american metropolitics summary

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University of Minnesota Law School Scholarship Repository Studies Institute on Metropolitan Opportunity 2002 American Metropolitics Summary Myron Orfield University of Minnesota Law School Follow this and additional works at: hp://scholarship.law.umn.edu/imo_studies Part of the Law Commons is Article is brought to you for free and open access by the University of Minnesota Law School. It has been accepted for inclusion in Studies collection by an authorized administrator of the Scholarship Repository. For more information, please contact [email protected]. Recommended Citation Myron Orfield, American Metropolitics Summary (2002).

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University of Minnesota Law SchoolScholarship Repository

Studies Institute on Metropolitan Opportunity

2002

American Metropolitics SummaryMyron OrfieldUniversity of Minnesota Law School

Follow this and additional works at: http://scholarship.law.umn.edu/imo_studies

Part of the Law Commons

This Article is brought to you for free and open access by the University of Minnesota Law School. It has been accepted for inclusion in Studiescollection by an authorized administrator of the Scholarship Repository. For more information, please contact [email protected].

Recommended CitationMyron Orfield, American Metropolitics Summary (2002).

MYRON ORFIELD

THE NEW SUBURBAN REALITY

AMERICANMETROPOLITICS

S U M M A R Y

Ameregis is a research and geographic informa-tion systems (GIS) firm that documents evolvingdevelopment patterns in U.S. metropolitan regions,and the growing social and economic disparitieswithin them. Ameregis is dedicated to integrating GISmapping and traditional research methods to informdecision-making. With its partner, Metropolitan AreaResearch Corporation, Ameregis assists individualsand groups in fashioning local remedies that addressthese concerns. Myron Orfield, a nationally recog-nized leader in land use, social and fiscal equity andregional governance reform, is the founder ofAmeregis and MARC.

American Metropolitics: The New Suburban Reality(Summary) was produced with the generous supportof the Ford Foundation. David Mahoney providedinvaluable editorial assistance in the creation of thisdocument.

Ameregis Staff

PresidentMyron Orfield

ResearchThomas LuceAnne DischerBaris Gumus-Dawes

DevelopmentLisa BigaouetteJill MazulloJoanna Vossen

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© 2003 Ameregis Corporation,All rights reserved.

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web: www.ameregis.com e-mail: [email protected]

AmericanMetropolitics

3

In the months leading up to the 2002 elections, theeyes of political pollsters and pundits were on America’ssuburbs. The notion that the suburbs are where elec-tions are won or lost has become an unassailable idéefixe in contemporary politics. While there is certainlysome truth to this premise, it obscures the more com-plex reality that “the suburbs” are in fact a remarkablydiverse collection of communities with a broad range ofdiffering strengths and weaknesses.

A close look at America’s 25 largest metropolitanareas shows that far from being a monolith, the sub-urbs actually comprise several distinct types. Someinner-ring suburban communities suffer from the sameurban ills that afflict inner cities, such as poverty andracial segregation. Many developing suburbs on thefringes of metropolitan areas are experiencing explo-sive population growth but have limited resources topay for the schools, sewers, and roads that this growthrequires. Still others enjoy the tax benefits of large con-centrations of office space and high-end housing, butare plagued by traffic congestion and degradation ofthe open space that made them attractive places to livein the first place.

The prevailing catch-as-catch-can pattern of metro-politan development, which encourages wasteful intra-regional competition and environmentally damagingland use, hurts all types of suburbs. Socioeconomic seg-regation, fiscal inequality, and sprawl plague virtuallyevery metropolitan area, and appear to be growing worsein most of them. At least 40 percent of the metropolitanpopulation resides in suburbs with social or fiscal chal-lenges severe enough to be considered “at risk” in ourclassification. Another 25 percent lives in rapidly devel-oping communities that are struggling to keep up withtheir explosive growth with limited financial resources.

A three-pronged attack of tax reform, land usereform, and regional government reform is needed tostem this tide. Though the obstacles are formidable,there is reason for optimism. Every type of metropolitancommunity—from central cities wrestling with povertyand other social ills to the affluent outer-ring suburbsbeset by traffic congestion and runaway development—stands to benefit from these reforms. Political partiesand leaders who can persuade metropolitan voters toact in their long-term self-interest on these issues willbe rewarded with far greater gains than those chasingthe vagaries of shifting polls.

n the inner-ring Chicago suburb ofCicero, where a visit by Martin Luther Kingonce precipitated a violent protest againsthousing integration, nonwhite students arenow in the majority. In the mid-1990’s inCherokee County, an Atlanta suburb com-prised largely of bedroom developing com-

munities, students often attended schools set up intrailers as their communities had neither the tax basenor other resources to build new schools for a growingpopulation. At the same time, schools were closing forlack of students in the region’s core. LopatcongTownship, New Jersey, an area at the fringes of the NewYork region making the transition from rural to subur-ban, is defending its 2003 ordinance to limit multifam-ily dwellings to two bedrooms, effectively zoning outfamilies with children in order to keep school enroll-ment (and costs) down. The proliferation of large-lothousing developments in suburban Macomb County,Michigan, has contaminated a nearby lake due to arash of failed septic systems, which will cost between$2 billion and $4 billion to convert to sewer.

