Order N u m b e r 9105194
Development policy of four U.S. cities
Randolph, Lewis Anthony, Ph.D.
The Ohio State University, 1990
Copyright © 1 9 9 0 by Randolph, Lewis Anthony. All rights reserved.
UMI 300 N. Zeeb Rd. Ann Arbor. MI 48106 DEVELOPMENT POLICY OF FOUR U.S. CITIES
DISSERTATION
Presented In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University
By
Lewis Anthony Randolph, B.A., M.A.
*****
THE Ohio State University
1990
Dissertation Committee Approved by Randall B. Ripley Aage R. Clausen (ji. Adviser William E. Nelson Department of Political Science Copyright by Lewis A. Randolph 1990 To My Late Mother and Sister For Encouraging Me To Pursue My Ph.D, and To My Wife and Two Sons For Be Supportive of My Efforts To Obtain My Ph.D.
ii ACKNOWLEDGEMENTS
I wish to express sincere appreciation to Dr. Randall
B. Ripley for his guidance and insight throughout the research. Thanks go to the other members of my committee, Drs. Aage R. Clausen and William E. Nelson, for their advice and valuable comments. Gratitude is expressed to Drs. Henry
Hunker, Joan Fitzgerald, Jim Upton, Anne Pruitt, Sue Blanshan, Joseph Russell, Richard Sylves and Wade Dyke for their support and encouragement. The technical assistance of Sue Benton, Dr. Rita Clark Chambers, and Mike Rupright is gratefully acknowledged. To my wife Tamara, I offer sincere thanks for her unending faith in me and her willingness to endure with me the vicissitudes of my endeavors. I thank my children, Desmond and Devin, for understanding my frequent absences. VITA
February 1, 1952...... Cincinnati, Ohio
1970...... General High School Diploma, Aiken Senior High School Cincinnati, Ohio 1970-1973...... B.A. , Central State University, Wilberforce, Ohio. 1973-1974...... M.A., Political Science, • University of Illinois, Urbana-Champaign, Illinois. 1979-1984...... Director, Minority Center, Assistant Director, Division of Student Life, Department of Student Affairs, University of Delaware, Newark, Delaware. 1984-1989...... Graduate Research Associate, Political Science Department, The Ohio State University, Columbus, Ohio.
iv 1990-Present...... Assistant Professor, Department of Political Science, Ohio University, Athens, Ohio.
FIELDS OF STUDY Major Field: Political Science Substantive Areas: Public Policy: Industrial and Technology Policy Urban Policy
Subfields Areas: Public Policy: Implementation and Implementation Evaluation Methods and Techniques Minor Field: Public Administration
Minor Substantive Area: Urban Fiscal Administration
v LIST OF TABLES
TABLE PAGE 1. Regime types, their origins and characteristics...... 7
2. Central city manufacturing employment as a percentage of metropolitan manufacturing jobs in eight SMSAs: 1900-1967...... 18 3. Suburban share of SMSA employment and population, by selected years...... 18 4. Population changes in three U.S. cities by race and ethnicity, 1970-1980...... 20
5. Unemployment rates for Columbus, State of Ohio and U.S. for 1979-89...... 109
6. Unemployment rates for City of St. Louis, state of Missouri and U.S. for 1979-89...... 121 7. Unemployment rates for City of Baltimore and State of Maryland and U.S. for 1979-89...... 135 8. Unemployment rates for City of Richmond, and State of Virginia and U.S. for 1979-89...... 149 9. Type of fiscal incentives and frequency of use in all cities...... 185 10. Type of fiscal incentives and frequency of use in Columbus, Baltimore, and Richmond...... 189
11. Type of development policy approaches use by each city in overall and neighborhood development... 198 12. Domincnt players in development policy initiatives in all cities...... 201
13. Dominant players in development policy initiatives for Baltimore, St. Louis, Richmond, and Columbus...... 202 vi Net impact of federal transfer program and tax reduction,1983
VII■ • LIST OF FIGURES
FIGURES PAGE 1. Simplified version of urban development policy mode l...... 71 2. Expanded version of urban development policy model...... 72 3. Market based approach scale...... 77 4. Neo market based approach scale...... 80 5. Percentage of nonwhites in total population for city of Columbus from 1960-80...... 102
6. Percentage of population employed in key industries in Columbus from 1960-80...... 106 7. Percentage of nonwhites in total population for city of St. Louis from 1960-80...... 115 8. Percentage of population employed in key industries in St. Louis from 1960-80...... 119
9. Percentage of nonwhites in total population for city of Baltimore from 1960-80...... 128 10. Percentage of population employed in key industries in Baltimore from 1960-80...... 133
11. Percentage of nonwhites in total population for city of Richmond from 1960-80...... 142 12. Percentage of population employed in key industries in Richmond from 1960-80...... 147 13. Expanded version of UDPM Model...... 168
viii 14. Reexamination of original version of UDPMModel...... 227 15. Revised UDPM Model...... 228 16. Effect of stimulative fiscal policy on domestic income...... 245 17. Relation between domestic income and foreign goods consumption...... 246 18. Effect on IS-LM of fiscal stimulus...... 247 19. Effect on IS-LM of monetary stimulus...... 248
ix TABLE OF CONTENTS
DEDICATION...... 11
ACKNOWLEDGMENTS...... Ill VITA ...... lv LIST OF TABLES...... vi LIST OF FIGURES...... vil
CHAPTER...... PAGE
I. THE PROBLEM OF URBAN REDEVELOPMENT
Introduction...... 1 Problem Of Urban Redevelopment...... 14 Impact of Suburbanization of Manufacturing....15 Federa 1 Impact...... 22 Economic Impact...... 25 Budget Deficit...... 26 Trade Deficit...... 27 Impact of Economic Recession of late 1970s on Cities...... 29 Political and Social Consequences ...... 35 ENDNOTES...... 41
II. LITERATURE REVIEW
INTRODUCTION...... 45 Treatment of URDP in Literature...... 4 6 POLITICAL BEHAVIOR APPROACH...... 48 SOCIOCULTURAL APPROACH...... 50 POLITICAL ECONOMY APPROACH...... 59 Limitations of Current Literature...... 64 ENDNOTES...... 67
X III. RESEARCH METHODOLOGY
Research Design...... 69 MODEL ...... 69 Working Hypotheses...... 82 Operationalization of Variables...... 83 Methodology...... 89 ENDNOTES...... 93 LISTS OF PHONE INTERVIEWS...... 98
IV. PROFILES OF FOUR CITIES
Introduction...... 99 Profile of Four Cities...... 100 Columbus...... 100 St. Louis...... 112 Baltimore...... 125 Richmond...... 139 SUMMARY...... 155 ENDNOTES...... 160 LIST OF PERSONAL INTERVIEWS...... 162 LISTS OF PHONE INTERVIEWS...... 163
V. REGIME TYPES AND DEVELOPMENT POLICY STYLES IN RICHMOND, ST. LOUIS, BALTIMORE AND COLUMBUS
Introduction...... 166 Analysis Of Research Questions...... 170 Analysis Of Working Hypotheses...... 207 ENDNOTES...... 211 LIST OF PERSONAL INTERVIEWS...... 213 LISTS OF PHONE INTERVIEWS ...... 215
xi VI. CONCLUSION
Introduction...... 216 Assessment of Research Objectives...... 216 Contributions To Previous Research...... 220 Contribution To Current Research and Literature...... 224 Reexamination of UDPM...... 227 New Information and Its Research implications...... 230 Lessons from The Research and Unanswered Questions...... 232 Research/Methodological Lessons...... 232 Unanswered Questions...... 232 Recommendations For Future Research...... 233 ENDNOTES...... 241 LIST OF PERSONAL INTERVIEWS...... 242 LIST OF PHONE INTERVIEWS...... 243
APPENDICES A. Data Relative To Chapter 1 ...... 244 B. Data Relative To Chapter 3...... 250 LIST OF REFERENCES...... 264
xii CHAPTER I INTRODUCTION
This dissertation will examine how the political and economic attitudes of regimes shape their urban development policy selections and how their political and economic attitudes influence their interactions with the institutions responsible for executing urban development policies. The primary reason for focusing on the role of regimes is to determine whether regimes rely solely on the market to stimulate growth and redevelopment efforts, or whether they advance policies that require public and private cooperation in development. The dissertation will also provide a working definition of a regime and it will attempt to explain why regimes favor one type of urban development policy rather than another, and what the political and policy implications of their choices are for their cities. Finally, this study will seek to explain-how the development policies of regimes vary from city to city and how circumstances cause a regime's urban redevelopment policy to succeed or falter. According to some scholars, the role of regimes is indisputable in stimulating the transformation of urban economies (Elkin 1980:18-123; Fainstein et al. 1983:245-280). An examination
1 2 of how urban redevelopment: policy unfolds has to include the role of regimes because they are important in crafting urban development policy since they embody certain political and economic attitudes that influence the community's interaction with private capital investment. The role of regimes in the crafting of urban development policy and an explanation of what constitutes a regime will be provided shortly.
Public sector decisions designed to alter the physical landscape or to improve the economic environment of a particular urban regional center are influenced significantly by the type of regime and by the market conditions of that area (Fainstein et al. 1983:245-280).
The term urban regime has been defined by several authors, including Stephen Elkin, Fainstein et al. , and Stone. Fainstein et al., define a regime as the administration or city government in power. They posit three types of regimes: directive, concessionary, and conserving
(Fainstein et al. 1983:258-279). Directive regimes existed prior to 1965 and planned and implemented major development projects under the direct supervision of the state with little or no political opposition. Concessionary regimes occurred between 1965-1975 and became more responsive to lower-income groups and especially to minorities during the 1960s because of political mobilization efforts by civil rights and community based organizations. Conserving regimes are politically conservative and they came into existence in 3 1975. The emergence of the conserving regime can be traced to 1975 because of two major occurrences. First, the tax revolts of the late 1970s contributed to the rise of the conserving regimes because the revolts revealed that the political attitudes of the American voter, especially at the state level, were becoming increasingly conservative on fiscal matters. As a result of the political shift in the public's attitudes towards government spending, voters decided to use the power of constitutional referendum as means of limiting the amount of taxes that could be levied against them by their state governments. In other words, those voters who felt that they were paying too many taxes, decided to retaliate against what they perceived as "excessive government," by simply engaging in a form of taxpayer's revolt. Second, due to the rise of the conservative political climate and the voter's increasing demand for improved governmental accountability in spending and taxing, more fiscally conservative political candidates ran for and were elected to office. In essence, the occurrence of these kinds of factors, precipitated the emergence of the conserving regime. These regimes may last for some time because of the conservative fiscal mood apparent in American politics.
Elkin describes urban regimes as being "Principally defined by the pattern of interests included and excluded from the exercise of governmental authority" (Elkin 1980:266- 267).Elkin identifies three types of regimes: pluralist, federalist, and entrepreneurial. According to Elkin, the pluralist regime first appeared in urban politics during the 1950s and early 1960s in the older ethnic communities of the northeast United States (267-273). Elkin labeled these regimes pluralist because "These regimes are enshrined in the period's urban politics literature, from whose pluralist emphases comes the [pluralist regimes]" (267). According to Elkin, the pluralist regime was basically an "inclusive coalition that dominated land use questions, particularly those linked to the economic vitality of the downtown area" (267). The federalist regime is so named because it emerged during the period of urban political history when federal funds were made available to local communities to combat urban decline and other social problems. Dependent upon federal funds to finance urban projects, federalist regimes were forced into temporary political alliances with such previously excluded groups as minorities and community based organizations (Elkin 1987:57-62). The entrepreneurial regime first surfaced on the urban scene in the southwest region of the U.S. in such cities as Dallas, Texas (Elkin 1980:273). This regime is generally dominated by businessmen. Private capital rather than government authority is used to stimulate development and to guide economic growth (Elkin 1980:273-
274). In other words, an entrepreneurial regime is a small coalition of business leaders who play a major role in 5 shaping development: policy. Stone interprets a regime as a "mediating agent between the goal of economic well-being and the particular development policies pursued. Hence, regime character is itself the target of political effort" (Stone 1987:289-290).
Stone identifies two types of regimes: corporate and caretaker. A corporate regime is dominated by private interests (i.e., downtown business groups) and has as a primary goal the promotion of the "development interest of major downtown corporations" (273). A caretaker regime is dominated by small business and homeownership groups and engages in veto politics to curtail local government's economic redevelopment adventurist behavior (273). The final type of regime that has evolved during the 1980s is the complex or "shadow" regime. Heuristic in scope and developed by Robert P. Stoker in "Baltimore: The Self- Evaluating City?" (Stone 1987:244-245), this type of regime first emerged in Baltimore, Maryland during the tenure of
Mayor Donald Schaefer (244-245). Stoker depicts this type of regime as a shadow government because "Under executive sponsorship, private interests came to play a central role in development" (273- 274). In other words, this type of regime appears to be a coalition of an elite corps of public and private bureaucrats who dominate urban redevelopment initiatives and projects.
The explanation and description of the term regime appear to defy simplistic categorization. Despite the several explanations and descriptions of regimes, the number of regime types can actually be reduced to four: Autonomous, Accommodating, Privatist, and Fusion. The four regime types can best be illustrated by Table 1 which depicts the actual number of regimes, major defining characteristics and their origins. 7
Table 1 REGIME TYPES, THEIR ORIGINS AND CHARACTERISTICS
REGIME MAJOR DEFINING ORIGINS OF TYPES CHARACTERISTICS REGIMES TYPES
AUTONOMOUS Dominated by public Elkin's officials. Development Pluralist & policy focus is on Fainstein improving the conditions et. al's of the CBD area. Regime Directive dominates most land use regimes. matters. ACCOMMODATING Dominated by public Elkin's officials. Development Federalist & policy focus is on social Fainstein program spending and et. al's neighborhood development. Concessionary regimes.
PRIVATIST Dominated by private Fainstein sector. Development et. al's policy focus is on Conserving, revitalizing the city's Stone's economy. Corporate & Elkin's Entrepreneurial regimes.
FUSION Dominated by a coalition Stoker's of elite corps of public Shadow and private bureaucrats. regime. Development policy focus is on promoting and subsidizing business activities in the city. The several regime types can be reduced to four because, first, Fainstein et al.'s directive regime and Elkin's pluralist regime are basically the same because their urban development focus is on land use questions, and their primary
urban development objective is to revitalize the Central Business District (CBD). The two have attempted to revitalize their CBDs by removing blighted conditions in an attempt to make the areas so economically appealing that they attract investment. Both regimes emerged during the 1950s, but disap peared from the urban scene during the mid 19 60s, primarily because their use of urban renewal policy created tremendous political difficulties for those areas that employed it. Both of the regimes are public sector directed in terms of crafting development policy, and they are politically
autonomous because they operate with little or no major political opposition in the urban arena (Elkin 1980:273-277; Fainstein et al. 1983:267-273).
Second, Fainstein et al.'s concessionary regime and Elkin's federalism regime are similar because both evolved
during the "Great Society Program" era, and both regimes attacked urban decline by investing public money in human capital programs (i.e., social spending). Both types of
regimes depend upon federal funds to support their human capital programs. Because of their economic dependency on
federal funds, they are forced by political necessity to maintain some degree of ongoing political dialogue, and on 9 occasion to engage in political compromises with groups previously excluded from the political process. The regimes are public directed, and they are more responsive to the needs of community based organizations than are directive or pluralist regimes because the organizations on some occasions are able to pose a political threat to their development policies (Elkin 1987:57-60; Fainstein et al. 1983:258-279). Federalist and Concessionary regimes are depicted as being accommodating because in order to continue to receive their
federal funds, they must demonstrate to the feds that the decision making and allocation of funds did in fact have
citizen input. In order to perpetuate themselves, they have to make political accommodations with community based groups. However, due to recent shifts in federal urban policy and to growing fiscal conservatism among voters, the number of concessionary and federalist regimes has been diminished but not eliminated. They are not the dominant type of urban regime in most urban centers today.
