 3.1 percent The data for the central city suggest a mixed record: population increased by 10.9 percent, poverty increased from 18.1 percent to 19.2 percent, real median house- 320 PART V: URBAN AMERICA IN THE NEW CENTURY hold income fell by a comparatively small 5.4 percent, and the number of people living in high-poverty areas edged up from 30,000 to 32,000 Housing vacancies increased as they did nearly everywhere (from 7.6 percent to 13.5 percent), but the murder rate declined from 12.5 per 100,000 to 8.0 per 100,000, and in 2010, only 15 percent of adult Tampa residents had not graduated from high school The population of the Orlando metro area grew rapidly by 29.7 percent, and the central city grew by 27.9 percent even though it added only 9.5 percent to land area Growth of the Hispanic population accounts for 55 percent of metropolitan population growth Total employment in the metro area in 2010 was 10.1 percent greater than in 2000, so population growth far outstripped employment growth The poverty rate in the city of Orlando increased from 15.9 percent to 17.3 percent, and real median household income fell by 11.4 percent, but the number of people living in high-poverty areas remained very low (7,000 in 2000 and 6,000 in 2010) In addition, the murder rate fell to a relatively low 7.6 per 100,000 in 2010, and just 13 percent of adults had not graduated from high school On the other hand, the housing vacancy rate in the central city increased from 7.3 percent to 15.4 percent, which suggests that Orlando experienced the housing bubble and overbuilding that occurred in Miami and Tampa Finally, the data on single-parent families so far has not been discussed systematically here because it increased slightly in the central cities examined thus far The large increase in Orlando, however—from 47 percent to 60.4 percent—means that Orlando has the second-worst record on this important factor of any of the central cities on the South and West included in this book (Birmingham is worst with 63.4 percent.) METROPOLITAN AREAS OF THE DEEP SOUTH: BIRMINGHAM AND NEW ORLEANS While the major metropolitan areas of Texas and Florida experienced significant population growth, Birmingham continued to lag behind Population of the metropolitan area increased by 7.2 percent to 1.128 million in 2010, which makes Birmingham the smallest metropolitan area included in this study Total employment was 4.8 percent less in 2010 than in 2000 as manufacturing employment continued to fall, from 53,000 in 2000 to 35,000 in 2010 (which accounts for 72 percent of the total employment decline) Metro Birmingham has a small Hispanic population of just 4.3 percent in 2010 Relatively slow population growth at the metropolitan level coupled with no additions to land area translated into population decline in the central city of 12.8 percent from 2000 to 2010 The poverty rate in the central city increased from 24.7 percent to 27.3 percent, and real median household income fell by 11.6 percent The black population of the city of Birmingham remained at 73 percent The percentage of single-parent families increased from 54.7 percent to the 63.4 percent noted above Population loss produced an increase in the housing vacancy rate from 11.5 percent to 18.0 percent One positive note for the city was the decline in the murder rate from 32 per 100,000 to 19 per 100,000 In all, Birmingham continued to resemble some of the metropolitan areas of the North Hurricane Katrina struck New Orleans on August 29, 2005 The magnitude of this natural disaster rivals the Chicago fire of 1871 and the San Francisco earthquake of 1906 Both Chicago and San Francisco were growing rapidly at the time of the disaster, however, so those cities recovered quickly Such has not been the case for New URBAN AREAS OF THE SOUTH AND WEST: 2000–2010 321 Orleans Metropolitan New Orleans had not been growing briskly prior to 2000 (and 2005, as it happened) The metropolitan population was 1.304 million in 1980 and was estimated in the American Community Survey at 1.345 million in 2005 The population of the central city declined from 588,000 in 1980 to 497,000 in 1990, and the housing vacancy rate increased from 8.7 percent to 16.0 percent The central city housing stock was reduced by 11,000 units in the 1990s, so the vacancy rate fell to 11.5 percent (as population fell by another 12,000) Housing development in the suburbs proceeded at a fairly brisk pace, which suggests that the filtering process was working to the detriment of the central city housing market New Orleans