These examples reflect the fragmentation that liesat the heart of America’s new suburban reality. If thesuburbs were ever a homogeneous bastion of untrou-bled prosperity, they certainly are no longer. Evidencefor this goes well beyond the anecdotal: An analysis ofthe 25 largest metropolitan areas demonstrates thatvarying social and economic pressures have led to theemergence of distinct types of suburban communitiesthat differ from one another in identifiable ways.

A method known as cluster analysis was used togroup suburban areas according to several measures oftheir fiscal characteristics (specifically, their ability toraise tax revenue and the change over time in that abil-ity) as well as key factors that directly or indirectlyaffect the cost of providing local services (including

poverty levels, population density and growth, age ofhousing, and racial composition). The cluster analysisidentified six types of communities, three of which faceeconomic or social challenges severe enough to beconsidered “at risk.”

The health of any community is largely a functionof whether it has adequate resources to meet its partic-ular needs. Two of the most significant factors used inthe cluster analysis are school populations, whichaffect the “needs” side of the ledger, and tax capacity,on the “resources” side.

Schools are a powerful indicator of a community’scurrent health and of its future well-being. As the num-ber of poor children in a community’s schools grows,middle-class families’ demand for housing in the com-munity softens, and housing prices reflect this decline.Families with school-age children are likely to leavefirst because changes in the schools affect them most.Some non-poor families may choose to stay in thecommunity but put their children in private schools,though few households can afford the additionalexpense for long. A community with schools in transi-tion may also draw “empty-nesters” and other non-poor households without school-age children. Poverty

The New Suburban Reality

I

If the suburbs were evera homogeneous bastionof untroubled prosperity,they certainly areno longer.

4

rates among school-age children therefore tend to risemore quickly than the overall poverty rate.

Although poverty and its consequences underlie eco-nomic segregation, it is difficult to separate poverty fromrace and ethnicity—particularly for African Americansand Latinos, who are strongly discriminated against inthe housing market. Sadly, an analysis of racial data forelementary school students in the 25 largest metropoli-tan areas shows that once the minority share in a com-munity’s schools increases to a threshold level (10 to 20percent), racial transition accelerates until minority per-centages reach very high levels (greater than 80 percent).

While trends in a community’s school populationindicate critical local needs, local tax capacity is a goodmeasure of the ability to raise revenues to meet thoseneeds. Communities with copious tax resources havelow tax rates and great services. Resource-poor com-munities have just the opposite. Why is this? Think of itthis way: if a community’s tax wealth per household is$100, a 10 percent tax rate raises $10 per household forservices; if tax wealth is $1,000 per household, thesame rate raises $100. No matter how smart adminis-trators are, and no matter how much reorganization

they do, they cannot avoid this basic math.One of the three at-risk suburban types identified

by the cluster analysis is comprised of aging communi-ties that have very low tax capacity, high municipalcosts, and—most distinctively—high concentrations ofminority children in the public schools. As a group,these at-risk segregated communities had per-house-hold tax capacities that were less than two-thirds of themetropolitan area average, and the slowest growth intax capacity of all the suburban types. On the cost side,this group had very high poverty rates (nearly twice theregional average), lower-than-average populationgrowth, aging housing stock, a population densityalmost four times the regional average, and a higherpercentage of minority children in the public schoolsthan even the central cities.

The at-risk segregated communities are some ofmetropolitan America’s worst places to live. Poor andsegregated, they have a fraction of the resources of thecentral cities they surround. In 1994, the taxes on a$100,000 house in the at-risk segregated suburb ofMaywood, Illinois, were $4,672. This level of taxationwould support local school spending of $3,350 per

The close relationship

between racially segregated com-munities and areas of concentrat-ed poverty has been used to sup-port flawed conclusions aboutAfrican-Americans and Latinos.Some people, associating an influxof minorities into a communitywith social and economic decline,conclude that minority residentssomehow contribute less thanwhites to a community’s healthand stability.

Nowhere was this tragic mis-conception better illustrated thanin a segment from the televisionnews magazine NBC Datelineabout the white-collar Chicagosuburb of Matteson, Illinois, 20

miles south of the Loop. In theearly to mid-1990s, black middle-class families began to move toMatteson, a community of large,attractive suburban homes, openspace, and good schools. Theseblacks were, by most importantdemographic measures, at leastthe socioeconomic equals ofMatteson’s white residents. Somewere, in fact, better off thanMatteson’s whites. But as soon asblack households became a signifi-cant percentage of the population,there was a sudden sell-off ofhomes by white residents. Askedwhy they were moving, the whitesellers replied, "Because theschools are getting worse and

crime is increasing." On the evi-dence, neither claim was true.School test scores and the crimerate remained unchanged.However, once the white residentsleft, demand for middle-classhousing in Matteson cooled,because the black middle classwas not large enough to sustainmarket demand. Not only did theschools become more segregated,they also became much poorer.This is why "white flight" invariablymeans poverty—this tragicsequence of events has playeditself out in countless suburbsacross the country.