Third, Elkin's entrepreneurial regime, Fainstein et al.'s conserving regime, and Stone's corporate regime are similar because they are more responsive to the developmental needs of the private sector and they appear to rely heavily on the market approach to stimulating economic development and sustaining growth because they are convinced that the private sector is more efficient and superior to the public sector in reversing urban decline. These regimes are private 10 directed because they are usually dominated by business development and pro-growth booster groups (Stone 1987:25- 50, 272-273; Fainstein et al. 1983: 258-279). Finally, the caretaker and shadow regimes are not similar to one another or to other types of regimes because caretaker regimes are not public or private directed or dominated by development groups. In fact, they are generally dominated by small businesses and homeownership association groups. Caretaker groups basically engage in veto referendum politics. Shadow regimes are also different from caretaker and the other regimes because they are comprised of members from public and private bureaucracies. In other words, public
and private bureaucrats are fused together into one developmental organization. Due to this complex arrangement it is difficult to determine whether the public or private sector dominates local development policy. What occurs as a result of this kind of developmental arrangement is a fusion
of private and public forces. Moreover, this type of regime
tends to dominate urban development policy and the agenda setting process. The caretaker and shadow regimes are also different from the other regimes because the two regimes types are basically heuristic in scope. The caretaker regime is not categorized under table 1, because it is completely different from the other kinds of regimes that have been discussed thus far.
Consequently, after consolidating regimes that are 11 similar in description and scope, one discovers four different types: Accommodating, Autonomous, Privatist and Fusion. From the several interpretations of regimes, one could conclude that regimes basically can be described as a collective of private interests or a coalition of private and public officials (e.g., elected, appointed, developmental bureaucrats and private sector participants) who dominate major urban development policy initiatives and decisions. The primary reason why the role of regimes in urban redevelopment policy arena is significant and indisputable is that they can influence the internal physical development of an urban area both directly and indirectly. For instance, regimes can directly shape the physical development of a community by devising fiscal schemes to attract private capital investment into a particular area. They can indirectly influence physical development by creating an investment climate conducive to private capital interests. For example, they can facilitate this process by public policy pronouncements which communicate to business that their particular climate is conducive to the expansion needs of business.
They also can influence development issues through the policy process. For instance, they can exclude the political opposition from the decision-making process by preventing them from mounting a successful campaign against a particular project supported by the regime. For example, the regime can 12 counter the opposition's attacks by an expensive media campaign designed to refute negative charges and to convince voters that the regime's project is essential to the city's economic growth. They often can influence important urban policy decisions by simply out- spending their opposition as r • is illustrated and substantiated by Elkin's case study of
Dallas, Texas's entrepreneurial regime (Stone 1987:25-50). According to Elkin, the Dallas regime exercised so much political influence in the city that "Major business
interests in Dallas organized themselves and the city's politics to promote their collective interests in economic growth" (25).
The role that a regime plays in any urban community is ultimately shaped by its political and economic orientation. Regimes adopt development policy strategies based upon their political views. For instance, a politically conservative regime might be inclined to pursue a market based approach to urban development. The market based approach (MBA) to development is deeply rooted in the notion that market, not government, should function as the primary vehicle for distributing society's scarce resources (Peretz 1986:626; Hula 1986:583-588;1988:1-18). The type of fiscal strategies that one could expect a market based approach to employ in order to improve the community's business climate of are tax exemption on capital improvement, tax abatement on land, industrial bond financing, relaxation of zoning and landuse 13 policy, enterprise zones, liberal use of eminent domain powers, and use of federal funds to stimulate major urban development projects. A politically moderate regime might be inclined to adopt a neo-market approach to urban development. This type of approach is based upon the premise that market forces alone cannot serve as the decisive factor in the urban development
arena. If major urban development issues are left to be* resolved by the private sector, then those issues may not be addressed in a timely manner because the market forces may deem the solution to be economically disadvantageous. In other words, when the market is unable or unwilling to respond effectively, this approach believes that governmental participation may be required to stimulate development. The type of strategies typically employed under a neo-market approach in order to sustain growth or to induce economic expansion in the city are industrial bond financing, state\local supported training of industrial employees, tax moratorium on land, low cost loans to private businesses, grants, corporate income tax exemption, use of general obligation bonds for industrial development financing and developer financing, and establishment of foreign trade and banking zones. The market and neo-market based approaches to development will be discussed briefly in the next chapter and they will be elaborated on further in chapter three.
Whatever approach a regime adopts, its policy choice is 14 ultimately modified by its economic conditions and by its interaction with private investors and their capital inducement needs for profits. The type of social and economic problems that have recently emerged to shape regimes' political and economic environment, their development policy choices, and their interaction with private capital investment are those issues associated with the decline of large urban communities. These issues will explained shortly.
PROBLEM OF URBAN REDEVELOPMENT
According to authorities on urban redevelopment in the U.S., several factors have contributed significantly to the decline of economic growth in large American urban centers and have constrained the development policy choices of cities and their regimes. What follows are three brief, plausible explanations of why the decline occurred and of how the decline relates to the problem of urban redevelopment.
The factors that contributed significantly to the decline of urban centers (especially in the Midwest) are the suburbanization of manufacturing and retailing/wholesaling processes, shifts in federal urban policy, the rise of budget and trade deficits, and the economic recession of the early 198 0s. The significance of these factors is discussed below. 15 Impact of Suburbanization of Manufacturing on Cities.
Before World War II, industry (especially manufacturing
and retailing/wholesaling) was centralized and heavily concentrated in and around the central business districts (CBDs) of most cities in large urban areas because the CBD was the point within older cities that had the lowest transportation costs (Fainstein 1983:1-34;Heilbrun 1982:24- 85) . With a heavy concentration of industries within or near their borders, large urban areas also experienced a significant influx of population primarily because of the employment opportunities offered by the industrial base economy (24-85) . Moreover, these individuals gravitated towards the CBD to establish residence because it was close to their place of employment (140-142). As a result of the heavy concentration of industry and population within the borders of most major urban centers, cities experienced a relatively stable economic base (Sawers et al. 1984:3-15).
However, after 1945, the centralization and concentration of economic activity, along with the Influx and concentration of population in and around the urban core, began to change because both industry and population migrated away from the cities and into the suburbs (Sawers et al. 1984:3-6; Heilbrun 1982:42-68). What occurred after 1945 and continues today is the decentralization of manufacturing and population. The decentralization of industry from the urban core was intensified because of the spatial advantages that the suburbs offered to companies. For instance, plants could
spread out, whereas in the old urban core they had been restricted because of the competition for space. The suburbs were also attractive because there was less competition for space and because rent was cheaper (42-68). By relocating their home base of operation in the suburbs, companies were no longer dependent upon canals, rivers, or even railroads to transport their goods (42-68). In fact, when fully operational, suburban plants were more compatible with the emerging trucking industry as a means of transporting goods into and out of cities. In other words, the emerging
trucking industry, along with the development of the federal highway system, enabled companies to improve their delivery and transport systems which in turn further reduced their transportation costs (42-68).
As was indicated earlier, the population that was once concentrated in and around the urban core also began to shift
in the same direction as industry because of the increasing affordability of automobiles which enabled the white middle and lower working classes to leave the city and move to the
suburbs (Sawers et al. 1984:42-68; Yeates et al. 1980:303- 306; Mitchell 1975:7-11). The steady movement of population
following manufacturing became known as the suburbanization of the manufacturing process (Sawers et al. 1984:3-15).
Essentially, industry and people shifted away from the 17 central cities and to the suburbs. The process was aided in part by the federal government through the construction of highways and through the provisions of low cost VA and FHA mortgage loans to white middle and lower income families (3- 15) . The suburbs would remain primarily white because of racial restrictions in VA and FHA mortgage loans and because of discriminatory housing practices by the real estate industry (Fainstein et al. 1983:15-16; Sawers et al. 1984:3- 15) . Once the suburbanization of manufacturing and wholesaling accelerated, the impact of this process on urban centers, especially in certain parts of the Midwest and
Northeast regions of the United States, was devastating (Fainstein et al. 1983:4-13). The significance of this process is substantiated by Tables 2 and 3 which illustrate the decrease in manufacturing employment for central cities and the increase in suburban employment in key industries over a period of time. 18
TABLE 2 Central City Manufacturing Employment As a Percentage of/ Metropolitan Manufacturing Jobs In Eight SMSAs:1900-1967.
Period Percent Share Changes %% 1900-1918 88.6 - 1919-1938 77 . 3 -11.3 1939-1958 76.4 - 0.9 1959-1966 66.7 - 9.7 1967 60.8 - 5.9 Source: Bennett Harrison. Urban Economic Development. Washington,D.C: The Urban Institute 1974:8.
TABLE 3 Suburban Share of SMSA Employment and Population, by Selected Years.
Item 1948 1954 | 1958 1963 Employment Manufacturing 33.1 38.6 42.0 51..8 Wholesaling 8.2 14 . 5 20.7 28..6 Retailing 24 .7 30.6 37.2 45..4 Services 15.2 21.6 26.1 31..3 Population 36.0 43.5 48.2 54.,3 Source: John F. Kain "The Distribution and Movement of Jobs and Industry," in The Metropolitan Enigma ed. James Q. Wilson Cambridge: Harvard University Press 1968:27
The two Tables indicate, first, that central cities have been experiencing a declining trend in manufacturing 19 employment for quite some time. Second, Table 3 reflects the steady increase in the suburban share of SMSA population in key industries over fifteen years. As was noted earlier, the suburbanization of the manufacturing process also triggered the outmigration of the white middle class to "escape such undesirable qualities as crime, crowding, noise, and the presence of minorities" (Judd 1988:167). The white middle class that fled the cities was gradually replaced primarily by poor Appalachian whites and minorities, basically blacks and Hispanics, over a period of time (Kasarda 1985:51-54). For example, by 1980, 55% of Baltimore's and 52% of Richmond, Virginia's population were minorities; and St.Louis lost more than 30% of its non-Hispanic white residents. Table 4 illustrates the population changes that took place in three U.S. cities over ten years. 20
TABLE 4 Population Changes in Three U.S. cities by Race and Ethnicity, 1970-1980.
Central Total Whites Non-Hispanic His- | % City Pop. Blk. Other panic Min. Baltimore 1970 905,759 479,837 420,210 5,712 (NA) 46% 1980 786,775 345,113 431,151 2 ,873 7, 638 55%
Change -118,984 -134,724 +10,941 -2,839
Richmond 1970 249,621 143,857 104,766 988 (NA) 42% 1980 219,214 104,743 112,357 2,114 2,210 52%
Change -30,407 -39,114 +7,591 +1,126 St.Louis 1970 622,236 364,992 254,191 3,053 (NA) 40% 1980 453,085 242,5/6 206,386 4,123 5,531 46%
Change -169,151 -122,416 -47,805 +1,070
Source: U.S. Bureau of the Census, Census of Population: Characteristics of the Population, 1970-1980.
As a result of these racial/ethnic population shifts in some of America's urban centers, many cities became predominantly black or Hispanic (Kasarda 1985:51-54; Fainstein et al. 1983:4-6). In other words, cities also became increasingly filled with populations who were poor (Bradbury et al. 1982:51-54). For instance, "From 1975 to
1978, the median income of males over sixteen moving within the same metropolitan area was $12,411 for those moving out 21
of central cities, but $10,240 (17% less) for those moving into central cities" (24). Moreover, the income and revenue levels of cities declined because of the loss of industry and middle class taxpayers. The decline that occurred as a result of the suburbanization of the manufacturing process was definitely noticeable as property values decreased; tax revenues declined; public services deteriorated; annexation of adjacent areas was slowed, and the cities began to lose
enormous amounts of their population (Fainstein et al. 1983:4-5;Bradbury et al. 1982:24-29). Essentially, cities became increasing poorer, predominantly minority, and "vehicles for the encapsulation of minority groups and Appalachian whites in obsolete
sectors of the economy and deteriorating environments" (Fainstein et al. 1983:4-5; Kasarda 1985:52-53). In essence, cities were left with a dwindling tax base and a disproportionate number of high cost citizens, Appalachian whites and ethnic\racial minorities eventually strained
urban areas' budgets, primarily because of their political demands and needs for more basic governmental services. This population would also comprise a large portion of the "hard
core" unemployed population that has historically plagued the economies of most large urban centers.
The social, physical, and economic deterioration of America's urban areas eventually led to attempts by the
federal government to halt the declining trends of urban 22 areas. The federal impact is discussed below.
Federal Impact
The economies of those urban areas that underwent the suburbanization of the manufacturing/wholesaling process were negatively affected by declining income levels due to the outmigration of the white middle class and by dwindling
taxes. As a result of these significant socioeconomic setbacks, the federal presence would eventually be expanded in order to help declining cities alter their physical landscape and improve their economic environment (Fainstein et al. 1983:1-27; Judd 1988:372). During the 1950s, the federal presence was primarily confined to urban renewal which was successful in removing urban blight; however, it was controversial because it reduced the supply of
affordable housing for minorities and the working poor (Fainstein et al. 1983:1-27).
The policy was controversial also because it radically
altered entire racial and ethnic communities. An excellent illustration of this disruption took place in a neighborhood of Columbus, Ohio called Mt. Vernon. Initially a white upper middle class neighborhood located within ten minutes of the
Columbus CBD, Mt. Vernon evolved into a predominantly black working class area and was the major east-west commercial artery of Columbus' oldest black community. But the high 23 concentration of small black-owned businesses which played a vital role in stimulating the area's economy was disrupted and eventually displaced when the interstate highway system was completed (Hunker interview 1987). The second strategy adopted by the federal government to reduce urban decline was the infusion of federal funds to combat the social problems that afflicted urban areas. This particular approach to combating urban decline was adopted primarily because President Johnson made a person commitment to reduce poverty in America and demonstrate his commitment to this herculean task by using the power and prestige of his office to launch his "War On Poverty Program" (Sawers et al. 1984:4-5). The "War On Poverty Program" was a series of massive social programs: Head Start, Model Cities, Food
Stamp Program, Community Action Program, Medicare, and Medicaid Programs (Pressman et al. 1973:1-162). Although the programs were well- intended, they were not successful either in combating poverty effectively or in halting urban decline (Pressman et al. 1973:1-162). The active role and the large scale funding of social programs associated with the Johnson administration were reversed under the administrations of Nixon and Ford (Brown et al. 1984:21-31; Judd 1988:321-327). Both Republican Presidents rejected the notion of using massive federal spending as a means to combat urban decline because both perceived this approach as being ineffective (Brown et al. 24 1984:21-31; Judd 1988:321-327). Federal spending as a solution to halting urban decline was further rejected by Jimmy Carter, a Democrat; and it was subsequently scaled down significantly by the Reagan administration (Nathan et al. 1987:5-10; Brown et al. 1984:104-107). In essence, from 1975 to the present, cities have experienced a massive withdrawal of federal funds for urban redevelopment. The loss of federal funds occurred at an inopportune time for most urban areas. Most cities had not successfully
completed the transition from a heavy dependence upon an industrial base economy. Furthermore, the reduction of funds occurred before most cities, and especially those in the "rustbelt," had fully recovered from their tremendous economic losses (Fainstein et al. 1983:8-12). As a result of the withdrawal of federal funds, large urban centers experienced a fiscal crisis severe enough during the late 1970s to force cities to implement austerity measures. Urban
centers cut back programs in their social infrastructure; they had to forego urban redevelopment projects, and they
had to postpone badly needed repairs to their physical infrastructure, i.e., streets, roads, sewers, etc. (245-
280) . The economic decline that afflicted urban areas especially was triggered by the loss of manufacturing jobs which led to decreasing income levels and eventually to
declining municipal revenues. Moreover, the gradual 25 withdrawal of federal funds for badly needed social programs exacerbated the economic decline which was prolonged even further because of the disinvestment by corporations in cities. The disinvestment itself was triggered by the changing racial/ethnic composition of urban residential populations. In other words, some large urban centers (especially Cleveland, Detroit, and Dayton, Ohio) were not perceived by business as being profitable areas in which to invest. Potential investors' perception of some large urban
centers as being unprofitable was precipitated and perpetuated as these areas were increasingly inhabited by poor and minority populations. Therefore, the rapid loss of
capital investment in cities, along with the simultaneous attraction of poor and minority populations to cities, worsened the economic plight of cities during the recession of the late 1970s and early 1980s.