is the one urban area in the United States that must rely on a system of levees, pumps, canals, and flood insurance New Orleans was flooded because the levee system failed to provide the protection that had been anticipated Hurricane Katrina did not make a direct hit on the city, and the levee system was supposed to provide protection against a hurricane of its strength (category 3) As Horne (2006) explained, extensive engineering studies showed how the system failed as a result of the surge of water into New Orleans, which pushed the levee walls out of alignment and caused water to undermine them The soil shifted, taking the concrete flood walls with it It was clear that a major reconstruction of the system was needed, and $14.5 billion was spent by the U.S Army Corps of Engineers between 2006 and 2012 to just that A key component is the Lake Borgne surge barrier that can block water coming up the Gulf Intracoastal Waterway The matter of flood insurance is a complex and controversial topic, and debate over the national program was renewed in the wake of Superstorm Sandy in 2012 In short, the issue is whether the current system provides an incentive for people to build—and continue to rebuild—in dangerous locations The population of the New Orleans metropolitan area was 1.317 million in 2000 and 1.168 million in 2010 The decline in population of 149,000 was almost entirely confined to the city of New Orleans, which fell from 485,000 to 344,000 Total employment was 618,000 in 2000, and the total remained stable up through 2004 with 614,000 The annual figure for 2005 is 556,000, but the monthly data show a drop from 604,000 in August 2005 to 426,000 in October 2005 Total employment began to recover from this low point, and the annual figure for 2006 is 481,000 and 526,000 in 2008 Employment fell by only a small amount in 2010 to 519,000 and recovered to 530,000 in 2012, but total employment in 2012 was just 85.8 percent of its level in 2000, and population in 2010 was 88.7 percent of the 2000 census count Of the total loss of jobs of 99,000 between 2000 and 2012, the largest loss is 26,000 in government employment Employment losses took place in all other sectors as well, except for education and health services The racial composition of the city of New Orleans changed somewhat as its population declined by 29.1 percent The percentage of white residents increased from 26.6 percent to 30.5 percent, and the share of black residents fell from 66.7 percent to 60.2 percent Economic and social indicators for 2000 and 2010 convey a mixed picture The poverty rate declined from 27.9 percent to 25.7 percent, and the number of people living in high-poverty areas plunged from 97,000 to 38,000 Real median household income edged up slightly by 1.9 percent The murder rate increased from 42 per 100,000 to 51 per 100,000, however, and the percentage of single-parent families rose from 54.7 percent to 57.1 percent The number of occupied housing units fell from 188,000 to 322 PART V: URBAN AMERICA IN THE NEW CENTURY 142,000 (down 24.5 percent, in line with the population loss) And the housing vacancy rate, which had been 11.5 percent in 2000, was recorded at 25.1 percent in 2010 Units recorded as vacant are supposed to be habitable Some portions of the city that were destroyed by the flood waters are not currently being rebuilt One possible explanation is that some of the older housing had been in deteriorating condition in 2005 and therefore was relatively inexpensive housing Replacement housing must be new construction and will cost more than the old housing The old residents cannot afford the new housing and perhaps have moved elsewhere and have little desire to return anyway Furthermore, the world demands that New Orleans exist and provide the services that only it can provide The New Orleans that is demanded by the world appears to be smaller than the New Orleans that existed in 2005, though On a more hopeful note for New Orleans, a prediction made by Nossiter (2007) that the city of New Orleans may stay half its old size has not come to pass ATLANTA The Atlanta metropolitan area continued its rapid population growth as its population reached 5.269 million in 2010 (an increase of 24.0 percent from 2000) As of 2010, all four of the largest urban areas of the South (Dallas–Fort Worth, Houston, Miami, and Atlanta) had populations well over million Metropolitan population growth was dominated by the increase in the black population from 1.217 million to 1.708 million, which accounts for 48 percent of