The Truth About White Flight

5

pupil. In Kenilworth, an affluent suburb to the north,the taxes would be $2,688, yet this lower rate, appliedto the whole tax base, would support almost threetimes the level of spending per pupil. Similarly, busi-ness taxes on a 100,000-square-foot office building inbooming DuPage County were $212,639, comparedwith $468,000 in south suburban Cook County.

A second category of at-risk communities—madeup mostly of inner-ring suburbs and outlying citiesthat have been swallowed up by metropolitangrowth—has older housing stock than any of the othersuburban groups. Like the at-risk segregated commu-nities, these at-risk older communities have relativelylow tax capacity and tax-capacity growth, and evenhigher density, but they also have relatively low levelsof poverty and of minority children in public schools.These places often stand cheek by jowl with the at-risksegregated suburbs, and there is often a stronglydefended racial line between them. In fact, though, theat-risk segregated and older communities have manycommon concerns. Both groups have slow (or evennegative) population growth, relatively meager localresources, and struggling commercial districts. Theirmain street corridors and commercial districts cannotattract new, big businesses that could easily build ongreenfield sites. Despite these commonalities, segre-gated and older at-risk suburbs have not formed acohesive political whole, probably because they areoften divided on the issue of race.

Many communities included in the third at-riskgroup are exurbs on the fringes of the metropolitanareas that are making the transition from rural to sub-

urban. These at-risk low-density communities share thecharacteristics of low tax capacity and low-tax-capacitygrowth with the other at-risk suburbs, but they differ inother important ways. Many are just beginning thetransition from rural or farm land to suburban develop-ment patterns. Their relatively low fiscal resources arethus stretched thin by demands for new infrastructureand the other accoutrements of growth. Compared tomost other suburban areas, they must also cope withsignificantly higher-than-average poverty.

The fourth suburban type represents what manywould regard as the quintessential suburb. Bedroom-developing communities have rapidly growing popula-tions that tend to be white and relatively affluent.Density is low, housing is new, and tax capacity is justbelow average but growing at an average rate. Althoughthis group contained about a quarter of the populationof the metropolitan areas studied, it had nearly 60 per-

Table 1. Characteristics of the Community Types

Communities with copious tax resources have low tax rates andgreat services. Resource-poor communities havejust the opposite.

6

All Suburban Types

Table 2. Segregation by Income in Elementary Schools

Dissimilarity Indexes for 1992 and 1997

Table 3. Racial Segregation in Metropolitan Populations

and Elementary Schools: Dissimilarity Indexes in Selected Years

7

cent of the population growth in those areas. Thoughnot experiencing the social stress of some of the at-riskcommunities, bedroom-developing suburbs mustmanage the costs of a high rate of population growthwith only average (or below-average) local resources.

Both the at-risk low-density and the bedroom-developing suburbs share fiscal pressures arising fromschool and infrastructure finance. In all the large met-ropolitan areas, the student-to-household ratio inthese two types of communities is much higher thanthe regional average. Because of this ratio and their (atbest) average tax base, these suburbs often have thelowest per-pupil spending in metropolitan America.Developmental infrastructure such as roads and sew-ers can also present large challenges for the at-risk andbedroom-developing suburbs.

The last two classifications include many of the so-called “edge cities”: suburban communities with vastamounts of office space and more jobs than bedrooms.Affluent job centers (and the even more prosperousvery affluent job centers) reap the benefits of extraordi-nary tax bases—capacities of more than two and fivetimes the regional averages, respectively—that aregrowing at rates outstripping regional averages.Collectively, they have more than four times the officespace per household of any other group of suburbs,more even than central cities. At the same time, cost

factors such as poverty and age of housing are wellbelow regional averages. As might be expected, thepolitical and business leaders in these communitieswork hard to maintain their quality of life, and, of alltypes of suburbs, they are the ones that have revoltedmost successfully against growth and sprawl.

These places might seem to have it all: affluent resi-dents, a high tax base, an average number of children,and very low poverty. However, the mass of jobs andcommercial activity also has its downside. First,because many workers cannot afford the local housing,these beehives of local activity generally have intensetraffic congestion. Second, because land becomes sovaluable it is often difficult to maintain open space.

Well over half (56 percent) of the suburban popula-tion of the metropolitan areas included in the studylived in at-risk communities. Yet they controlled only38 percent of local tax capacity in the suburbs.Conversely, the two clusters of affluent job centersaccounted for less than 10 percent of the suburbanpopulation, but had 22 percent of the local tax capaci-ty. Poverty levels and other cost factors diverge inequally dramatic fashion. These disparities point to awidening gulf between “have” and “have not” suburbs.

In fact, quantitative analyses show that both eco-nomic and racial segregation in America’s schools roseduring the 1990s. Dissimilarity indexes—general meas-

In the Detroit region manymoderate-income workers in theautomobile or related industriesseek out their bit of paradise in therapidly developing northern quad-rant of Macomb County, northeastof Detroit, where they can afford alot of land and pay low taxes. Butthis package deal does not includesewer systems or roads. With theirlow fiscal capacity and the federalgovernment’s declining commit-ment to finance suburban sewerimprovements, these suburbs haveno way to pay for the thousand of

miles of sewers they need, esti-mated to cost between $2 billionand $4 billion.