Economic Impact
The trade deficit, the budget deficit, and the economic recession of the 1970s and early 1980s produced additional problems not only for urban centers but also for regions as well. The origins of the three economic problems that impacted urban communities are traceable to government policies. Moreover, the response of decision makers in both
Republican and Democratic administrations to the emerging 26 phenomenon only exacerbated the problem of urban decline.
Budget Deficit The immediate impact of the budget deficit on the problem of urban decline was that it led to further federal
cutbacks and eventually elimination of such programs as revenue sharing, urban development action grants (UDAG), community development grants, and a whole host of other urban related programs. The Administration and Congress eliminated these programs because they were no longer politically popular and hence were easy targets for Reagan budget cutting. These programs were no longer politically
popular and were easy targets for the budget cutting ax, primarily because both the federal government and the American public, especially the middle class taxpayer were no longer willingly to fight urban decline by waging an expensive all out war on its root cause, poverty. The policy implications of these cuts on cities is that: they severely hampered the ability of cities to adequately meet their commitment to human capital programs; forced some cities to engage in deficit financing in order to meet their social program spending obligation; forced others to enact austerity measures in order to avoid a fiscal crisis. The
long term impact of these cuts on cities, is that they forced local regimes to abandoned or forego some of their major development projects. The significance of the budget cuts on cities will be expounded on further in this chapter. 27
Trade Deficit
The trade deficit that evolved in the U.S. is traceable to the 1964 tax cut which increased domestic income for many poor Americans who were unaccustomed to having a sufficient disposable income to purchase the foreign goods readily available to all income levels because of our open economy. The trade deficit increased as Americans continued to consume more foreign goods because of the growing stigma associated with the quality of American products. The stigma towards certain U.S. products (small cars, TVs, etc.) evolved because of the perception that certain domestic productions were inferior and expensive in comparison to foreign goods (Zucker et al. 1982:7-15).
U.S. producers were unable to successfully penetrate their competitor's market because of the powerful barriers which also provided the U. S. trading partners with an incredible comparative advantage (136-137). Given the barriers to entry abroad, along with certain key industries (textile, steel, and autos) losing their share not only of the domestic market but also of the global market, the trade deficit continued to mount. (See Figure 6 in the Appendix for illustrations of U.S. industries most affected at home and abroad). 28 Finally, the deficit continued to increase because major U.S. firms in key manufacturing industries failed to adopt labor saving devices in their production processes. For instance, "The U.S. steel industry was still putting up open-hearth furnaces in the late 1950s, while the Japanese were building modern steel plants that used the basic oxygen process. Ironically, the basic oxygen process was a U.S. invention" (13). Congress and the White House have responded to this problem in two different ways. First, Congress passed the Job Training Partnership Act (JTPA) in 1982. One major feature of this legislation is assistance provided to businesses that are hardest hit by foreign competition (Buchholz 1986:284-285). Also, the sizeable number of Congressional members whose districts' economies were devastated by increasing foreign competition resulting in the loss of manufacturing jobs and plant closings reacted by proposing protectionist legislation and by adopting a national plant closing law in 1988. Second, while Congressional members introduced protectionist legislation, the White House basically advocated free but fair trade. On some occasions, the White House has convinced major trading partners (e.g., Japan) to self-impose restrictions or quotas on the number of cars it exports to the U.S. . However, when Congress threatened to impose "tougher" restrictions on foreign producers, the White House responded by giving lip service to protectionism. A recent example of this was the 29
White House threat to impose a tariff on all gourmet items (especially white wines) from France. With the exception of these rare occasions, the White House has maintained a free trade posture.
In spite of pro-protectionist sentiment in Congress and the free trade approach advanced by the White House, the trade deficit continues because there is no coherent trade policy for U.S. producers. Moreover, the impact of the trade deficit on some urban areas has been the steady loss of manufacturing jobs. This particular consequence will be discussed further in the next section.
Impact of Economic Recession of late 1970s on Cities.
The economic decline that most urban areas experienced initially during the suburbanization of the manufacturing/ retailing process, and subsequently because of the substantial loss of federal funds for urban redevelopment, was aggravated even further during the late 1970s and early
1980s by the recession which produced major economic problems not only for urban areas but for entire regions as well. In fact, as was indicated in the previous section on the trade deficit, one of the major problems that occurred rapidly during the recession was the long term unemployment most noticeable in the Midwest and Northeast where large urban centers had depended upon industries such as steel. 30 auto, and retailing/wholesaling for a significant portion of their revenue (Bluestone et al. 1982:1-230). For instance, workers in declining industries such as steel and auto manufacturing were displaced by labor saving modernization techniques, and a significant number of plants relocated to sunbelt states and abroad to take advantage of low wages and to reduce energy costs (Bluestone et al. 1982:1-150; Beyerchen et al. 1983:16-17). As a result of the growing number of displaced workers in and around large urban centers, union officials, with the political support of elected officials, began to call for protectionism, especially in the steel and auto industries, against certain economic foreign competitors (Pearson et al. 1981:45-52). Protectionism in the steel and auto industries was motivated in part by the loss of jobs and by the pressure put on unions and elected officials by individuals who lost their jobs. Moreover, the advocates of protectionism may have believed that America was no longer in control of its own economic destiny but was gradually being economically colonized by "foreign investors"
(Bartlett 1984:159-172). As a result of the "foreign investment invaders" hysteria, calls for protectionism increased and were aimed initially at those foreign countries which posed a serious economic challenge in terms of capturing and eventually dominating a sizeable portion of the American auto/steel domestic market (159-172). However, the one foreign country that would eventually be singled out as undermining America's ability to compete effectively at home and abroad was Japan because it was perceived as an unfair competitor by corporate, union, and elected officials from declining industries in the Midwest and Northeast of the U.S. (159—172) . As a result of the unfair competition American producers faced in the domestic and global market economy, these officials began to lobby Congress to restrict the number of foreign auto\steel imports, especially Japanese, allowed into the U.S. (159- 172) . By labeling Japan "public economic enemy number one" and by enacting some restrictions, public and private officials were simply reacting to the problem and not arriving at a solution. What is more, the measures adopted by Congress and subsequently those enacted by states to aid industries in large urban areas severely affected by foreign competition, failed to halt the economic decline (Pearson et al. 1981:45-52; McDonald 1984:314-423). The decline facing these areas was complex because most of the industries that they seek to protect are declining and inefficient. From an economic standpoint it is very difficult to protect such industries. Therefore, this problem defied a simplistic solution such as adopting protectionist measures for industries already declining in the national economy.
The prolonged economic decline that plagued most large urban areas was exacerbated because of the simultaneous 32 occurrence of increasing competition for the U.S. domestic auto and steel industries by Japan and West Germany, which forced U.S. producers to increasingly adopt labor saving modernization techniques in their assembly line operations. As a result of the adoption of these techniques, the need for assembly line workers (both skilled and unskilled) was reduced. The reduction in personnel led in turn to further losses in income and revenues for urban areas which housed these industries. Over time, large urban centers began to lose their secondary industries to sunbelt states and to developing countries abroad. The loss of secondary industries resulted in further economic decline for these areas. Because of the loss of manufacturing jobs, urban areas attempted to switch their economic base from a secondary to a tertiary economy.
However, most urban areas were unable to complete the transition primarily because they were unable to satisfy the need of a tertiary economy for skilled/technically trained workers. As a result of this inability to make the successful transition from a secondary sector dominated economy (i.e.,service and high tech industries), several cities in the Midwest were not successful in attracting or sustaining high tech industrial relocations to their respective areas (Fainstein et al. 1983:245-280; Sawers et al. 1984:3-19; Gottman 1983:1-34). One could reasonably speculate that a primary reason why such declining areas 33 were unsuccessful in maintaining a stable flow of capital investment or in attracting new investment was that those areas were not perceived as economically attractive or profitable areas in which to invest (Fainstein et al. 1983:245-280; Hanson 1983:38-134; Gottman 1983:1-34).
To maintain their current level of services and to combat the further erosion of their respective economic bases, local officials responded differently depending upon their particular circumstances. For instance, if the concern was for the provision of services to "high cost" citizens, some officials enacted austerity measures; other officials found it politically unfeasible to reduce social services and chose instead to meet their constituents' needs by engaging in deficit financing (Shefter 1985:105-195). In fact, deficit financing proved to be politically and economically devastating for such cities as New York and Cleveland,Ohio (Shefter 1985:105-195; Swanstrom 1985:70- 200). Deficit financing led to a drop in Cleveland's bond
rating and forced the city to default. Furthermore, without the assistance of the federal government, New York probably would have been bankrupt (Shefter 1985:105-200). On the other hand, if the concern of the city was to revitalize its community especially in and around the CBD area, some local officials began to adopt and implement specific fiscal incentives (e.g., tax abatement, subsidized loans, industrial bond financing, tax exemptions, or 34 moratoriums on equipment) as means of luring businesses to relocate inside their respective borders and of correcting economic imbalances within their local economies (Swanstrom 1985:136-153; Bluestone et al. 1982:11-200; Reese 1988:1-
22). The premise behind such fiscal incentives was that once these firms or companies moved to their new locations, new jobs would eventually be created (Swanstrom 1985:136-250;
Stocker 1984:2-3). In other words, the incentives were used by local officials in an attempt to rejuvenate their sagging economies and to stimulate economic growth and employment (Fainstein et al. 1983:1-50; Harrison et al. 1978:424; Mandelker et al. 1980:11-32; Wolkoff 1983:78-79). The long term implications of these kinds of policies on urban political economies is that over a period of time some of the incentives or initiatives eventually proved economically and politically costly for local communities. For example, the prolonged use of tax abatement in Cleveland, Ohio led to defeat of an incumbent mayor, politically divided the city, nearly ruined the image of the city, and deprived the city of millions of dollars in badly needed tax revenues (Swanstrom 1985:136-250). Moreover, when cities began an internecine competition for investment capital, they soon discovered that they were participating in "tax cut wars" (Peretz 1985:626-637). The ramification of such "tax cut wars," was that local communities were basically participating in a zero sum game because although 35 there were winners and losers initially, ultimately there were only losers in this irrational process. The process
could be perceived as irrational because if Columbus lures a business from Baltimore, Maryland today, Columbus wins and Baltimore losses; however, suppose Richmond, Virginia beats Columbus tomorrow and so on, who wins? In this zero sum game, only marginal companies were winners because they used tax incentives to stay in business a few more months, maybe even a few more years (Pomp et al. 1980:218-232) . But because of the reduction in federal funds, loss of manufacturing jobs, and some areas' inability to expand their tertiary sector in a timely manner, some
cities were forced by political and economic necessity to engage in "tax cut wars".
Political and Social consequences
The suburbanization of manufacturing, retailing and
wholesaling processes, shifts in federal urban policy, the rise of budget and trade deficits, and economic recession of the early 1980s created some long term social costs and urban redevelopment policy constraints for cities and their regime.
The social costs that occurred in cities as a result of the aforementioned economic problems, were the rise of homelessness, an increase in joblessness for central city 36
residents, and the emergence of an urban underclass population. What follows is a brief plausible explanation of how the above mentioned issues contributed to the rise of
some long term social costs that may affect the transformation of some cities1 economies. The long term social costs along with their policy implications will be explained shortly. The problem of the homeless in most urban communities can be attributed to the rise in joblessness, and the lack of decent and affordable housing. The lack of affordable
housing can be attributed to a shift in federal urban policy (i.e., severe cutbacks in HUD operating budget). The increase in joblessness in some major cities espe cially among minority populations, occurred as a direct result of the suburbanization of manufacturing, wholesaling
and retailing processes, and of structural changes that took place in key manufacturing industries. The loss of manufacturing jobs created two major problems for urban
centers that depended upon them for employment for their residents. The loss of manufacturing jobs severely reduced the number of entry level jobs for minorities and women (Child Hill 1985:1-43). The significance of this point is that the loss of jobs for these two populations forced many of them to seek some form of public assistance. Their increased demand for public assistance eventually strained some local units' budgets and forced some of them to enact austerity measures in order to avoid a fiscal crisis. Some cities simply lacked the necessary federal funds and income to meet the need of these two populations but were unwilling to pay the political costs for incurring a fiscal crisis. Therefore, due to the reduction in federal funds for social programs and the increase in joblessness for women and minorities, an urban underclass with a "feminization of poverty" undertone began to emerge in most large cities (Peterson 1985:129-160). The growing underclass population was most noticeable among minority populations of blacks and Hispanics because both groups had suffered enormous employment losses as a result of structural changes in key industries and plant closings (Child Hill 1985:1-43). This point is substantiated in article by William Julius Wilson entitled, "The Urban Underclass in Advanced Industrial Society" (Peterson 1985:129-160). According to Wilson, the factors that contributed significantly to the progression of the underclass phenomenon were structural changes that occurred in key manufacturing industries and the suburbanization of manufacturing, wholesaling and retailing processes (129- 160). Wilson argues that structural changes in manufacturing and the outmigration of jobs lead to an increase in joblessness for the underclass, many of whom were women and single heads of households (129-160). Wilson states that the rise in joblessness among the underclass was exacerbated because most of them lacked sufficient skills to compete effectively in a changing employment market. Therefore, because of their lack of sufficient training and employment skills, and cuts in federal social programs, many of the underclass felt hopeless (129-160). Because the feeling of hopelessness, some of them resorted to dysfunctional social behavior (e.g.,increase in drug addiction, drug trafficking, and drug related violence, rise in youth gangs and gang related violence). The media generally tended to cover those events that gave the impression that most of the underclass population was engaging in social dysfunctional behavior. This perception made it difficult for cities to attract investment to these areas. These kinds of social problems have converged to create additional policy constraints for cities and their regimes. They serve as constraints primarily because cities and their
regime's urban development policy choices are shaped in part by the market conditions and by the demographic and
environmental features of its community. The concern here is that because of fiscal difficulties caused by simultaneous losses of manufacturing jobs, the reduction in federal funds, and prevailing conservative political climate among the voting electorate (i.e., especially towards tax increases) regimes are now forced to adopt forward looking developmental strategies designed to switch their economic base from a secondary to a tertiary 39 economy in order to regain some control over their economic destiny. How cities have attempted the political transformation is a concern of this dissertation.
This dissertation seeks to explain the role of regimes in urban development policy and to ascertain if the regime relies solely on the market to stimulate growth and redevelopment efforts, or whether they advance polices that require public and private cooperation in development in six chapters:
(1) Chapter one has provided a working definition of what constitutes a regime. The chapter also included an explanation of the causes of urban decline and the consequences of urban decline on cities.
(2) Chapter two will provide a brief explanation of urban development policy and an examination of the urban development policy literature.
(3) Chapter three will involved the presentation and explanation of the urban development policy model.