the growth The growth of the Hispanic population from 270,000 to 547,000 accounts for 27.1 percent of the increase in metro population Because the population of the central city remained roughly constant, all this growth occurred in the suburbs This large increase in population of 1.02 million, however, was accompanied by no employment increase as of 2010 (1.0 percent increase), and the employment level in 2012 was only 2.4 percent higher than in 2000 The failure of employment to grow can be attributed in part to the decline in manufacturing jobs from 207,000 in 2000 to 143,000 in 2010 The city of Atlanta contains only a small fraction of the metropolitan population (8.0 percent in 2010), and its population remained stable (up 4,000 to 420,000) The racial composition of the population of the city changed somewhat in that the percentage of white population increased from 31.3 percent to 36.3 percent (as the percentage black population fell from 61.0 percent to 54.0 percent) Indeed, the black population of the city of Atlanta fell by 27,000 to 227,000 The Hispanic population is only a small share of the central city population (5.2 percent in 2010) The city held its own or showed improvement on economic and social indicators The poverty rate fell from 24.4 percent to 23.2 percent, the real median household income declined by only 2.1 percent, and the number of people living in high-poverty areas did not change In addition, the murder rate dropped from 32 per 100,000 to 22 per 100,000, and the percentage of adults who had not completed high school fell from 23 percent to 13 percent Another hopeful sign is the sizable decline in the percentage of single-parent families from 59.0 percent in 2000 to 53.0 percent in 2010 On the negative side, housing vacancies increased from 9.5 percent to 17.6 percent as the number of occupied units actually increased from 168,000 to 185,000 According to census data, 39,000 housing units were added to the housing stock in the central city, but the number of occupied units increased by only 17,000 URBAN AREAS OF THE SOUTH AND WEST: 2000–2010 323 URBAN AREAS OF THE UPPER SOUTH Completing the survey of southern urban areas included in this study are the urban areas of North Carolina The metropolitan areas included here are Charlotte, Raleigh-Durham, and Greensboro as well as Nashville and Norfolk (Virginia Beach) The Nashville metropolitan area participated in the population growth that occurred in most of the southern metros by increasing from 1.312 million to 1.590 million (up 21.2 percent) And, as was the case for other metro areas, employment lagged behind population growth because of the recession Total employment in 2010 was up only 5.2 percent over its level in 2000 Nashville had added another 52,000 jobs in the next two years, however, so total employment in 2012 was 12.6 percent greater than in 2000 Nashville is a large central city (with 475 square miles), and it continued to add population The population of 601,000 (37.8 percent of the metro population) was an increase of 56,000 from 2000 The racial mix in the city changed somewhat; the Hispanic population increased from 4.7 percent to 10.0 percent of total population as the white population declined from a 64.0 percent to a 56.3 percent share The black population increased in share from 26.7 percent to 28.4 percent These changes in racial mix were accompanied by an increase in the poverty rate from 13.3 percent to 18.2 percent and a decline in real median household income of 12.9 percent, but the murder rate and the number of people living in high-poverty areas both declined And, as was the case nearly everywhere, the housing vacancy rate went up Charlotte and Raleigh-Durham experienced rapid population growth (33.6 percent and 32.2 percent, respectively) in the first decade of the new century, while Greensboro lagged behind with population growth of 12.6 percent Total employment in both Charlotte and Raleigh-Durham was greater in 2010 than in 2000 (up 4.5 percent and 11.2 percent), but employment in metro Greensboro in 2010 was 92.7 percent of its level in 2000 All three central cities increased in population because they all increased land area by more than 20 percent The increase in the city of Greensboro was 20.5 percent, while Charlotte increased by 35.1 percent and Raleigh added 46.4 percent All three central cities were hit hard by the recession, however The declines in real median household income were 21.6 percent (Greensboro), 16.2 percent (Charlotte), and 16.1 percent (Raleigh) The poverty