Ohio's Small and Mid-Sized Legacy Cities

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Thanks for listening and thanks to the CDC Association for hosting this webinar.

Please type questions in to the box. I’ll pause a few times to answer questions.

Going to start out presenting data from our two reports, and then will talk through promising strategies we identified for SMLC revitalization.

Who is GOPC? : We are an outcome-oriented statewide non-profit that champions revitalization and sustainable redevelopment in Ohio :
Our aim is to make Ohio economically competitive by promoting sustainable land use. In particular we want to revitalize our urban cores and metropolitan regions to make them attractive to current and prospective residents and businesses.

Non-partisan, non-profit, primarily foundation-funded

What is an SMLC?

Smaller cities have experienced a number of challenges experienced by legacy cities of all sizes over the last half century, including population loss, profound shifts in the local economies resulting in a loss of manufacturing jobs, and resulting disinvestment in urban neighborhoods and downtowns.

These cities deal with “big city problems” like entrenched poverty, racial segregation, and crime. In GOPC’s analysis, mid-sized legacy cities had similar economic health stats as large cities in 2000.

But, the path of these places has started to diverge with larger cities starting to see some signs of revitalization while many smaller cities continue to struggle. Major investments in places like Pittsburgh, Cincinnati, and Baltimore appear to be paying off. But the strategies that worked in those places may not transfer to smaller cities.
Corporate consolidation means less local private sector leadership, CRA money.
Major institutional anchors with serious capacity like UPMC and Johns Hopkins less likely to be in these smaller places (few exceptions to this, though).
Superstars in government, private sector, grassroots are likely to already be stretched thin.

In some ways, challenges are even more significant because of smaller area – one or two block of significant disinvestment can have a much bigger impact in a smaller place than a larger one in terms of tax base, community perception.

Small cities retain importance in most states’ economic and demographic make ups. In Ohio, for example, SMLCs and their regions make up a third of the state’s population and a third of the state’s GDP. These places also serve as cultural and service hubs for millions of people.

Because of their smaller scales, SMLCs are good places to test out new strategies for equitable revitalization.

Finally, these places have traditionally anchored a substantial middle class. Analysis of Pew research shows that metros around SMLCs have a larger share of middle class residents than the country as a whole. The opportunities for work in these cities drew immigrants from abroad and migrants from the South to these places to build a better life. Yet those opportunities are slipping away, particularly for the most vulnerable residents.

Ohio’s legacy cities of all sizes have experienced deep challenges over the past several decades. But at the same time, Columbus has boomed and the state as a whole has remained relatively stable. In an effort to better understand how these cities fit into that broader context, GOPC undertook this study.

Quickly explain which are which,

In general, Ohio’s cities and regions have struggled to recover from the Great Recession.

Of even more concern, in many ways it appears that the situation in many cities – particularly smaller ones – has continued to worsen over time.

Go through very quickly as an example of the kind of change seen before and after the Recession. Prior to 2009, home prices were growing in all geographies except for small cities. After 2009, they plummet in nearly all cases.

Some preliminary data from 2015 shows that there may be some movement in the right direction. But all data is not released yet, and even what is out there does not show cities making up for previous losses.

Columbus experienced an economic and population boom over the last 15 years, which in some ways has masked the challenges facing Ohio’s legacy cities.

When averaging the performance of all of Ohio’s cities together on each of the indicators, Columbus boosts the all city average by about 10 percentage points on most indicators. This boost has increased since 2000, when the boost was just 7 percent. This happens on the metro level as well, albeit to a small degree.

In many ways, the larger cities have long had the deepest problems in the state. They still have the highest rates of poverty and unemployment in the state, and the lowest household incomes.

But some of these challenges are stabilizing, even given the Recession.

Poverty rates grew everywhere, including in large legacy cities, but they grew at a much slower rate there than any other geography.

LLCs also saw the lowest housing vacancy rate growth of any legacy city type and the state as a whole. This is somewhat astounding given Cleveland’s serious challenges with long-term housing vacancy.

The brightest spot for LLCs is the growth in their LPRs. No other city type – including Columbus – saw growth in this rate. There is evidence that the Recession stunted even greater growth too – in Cincinnati, the LPR grew both before and after 2009. In Cleveland, the growth rate pre-2009 was 5 percent – very high – but there was some loss after 2009.