(4) Chapter four will contain social, political and economic demographic profiles of the four cities. (5) Chapter five will offer a comparative analysis of the four cities' development policy approaches. The analysis will also include an explanation of whether or not regimes rely solely on a market based approach to development or if they advance policies that require some form of public and private cooperation in the development arena. Finally, chapter six arrives at conclusions. These will include a brief explanation of why the political science discipline should continue to focus on the subject of urban development policy and what areas of urban development policy should be explored for future research efforts. 41
ENDNOTES
1. Whites also may have fled to suburbia, to increase the "social distance" between themselves and the growing minority populations. The need for social distance, generally occurs when one group (generally whites) perceive a need for a specific amount of residential space between themselves and undesirable groups (i.e., racial or ethnic minorities). This point can be substantiated based upon the research conducted by the Mitchell, Yeates and Garner (Mitchell 1975:7-11; Yeates et al. 1980:303-306). 2. The terms primary, secondary, tertiary, quaternary, and quinary sectors can be explained as follows: (a) primary sector refers to that part of the workforce engaged in extracting resources (e.g., fishery, farming, mining, and forestry). (b) the secondary sector is that portion of the labor force engaged in manufacturing, construction, etc. ; (c) tertiary sector refers to that portion of the labor force engaged in the production of intangibles or non things (i.e., the service economy); (d) quaternary sector refers to that portion of the workforce engaged in research and development and education; (e) quinary sector refers to that portion of the workforce engaged in government (Gottman 1983:1-14).
3. Local officials use tax abatement as a fiscal incentive because: (a) officials in the frostbelt states interpret it as a vehicle to reduce the flight of business from their borders to the emerging sunbelt region; (b) politicians find tax abatement appealing as a political issue because it can be easily exploited for personal gain in the political arena. For instance, a local "politico" could exploit a community's fear of further economic decline by promoting a policy of tax abatement as a means of maintaining economic stability and thus creating jobs in the long run. Moreover, a pol can exploit their community's fears by indicating that this type of policy is vital to the city's growth and if not adopted the city would continue to deteriorate (Wolkoff 1983:78-79; Swanstrom 1985:136-150); (c) a relatively new reason for the use of tax abatement by states and local units is the comparison of incentives to the arms race model. Paul Peretz in "The Market For Industry: Where Angels 42 Fear To Tread"; states that "states and localities are forced into matching and or beating incentives provided by other states and localities, because of the inability to act collectively" (Peretz 1986:625-630; Wolkoff 1983:79). In essence, he suggests that states and local units of government perceive that failure to act could result in loss of business/industries to nearby states. 4. Origins of Budget Deficit Since the Second World War, the budget deficit has been fueled by uncontrollable spending by Congress and the Executive branch of the national government (Wildavsky xvi- xxxi:1984). In recent years the size and origins of the current deficit can be traced to the following three major government policy initiatives. (1 ) Tax Cut of 1964 The current deficit can be traced initially to the tax cut of 1964. The Kennedy-Johnson tax cut was designed to expand the economy through a combination of tax cuts and government sponsored grants (Alperovitz et al. 1984:3-49). According to Alperovitz and Faux, this particular initiative did unbalance the budget, but it also led to growth and jobs. In fact, the tax cut increased government revenue which was significant because it allowed the Johnson administration to simultaneously commit itself to the Viet Nam conflict and to a domestic social program intended to eradicate poverty. Given the flow of revenues that went to the U.S. government, the Johnson administration believed it could overcome the dilemma of having to choose between guns and butter. Through an expansionary fiscal policy supported in part by a tax cut, the Johnson administration believed that it could undertake a distributive policy abroad while advancing a redistributive policy at home. Before discussing the second government initiative that increased the budget deficit, one still has to explain how the tax cut relates to the origins of the deficit. First, the tax cut led to an increase in domestic income (See Figure 1 in Appendix A). Second, as was indicated earlier, the tax cut in theory would stimulate growth and jobs which in turn would increase government revenues. Third, the increase in government revenues enabled the national government to adopt and implement an expansionary fiscal policy. Fourth, the expansionary fiscal policy eventually simultaneously raised interest rates and increased domestic consumption of foreign goods (See Figures 2 and 3 in Appendix A). The relationship between the tax cut of 1964 and the origins of the deficit is that one of the long term effects of this policy measure is its contribution to our current 43 trade deficit. In essence, an unbalanced trade deficit also increases the budget deficit. This point will be elaborated further in this section of the Chapter.
(2 ) Recession of 1973 The budget deficit increased again in 1973, primarily because of the external shock to the economy of the 1973 (OPEC) oil embargo. The effect of the oil embargo was most noticeable in the energy industry. For instance, according to Alperovitz and Faux, "Average consumer prices for energy in America (heating, oil, gasoline, gas, and electricity) rose 17% in 1973 and an additional 22% in 1975" (35) . Furthermore, the impact of the rise in energy prices was felt most notably in the steel and auto industries where production processes or consumers' spending patterns were directly related to the price of oil. For instance, during this period, the auto and steel industries had the largest layoff periods in the U.S. (36-37). The increase in oil prices had a rippling effect in the U.S. economy. One of the major effects was a rise in prices and in unemployment. The increase in unemployment led to an increase in the deficit because the U.S. lost the potential revenues that it would have collected under normal circumstances had these indi viduals been gainfully employed and paying taxes. The type of inflation that the U.S. experienced during this period was stagflation; the economy was stagnant and inflated at the same time. This meant that the U.S. experienced both high unemployment levels and high prices. To combat the new phenomena of stagflation, both the Nixon and Ford administrations elected to pursue an expansionary monetary policy (See Figure 4 in Appendix A). The intent of this policy was to peg interest rates at levels low enough that private investments in basic industries could capture capital relatively cheaply. What transpired after this was that from 1975 to 1979 inflation eventually eroded the artificial gains achieved through the expansionary monetary policy. Spiraling inflation plagued the U.S. especially during the second half of the Carter presidency. Carter (through his appointment of a conservative banker, Paul Volcker, to the Federal Reserve Board) chose to combat increased inflation with a tight money supply policy (Alperovitz et al. 1984:37). The impact of this policy was so significant that interest rates during 1979-1980 rose to 20%. The failure of the Carter policies eventually led to the Reagan presidency and a supply-side "revolutionary" approach. (3) Reaganomics The size of the deficit tripled under the Reagan 44 administration because of his tax cut coupled with a restricted monetary policy that refused to pay off debts with inflation. The tax cut was the cornerstone of Reagan's economic plan. In essence, Reagan along with his supporters Kemp-Roth and Arthur Laffer, believed that they could reduce inflation and unemployment by cutting taxes, reducing federal regulations, and initiating a redistributive policy through tax incentives that favored the wealthy (Dolbeare 1986:40-41). For further illustration of the Reagan tax cut, see Figure 5 in Appendix A. Reagan and his followers perceived that the supply-side approach would expand the economy and create new jobs without government spending. The flaw in Reagan's approach was that it was not new and eventually did involve increased government spending. The tax cut was similar to the one in 1964, except that it was biased in the direction of the wealthy. Also, although Reagan and his followers would deny it, his policy was Keynesian; but instead of focusing on the demand side, it focused on the supply side. Moreover, government spending was increased to maintain the Administration's commitment to a military buildup. This type of spending policy is simply an expansionary fiscal policy. By refusing to curtail defense spending or to raise taxes, the Administration's initiatives produced a massive deficit. One major attempt to control and reduce the budget deficit was the enactment of the Balanced Budget Amendment or Gramm-Rudman-Hollings which essentially stated that the federal government could not spend over a certain amount between 1986-1991. If federal spending exceeded the allotted amount, then the triggering mechanism for reducing the deficit would be the Comptroller General. The U.S. Supreme Court ruled the triggering mechanism unconstitutional because it violated the separation of powers clause of the Constitution. Congress and the President are still following the process of Gramm-Rudman; but without the triggering mechanism, they are continuing their uncontrolled spending. CHAPTER II INTRODUCTION
To explain the role of regimes in an urban development
policy (URDP), or to determine whether regimes rely solely on the market to stimulate growth and redevelopment efforts, or whether they advance policies that require public and private cooperation in development, first one has to define urban development policy and to examine the issue of urban development in the context of the literature. Moreover, the literature review must examine how political scientists have explained this phenomenon. The literature review is for the purpose of illuminating what specific aspects of urban development policy have and have not been addressed in the literature.
According to Peterson, URDP involves "those policies
that contribute to economic well-being of cities" (Peterson
1981:41-44). Policies that contribute to the economic well being of cities are those whose "positive effects are greater than their costs to community residents" (42). URDP can also be defined as those initiatives advanced by local governments that contribute to the configuration of "the
local community through control of land use and investments
45 46
in physical structure" (Stone 1987:6). The type of initiatives that can contribute to the configuration of local communities through control of land use and investments in physical structure are such items as: use of tax abatement to facilitate investment in a particular section of a city; use of eminent domain powers to "assemble parcels of land for resale or leasing" (Stone 1987:6-16); use of federal funds to facilitate a major urban development project; use of general obligation bonds for industrial development financing; use of impact fees (i.e., a small tax on developers) as a means of funding the maintenance of bridges, roads, and sewers. Thus, URDP is the process by which local governments or regimes attempt to alter or enhance the physical and economic landscape of their community. URDP also involves the employment of fiscal strategies and public policy pronouncements designed to stimulate or maintain a stable flow of private capital investment. Because of the political and policy implications of urban redevelopment in American cities, the concern of this literature review will be to explicate how political scientists have explained this phenomenon.
Treatment of URDP in Literature
In the literature, different political scientists have sought to explain URDP by focusing on different single aspects of the problem. For instance, some political
scientists focus solely on political variables to describe the urban development policy process, while others emphasize the importance of economic or social variables. Several
approaches to explaining URDP have emerged from the literature over a period of time. However, this dissertation will concentrate on the approaches that have dominated this subfield: a political behavior focus, a sociocultural scope, and a political economy perspective. For instance, the literature that involves a political behavior approach has been dominated by research on the issues of how power is distributed and how policy is made in cities (e.g., pluralist versus elite debates). The literature that centers around the sociocultural perspective has focused on such social issues as the urban crisis and the problems caused by urban development policy. Finally, the literature that involves a
political economy approach has concentrated primarily on such
issues as urban fiscal crisis and political conflicts within
cities over growth policies. The significance of these approaches is that they attempt to explicate how urban development policy unfolds and impacts cities and communities. How these approaches are employed in the
literature to explain such a complex problem as urban development is one of the primary concerns of this chapter. 48
POLITICAL BEHAVIOR APPROACH
The dominant behavior approach used by political
scientists in the literature to explain the urban development policy process has involved political participation. The type of study that dominated the early urban literature was the community power inquiry. The primary objective of this kind of research was to explain how power was distributed and how policy was made in cities. This approach to explaining urban development policy can be traced to the pluralist versus
elitist debates during the 1950s and early 1960s (Swanstrom 1985:12-17). Most of the urban policy literature during that period centered around the issue of the distribution of power within communities.
The debates over the distribution of power produced three distinct ideologies: pluralist, elitist, and anti-
pluralist. The leading scholars and spokespersons for these groups were Robert Dahl (pluralist), Floyd Hunter (elite),
Michael Parenti, Peter Bachrach, and Morton Baratz (anti- pluralist) (Carson 1977:10-26). The proponents of the elitist theory believed that power and policy making in most urban
communities were controlled by economic elites. In essence, advocates of the elitist theory equated wealth with power and political influence (Hunter 1953:52-65). The pluralists
rejected this argument because they believed that decision 49 making was highly fragmented and that power was decentralized because the democratic process enabled individuals or groups to freely compete for influence in the political market (Dahl 1961:89-270). The anti-pluralists countered the pluralist argument by asserting that the most important decisions made in policy process were those involving non-decisions. According to Parenti and other anti-pluralists, non-decisions are essential to understanding the distribution of power in communities because as a result of the mobilization of bias, certain groups' interests were included or excluded from the policy making process (Carson 1977:10-14). In these debates over the distribution of power, scholars were trying to explain urban policy making from a narrow perspective. The elitists equated wealth with influence and believed that political variables had no influence over the process. The pluralists, on the other hand, believed that politics mattered but that economic variables had no significant influence on the process. The anti-pluralists believed that attitudes of decision makers were of primary importance. In their debates, writers appear to suggest that either economics, attitudes, or politics alone is the deciding factor in explaining policy outcomes. Much of the literature has the limitations of any analysis that seeks to explain such a complex phenomenon as urban development policy by studying on one aspect of the issue. 50 Thus, by focusing on one specific aspect of the problem, they failed to produce a better understanding of the relationship between public officials and private capital about the urban development policy process (Schmandt et al. 1988:3-33).
Therefore, the debates between the schools of thought
(especially between pluralist and elitists} were generally reduced to discussions about whose research methodology was superior. In other words, missing from these discussions were explanations of how the policy process unfolded, and of how public and private institutions interrelated with one another regarding development policy making (3-33) . Furthermore, they did not explain adequately how policy was made or consider how the influx of high-cost citizens to a particular city and the outmigration of income-producing citizens away from the same city over time, could impact the effectiveness of a city’s urban development policy or place fiscal constraints on the type of initiatives that could be employed to stimulate growth.
Because of the limitations of the early political behavior approach to explaining URDP, other explanations of URDP evolved from the literature. The next approach that emerged was the sociocultural approach.
SOCIOCULTURAL APPROACH
The sociocultural explanation of URDP first appeared in 51 the literature during the mid 1960s. This approach derived its name from the urban policy literature of the period, a literature that sought to explain urban policy by examining the effects on cities of racial segregation, demographic trends, social dislocation, and poverty. Due to the sociocultural scope of this approach, the literature at that time concentrated on explaining the concept of "urban crisis" and employing it to explicate URDP. This approach dominated the direction of urban policy literature because America found itself in the midst of trying to grapple with an explosion of social problems associated with the phenomenon called the "urban crisis" (Gottdiener 1985:421; Schmandt et al. 1988:11-14). Gottdiener, in his article "Whatever Happened, to the Urban Crisis?," defines urban crisis as "A general term for separate phases of metropolitan restructuring occurring over the past two decades that is associated with dramatic and highly publicized events"
(Gottdiener 1985:421). In essence, an urban crisis simply involves the social consequences of metropolitanization, especially the significant shifts in the characteristics of the city population (e.g., a decrease in income-producing citizens and an increase in high-cost citizens) over time. Discussion of the urban crisis approach to explaining the problem of urban development eventually (like the power distribution arguments) produced two different perspectives about the causes and extent of the crisis. The perspectives 52 that emerged from the literature on this issue could basically be divided into supporters and opponents of the urban crisis approach. The proponents of the urban crisis point-of-view believed that the dimensions of the current crisis were fiscal, social, and political. Moreover, proponents of the social explanation of the urban crisis basically agreed that social problems ignored by policy makers over a period of time contributed significantly to the urban crisis that exploded during the 1960s. Although the proponents of this approach agreed on the overall cause of the crisis, they differed slightly in their explanation of the manner in which it unfolded. Two variations of this explanation emerged from the literature. One sought to explain the social aspect of the urban crisis by focusing on the impact of major demographic shifts on cities over a period of time; the second variation of this explanation sought to explain the problem by examining the impact on urban areas of the racial isolation experienced by blacks. Proponents of both explanations believed that these two factors precipitated the social aspect of the urban crisis that plagued most urban communities during the 1960s and to this day (Judd 1988: 145-
162; Howard 1978: 1-16; Savitch 1978: 118-135; Smith 1978: 16-29). Both explanations are outlined below. 53 (Demographic Explanation)
According to Dennis Judd, The Politics of American Cities, the social aspect of the urban crisis that afflicted most major American cities occurred because of the change in the social composition of central cities since the second world war (Judd 1988:145-192). Judd attributes the shift to a decrease in white population and an increase in non-white population. This movement had class significance because most of the whites moving out were middle and upper class, while the non-whites moving in were lower class (145-192). Judd further believed that the movement of blacks into the city precipitated the outmigration of whites from the cities and into the suburbs. The social consequence of this shift in population was that whites became a minority in some cities and a majority in the surrounding communities (145-
192). The economic implication associated with this type of demographic exchange between central cities and suburbs is that cities got a high proportion of poor blacks and other poor people living in metropolitan areas.