The communities of MacombCounty—which, though theyinclude a combination of all thesuburban types, are predomi-nantly at-risk low-density andbedroom-developing suburbs—represent a powerful example ofthe downside of unplannedgrowth from a base of low fiscalcapacity. Throughout the 1990s,Lake St. Clair, a large freshwaterlake on the county’s eastern bor-

der, was becoming unsafe forswimming. Of the eight publicbeaches monitored on MacombCounty’s web page, all wereclosed several days during thesummer of 2001 because of E.coli from untreated sewage. Atleast one of the lake’s large pub-lic beaches was closed for theentire summer. Failed septic sys-tems caused much of this prob-lem, but several of the citieshave recently admitted to dump-ing raw sewage into the water-ways feeding Lake St. Clair.

Trouble In Paradise

8

ures of the degree of segregation—show that metropol-itan areas with increased economic and racial segrega-tion in elementary schools between 1992 and 1997outnumbered metro areas with reduced segregationduring those same years.

Tax-base inequality also increased during the 1990s.A general measure of inequality in tax bases known asthe Gini coefficient indicated an average increase ofabout 8 percent in the 25 largest metropolitan areasbetween 1993 and 1998, with 18 of the metro areasshowing increases in inequality.

Comparing the Gini coefficients for the 25 largestU.S. metropolitan areas in 1998 to the economic andracial dissimilarity indexes for the same cities in 1997shows just how closely tax-base inequality in a metro-politan area correlates with income and racial segrega-tion. Seven of the 10 metropolitan areas with the mostunequal tax-base distributions are also among the 10areas with the greatest degree of income segregation inschools and 9 of the 10 are among the 10 areas showing

the greatest degrees of racial segregation in schools.Urban sprawl indicators also correlate strongly with

measures of segregation and inequality. Regions wherepopulation density in the urbanized areas declined themost tend to show the greatest degrees of racial segre-gation and tax-base inequality. Comparing the sprawldata with tax capacity data for different types of com-munities shows that sprawl affects the fiscal health ofsprawling communities. The average tax capacity forat-risk, low-density suburbs in the 12 metropolitanareas with the greatest degrees of sprawl is 60 percentof the regional average; in the 13 metro areas with theleast sprawl, the average capacity is 78 percent of theregional average. Likewise, the capacities for bedroom-developing suburbs are 82 percent of the regional aver-age in sprawling metro areas, and 101 percent of theaverage in more contained areas. Clearly, the suburbanareas most directly affected by sprawl are fiscallystronger relative to the rest of their metropolitan areasin regions where growth is managed more effectively.

9

Table 4. 1993 and 1998 Gini Coefficients:

Tax Capacity per Household

10

Atlanta’s elementary schools show a pattern typical of manymetropolitan areas – very high poverty rates in central city schoolsalong with high and growing poverty rates in many nearby suburbanschools. Relatively high free lunch eligibility rates in the suburbs aremost pronounced south and southeast of the city of Atlanta.

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Map 1. Atlanta Region (Central Area): Percentage of Elementary

Students Eligible for Free Lunch by School, 1997

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Map 2. Denver Region (Central Area): Percentage of Elementary Students

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School poverty in the Denver region also shows the typical pattern,focused in the city of Denver and in suburbs immediately north and eastof the city.

11

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As in most metropolitan areas, poverty and race in Atlanta schoolsare correlated. Non-Asian minority percentages tend to be highestwhere poverty rates are highest (Map 1). Minority percentages arehighest in the city of Atlanta and its southern and eastern suburbs.

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Map 3. Atlanta Region (Central Area): Percentage Non-Asian

Elementary Students by School, 1997

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Map 4. Denver Region (Central Area): Percentage Non-Asian Elementary

Students by School, 1997

The distribution of non-Asian minority students mirrors the one forpoor students with the highest minority shares in the city of Denver andits northern and eastern suburbs.

13

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Tax capacity measures the ability of local governments to raiserevenue from all of the taxes available to them. Lower than averagetax capacities per household are focused in the core of the New Yorkregion. The lowest capacities are found in and around Newark and

Jersey City, New Jersey but lower-than-average capacities can also befound in parts of Long Island and in outer suburbs in the northwest-ern part of the region.

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16

he many challenges facing America’smetropolitan areas can be attacked effec-tively only through a coordinated, region-al approach. Concentrated poverty andcommunity disinvestments, among themost important of the countless factorsfeeding metropolitan sprawl, are related

to incentives built into public policies for metropolitandevelopment. These incentives include tax policiesthat promote wasteful competition among local gov-ernments, transportation and infrastructure invest-ment patterns that subsidize sprawling development,and fragmented governance that makes thoughtful andefficient land-use planning more difficult.