Mid-sized cities are very much like LLCs in a number of ways – and many have the assets of their larger counterparts on a smaller scale, including urban downtowns, multiple university campuses, significant health care systems, and strong philanthropic partners.

Unfortunately, they also share some of the challenges of their larger peers, including entrenched poverty and long-term population loss. Unfortunately, mid-sized cities diverged from their larger peers in a number of ways over the last fifteen years and these cities may not have the same critical mass of assets to revitalize as their larger peers.

Mid-sized cities did not see the gains in LPR that the larger cities did. In fact, mid-sized cities had a higher average LPR in 2000 than LLCs.

But by 2014, LLCs had surpassed them.

And while LLCs saw growth in their LPRs over this time period, all MLCs but one – Canton – saw declines. Today, only Akron (62.4) and Toledo (62.3) have LPRs that approach the national rate of nearly 64%.

The other major challenge facing MLCs is their housing markets. Many MLCs saw a meteoric rise in long-term housing vacancy. While Cleveland is estimated to have 9.5 out of every 100 homes vacant, that number is 13 out of every 100 in Dayton and Youngstown. MLCs also have the lowest average housing values in the state, at just $75,000.

Smaller cities are fundamentally distinguished from their larger counterparts, including medium cities in a few ways. Very few of these cities have assets like major corporate headquarters, college campuses or major cultural institutions. Some of Ohio’s small legacy cities are fortunate to have strong philanthropic partners, but that may be the exception more than the rule.

It is important to note that small cities vary amongst themselves even more so than the mid-size or large cities. The trajectories of some of these places is very different – some are located within larger metros – like Lorain and Elyria – or some are on the outskirts of growing exurban regions, like Hamilton.

On the whole, these cities don’t face the same kinds of challenges related to persistent poverty as their larger counterparts, but they did see some of the greatest losses of all city types over the last 15 years.

Most pressingly, these cities saw the greatest declines in LPR of all city types. In somewhat shocking fashion. Some small cities saw their labor force participation rates drop by as much as 10 percentage points – including Marion whose rate dropped from 59.4 percent in 2000 to 48.3 in 2014. As a point of comparison, Columbus’s LRP was 70% in 2014.

Small cities also saw serious declines in employment – with unemployment rates increasing by nearly 100 percent in some cases. Together, these two indicators paint a picture of severely distressed job markets.

Unsurprisingly, poverty grew at a correspondingly high rate. SLCs saw the greatest growth in poverty of all city types over this period.

An important trend that we won’t go into much is that the suburban areas surrounding these cities are also experiencing challenges. These suburban areas used to buffer legacy cities from some of the worst effects of decline, but now it appears that declining economic health and population loss is beginning to seep into suburban areas as well.

Looking at trajectories over the last 15 years at the metro level. Can still see few bright spots other than the consistent growth in the number of jobs.

This is a forthcoming report from the LILP. Picked 24 cities in Northeast and Midwest to compare over the same time period. Not all Ohio cities are in the study, but still can give a representation of how Ohio’s SMLCs compared to peers in other states.

Other small cities throughout the country, including in the Midwest and even Ohio, have seen a number of positive trends not present in most Ohio SMLCs. Notably, however, comparison cities across the board saw negative trends in unemployment and poverty reduction as well as real household income gains. (Per capita income was not collected for these cities). On the other hand, a number of smaller cities saw gains in labor force participation rates which were mostly not seen in Ohio’s smaller cities.

The clearest distinction between cities is whether or not their populations continued to decline after 2000 or began to grow. About half of the cities continued to lose population while the other half grew.
Only one city – Allentown – has regained and surpassed its peak population.
Only two cities in the Midwest saw population growth after 2000. In contrast, all cities in Massachusetts, most cities in Pennsylvania, and one in New York experienced growth from 2000.
Four cities, concentrated in Ohio, Michigan, and Indiana, lost close to another ten percent of their peak populations between 2000 and 2014. Of the cities included in the study in Ohio, only Hamilton’s population grew after 2000, but still did not exceed the losses accrued before that year.