(Racial Isolation Explanation) The authors of this approach believed that the factor that contributed significantly to the social aspect of the urban crisis was the racial isolation experienced by most blacks living in central cities (Howard 1978: 1-16; Smith
1978: 16-29; Savitch 1978: 118-135). According to Howard, 54
the racial isolation experienced by blacks in central cities was precipitated in part by the severe poverty that historically afflicted has a large portion of the black community, and is perpetuated in part by institutionalized racism (1-8). Howard supports his claim of institutional
racism by pointing out the rise in anti-black attitudes by whites, and he illustrates the severity of poverty among
blacks by citing the disproportionate number of blacks who suffer chronic unemployment, are subjected to poor education, live in substandard housing, and receive poor health care. Howard further illustrates the economic plight of blacks by pointing out the small number of blacks who own and operate businesses in their communities (1-16). The significance of the racial isolation experienced by blacks living in central cities, to the social aspect of urban crisis, was that the combined problems of poverty and racism further alienated this population and eventually ignited the social protests that occurred in most urban areas during the 1960s (1-16).
Furthermore, the problems of poverty and racism eventually
locked a large segment of the black population into a permanent underclass status in some urban communities (1- 16) . As a result of this phenomenon, scholars such as Savitch have further concluded that due to the shift in income and population, cities were quickly becoming "reservations for poor and unwanted," while the suburbs were becoming a haven
for those who could afford to live in them. (Savitch 1987: 55
118-121). The implication of the racial isolation of blacks for the urban crisis is that cities would eventually end up with a large underclass population of high-cost citizens. The primary reason why the heavy concentration of poor/high- cost citizens constitutes an urban crisis, is that cities must provide services for high-cost citizens because their needs are greater than those of income producing citizens. Cities are forced to provide services for high-cost citizens because, for example, this population tends to experience severe unemployment because they lack the skills required employment for an advanced capitalist economy. As a result of the increase of high-cost citizens in central cities, some scholars have equated the relationship between cities and suburbs with that of colonalism (Savitch 1978:118-119). In essence, they believe that the shift in population and income away from cities and to the suburbs has caused cities to become colonies of their suburbs.
Although such opponents as William Julius Wilson concur that cities have experienced major social and economic changes, he strongly disagrees about the causes of the social urban crisis. According to William Julius Wilson's article "The Urban Underclass in Advanced Industrial Society," and his text The Truly Disadvantaged, the primary cause of the social urban crisis was not the major demographic changes that have afflicted urban areas or the racial isolation experienced by blacks residing in central cities, but the structural changes that occurred in the U.S. economy over a period of time. (Wilson 1987:1-170) . Wilson believes that the outmigration of industries away from central cities and the shift in the U.S. economy from a manufacturing to a tertiary base eventually led to deterioration in the quality of life for most blacks and poor people. The deterioration occurred primarily because this population lacked the necessary job/technical skills and work experience to compete effectively in an advanced capitalist economy (Peterson 1985: 129-160). Therefore, because of the lack of economic opportunity that has historically plagued this group (especially blacks), and the impact of structural changes in the economy, this group eventually found itself increasingly confined to economically depressed ghettos with very few alternatives. As a result of this phenomenon, an urban underclass population emerged. The significance of the emergence of the underclass population to the social aspect of the urban crisis is that "cities eventually end up with a large underclass population or high cost citizens"
(Peterson 1985:129-160). Wilson believes that the result of the mass migration of poor and especially blacks to central cities has been an increase in single mother families, welfare dependency, crime and violence, medical crisis and poverty (129-160; Banfield
1968:). For further elaboration on the implication 57 of Wilson's analysis, see the endnotes to this chapter. In essence, the demographic disequilibrium or the over supply of workers with limited skills and who depend for employment on industries which are declining in the national economy has created a major paradox for urban areas. For instance, as was explained in the previous chapter, the loss of income and population has created a fiscal crisis for some urbari communities because they can no longer depend upon federal programs or upon manufacturing jobs to solve the social and economic needs of their underclass citizens (Gottdiener 1985:421-422). According to the proponents of the urban crisis approach, the urban crisis is not simply a social or fiscal crisis, but a political one as well because suburban areas have increased their political strength during last twenty years. This trend has been reflected in the past two presidential elections. In fact, noted political observers such as Kevin Phillips and Ben Wattenberg believe that cities are no longer the key battleground for presidential elections; instead, the new arena is suburbia (Judd
1988:157). In other words, the political crisis has occurred because the suburbs have gained political strength. As a result of the shift in political strength, political and economic appeasement have gone to the suburbs. For further elaboration on this point see the endnotes to this chapter. 58
Proponents of the urban crisis approach believe that social, political, and fiscal dimensions of the urban crisis have produced many problems in the current urban environment which place political and fiscal constraints on the type of development policies that are carried out by cities.
Opponents such as Clark in his article, "Fiscal Strain: How Different Are Snow Belt and Sun Belt Cities?" reject the notion of an urban crisis because they believe that there is no linkage between socioeconomic characteristics and fiscal policy (Peterson 1985:253-280). Clark believes that the two are distinct because his statistical analysis indicates that "few of the socioeconomic characteristics were significantly related to any measures of fiscal policy" (257). Hence Clark concluded that socioeconomic characteristics are important, but that alone they do not determine local fiscal policies.
Moreover, he further argues that loss of population is a inefficient explanation of fiscal strain because "The evidence is weak that population loss inherently increases service costs; many variables complicate the relationship" (262). Clark further rejects the linkage between loss of population and increased fiscal strain because he believes that the strain occurs because local officials did not adapt their spending patterns to the decline in their socioeconomic base. Therefore, he believes that fiscal strain can be relieved by reducing expenditures or by improving the economic health of the community (263). The urban crisis approach has significantly improved our understanding of the complex social, political, and economic problems that have afflicted urban areas over two decades. The problem with this approach is that it simply describes how urban communities have undergone major political, social, and economic changes over time. But this type of analysis does not really address the issue of URDP. For instance, this approach does not provide a theoretical explanation or model of how urban development policy is constructed and implemented. Moreover, it fails to explain
how public and private institutions interact over economic issues in the urban development policy arena. One plausible explanation of why these kinds of concerns are absent from the literature is that the urban crisis approach has generally been dominated by sociologists and urban geographers whose research orientations and method of
explanation are usually centered around non-political variables. Thus, the different research agendas of
sociologist and urban geographers may account for the small number or lack of studies that address the kinds of concerns that have been expressed thus far.
POLITICAL ECONOMY APPROACH
The third approach that emerged from the literature
was a political economy explanation of URDP. This approach was probably precipitated in part by the shift in the 60 direction of national social policy and by the limitations of an urban crisis approach to explaining URDP. This approach derived its name from the urban policy literature that employed a political economy analysis to explain the problems of urban communities and to examine the public policies designed to address those problems^. Until recently, political economy approach was dominated by such disciplines as geography, city and regional planning, economics, and sociology. However, in the past five years, political scientists have began to assert their presence in this subfield by employing this analysis to explain urban development policy. For instance, this approach has been used by political scientists to investigate the political and economic consequences of a fiscal crisis on a city's economy. It has also been employed to examine the type of social and political constraints that a fiscal crisis can create for a city's future development policy initiatives. Moreover, this approach has been used to observe the political conflicts within cities over growth policies in order to explain the impacts of certain kinds of development policy initiatives on city residents. The political scientists who have contributed significantly to the political economy explanation of urban development policy are Martin Shefter, Paul Peterson, and Todd Swanstrom.
Peterson's approach involved the use of an economic analysis to explicate urban development policy. For instance, Peterson believes that the social and economic attractiveness of any city is an essential ingredient to maintaining its overall economic vitality (Peterson 1981:17-138). Thus, a socially and economically unattractive city will have difficulty attracting mobile wealth. Peterson further believes that some cities can overcome this problem by conducting their affairs in a business like manner (Peterson 1981:17-38). Peterson suggests that city governments can be
treated like business firms because cities and firms compete for investments. Moreover, he believes that to survive, cities must adopt policies that will increase their wealth (17-38). According to Peterson, the failure to initiate policies that enhance attractiveness will only decrease a
city's chances of attracting and sustaining mobile wealth. Martin Shefter and Todd Swanstrom contributed to this approach in the literature by examining the implications of fiscal crises and growth policies of large cities on the urban development policy process. These political scientists have explained the political role of investment in cities and have illustrated how vulnerable most large cities are to
a fiscal crisis. For instance, Martin Shefter's definitive account of New York's fiscal crisis concludes that fiscal crises are indigenous to urban communities and that they occur because of "recurrent tensions in city politics" (Shefter 1985:3-37). Shefter stated that changes in economy, demographics, and political environment trigger the recurrent tensions which produce a fiscal crisis (3-37). Shefter explained that cities try to avoid fiscal crises by pursuing policies that win votes, prevent social and political upheavals, contribute to the economic vitality of the city and generate sufficient revenues to finance city government (3-37). According to Shefter, if cities do not pursue policies which make the city attractive to investors, then cities will lose badly needed investment over time (especially if taxes increase or if the quality of public services declines) (4-5). Swanstrom, on the other hand, explored the process of urban development policy by concentrating on the phenomenon of growth politics (Swanstrom 1985:3-33). According to Swanstrom, "Growth politics are the efforts of governments to entice mobile wealth to enter their boundaries" (Swanstrom 1985:3-33). Swanstrom believes that the mobility of capital forces cities to compete in order to attract and sustain badly needed investment dollars. He noted that city officials must exercise political discretion when responding to the needs of private capital investment because failure to do so could increase political tensions over growth policies (31-33).
The political economy approach to URDP has contributed to the literature and to the subfield in two important ways.
First, Peterson's analysis of urban development policy has reestablished the importance of economic variables as decisive factor in explaining urban development policy. Peterson's emphasis on the importance of economic factors in the understanding of urban development policy is indirectly a rehash of the old community power debates (Swanstrom
1985:16-17). However, the problem with his approach is that by extolling the importance of economic variables in the understanding of this phenomena, he essentially agrees with elite theorists that economics is the decisive factor and that politics do not really matter. This point can be substantiated from The Crisis of Growth Politics, where
Swanstrom argues that "Peterson's market theory deliberately ignores those internal power struggles, viewing cities, like private corporations, as essentially market entities, with rational policies dictated by market pressures" (16).
Swanstrom appears to be indicating, that Peterson has ignored that politics in fact do matter in this area. Second, Swanstrom and Shefter have enhanced the discipline's understanding of the causes and impacts of a fiscal crisis; however, both authors have failed to establish in their research a definitive account of the linkage between political problems and economic crisises. The limitations of all the literature will be identified next. 64 Limitations of Current Literature
First, missing from the urban development policy literature is an explanation and conceptual model of how the urban redevelopment policy process works. A conceptual model is necessary for the subfield and discipline now because the issues and problems are complex. Moreover, the type of models (e.g., elite and pluralist) presented in the past are simply outdated and cannot address the complex development problems in urban communities over the past two decades. Second, another concern missing from the literature is the identification of the development policy styles employed by local regimes to stimulate growth and development. The reader will recall that a brief explanation of a heuristic approach to identifying a regime's development policy styles was presented in the previous chapter. The styles presented earlier were the market and neo-market based approaches to development. These approaches illustrate how the literature has failed to define the type of development policy styles that are being employed by local regimes to revitalize their local economies. A classification of local regimes' development policy styles is essential to the progress of the subfield now because it could serve as a valuable research tool for properly identifying or possibly predicting the type of development policy style that is being advanced or implemented by a particular regime type. For instance, if one is studying a privatist regime, then one might expect to find that regime advancing a market based approach to development. This is so because generally speaking a conservative or privatist regime might be more inclined because of its conservative political attitudes to adopt a conservative or market based approach to development. Thus, a method that correctly identifies a regimes's development style could enhance the subfield's ability to better assess a regime's performance in this area and to ascertain the effectiveness of a particular regime's development policy approach. For further explanation of the Market and Neo Market approaches to URDP see chapter three. Third, additional concerns that are missing from the literature are explanations of how the political and economic attitudes of regimes shape their urban development policy selections; of how a regime's attitudes influence their interactions with the institutions responsible for executing urban development policies; of how and why regimes vary from city to city; of whether a local regime is private or public directed. Perhaps these concerns have not be addressed in the literature thus far because urban redevelopment policy is still an emerging subfield in which political scientists only recently have begun to conduct research. In this field untiO. recently dominated by economics, geography, sociology, and city and regional planning, the focus of explanation of urban development policy has generally been on non-political variables. Given the scarity of current literature written by political scientist on urban redevelopment policy the investigator is advancing beyond traditional political science. Relevant literature from other disciplines will be employed to enhance the analysis and bridge the gap between political science and other literature. The author intends to explore and discuss this issue by combining a multidisciplinary approach with a political science perspective to urban development policy. This kind of approach is feasible at this time because should political scientists continue to isolate themselves from this subfield, they run the risk of eliminating themselves from contributing to this important field of knowledge. In the context of these studies several working hypotheses will emerge along with an URDP model in the next chapter to help guide the direction of research. This study will focus on the examination of regime performance and the redevelopment efforts of four cities. 67
ENDNOTES
1. Another plausible explanation of why cities were no longer perceived as the political battleground especially in national elections was that some cities were losing population and their annexation movement had slowed. In other words, "A suburban noose was tightening around the industrial cities, limiting their spatial growth and drawing from them a disproportionate share of affluent people" (Judd 1988: 145- 192) . The reduction in population was important because it automatically led to a reduction in state and federal political representatives. The political implication of the slowed annexation movement and loss of population was a steady erosion of city's political influence in national elections.
2. Another factor that may have led to a growth in suburban political strength and to a decrease in city political strength was the unraveling of FDR's New Deal Political Coalition (blacks, Jews, labor, liberals, Catholics and Southern Democrats). In other words, due to emerging and different political agendas, groups that had historically voted for the Democratic Party and had been its political backbone in the past, now found themselves increasingly at odds over the direction of important social policy (e.g., blacks and Jews over affirmative action; blacks and labor over affirmative action; liberals and Catholics over birth control and abortion; blacks and Southern Democrats over civil rights and integration). Moreover, because a sizeable portion of this coalition (with the exception of blacks) were now located in the suburbs, their political interest in and obligation to a bygone political era changed. As a result of this change in political commitment, suburban political influence was strengthened.
3. One implication of Wilson's analysis of the urban underclass is that his description of this population and its impact on urban communities indirectly reinforces the conclusion reached by Banfield twenty one years ago in his classic text Unheavenlv Citv (Banfield 1968:). The reason why Wilson's analysis can be perceived by some as indirectly supporting Banfield's position and conservative social/urban policy, is that his deemphasis on the significance of race as a factor in explaining the plight of the urban poor 68 (especially blacks) in his text The Declining Significance of Race, has led some urban scholars to conclude that Wilson's position simply strenghted the conservative social policy agenda and weakened the liberal argument by eliminating the importance of race as a contributing factor to the rise of the urban underclass phenomenon (Lowi 1988:852-858). The long- term implication of Wilson's analysis, according to his critics, is that when race is deemphasized as a factor in contributing to the rise of an urban underclass phenomenon, one cannot help but conclude that this narrow approach appears to be grounded in a "blame the victim" analogy (Willie 1988:865-874). If one reads Wilson's text, one cannot help but agree with Banfield and conservatives that it is impossible to improve the social and economic conditions of the poor through the use of public policy. CHAPTER III RESEARCH DESIGN
The plan of study in this dissertation consists of the model, the working hypothesis, and the operationalization of the variables. Moreover, the study should generate data that explain how the development policies of regimes vary from city to city; how the political and economic attitudes of regimes shape their urban development policy selections; how regimes' attitudes influence their interactions with the institutions responsible for executing urban development policies; and how circumstances cause a regime's urban redevelopment policy to succeed or falter. This model gathers information to explain factors that either enhance or
diminish the effectiveness of a particular development policy.