Fortunately, the foundations for positive changeare, to a large extent, already in place. Regional taxreform, which involves a more equitable fiscal relation-ship among the cities in a metropolitan area, has itsroots in the state school-aid systems that exist in virtu-ally every state in the country. Land-use reform tocombat sprawl is a growing issue in the nation, and 16states have already adopted comprehensive growth-management acts. Federal law has required thatregional governments coordinate hundreds of millionsof transportation dollars in every region in the country;the challenge now is to make these existing regionalgovernments more effective and more accountable tothe people they serve.

Tax Reform

Under the fiscal system that currently holds sway inmost regions of the country, local governments havestrong incentives to adopt policies and regulationsdesigned to serve their own short-term economicinterest at the expense of their own long-term healthand the well-being of the region as a whole.

One way that local governments do this is through“fiscal zoning,” a deliberate attempt by a governmentto reap fiscal dividends from new development by lim-iting the types of land uses within its jurisdiction.Because property taxes are the most significant form ofrevenue for most local governments, they have a directincentive to tailor their land-use regulations to encour-age development of high-value commercial, industrial,and residential properties that generate relatively littlein public costs, and to discourage development oflower-value properties such as affordable housing thatcreate a need for higher public expenditures. Whenplayed out over an entire metropolitan area, this fiscalzoning process can significantly influence where peo-ple can afford to live, the types and quality of publicservices they receive from their local government, andthe presence or absence of employment opportunitiesnear their homes.

Another aspect of local governments’ short-sightedpursuit of positive fiscal dividends is the wasteful andbiased competition for desirable commercial andindustrial properties. It is wasteful because one com-munity’s gain is likely to be another community’s loss.The resources expended in such competition typicallydo not enhance the overall regional economy, but onlyshuffle activity from one place to another. It is biasedbecause it creates the potential for a vicious, self-rein-forcing cycle of decline in places that “lose” early in thegame. As a locality loses activities that generate posi-tive fiscal dividends, it must either raise taxes on itsremaining tax base to maintain services at existing lev-els or reduce services at existing tax rates. Either choicefurther reduces the locality’s ability to compete foradditions to its tax base or to keep its existing base.

Fiscal zoning and tax-base competition tend toconcentrate families and individuals with the greatest

17

The Road to Reform

T

need for public services in communities that are theleast able to generate the revenue to provide thoseservices. Conversely, those who can afford to livewhere they choose (and therefore are less in need ofpublic services) are increasingly concentrated in com-munities that have managed to successfully attract thedevelopment of large, expensive homes and other rev-enue-generating land uses. The result is a wideninggap between communities with low tax capacities andhigh costs, on the one hand, and those with high taxcapacities and low costs on the other.

The arguments for tax reform are primarily efficien-cy arguments. Attenuating the link between growth inparticular types of local land uses and the tax baseavailable to produce local services reduces wastefulcompetition. Providing financial incentives for particu-lar types of development that provide regional benefitsbut do not generate local fiscal dividends can improvethe functioning of regional housing and labor markets.

An essential part of creating a stable, cooperativeregion is to gradually equalize the resources of localgovernments with land-use planning powers. In addi-tion to improving equity, which will allow central cities,at-risk suburbs, and many bedroom-developing sub-urbs to lower taxes and improve services, it will reducethe competition between places, give communitiesreal fiscal incentives to cooperate, and make regionalland-use planning easier to achieve.

Many states attempt to reduce fiscal inequityamong jurisdictions through revenue-sharing pro-

grams that distribute a portion of the revenue fromone or more state taxes to local governments through avariety of formulas. Although most revenue-sharingprograms began with a simple per-capita approach,they now generally place greater emphasis on the com-munities’ needs, typically determined by characteris-tics such as tax base, revenues, spending, or somecombination of the three. Equity measures improve forall but two of the 25 largest metropolitan areas whenaid is added to local tax capacity. However, the effectsof aid vary considerably, ranging from a 63 percentchange for the better in the inequality measure to an11 percent change for the worse.

Tax-base sharing, an alternative way to reduce tax-base inequities, has several advantages over the patch-work quilt of aid programs common to most states.Unlike separate programs that distribute state rev-enues to counties, cities, townships, and special dis-tricts, tax-base sharing simply redistributes the com-mon base from which each local jurisdiction derives itsrevenues. It also helps to equalize the resources avail-able to local governments without removing local con-trol over tax rates. Further, by requiring local govern-ments to relinquish some of their fiscal dividend fromnew commercial/industrial development, tax-basesharing reduces the incentive to waste taxpayer dollarsby stealing it away from other communities. Similarly,including residential property in tax-base sharingdilutes local governments’ incentives to use fiscal zon-ing or its substitutes to restrict residential develop-ment to “profitable” types of housing, making coopera-tive, efficient land-use planning easier.

With tax-base sharing, a portion of each locality’stax base (or growth in tax base) is contributed to aregional pool and redistributed according to criteriasuch as tax capacity, service cost or need indicators, orland-use decisions. In Minneapolis-St. Paul, the onlymetropolitan area for which tax-base sharing legisla-tion has actually been enacted, local tax-base dispari-ties were reduced by roughly 20 percent by the pro-gram in the year 2000. Simulations for other metropoli-tan areas show that tax-base sharing is a much morecost-effective means of reducing tax-base equity thanexisting aid programs. Tax-base sharing reduces dis-parities by 2 percentage points for each percentagepoint of shared revenues, while current aid programsreduce disparities by just half of a percentage point foreach percentage point of aid.