rates increased in all three of these cities, as did the housing vacancy rates On the other hand, all three have relatively low murder rates and small percentages of adults who had not completed high school Although the Norfolk metropolitan area is now known as the Virginia Beach–Norfolk metro area because the population of the Virginia Beach incorporated area exceeds that of the city of Norfolk, this discussion will continue to designate Norfolk as the central city because it is the older entity Metropolitan population grew by 6.1 percent to 1.672 million while total employment increased by 2.1 percent from 2000 to 2010 Employment includes a sizable government sector, which was 20.2 percent of total employment in 2000 and 21.7 percent in 2010 Government employment (federal, state, and local) increased from 145,800 in 2000 to 159,200 in 2010, accounting for nearly the entire gain in total employment of 15,000 Federal employment increased from 46,400 to 50,200 over the ten years and added another 1,200 jobs between 2010 and 2012 Local government jobs increased from 82,200 in 2000 to 88,800 in 2008 and then declined to 87,700 in 2010 (and declined further to 86,700 in 2012) Employment by state government also increased from 19,300 in 2000 to 21,400 in 2010 and to 22,200 in 2012 324 PART V: URBAN AMERICA IN THE NEW CENTURY Although government employment increased by only 1,200 between 2010 and 2012, the private economy added 8,000 jobs Partly as a result of the relative stability in employment at the metropolitan level compared to population growth, the central city of Norfolk did well in comparison with most central cities Population grew by 9,000 to 243,000, and the poverty rate fell from 19.4 percent to 17.1 percent The number of people living in high-poverty areas declined from 34,000 to 21,000, and real median household income increased by 2.2 percent The housing vacancy rate increased a small amount from 8.4 percent to 9.0 percent INDEX RESULTS FOR CENTRAL CITIES OF THE SOUTH The findings for the central cities of the South shall be summarized as for previous decades using the index of seven variables: central city population change, change in the poverty rate, change in the number of people living in areas of high poverty (40 percent or greater), change in the murder rate per 100,000, change in the percentage of adults who had not completed high school, change in the percentage of single-parent families, and change in real median household income The results are shown in Table 23.4 The basic finding is that the indexes for the first decade of the new century show a reversal of the positive outcomes in the 1990s With two exceptions (Atlanta and Norfolk), the momentum for a virtuous circle for these central cities was lost The indexes for Atlanta and Norfolk are strongly positive for the 2000–2010 decade Both cities had declines in the poverty rate and the murder rate and had stable real median household incomes None of the other index variables moved in the negative direction in Atlanta, and Norfolk gained population and saw a reduction in the population living in high-poverty areas Houston is the city at the other extreme, with a –3 index While Houston gained population, all other variables with the exception of high school dropouts moved in the negative direction Poverty was up, murder was up, real median household income was down, and so on Both Birmingham and Nashville have indexes of –2, and all the other cities have indexes of –1, 0, or +1 These outcomes are in sharp contrast to the indexes for the 1990–2000 decade, in which ten cities out of fifteen had indexes of +3 or greater URBAN AREAS OF THE WEST The urban areas of the North and South are reflections of the economic difficulties of the nation The urban areas of the West, however, produced some positive results that may come as a surprise Seven of the eight western urban areas included in this book (with San Jose and Las Vegas added to the original six) are included in the Case-Shiller index Table 23.5 displays the high point, the low point, and the August 2013 value for these indexes Six of the seven metropolitan areas experienced the housing market bubble; Denver is the exception The housing market bubble was a general phenomenon in the major urban areas of the Far West Among these six, the smallest increase was in Seattle, with an index of 192.30 in July 2007, which translates into a real price increase over January 2000 of 60 percent The largest increase in the Case-Shiller index occurred in Los Angeles with 273.94 