(A) MODEL The Urban Development Policy Model (UDPM) is presented
in three parts. The first part briefly explains the variable
clusters and illustrates the simplified and expanded versions of the UDPM. The second part focuses on the linkages between variables clusters and their potential influences on the
69 70 outcome. The final portion briefly explains the assumptions behind the model.
(Explanations and Illustrations) The proposed model contains four variable clusters: two contextual variables clusters, which are the demographic and environmental factors and urban economy; one independent variable cluster, the political variable; and one dependent variable cluster, development policy choice. See Figures 1 and 2 for illustrations of the model. 71
Contextual Variables
DEMOGRAPHIC & ENVIRONMENTAL FACTORS < —
Independent Variable
Dependent POLITICAL Variable VARIABLE URBAN r> DEVELOPMENT ECONOMY POLICY CHOICE
Figure l
Simplified Version of UDPM 72
Demographic & Environmental Factors
Demographic 1.Racial Composition 2.Education Levels 3.Crime Rate
Environmenta1 1.Research Institutions 2. Territorial Groups 3. Business Groups 4. Labor Groups
Political Variable Regime Type 1. Composition of Regime 2. Attitudes of local regime
City Structure Development Policy Choice 1. Attitudes of local officials Development 2. Administrative Policy strategy etting
URBAN ECONOMY 1. Type of Economy 2. Unemployment Rates
Figure 2 Expanded Version of UDPM Model 73
(Linkages) Incorporating the four clusters into the urban development model illustrates the possible connections between the variables and their potential influence on urban development policy. The demographics/environmental factors can directly influence the regime type and the urban economy. Regime type can directly affect the development policy choice. The urban economy can directly shape the demographic/environmental factors and influence the regime. It can also indirectly affect the development policy choice through the regime. The development policy choice can directly affect the urban economy. Thus, this model assumes that development policy choices initially and by themselves will not only impact the local urban economy, but also will ultimately play a major role in shaping future quality of life in any city . Because of the limited scope of this research an impact evaluation analysis will not be a part of this project. (Underlying Assumptions) The UDPM has two underlying assumptions. The primary assumption is that urban development policy choices are shaped by the regime type's political/economic orientation and by the market conditions of the community. The secondary assumption is that the demographic and environmental features of a particular area can place constraints on the type of 74 developmental policy initiatives that a regime can adopt. For instance, if an area has a high unemployment rate, a high crime rate, and a sizeable black or minority population that is poor, then the regime will have to take these factors into account when crafting its policy or it could create additional political tensions for the city. Regimes adopt development policy strategies depending upon their political and economic orientations. For instance, a privatist regime might be inclined to pursue a market based approach (MBA) to urban development because this particular strategy is consistent with a privatist regime's conservative approach to urban development. On the other hand, a fusion regime might be inclinded to pursue a neo market approach (NMA) to development because this strategy is consistent with its moderate approach to development. Whatever approach a regime adopts, its policy choice is shaped by economic conditions and by its interaction with private investors who have capital inducements needs.
Explanation of Market and Neo Market Approaches (MBA) The market based approach (MBA) to development is deeply rooted in the notion that market, not government, should function as the primary vehicle for distributing society's scarce resources (Hula 1988:1-3). According to noted political scientist Charles Lindblom, in Politics and 75 Market. U.S. business, not government, has historically beon the dominant force in the market economy. Lindblom maintains that the primary reason why business has played such a decisive role in the market place is that business exercises its authority in the market by employing individuals and provide revenue for government (Lindblom 1977:17-200) . Hence, he believes that business has an unfair advantage in this area (17-200). One plausible expalanation why some policy makers may elect to promote a MBA to development is that the U.S. in general relies more extensively on the market to
stimulate growth than does any other Western European democracy, because of its deeply rooted belief in the supremacy of the market and the emergence of big business first on the American political landscape and big government later (McCraw 1984:33-52).
Secondly, according to Hula the policy literature has failed to provide a concise explanation of what actually constitutes an MBA to development (Hula 1988:7-8). He believes that the primary reason why a clear definition of MBA has not emerged from the literature, is that the investigative research in this area has generally concerned only privatization of some public services, incentive programs and market analogs (For further illustration of a market analog see endnote 1). In essence, one could define an MBA in its purest form as a conservative approach to urban development policy, that 76 subscribes to the belief that market forces alone, and not government manipulation of the economy are the most effective device for stimulating growth. Moreover, in the absence of a clear definition of an MBA approach, the author has come up with a partial solution to the definitional confusion. An heuristic measurement scale that attempts to identify those factors that comprise MBA to urban development has been developed for use in this study. For further illustration and explanation of the measurement scale, see Figure 3 on the next page. 77
M- i i f TEC P TA R&DMA UFF EZ L VC RZ IBFH IF DFLEDCIX FTZ ITP TEE GOB LCL TEI
FIGURE 3 MARKET BASED APPROACH SCALE
Key for Scale Items: L=Low, M=Medium and H=High TA - Tax Abatement. R&D - Research and Development Support. VC - Venture Capital support. EZ - Enterprise Zones. TEC - Tax Exemption on Capital Improvement. MA - Marketing Assistance. IBF - Industrial Bond Financing. RZ - Relaxation of Zoning/Landuse Policy. IF - Imapct Fees. P - Privatization. LED - Liberal Use of Eminent Domain Powers. UFF - Use of Federal Funds to Stimulate Major Urban Development Projects. LCL - Low Cost Loans to Business. CIX - Corporate Income Tax Exemption. DF - Developer Financing. FTZ - Establishment of Federal Trade Zones. GOB - Use of General Obligation Bonds for Industrial Development Financing. ITP - Use of State/Local Supported Training of Industrial Employees. TEE - Tax Exemption on or moratorium on New Equipment. TEI - Tax Exemption on Manufacturer's Inventory. Figure 3 is the MBA, and it depicts different
abbreviated types of initatives that one would expect to find under a MBA to urban development. The scale has three possible variations : L=Low, M=Medium and H=High. The low, medium, and high variations, simply mean that a specific strategy is more likely to receive a higher, medium, or lower priority ranking under a particular approach to urban development. This means that an MBA is more likely to employ tax abatement as a vehicle for stimulating investment more frequently than would a neo market approach because this type of incentive and those ranked in the high section of the scale are consistent with a conservative approach to development. Hence, tax abatement will be ranked higher on the MBA scale. For further elaboration on the rationale for construction of scale and on such items as tax abatement and impact fees, please see endnotes 3, 4, and 5. Although the two approaches are different in scope, some fiscal initatives will appear on both scales, because there are some core strategies or initativess that all cities employ to attract private capital investment. Before discussing the Neo-Market approach, the author wishes to remind the reader that the scale is huristic. Furthermore, the type and ranking of each initative depend upon which approach is being employed, and on the political and socioeconomic conditions of a particular 79 (NMA) The NMA is a huristic attempt by the author to identify an alternative approach to the MBA. The idea for this approach was derived from the following sources: first, the ideal to develop an alternative to the MBA, stemmed from the author's belief that cities are different in terms of their political/leadership styles and economic conditions. Therefore, given their apparent differences, the author concluded that their approaches to development must also be different. This assumption was subsequently supported over a period of time through personal telephone conversations with such noted urban development academicians as Susan Clarke, Todd Swanstrom, Stephen Elkins and Dennis Judd, who concurred with the author that some cities were not employing a market based approach to development (Phone Interviews with Clarke et al.). For listing of phone interviews see list of phone interviews in reference section. Second, the NMA was indirectly inspired by some of the same literature that was used to construct the MBA (Reese 1988; Rubin et al. 1987;
Dalenberg et al. 1988). In essence, with the exception of telephone conversations with urban scholars, and with the help of limited amount of printed materials, the author takes full responsibility for the construction and development of NMA.
The NMA as an approach is rooted in the belief that the market is imperfect and subject to failure (Hula 1988:3-4). 80 An excellent example of market failure was the Great Depression (3-4). Therefore, because of market imperfections, political action may be required to resolve problems resulting from market failures (6-7). NMA in its purest form is basically a moderate approach which recognizes that market forces alone cannot serve as the decisive factor in the urban development arena. Moreover, this approach believes that if major urban development issues are left to be resolved by the private sector, then those issues may not be addressed in a timely manner, because the market may rule out economic solutions because of the risk factors involved. Thus, when the market is unable or unwilling to respond effectively, this approach assumes that political action may be needed to stimulate development. The NMA is illustrated below by Figure 4, the NMA measurement scale.
M: EZ TEE P MA R&D IBF TEI LCL DF VC L GOB ITP IF H TA RZ FTZ TEC LED CIX UFF
FIGURE 4 NEO MARKET APPROACH
The NMA is explained in the same manner as the MBA 81 (i.e., the range of variations on the scale are the sane).
Again, the types of incentives and or strategies are sinilar; the only difference between this approach and MBA is that because of the noderate attitude of the regime, a NMA night rank its development incentive priorities differently. For example, a NMA nay elect to rank a venture capital program higher than, for example, tax abatement, because it nay believe that the creation of a venture capital loan program
in the long run may produce a more diversified economy and lead to a stimulation of increased high tech and other service oriented investment activity. Once again, the rankings that are decided by the NMA or MBA are determined eventually by the city’s political and socioeconomic
conditions. Moreover, due to the newness of this conceptual framework, the author's arrangement of the different kinds of fiscal incentives on the NMA scale are basically result
of the author's own personal judgement and perception of where he believes a NMA would ranked the different incentives.
By focusing on the effect of the contextual variables in the model on the independent variable, of the independent variable on the dependent variable, and when integrated with the working hypotheses (below), the model could prove useful
in generating the necessary data that explains why urban development policies vary from city to city. 82
(B> Working Hypotheses The model of analysis was conceived out of several working hypotheses concerning how the political and economic attitudes of regimes shape their urban development policy selections and influence their interactions with the institutions responsible for executing urban development policies. As specified in the model, the data that will be collected should help to support or refute the preliminary hypotheses. The working hypotheses that will guide the direction of the research are presented below: Hypothesis 1
If a city has a privatist regime, then that city will employ a market based approach to urban development. Hypothesis 2 If a city has a fusion regime, then that city will pursue a neo market approach to urban development. Hypothesis 3
If the local regime is dominated by the private sector, then the administrative office responsible for implementing economic development policy will take a passive role in the formation of local development policy.
Hypothesis 4 If the local regime is dominated by the public sector, then the administrative office responsible for implementing economic development policy will take an aggressive role in 83 the formation of local development policy.
(C) Operationalization of Variables
As was explained in section A, the four cluster variables are the demographics/environmental factors, the political variable, the urban economy, and the development policy choice. Each variable cluster is comprised of different groupings themselves composed of several different variables which will be used as part of the operationalization procedure. Thus, this procedure both measures and identifies the variables observed. Contextual variables are not the primary focus of this discussion. The individual groupings along with their variables that will be used as part of the operationalization process are: The demographic and environmental constraints are those which affect the climate in which regime policy choices and the economy operate. The groupings along with their variables that comprise the demographic/environment are:
A. Demographics. Included under this heading are racial composition, education levels, and crime rate. 1. The variable to be observed in this study in order to explain the significance of an area's racial composition to the aforementioned concerns, is the percentage of minorities in a particular city. That information will be obtained from government statistics. 84 2. Educational levels refers to the overall educational level of a given area. The variable to be observed to determine the effect of education on the type of economy that exists in the area is the percentage of high school graduates. Information about the percentage of high school graduates in a particular area will be obtained from government statistics. 3. Crime rate refers to the city's overall crime rate and its effect on the type of urban development policies pursued by the local regime. The variable to be observed to determine the effect of crime on the previously mentioned concern is the percentage of crimes committed against business in a particular city (for further elaboration on the reason why this particular crime was selected see endnote 6) . The information also will be obtained from government statistics.
B. Environmental Factors. Included under this heading are research institutions, territorial groups, business groups, and labor groups.
1. Research institution refers to the number of research institutions in an area that are able to provide technical assistance to high tech companies that may decide to locate there. The variable that will be used to explain the significance of research institution within a particular area on a local regime's development policy choice, is the number and prestige of research institutions in a given city. 85 Information to assess the percentage of research institutions will be obtained from government statistics.
2. Territorial groups refers to the number and types of neighborhood/community based development groups in a particular city. Information about the number and type of neighborhood /community based development groups will be obtained from primary and secondary sources. 3. Business groups refers to the number and types of business and high tech civic groups in a particular city.
Information about their number and type will be obtained from government statistics and institutional records. 4. Labor groups refers to the level of unionization in a particular city. Information about the level of unionization will be obtained from government statistics. Urban economy refers to the economic conditions of each urban area. It also refers to the local economy's effect on private investment and the regime's development policy selection. The factors and variables to be observed in order to describe the economic conditions of a particular urban area that could directly effect investment and the regime's development policy choice selection are: 1. Type of economy refers to whether the local economy of a particular city is secondary (i.e., manufacturing) or tertiary (i.e., service and high tech) based. The variable to be used to ascertain the type of local economy is the percentage of the city's population employed in a particular 86 sector of the economy. 2. Unemployment rate refers to the unemployment level for each city. The variable to be observed is the percentage of unemployed persons in a particular city. Information about the urban economy and unemployment rates will be obtained from governmental statistics and local published reports. Political variable Refers to the political constraints * in an urban area that help to shape the investment climate and development policy selection. The groupings along with their variables that comprise the political environment are: A. Regime Type refers to the type of regime in power along with the political constraints in the environment that help shape its developmental policy selection. The groupings along with their variables that comprise the regime types are:
1. Composition refers the configuration of the local regime. The intent here is to determine the makeup of regime, and to ascertain whether the regime is privately or publicly directed. The variable to be observed in order to ascertain whether the regime is publicly or privately directed is the percentage of major development projects that are initiated by the public or private sector.
2. Attitudes of regime type refers to the political and economic attitudes of the local regime towards urban development policy. The variable to be observed in this study in order to explain a particular city's receptivity to a 87 particular development approach is the local regime's policy pronouncements on private investment expansion as communicated through media campaigns. Information on the composition and attitudes of regime types will be ascertained by personal interviews with public officials and business leaders. Additional information on
the attitudes of regimes will be obtained from press statements and official reports. B. City Structure refers to the type of government that exists and the individual city's receptivity to a particular development strategy. 1. Attitudes of local officials refers to the political
and economic attiudes of city bureaucratic officials towards urban development policy. The variable to be observed in this study to explain city bureaucratic official's receptivity to
a particular development approach, are the views of local officials on development policy. Information on the political and economic development attitudes of the officials will be obtained by personal interviews.
2. Administrative setting refers to the working relationship between the coordinator or administrator of a
local economic development office or corporation and the urban bureaucracy and regime. It is important to ascertain whether conflicting goals exist between the development office /corporation and the city bureaucracy and regime, because this will influence the effectiveness of the policy. 88 The variable that will be used to observe and possibly explain the working relationship between these units and the development office or corporation are the attitudes of local officials. Information for the administrative setting will be ascertained primarily through personal interviews with urban officials, personnel of the development office or
corporation and community leaders from the public at large. Development policy choice refers basically to the city's development approach. The grouping along with its variables that comprise the development policy choice is: A. Development policy strategy refers to the type of urban development approach (i.e., market based or neo market) employed by the city to attract investment. The variables to be observed to ascertain the type of development policy strategy adopted by a particular city are: the type of development initiatives and programs pursued by the
economic development office or corporation to attract private
capital investment.