Reforms in these policy areas need not be radical.All states provide at least some financial support tolocal governments. A reform agenda can begin withincremental improvements in the way current aid is

efforts by individual communitites to unilateral-ly curb development within their boundaries oftenend up contributing to sprawl instead of reducingit. In 1972, the San Francisco region city ofPetaluma decided to slow growth by limiting thenumber of building permits issued annually. Thiscaused a dramatic increase in housing demand infarther-out Santa Rosa. According to U.S. Censusfigures, the population of the Santa Rosa areanearly doubled between 1970 and 1980. In the end,Santa Rosa had to build new roads and sewers,and residents of Petaluma were forced to deal withthe increased traffic through their community.

How Not To Curb Growth

18

allocated. Tax-base-sharing programs can be designedto capture a portion of tax-base growth, as occurred inthe Twin Cities, rather than part of existing tax bases,allowing regions to reap the efficiency benefits immedi-ately while the redistributive impacts grow more slowly.

Land-Use Reform

Individual communities can do little to deal with theunderlying regional forces contributing to sprawlingdevelopment patterns. While local development mora-toriums, slowdowns, or other local restrictions mayseem like a good strategy for reducing the negativeimpacts of increased development, ultimately theyonly throw development farther out to surroundingcommunities eager to attract additional developmentto add to their tax base and help them keep up withthe costs of their residential growth. In many cases,these surrounding communities are at-risk low-densityand bedroom-developing communities trying to keepup with their growing costs.

A number of states have tried to tackle the difficul-ties associated with purely local land-use planningthrough some form of statewide planning. At present,16 states have a land-use planning system in place; 10of these states actually require comprehensive localplanning, while the other 6 encourage it. Oregon ledthe way with the passage of its Land Use Act in 1973.This landmark legislation requires each of the state’scities and counties to adopt a long-range, comprehen-sive plan for development consistent with the state’sspecified planning goals.

Another popular strategy employed by states to com-bat sprawling development has been to authorize andencourage the use of various “smart growth” tools.Common growth-management tools include the urbangrowth boundary, which prevents or limits developmentoutside a designated area; the urban service area, whichlimits provision of public services such as sewerage andwater to a designated area; designated areas wheregrowth will be focused; and concurrency, which requiresadequate public infrastructure to be in place before orat the same time as development occurs. These can beeffective tools. Misused or used in isolation withoutcomplementary policies in the non-developing portionsof regions, however, they can contribute to low-density,dispersed development instead of preventing it.

Smart-growth planning also attempts to protectagricultural lands and open space from development,maintaining the amenity value of such areas and pre-serving them for future generations. To this end, manystates and regions create agricultural district programs,purchase agriculture conservation easements or devel-

opment rights through state land trust funds, andallow the transfer of development rights from a rural toan urban location. These land-preservation tools,though well-intentioned, are extremely costly and can-not on their own truly change the nature of U.S. devel-opment patterns.

Effective regional land-use reform hinges on threeelements: coordinated infrastructure planning, aregional housing plan, and regional review and coordi-nation of local planning.

Coordinated Infrastucture Planning. Piecemeal provi-sion of the basic infrastructure that guides regionalinvestment and development patterns is a major con-tributor to inefficient, sprawling development, con-gested roadways, and environmental strains.Regionalizing infrastructure provision and planninghelps guide development in more efficient and equi-table ways. It can, for instance, help reduce per capitacosts throughout the region by creating an orderly pat-tern of development. Transportation investments arean especially important part of regional infrastructurethat should be coordinated with other investments,and giving a regional agency authority over transporta-tion investments is one way to help achieve this goal.

Regional Housing Plan. A regional strategy to reducezoning, financial, and other barriers to the develop-ment of affordable housing is the logical first steptoward the goal of mixed-income housing in everycommunity within a region. The housing industry haslong argued that regulatory barriers such as large lotsizes, prohibitions on multifamily housing, and assort-ed fees hurt the natural marketplace for affordablehousing. Removing such barriers is a step that thebuilding community can accept, and is a way to devel-op a relationship with an important private-sectoractor in land development.Fair-share requirements ensure that all places con-tribute to the regionwide supply of affordable housing.These programs allocate to each city a part of theregion’s affordable housing, on the basis of the jurisdic-tion’s population, previous efforts to create affordablehousing, and job availability. An effective fair-sharehousing program seeks a sustainable balance of lower-cost and more expensive housing in all areas of theregion, whether they are greenfield suburban sites orgentrifying neighborhoods.