Young professionals are another important demographic and its trajectory varies in SMLCs – some saw greater growth in this cohort than the country as a whole, while a few saw decline or slower growth. Still, none of the SMLCs come close to approaching the percent of residents that are YPs in places like DC, Boston, or San Francisco – or even Pittsburgh.

Ohio’s trend in young professionals is a mixed bag – most cities saw growth in this population, but not to the extent that some East Coast cities did. Two Ohio cities – Dayton and Hamilton, do see greater growth than the nation on average, as indicated by the dotted line. This is particularly heartening, because it means that the pace of growth in these cities goes beyond just generational change, meaning that there are either more young residents getting college degrees or more young professionals moving into these cities.

Some cities saw significant growth in their immigrant populations while others saw decline (cities with greatest growth had relatively small shares to begin with – mostly in PA and OH)

Ohio cities do notably well in this category, with Dayton and Youngstown seeing some of the greatest immigrant growth among SMLCs nationwide. All cities that experienced growth in this demographic saw greater growth than the nation as a whole. Still Midwestern cities mostly already had much smaller immigrant populations than Northeastern ones, and these changes have not caught the Midwest up.

LILP report, case study cities – look out for that soon.

Key finding in SMLC research is that smaller cities, perhaps more so than their larger counterparts, can be are very sensitive to having the right people in the right positions. This isn’t always enough to counteract major forces like deindustrialization, etc., but can help significantly in righting the ship.

There are two aspects to the leadership issue – 1) having the right people in the right positions, and 2) getting them to work together across sectors to solve problems.

Case study examples of the “the right people in the right place”:
Worcester networked leadership – a cohort of long-time city leaders retired around the same time, meaning that a new generation of leaders assumed important public and private sector roles around the same time. Some leaders were intentionally recruited from outside of the community and others were home grown. A major downtown project was shepherded through by this cohort, which local leaders said could not have happened without this transition in leaders.

Kalamazoo leadership crisis – A early retirement was offered in Kalamazoo, and an unexpected number of city employees took it. Although this resulted in a loss of institutional knowledge, it also changed the culture of city hall. Very few people in city hall remembered how things had been done in the “good old days” and were willing to try new and innovative ways of confronting the city’s challenges.

Clearly, this is challenging thing to make happen. But two cities have created leadership programs aimed at creating the next generation of leaders. Hamilton and South Bend both have leadership programs aimed at placing recent grads into private and public sector positions where they get to be “in the room” with decision-makers early on in their careers. This is an overlooked asset for talent attraction in SMLCs – the opportunity for ambitious young people to quickly become “big fish”.

The second challenge is related to cross-sectoral leadership and collaboration. The challenges facing these cities are often too great for city governments to tackle alone, especially in an era of limited resources. Leaders beyond government need to feel a sense of ownership over making the city a better place, and must work with elected and appointed leaders to set a plan in motion for revitalizing the city. When private sector leaders see revitalization of the city as being in their own best interests, the city benefits.

Case study examples of cross-sectoral problem ownership:

Lancaster Alliance (similar to Grand Action) – in the late 1990s, a group of corporate and business leaders became concerned that if Lancaster continued to deteriorate, the whole region would suffer. They created the Lancaster Alliance, a network of local private sector leaders, and worked with the Chamber of Commerce to create a 15 year economic development plan for the city that was adopted by city government.

Hamilton CORE fund a great example in Ohio. Local philanthropic and private sector leaders create the CORE fund – the Consortium for Ongoing Reinvestment – a gap financing tool for investments in Hamilton’s downtown. The city, the Hamilton Community Foundation, and local banks came together to create and invest in a fund that can fund projects that typically cannot get bank financing. The fund is working on raising $5 million and are focused on investing in placemaking and other catalytic downtown investments.

Efforts to revitalize smaller legacy cities will not be successful if they focus on higher-income people alone.
Many smaller legacy cities have the opportunity to integrate inclusive policies into their revitalization efforts now while their markets are weak to make sure that they do not get stuck trying to maintain a diverse community when market forces are working against them.
Cities should think about how to build a whole web of interventions for increasing opportunity, but focusing on closing the skills gap is a good place to start.