Information on the urban development policy strategies will be obtained primarily through institutional records, personal interviews with local officials and community representatives outside of government.
Incorporating the aforementioned operationalized variables in the model should allow the proposed urban development model to provide information that could explain 89 why elected officials elect to adopt one particular approach over another. Furthermore, the model could serve as a comparative framework for future inquirers by generating initial data to prompt further research in this area so that important issues could be addressed - such as why a policy is successful in one area but not in another.
(D) Methodology The study will concentrate primarily on St. Louis,
Missouri; Richmond, Virginia; Baltimore, Maryland; and Columbus, Ohio. These four cities have been selected because their geographic mix will provide a potentially large amount of descriptive data that will generate information for a comparative exploratory study. Three of the cities were chosen because of their large heterogenous population. For example: 55% of Baltimore's population is minority; 52% of Richmond's population is minority; 4 6% of St. Louis's is minority (Census of Population 1960-80). Columbus was selected because it has a substantial minority population (20%) and because it is a convenient and noted test site in the United States (Census of Population 1960-80). Because of the loss of jobs and revenue in their secondary sector, these cities are attempting to transform their economic bases from secondary based economies to tertiary or quaternary economies. These cities were also selected because of their 90 differences and similarities in political structure. For example, St. Louis and Baltimore both have a strong mayor city council form of government controlled by Democrats. Columbus is a weak mayor city council form of government whose council is controlled by Democrats and whose mayor is Republican. Richmond represents a city manager council form of government elected on a non-partisan basis (DeSantis 1988:197-330).
By selecting cities with similarities and differences, the author will attempt to explain why regime styles and urban development policies vary across communities. The proposed study will be an exploratory comparative analysis with a historical perspective. Both primary and secondary methods will be used in gathering data. The primary methods will consist of at least one field visit to all of
the cities, semi-structured interviews, institutional records
and government statistics. The secondary methods will include primarily information from pamphlets, newsletters and brochures. Additionally, secondary methods will include informal discussions with formal and informal representatives
from professional and community-based organizations (e.g., neighborhood development groups) business groups and noted urban academician scholars. Moreover, the information obtained from this study will respond to the larger question at hand: How have the attitudes of regimes shaped their urban development policy selections and how have their political 91 and economic attitudes influenced their interactions with the institutions responsible for executing urban development policies? In addition to examining the larger question, this research will pose these questions in order to explain the significance of regimes in the crafting of urban development policy: (1) What is the composition of the local regime? Is the leadership of the regime dominated by private or public officials?
(2) What type of development initiatives are at or near the top of local regime's political/economic agenda? (3) Does the local regime rely solely on the market or does it use public authority and resources to stimulate urban development projects? (4) Who is responsible for initiating and implementing economic development policy in the city? Is the organization quasi-independent? Do the policies reflect the needs of total community or a small segment of the city?
(5) How do the demographic and environmental features
of a city indirectly influence the type of developmental policy inititatives that are advanced by the local regime?
These types of questions in the study are intended to elicit responses that could prove useful to local officials by assisting them in better understanding the current development strategies that they are pursuing. For further elaboration of the type of questions that will be used in the field research, see Appendix B. 93
ENDNOTES
1. An example of a market analog is a situation in which the public sector uses the private sector to develop and implement a job training program (Hula 1988: 7-8). 2. The market based approach/scale to urban development was inspired by and derived from an article by Paul Peretz entitled "The Market For Industry: Where Angels Fear To Tread?" and by a book that was edited by Richard C. Hula entitled Market Based Public Policy (Hula 1988:7-16; Peretz 1986:624-633). Peretz and Hula's works provided a framework for the development of measurement scale because their research was one of the early political science/policy articles to explore and apply the concept of a market based approach to local development. Peretz's research and other authors works on the different types of fiscal incentives, employed by local government to improve their local economies, provided the idea for the type of items that were used to construct the scale (Harrison et al. 1978; Malecki 1986; Mandelker et al. 1980; Peretz 1986; Pomp et al. 1980; Reese 1988; Rubin et al. 1987; Wassail et al. 1985; Wolkoff 1983;) .
3. The rationale behind the construction of heuristic scale can best be explicated in this fashion: Firstly, the rationale for constructing the scale was two fold: (l) Based upon the urban development policy and state/local finance literature on the use of fiscal incentives by cities to attract private capital investment, the author attempted to provide a conceptual illustration of what a MBA might look like. The intent behind conceptual framework was to enable the author to visually display an important theorectical concept and devise a partial method for assisting future researchers in ascertaining how one could determine (i.e., based on the scale) if a particular city was in fact using an MBA to development. (2) The items that were used to construct the scale were selected primarily from the urban development policy and state\local finance literature on the type of fiscal incentives that are currently being used by local governments to attract and retain private capital investment. Secondly, the primary reason why fiscal incentives such as 94
tax abatement, enterprize zones, industrial bond financing, corporate income tax exemption and general obligation bonds were placed at the upper end of the scale or prioritized higher on the MBA scale than venture captial support programs or impact fees, is because: (1) according to most state\local finance literature on this subject, such as fiscal incentives and tax abatement or enterprize zones, are perceived by academcians to be consistent with a conservative orientation towards development (Harrison et al. 1978:424; Wassail et al. 1985; Hula 1988:7-16; Peretz 1986:624-633). In other words, the use of these kinds of incentives do require an increase in government expenditure, which in turn appeals to the conservative's narrow perception on the role of government in the market place. Another reason why these items were arranaged in the order that they are presented, is because incentives like tax abatement and enterprize zones are perceived by policy makers as not being politically risky or costly to the taxpayers. Therefore, from the policy makers point-of-view, granting tax abatement or using enterprize zones to stimulate development does not require the raising of taxes or shifting of public funds to cover the costs: whereas an establishment of a venture capital support program might necessiate a tax hike or involve the shifting of public funds to cover the start up costs of this type of program. In other words, programs that involve substantial start up costs, could prove to be politically dangerous for some local officials in the long run. Furthermore, an incentive such as impact fees would not be ranked high on an MBA scale because an MBA would pereceive the use of impact fees as potentially retarding growth and development. The reason why use of impact fees are perceived by developers and pro-growth forces as potentially being a hinderance to development, is because they believe that use of these kinds fees will only increase costs for consumers, which in turn will slow development. Therefore, most market based orientations would reject those programs that are perceived to have a negative effect on growth and development (Wassail et al. 1985; Bandy 1987; Dalenberg et al. 1988). In essence, given the conservative nature behind the MBA one would hardly expect to find impact fees, venture capital support programs and other items that require substantial investment of public dollars or which have the perception of retarding development to be ranked high under this type of approach. Thirdly, another reason why the items were place in the order in which they appear on the scale, is because due to the newness in this approach the author is relying to a large degree on a "judgement call".
4. There are several plausible reasons why governments grant tax abatements and why businesses seek them. 95
Government A fundamental premise behind the logic of tax abatement is the perception by state and local officials that this incentive influences business location decisions. Given this perception, there are at least eight reasons why state and local officials use abatement as a fiscal incentive: a. Supporters of this policy tend to view tax abatement as a means of increasing capital investment to their area, in order to offset decline in their particular community (Swanstrom 1985:149-150). b. Tax abatement is viewed as a means of rejuvenating a battered economy (136-150). c. Officials in the snowbelt states interpret tax abatement as a vehicle to reduce the flight of business from their borders to the emerging sunbelt region (Harrison et al. 1978:424; Swanstrom 1985:148-150). d. Michael Wolkoff, in his article, "The Nature of Property Tax Abatement Awards," argues that tax abatements "are attractive because they are one of the few options available that seem to encourage economic development, and that can be applied to every applicant firm" (Wolkoff 1983:78-79). e. Politicians find tax abatement appealing as a political issue because it can be easily exploited for personal gain in the political arena. For instance, a local "pol" could exploit a community's fear of further economic decline by promoting a policy of tax abatement as a means of maintaining economy stability and thus creating jobs in the long run. Moreover, he or she could further exploit the community's fears by indicating that this type of policy is vital to the city's growth and if not adopted the city would continue to deteriorate (78-79). f. A relatively new reason/explanation for the use of tax abatement by states and localities is the comparison of incentives to the arms race model (Peretz 1986:625-630). Paul Peretz argues that "states and localities are forced into matching and or beating incentives provided by other states and localities, because of their inability to act collectively" (625-63 0). In essence, he suggests that states and localities perceive that failure to act could result in loss of business and industries to nearby states (625-630). 96 Business
Businesses seek tax abatement for these reasons: a. Mandleker et al., in Reviving Cities With Tax Abatement (a study of St. Louis, Missouri) , indicates that those companies or firms which seek property tax abatement do so in situations where they are trying to determine the optimum location (Mandleker et al 1980:32). b. Firms or companies seek abatement in situations where there appears to be a substantial financial risk for a company in proceeding with a new investment project. This pattern is generally noticeable if a firm is planning to expand or invest a portion of its operations in a declining area or an area that is in transition (i.e., from deterioration to revitalization). In other words, if the company perceives that its costs are too great, then it will apply for abatement, contending to local officials that without abatement, their expansion or relocation to that specific area will not occur; hence, a potential loss of revenue and or jobs is implied. In situations where local officials, especially those in declining areas, are confronted with the threat or prospect of a loss of potential revenues and or jobs for their respective city, they will generally give in to the pressure and grant the abatement request (Brazer 1982:285). c. Tax abatement by its very nature is appealing to investors and businesses because it "reduces the price of capital for investing firms by excluding a portion of new investment from taxation for a period of time" (285),
States and localities provide fiscal incentives such as tax abatement to induce economic development and to encourage specific types of development at specific locations. Governments also provide it to prevent adjacent or nearby states from "pirating" their businesses, which in turn prevents the loss of jobs. On the other hand, states and local units do in fact steal jobs from other states and localities by granting tax abatements. Businesses exploit tax abatements as a means of reducing the costs in a specific locale.
5. According to Dalenberg et al., impact fees are used by local government as a means of investing in and maintaining their physical infrastructure. The reason why the use of impact fees for the purpose of investing in the physical infrastructure is relevant to the development scale, is that several studies conducted on the location decisions of high tech firms and other tertiary industries have clearly indicated that these types of firms prefer to locate in areas 97 with good public services (Dalenberg et al. 1988:1-4) . Public infrastructure investment is also a key ingredient to the future economic growth of a particular area, because it enhances a community's attractiveness to companies and it stimulates private investment (1-4). Moreover, "Studies show that specific types of infrastructure, such as transportation and communications, have a larger effect on economic growth than do other types of infrastructure " (2) . 6. Although, crimes comitted against individuals, such as muggings, rapes, robbery or assults are important, the author elected to focus on crimes committed against business. This position can be substantiated because according to a phone interview with a staff member of the Columbus Chamber of Commerce, the one particular crime that appears to concerns most businesses moving into an area are those committed against business (Phone interview with Doug Davidson 1989). 98
LISTS OF PHONE INTERVIEWS
Clarke, Dr. Susan, Professor, Associate Director of the Center for Public Policy Research the University of Colorado at Boulder, Boulder, Colorado. 10 August 1988. Davidson, Doug, Regional Development Divison, Columbus Chamber of Commerce, Columbus, Ohio. 8 February 1989.
Elkins, Dr. Stephen L., Professor, Department of Government and Politics at the University of Maryland at College Park, College Park, Maryland. 20 July 1989. Judd, Dennis R. , Professor, chair Department of Political Science University of Missouri at St. Louis, St. Louis Missouri. 15 August 1989. Swanstrom, Todd, Assistant Professor in the Rockefeller College of Public Affairs and Policy at the State University of New York at Albany, Albany, New York. 24 March 1988. CHAPTER IV INTRODUCTION
The purpose of this chapter is to provide profiles of Baltimore, HD; Columbus, OH; Richmond, VA; and St. Louis, HO. The profiles of the four cities consist of, first, a brief demographic, economic, and political "snap shot" of each city in order to supply background detail on each city so that the reader can better understand how demographic and environmental features of a city indirectly influence the type of developmental policy initiatives that are advanced by the local regimes. Second, the reader will recall that an urban development policy model was presented in the previous chapter, and that several variables along with their linkages were operationalized and discussed. Some of the variable clusters introduced earlier are employed in this chapter to produce the data for the profile of each city. The variable clusters along with their specific subgroupings used in producing data for the profiles are:
99 100 (1) Demographic and environmental. The variables are: racial composition, educational levels, research institutions, territorial groups, labor and business groups, and crime rate. (2) Urban economy data include employment by major industry and unemployment rates. (3) Political variable. The specific subgrouping employed under this heading is administrative setting. The rationale for using these specific subgroupings is that they establish the relevancy of all the statistics presented in the case studies, and they serve as a backdrop for the analysis of the four city’s regime types and development policy strategies.
Profile of Four Cities
(A) Columbus Demographic and Social Change
Columbus was incorporated in 1812 to serve as the political capital of Ohio because of its location in the middle of the state. By 1950, Columbus was a city of 50 square miles; today it spans 189 square miles (Columbus Factpack 1987:27). Columbus has grown so rapidly in the past
25 years because of an aggressive annexation policy, which has redefined its political boundaries, led to the expansion of its service economy base, and contributed to its increased 101 population (Habig Interview 1989). The median age of the population of Columbus is 27 (Columbus Factpack 1987:20). Columbus has a total population of 564,871, of which 81% is white and 19% is non-white; blacks comprise over 90% of the non-white population (Brady
Interview 1987; Columbus Factpack 1987:19). Since 1960, the city's the minority population has grown from 16% to 24 %. For further illustration of the racial makeup of Columbus, see Figure 5 on the next page, which illustrates the growth in minority population and the decline in non minority population over a twenty year period. 102
WHITE 135DI ktt>4666d NONWHtTE
1670
198D
T i T 2a 40 60 60 100
PERCENTAGES
Source: U.S. Bureau of the Census, Census of Population: Characteristics of the Population, 1960-80. Figure 5 % Of Nonwhites In Total Population For City Of Columbus From 1960-80. 103
The older sections of the city continue to experience an outmigration of middle income citizens. But the northeast and northwest areas of the city continue to attract a steady
flow of middle income residential growth because they are perceived by prospective residents to have excellent schools and safe neighborhoods.
Income. Education and Employment The median family incomes for whites and blacks in Columbus are $21,613 and $14,178, respectively (Carson Interview 1987). Although, both the median family incomes for whites and blacks in Columbus are below the national averages of $24,166 (whites) and $15,684 (blacks) one could still infer that Columbus is perceived by outsiders as being a middle-class community (Carson Interview 1987). The middle income image is an important asset for any city because it
indicates to potential investors that the area can support economic activities and that investment in the city can bring a favorable return. In other words, the middle class image enhances the city's ability to attract and retain businesses. The median school years completed by Columbus residents is 12.5 years, the percent of high school graduates is 68.9%, and the percent of college graduates for the city is 18.6 (Columbus Factpack 1987: 20). Although the Columbus school 104 system continues to shrink, the system is quickly becoming predominantly black. Blacks constitute 47.6 % of the school enrollment (Columbus Dispatch 1989: Bl) but only 23% of the total population. The irony of this situation is that the school system happens to be in one of the fastest growing cities in the Midwest. One explanation of the increase in black enrollment is that the city has fewer white students in its district (Bl) . The reason for the decline in white enrollment in the Columbus school system is that whites along with some middle class blacks have lost confidence in the ability of the Columbus school system to educate their children. The public’s lack of confidence perpetuate the myth that the public school system produces an inferior product. If a school system is perceived in this manner, then prospective private investors will equate the overall quality of the workforce with the school's reputation. A negative image held over a period of time could precipitate declining investment for that city.