Regional Review and Coordination of Local Planning.Because much land-use and infrastructure planning isbest provided at the local level, regional land-use

19

reform requires a coordinated framework in whichlocal governments develop comprehensive land-useplans that are consistent with state or regional plan-ning goals. Ideally, these goals are clearly laid out andapplicable to all communities within the region, andany local plans and policies inconsistent with thesegoals may be challenged in court or in special forumscreated for such adjudication. There should be strongpenalties for noncompliance, such as financial sanc-tions or the loss of authority to make land-use deci-sions and to grant building permits.

Metropolitan Governance Reform

The fragmentation of metropolitan areas into manylocal governments is not only a barrier to effectivegrowth management, but also a leading cause of racialand economic segregation, sprawl, and fiscal dispari-ties within those areas. In regions without a shared taxbase or dominant central city, competing jurisdictionsoften duplicate infrastructure and services that couldbe provided more cost effectively in older suburbs andcentral cities. Duplication of services and infrastruc-

ture in turn contributes to fiscal, social, and environ-mental stresses in the at-risk communities at the coreof metropolitan regions as well as in those at the edge.Zoning incentives to attract high-value residential andcommercial development result in exclusive neighbor-hoods, segregated by race and income. Meanwhile, thenew office and commercial centers in suburban edgecities siphon customers and resources from estab-lished business districts and allow the commuter zoneto expand, further inducing sprawl.

Recognizing fragmentation’s negative effects, anumber of regions have acted to bring a greaterregional focus to local governance. Metropolitan plan-ning organizations are the most widespread form ofregional governance in the U.S. today. MPOs were cre-ated by Congress in the 1970s to address the growingtransportation challenges in metropolitan regions.Given broad powers to guide regional growth throughlong-range transportation planning and the allocationof federal transportation funds to individual jurisdic-tions, the MPOs in America’s 25 largest metropolitanareas are, in a very real sense, special-purpose regionalgoverning bodies.

However, MPOs are not directly accountable to vot-ers and do not always make their transportationinvestments with social separation, sprawl, and fiscalinequities in mind. Without broader authority and amandate to address these assorted issues comprehen-sively, MPOs are limited in what they can accomplishon regional concerns.

Several regional councils and associations designat-ed as MPOs have, either by state mandate or throughtheir own initiative, taken on myriad other functions,attempting to fill the void in regional governance creat-ed by political fragmentation. Some of the most com-mon duties taken on by MPO staff include air qualityconformity planning, local and regional economicdevelopment initiatives, land-use plan review andcoordination, ride-share services, and regional demo-graphic and economic forecasting.

A strong, accountable regional governing body is anessential part of a comprehensive regional reform plan.The following strategies will help to ensure the long-term viability of any regional governing body, whetheran MPO with expanded authority or some otherregional body.

Strategy 1: Apportion voting membership by popula-tion. Decisions on how and where to spend taxpayerdollars for regional investments should be made in afair and equitable manner, giving equal representationto all types of communities and residents in a region.

two regions—Portland, Oregon, and Minneapolis-St. Paul—have vested significant and comprehen-sive planning powers in a single regional govern-ment body. Portland Metro controls developmentpatterns through its administration of the state-mandated regional urban growth boundary. TheTwin Cities Metropolitan Council regulates theexpansion of its Metropolitan Urban Service Areathrough its authority to plan for and permit exten-sions to the regional sewer system.

These formal powers, complemented by councilmembers’ accountability to the governor inMinnesota and directly to the voters in Portland,give these regional governments political leveragethat other metropolitan planning organizations andregional councils lack. Unlike most MPOs, mem-bers of the Portland and Twin Cities councils areunaffiliated with local governments and state agen-cies. This detachment from parochial interestsgives Metro and the Met Council unique freedom tofocus exclusively on regional needs and concerns.

Regionalism at Work

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Strategy 2: Hold direct elections for voting members.Direct elections of members of regional governingbodies would make regional decision-making moreopen and participatory. Even without expanding thecurrent scope of MPO powers, direct election of MPOboards would create a legitimate forum for the discus-sion of regional issues. Any increase in MPOs’ powerswould make direct election even more important.

Strategy 3: Broaden and deepen public awareness ofhow transportation investments contribute to or allevi-ate social separation and sprawl. Regional bodiesshould be required to evaluate their transportationdecisions to determine whether they worsen or allevi-ate social separation and sprawling development pat-terns in the region.

Strategy 4: Broaden the scope of land-use planning.MPOs or another regional body should develop anadvisory land-use plan for the region that embodies avision for efficiently coordinating all major forms ofdevelopmental infrastructure. These advisory land-useplans might offer cities incentives to submit for reviewcomprehensive plans covering such issues as sustain-able development, affordable housing, and publictransit.

Table 5. Revenue Capacity Equity Before and After Aid From

State Governments and Tax Base Sharing

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conomists and others have made theimportant point that regional cooperationhelps every community, but the parochialcosts and benefits of regional reforms varyby community type within metropolitanareas. Therefore, making the case forregionalism requires an understanding of

the nature of the different suburban community typesand the ways they may benefit from the variousreforms.