in September 2006 All six indexes fell sharply sometime thereafter, with low points that vary from early 2009 to early 2012 The index for Las Vegas fell from + + – – + + + + + + ++ ++ ++ + Population Source: Tables 23.1, 23.2, and 23.3 Dallas–Fort Worth Houston New Orleans Atlanta Birmingham Miami Norfolk San Antonio Tampa Greensboro Nashville Raleigh Charlotte Austin Orlando Central City – – 0 – – – – – – – – – – Median Household Income – – + + – – + – – – – – – – – Poverty Urban Crisis Index, Southern Central Cities: 2000–2010 Table 23.4 + – – + + + + + + + + + + + Murder – – + 0 + + – + + – – Poverty Concentration – – – + – – – – – – N/A – – – – OneParent Family + + + + + + + + + + + + + + + High School Dropouts –1 –3 +4 –2 +1 +4 –1 +1 –2 +1 –1 Index, 2000–2010 +1 +3 +3 +4 +1 +4 +2 +6 +5 +2 +3 +5 +4 +5 –1 Index, 1990–2000 325 326 PART V: URBAN AMERICA IN THE NEW CENTURY Table 23.5 Case-Shiller Home Price Indexes for Urban Areas of the South and West (1/2000 = 100.00) Urban Area Miami Tampa Atlanta Charlotte Dallas Los Angeles San Francisco Seattle Denver San Diego Phoenix Las Vegas High Index High Date Low Index Low Date Index 8/13 280.87 238.09 136.47 135.88 125.70 273.94 218.37 192.30 140.28 250.34 227.42 234.39 12/06 7/06 7/07 8/07 8/06 9/06 5/06 7/07 8/06 11/05 6/06 5/06 137.47 123.91 82.54 108.39 112.63 159.18 117.71 128.99 120.21 144.43 100.22 89.87 11/11 2/12 3/12 1/12 1/12 5/11 3/09 2/12 2/09 4/09 9/11 3/12 170.41 153.93 113.47 125.07 132.30 210.49 178.53 160.36 146.95 191.78 141.47 124.09 Source: Case-Shiller Home Price Index 234.39 in May 2006 to 89.87 in March 2012 (a decline of 62 percent), so real housing prices increased to 100 percent above and then declined to 33 percent below the January 2000 level All seven indexes show recovery as of August 2013, although the index for Las Vegas still means that real housing prices are below the January 2000 level (down percent) Seven of the western metro areas were included in the McDonald-Stokes (2013) study of foreclosure rates Three California metro areas (Los Angeles, San Francisco, and San Diego) had similar experiences with foreclosures, rising from a monthly rate of about 0.002 percent to slightly more than 0.25 percent per month The data for Denver are similar to these California metros (low point of 0.0014 and high point of 0.27 percent per month) Phoenix and Las Vegas, however, had much greater foreclosure rates with maxima of 0.47 percent and 0.58 percent per month The low and high foreclosure rates of 0.009 and 0.16 in Seattle were close to the national averages of 0.0106 and 0.113 What are the implications of the housing market bubble and crash for the real incomes in these metro areas? We refer again to Tables 23.1, 23.2, and 23.3 As usual, we begin with the big dog, Los Angeles The population of the metropolitan continued to grow, this time by 9.2 percent for the decade The metro population of 17.877 million can be compared to 19.567 million for the New York metropolitan area The growth rate for metro New York of 3.3 percent for the decade means that, in these trends continue, metro Los Angeles will overtake New York before 2030 Population growth was driven by an increase in the Hispanic population of 1.43 million; as of 2010, 44.9 percent of the population of metro Los Angeles was Hispanic And the city of Los Angeles added (98,000) 2.7 percent to its population The city became more Hispanic; 1.056 million of the increase in the Hispanic population occurred in the city of Los Angeles The city was 48.5 percent Hispanic in 2010 The economic downturn resulted in total employment in 2010 of 97.0 percent of the 2000 level The decline in manufacturing employment from 885,000 to 641,000 accounts for 121 percent of the job loss By 2012, employment had recovered to 99.6 percent of the 2000 level, but manufacturing jobs did not recover (remaining at 641,000), and government employment declined All other major employment sectors showed gains ... viii CONTENTS 15 New Urban Scholarship Urban Economics and the Urban Crisis Urban Sociology and the Urban Crisis Conclusion: Urban Economists, Urban Sociologists, and the Urban Crisis 179 179... page intentionally left blank Preface Postwar Urban America: Demography, Economics, and Social Policies is a demographic and economic history of the major urban areas in the United States from... Data 0F'RQDOG-RKQ) ± Postwar urban America : demography, economics, and social policies / by John F 0F'RQDOG pages cm Includes bibliographical references and index United States—Population—History—20th