Case studies:

Syracuse – The regional chamber decided that combating poverty is critical for the region’s future success. They created a workforce development program with a “dual client” approach that aims to find good jobs for low-income workers while training good employees for local businesses.

Lima - Lima’s network of workforce development programs aimed at changing culture around manufacturing jobs functions under a single umbrella organization called Link Lima. In addition to coordinating traditional job training programs, it also works on promoting the skilled trades for high school students, with a particular focus on young women.

Many of Ohio’s smaller cities are experiencing serious challenges with neighborhood disinvestment. The scale of the problem is often larger than a single neighborhood or a single strategy. Cities must be strategic in determining how they will confront these challenges in a way that rebuilds housing markets and promotes equity. Cities are often focusing their limited resources on “tipping point” neighborhoods and are working on systematically rebuilding housing markets in those places. As a level of recovery has happened in some cities, it becomes more important that considerations about how to maintain a socioeconomically and ethnically diverse city are folded into all housing-focused discussions.

Case Studies:

Youngstown – YNDC is working to rebuild housing markets block by block. Housing values are extremely low, making market-rate development nearly impossible without subsidy. Using extensive data analysis, YNDC will target neighborhoods to repair occupied or acquire and rehab vacant homes owned by the land bank. YNDC uses its own construction crew to keep costs low, which allows them to rehab without additional subsidy after the homes are donated. The homes are sold to pre-qualified buyers, but are listed for sale on the MLS to help build comps. The private market has started to fill in afterward, showing that markets are indeed being rebuilt.

Grand Rapids – The city of Grand Rapids has invested significant resources in neighborhood level planning and works closely with local neighborhood groups to create local plans that are guided by residents. When markets are strong, this also helps neighborhoods to have more sway in making sure that developers are sensitive to their visions for the neighborhood.

“Placemaking” means investing in creating places where people want to be. This could mean doing streetscaping, encouraging small businesses like coffee shops and bars to open downtown or in entertainment districts, investing in public art. Using placemaking as an economic development tool is built on the idea that many workers with choices, particularly higher earners and creative professionals, will first choose where they want to live and will then look for a job. So to compete for talented workers, cities need to invest in their unique sense of place. This is particularly important in downtowns, which need to be firmly reestablished as the economic and cultural centers of SMLCs and their surrounding regions.

Building a strong sense of place needs to be rooted in authenticity, so cities should focus on how best to capitalize on their existing assets instead of trying to replicate “cool” things from other cities. For smaller legacy cities in particular, creative placemaking can help reframe seeming liabilities into assets.

Case studies:

Scranton – Worked to take advantage of local residents returning from bigger cities and implementing what they liked in those places in Scranton. But simply recreating those cities is not what kept people there - placemaking was reformed to focus on quality of life and family ties. Many people returning home liked the city’s cool feel, but were drawn there because they believed they could have a higher quality of life than in a larger city.

Akron – With the support of local foundations, Akron has done a great deal to draw attention to quality-of-place issues. The Better Block program, that transforms an underutilized city block into a “complete street” for a day helps people imagine how a neighborhood might become vibrant and more liveable. More recently, the DAP and Knight have placed giant marbles, oversized games, and pop up shops and bars to bring people downtow and highlight its potential. These are first steps that engage people in understanding Akron’s unique sense of place.

Cities cannot face these challenges alone. Supportive state and federal policy is necessary for helping cities thrive, particularly in tough economic times. States like Ohio, where over three-quarters of the population lives in an urban area, need a meaningful slate of policies that help cities succeed. These policies range from support for active transportation to infrastructure upgrades to neighborhood stabilization. Ohio should also consider how characteristics like population size or distress level impact how policy is implemented in different places – solutions that are “one-size-fits-all” rarely get the right resources to the right places.

Case studies:

Massachusetts – the state of Mass specifically provides special resources for cities with populations between 35,000 and 250,000 people and educational attainment and household incomes below the state average. These cities qualify for special programs that work to create communities of choice and attract entrepreneurs.

NJ – Problematic program, but targets economic development incentives at struggling cities.

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Ohio's Small and Mid-Sized Legacy Cities

greaterohio

Ohio's Small and Mid-Sized Legacy Cities