The At-Risk Developed Suburbs

The case for regional reform to present to the at-risksegregated and at-risk older suburbs is simple.Regional equity gives them lower taxes and better serv-ices. In the at-risk developed suburbs, taxes are com-paratively high for the mix of services provided. Instates and regions without substantial state-supportedschool equity, these taxes can be the highest in metro-politan America. Simulations of property-tax sharingthroughout the country show the older suburbs as thelargest net gainers of resources of any of the subre-gions. New equity resources could help older suburbsshore up and improve aging infrastructure, clean upbrownfield sites, reconfigure abandoned malls orindustrial facilities, invest in housing in decliningneighborhoods, and give underfunded schools a boost.If the equity is sufficiently comprehensive, such meas-ures could be taken even as the local tax rates werebeing reduced.

The residential resources of at-risk developed sub-urbs are often deteriorating or threatened by rapidchange on their borders. A strong, well-implementedhousing plan that requires newer suburbs to take moreresponsibility for affordable housing is the only way toavoid this downward transition. Such a plan takespressure off the older suburbs and prevents the con-

centration of poverty and decline in these places. Onceolder declining suburbs understand that they alreadyhave more than their fair share of affordable housing,they can use a good regional housing plan as a power-ful defensive strategy to maintain their communities’stability.

Without regional solutions, the future of these at-risk places is bleak. With their low fiscal capacity andlack of amenities, they have little hope of improvingtheir position in a competitive regional economy. Ifthey cut taxes, they cannot generate the revenuesneeded to deal with their old infrastructure or povertyproblems in their schools. If they raise taxes to dealwith these challenges, they cannot attract businessesor homeowners. In the end, these places have nohaven outside regional cooperation.

The Developing Suburbs

At-risk low-density and bedroom-developing suburbshave three compelling reasons to support regionalcooperation. First, it will reduce their taxes andincrease their services, most notably in terms ofschools. Second, it will help them get the infrastructurethey need for safe and orderly development. And third,it will provide a better alternative to local unilateralgrowth moratoriums or slow-growth action to respondto the increasingly negative reaction within these com-munities to the development status quo.

While bedroom-developing communities are placesof comparatively low poverty and diversity, their chil-dren-per-household ratio is very high. Throughout thecountry, at-risk low-density suburbs spend less perpupil than districts in other types of metropolitancommunities. Through school equity and almost anyform of tax sharing, both of these types of developingcommunities can be among the largest recipients ofper-student aid. And as with the older suburbs, region-

Making the Casefor Regional Reform

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al fiscal equity can also allow these places to havelower tax rates.

In chasing after development to make up for thelack of a local tax base, developing communities tendto neglect the provision of infrastructure that will even-tually be needed but will be more costly to provideretroactively once development is in place.Regionalism provides assistance for infrastructure indeveloping communities through equity, which cangive them money to build infrastructure as well as torelieve cash-flow crises that force them to seek devel-opment at any price, and through sharing regionalinfrastructure costs. By pooling regional resources, andcreating regional funds and bonding authorities,regionalism can get infrastructure to these communi-ties in a cost-effective way.

Sprawl is another problem of particular concern toresidents of bedroom-developing suburbs. Most of thelocal initiatives to curb growth have been in theseplaces. But a single community can have little effect onthe growth of a region. Acting alone, a community isnot only unlikely to solve its own growth-related prob-lems but is likely to impose higher costs on the regionwhen it tries. In the end, regional or statewide plan-ning to protect open space and create a regionalgrowth boundary has been more effective than unilat-eral action. Regionally funded transit commuting alter-natives are among the most promising ways torespond to growing congestion. A cooperative regionalapproach that encourages affordable housing close toaffluent job centers is also likely to be more helpfulthan local NIMBY (Not In My Back Yard) approaches.

Affluent Job Centers

Despite their low poverty rates and high fiscal capaci-ties, affluent job centers are not immune from prob-lems caused by the prevailing pattern of regionaldevelopment. Because they are intense centers of jobgrowth, these communities are often troubled by high-er rates of congestion than other suburban areas, par-ticularly in the country’s fast-growth regions. Openspace is harder to preserve in these communities,because land becomes very valuable. In the mostextreme cases, suburban “edge cities” can become asdensely urban and congested as city business districts.

Some of the most celebrated and extreme fightsagainst status-quo development patterns haveoccurred in this small group of suburbs. Here, too,regionalism presents the only possible response tothese concerns, the only real way to maintain a subur-ban/rural edge, and the only plausible plan for dealingwith traffic congestion. It is the only way to have an

effect on a neighboring community’s poor decisions.Today’s metropolitan politics are based on an inac-

curate model of poor cities and rich suburbs. It doesnot acknowledge that almost half of the U.S. popula-tion lives in places that have finished developing andhave increasing urban problems. Nor does it come toterms with the fiscal pressure of growth and the pub-lic’s increasing discontent with sprawl and loss of openspace. A new metropolitics must understand the diver-sity of U.S. suburbs and build a broad bipartisanmovement for greater regional cooperation. If metro-politics does not succeed, our metropolitan regionswill continue to become more unequal, and moreenergy will be spent growing against ourselves.

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A new metropolitics must understand the diversity of U.S. suburbs and build a broad bipartisan movement for greaterregional cooperation.