Columbus houses 12 colleges (one is a major research institution, The Ohio State University), four business and technical colleges, and the world's largest independent * research organization, Battelle (Carson Interview 1987; Columbus Factpact 1987:38-40).
The three primary areas of employment for residents of Columbus are in the service, manufacturing, and wholesale/retail sectors of the local economy. Figure 6 on the next page illustrates the percentage of city's population employed in non-manufacturing jobs and manufacturing related jobs over a twenty year period. 106
33 ' / / / / / >
I 1 I I I I cons mah wnr pm pub s e w
IMJUSTHIES
Source: U.S. Bureau of Census, Census of Population, 1960, 1970 and 1980, General Social and Economic Characteristics Figure 6 City Of Columbus % Of Population Employed In Key Industries From 1960-80 Figure 6 continued.
Key: CONS= Construction Industry MAN= Manufacturing Industry WRT= Wholesale and Retail Industry FNR= Finance, Insurance and Real Estate Industries PUB= Public Administration SERV= Service Industry Note; According to U.S. Bureau of Census, Census of Population, General Social and Economic Characteristics, the Service Industry includes the following areas of the economy: business service, repair service, private households,entertainment and recreation services, hospitals, health services, elementary and secondary schools, colleges, social services, religious, legal, engineering, and other professional services. 108
Figure 6 indicates that although manufacturing has never been a dominant employer in Columbus the city has lost some of its manufacturing base during this period. In fact, the number of persons employed in manufacturing dropped from 25% in 1960 to roughly 16% in 1980. The service sector is presently the largest employer in Columbus; thirty percent of the population is employed in the service sector. Other areas of the local economy that have provided a stable source of employment over this period are the wholesale and retail industries and the finance, insurance, and real estate industries.
The current unemployment rate for Columbus is 5.2%, which, compared to other cities of its size, and with the nation is relatively low (Charity Interview 1989). For instance, Columbus's current unemployment rate is lower than the state's rate of 6.1% and slightly lower than the nation's rate of 5.3% (Baker Interview 1989) . For further illustration of the unemployment rates see Table 5 on the next page which shows the unemployment rates for Columbus, Ohio, and the nation for a ten year period. 109
Table 5 Unemployment: Rates for Columbus, State of Ohio and U.S. for 1979-89.
City, State and Nation 1979 1989 CO
COLUMBUS • 5.2
OHIO 5.9 6 . 1
U.S. 5.8 5.3 Source: Civilian Labor Force Estimates Ohio Bureau of Employment Services. October figure of 1989 is latest available.
However, in spite of an overall low unemployment rate for the city, black unemployment (as in most other major cities) continues to double that of white unemployment (Baker
Interview 1989). The black unemployment rate stands at 10.9% white unemployment is 5.3% (Baker Interview 1989).
Crime The overall crime rate for Columbus is low in comparison to other cities of its size. For instance, the overall crime rate in Columbus is 9,654 per 100,000 residents in the city, while in comparison to St. Louis (a city slightly smaller 110 than Columbus) the rate is 13,4 62 per 100,000 residents (Uniform Crime Reports 1988:86-113). For an explanation of the computation of the crime rate see endnote number 1 in the endnotes.
Although it is not listed among the top ten "drug related murder" capital cities of America, the city has not been able to escape its share of drug related homicides. As of November 6, 1989 the city has witnessed 88 homicides in 1989; twenty five of them were drug related (Columbus Dispatch 1989:D1). Twenty five drug related murders may appear to some public officials as too many, but comparing Columbus to other cities of its size the number is very small. Baltimore, Maryland, for example, also a major city and a city slightly larger than Columbus has witnessed as of December 31, 1989, 117 drug related deaths (Jenkins Interview 1990), 92 more than Columbus. A city's crime rate may affect economic development to the extent that firms might be reluctant to locate their base of operations in the downtown area if they think that their employees might not feel secure.
Corporate & Cultural Activity
Since 1951, the urban core or central business district (CBD) of Columbus has undergone urban renewal, rehabilitation and, more recently, increased capital investment. Columbus houses two Fortune 500 companies (Lancaster Colony and Ill Worthington Industries), and three companies inside its political boundaries are listed as Fortune 500 Service Companies (Bank One Corporation, Landmark, and Huntington Bancshares). In addition, Columbus has 11 banks (Bank One and
Huntington included), six TV stations, four cable- TV companies, 21 am/fm radio stations, one daily newspaper, 27 weekly newspapers and seven monthly periodicals, and 50 corporate headquarters for insurance companies, (Carson Interview 1987; Columbus Factpact 1987:38-40). The city has over 59 hotels and motels including two Hyatt Regency hotels and one national chain hotel, the Picket Suite hotel (Carson Interview 1987). The city has 15 retail centers (one is an inner city mall called Center City), 11 hospitals (one is a major research hospital at The Ohio State University), and four airports (one is an international airport, Port Columbus International) .
Columbus offers diverse recreational/culture outlets which include restaurants, several theatres, a symphony orchestra, and minor league professional baseball and basketball teams (Columbus Factpack 1987:38-40).
Governmental Activity
According to Standard and Poor's credit/bond rating for cities, Columbus has a double A+ bond rating (5) . The property tax is 46.828 mills of assessed valuation on commercial real property, 57 mills of assessed valuation on 112 business personal property, and 46 mills of assessed valuation on residential property (5). The city income tax currently is 2.0% and accounts for 27.2% of the city's total revenue. The significance of property tax rates and credit standings is that businesses use them to determine the additional cost of doing business in a particular area and to gauge the business climate of a particular city by examining its fiscal responsiveness to budgetary and fiscal matters.
Columbus has a mayor-council form of government, with seven members elected at large and serve on a part-time basis (Columbus Factpack 1987:6). The current city council is made up of six Democrats and one Republican. The mayorship is a full-time position, and the current mayor is a Republican. The current president of the city council is a black Democrat with strong political support in both the white and black communities (Strieker Interview 1987; Columbus Dispatch 1989:IB), The racial and gender makeup of council consists of: five white males and one white female and two black males.
(B) St. Louis Demographic and Social Change
Incorporated in 1876, St. Louis was the first American city with constitutionally guaranteed home rule (Stein
[forthcoming fall 1990] :5). According to Dr. Lana Stein in 113 her forthcoming Holding Bureaucrats Accountable. "St. Louis is located in the center of United States, at the confluence of the Mississippi and Missouri rivers" (Stein [forthcoming fall 1990] :1) and according to Stein, St. Louis's strategic location played a major role in stimulating its early growth and eventual transformation into a major port city in the U.S. (1).
St. Louis spans 61 square miles (County and City Data Book 1988:720) and has since 1876 (Stein [forthcoming fall 1990) :5) . The city has remained this size for over a hundred years because St. Louis is the only city in Missouri that has the status of city/county. The Missouri legislature created this special arrangement for St. Louis primarily because of the political problems between city and county officials over the provision of facilities. Moreover, the state ensured St. Louis special status when it constitutionally guaranteed the city home rule (Stein [forthcoming fall 1990] :5 /Patton Interview 1989). For further elaboration on the problem that prompted the state to make St. Louis its only city/county see
Endnote 2. Another reason why St. Louis has remained small city, is that the city is landlocked, but because of its status as a county, it cannot cross county boundaries to annex land (Patton Interview 1989). With a median age of 29 years the population of St. Louis is aging (Stein [forthcoming fall 1990] :14-15).
Eighteen percent of its total population is 65 years or 114 older. Compared to the national average the age composition is significant because businesses may perceive an aging work force as not being able to contribute to further growth and expansion (Hunker Interview 1989).
St. Louis has a total population of 453,085 of which 54% is white and 46% is non-white; blacks comprise over 90% of the non-white population (RCGA's Profile of St. Louis 1989:7; Census of Population 1960-80). Since I960, the city's minority population has grown from 28% to 46%. For further illustration on the growth in minority population and decline in non minority population over a twenty year period in St. Louis see Figure 7 on the next page. YEARS 199D 1970 1960 ore US Bra o te ess Cnu of Population, Census the Census, of the of Characteristics Bureau Population: U.S. Source: 1960-80. l W Y x V y y V x V V V x Y x W y V I , / / / / / / / / / / / / / / / / / / / / / V fNnhts nTtl Population Total In Nonwhites Of % 10 I o iyO t Louis St. Of City For T 20 From 1960-80 From 3D I Figure 7 Figure PERCENTAGES T 40 T 50 T ED
“T 7D
BD NOWHITE WHITE 115 116
The increase in black population since 1960 can be attributed to the mass migration of blacks to St. Louis before and after the Second World War, and to the outmigration of whites from the city to St. Louis county, an independent county (Stein [forthcoming fall 1990] :9-15). The older sections of the city continue to experience an outmigration of white and black middle income citizens (Stein [forthcoming fall 1990] :13-16). The areas of the city that continue to attract middle income residential growth are the central west end and the near south side (Patton Interview 1989). These areas continue to attract middle income residents because they are gentrified historic neighborhoods. The near south side continues to attract whites mostly because, according to Stein, "The largest share of the white population is concentrated on the south side" and because the area is perceived by whites to be a safe area
(Stein [forthcoming fall 1990] :14). Another reason why those whites who remain in the city are electing to relocate to the south side of the city is that St. Louis's residential areas are still highly segregated (14).
Income. Education and Employment The median family incomes for whites and blacks in St.
Louis are $17,984 and $11,442 respectively (Bureau of Census 117 1980). The median family incomes for whites and blacks in St. Louis are below the national averages of $24,166 (whites) and $15,684 (blacks). One could infer that St. Louis is perceived by outsiders as being a depressed area (Stein [forthcoming fall 1990] :15-17). The median school years completed by city residents is 11.7. The percent of high school graduates is 48.2%, and the percent of college graduates for the city is 10.0% (Bureau of Census 1988), both below the national averages of 66.5% and 16.2% (Stein [forthcoming fall 1990] :15). A poorly educated workforce affects negatively the city's ability to attract those kinds of industries, especially high tech companies, that are needed to diversify its economy. Furthermore, the city's developmental efforts may be impeded because one of the basic requirements needed to attract and retain high tech industries is an educated workforce
(Markusen et al. 1986:144-181; Malecki 1986:128-142; Saxenian 1985:81-106).
As in the case of Columbus, the St. Louis school system is also shrinking. Enrollment in the St. Louis school system is declining because over 40% of the city's residents are Roman Catholic, and many, regardless of race elect to send their children to parochial schools. (Stein [forthcoming fall 1990] :14). 2) Another factor that has precipitated a decline in public school enrollment in St. Louis has been the outmigration of white population from the city over a period 118 of time. As a result: of these two factors, the city's school system is quickly becoming predominantly black, with blacks constituting over 79% of the school enrollment (Orfield 1988: 114-115).
St. Louis houses seven colleges (one is a major research institution, Washington University) , and seven junior college districts with 21 colleges (including the largest, St. Louis Community College) (RCGA's Profile of St. Louis Economy 1989:3-4).
The three primary areas of employment for residents of St. Louis are in the service, manufacturing and wholesale/retail sectors of the local economy. This pattern is illustrated by Figure 8 on the next page. 119
'/////* 1960
1970
1980
cow MfkN ffTT FW* PUB s m
------im u sm iea------Source: U.S. Bureau of Census, Census of Population, 1960, 1970 and 1980, General Social and Economic Characteristics. Figure 8 City Of St. Louis % Of Population Employed In Key Industries From 1960-80 120
As Figure 8 reveals, St. Louis's economy has traditionally been dominated by the secondary sector i.e. manufacturing. The St. Louis metropolitan area is the second largest producer of automobiles in the U.S. (Stein [forthcoming fall 1990] :15). However, Figure 8 also reveals that over a twenty year period the city has witnessed a steady erosion of it manufacturing base. The percent of persons employed in manufacturing has dropped from 31% in 1960 to roughly 20% in 1980. The service sector has become a reliable source of employment for the city and is presently the largest employer in St. Louis, employing almost thirty percent of the population. (Census of Population 1960-80) . Other areas of the local economy that have become strong or large sources of employment over this period are the wholesale and retail industries and public administration. The current unemployment rate for St. is 8.2%, which is somewhat high compared to other cities of its size and with the nation (Signorino Interview 1989). For instance, the city's current unemployment rate is higher than the state's rate of 5.3% and the nation's rate of 5.0% (Signorino Interview 1989). For further illustration of the unemployment rates see Table 6 on the next page which shows the unemployment rates for St. Louis, Missouri, and the nation for a ten year period. 121
Table 6 Unemployment Rates for City of St. Louis, State of Missouri and U.S. for 1979-89.
City, State and Nation 1979 1989
CITY OF ST. LOUIS 6.0 8.2
STATE OF MISSOURI 4.4 5.0
U.S. 5.8 5.3 Source: Missouri Division of Employment Security 1989.
The unemployment rate for Missouri has generally been low for the past ten years. However, St. Louis's unemployment rate has been almost double that of the state during this period. Russell Signorino, research analyst for the Missouri Division of Employment Security, explains that the high unemployment rate for the city exceeded the state's rate because the city 's economy has traditionally been dominated by manufacturing. As a result, its economy has been devastated by the loss of these kinds of jobs over a period 122 of time (Stein (forthcoming fall 1990] :15). The elimination of entry level manufacturing jobs has adversely affected the city's blacks because a significant portion of them are unskilled and depend upon these kinds of jobs for steady employment. Moreover, the loss of entry jobs for the black working poor over a period of time has reduced their available employment options and thus has contributed further to the city's high unemployment rate. The black unemployment rate in St. Louis is 15.5% while white unemployment stands at 4.2% (Bureau of Labor Statistics 1988). The policy implication is that any reduction of employment options for the large unskilled segment of the black population would further aggravate their already fragile economic situation. Crime The overall crime rate for St. Louis is high in comparison to the other cities in this study. The overall crime rate in St. Louis is 13,462.35 per 100,000 residents, while the rate in Columbus is 9,654.59 per 100,000 residents city (Uniform Crime Reports 1988:86 -113). Although St. Louis is also not among the top ten "drug related murder" cities in America, the city has not been able to escape drug related homicides. According to Tim O'Neil, a state and local government reporter for the St. Louis Post
Dispatch, 169 homicides had been recorded for St. Louis as of December 31, 1989. Roughly 20% of the 169, or 34, were believed by police to have been drug related (O'Neil 123 Interview 1990). The primary reasons why St. Louis has a small number of drug related deaths in relation to such cities as Kansas City, Missouri or Los Angeles, is that according to O'Neil, the city has not had a major problem with gangs or "crips," and "crack" cocaine has not been the drug of choice among the city's drug users (O'Neil Interview 1990).
Corporate and Cultural Activity St. Louis houses nine Fortune 500 companies, and two companies inside its political boundaries are listed as Fortune 500 Service Companies (RCGA's Profile of St. Louis 1989-90: 20-41). The St. Louis metro area also houses 17 headquarters of Forbes 500 largest industrial and service corporations (41) . St. Louis has two Foreign Trade Zones "providing legal enclaves where imports and exports can be processed and stored duty free" (4-5) . St. Louis has 22 banks and is also home for the Eighth District Federal Reserve Bank
(Rand McNally Banker's Directory 1988: 1610-3463). St. Louis has 10 TV stations, one cable TV station, 32 am/fm radio stations, two daily newspapers, and 88 monthly and weekly newspapers (Gale Directory of Publications 1989: 641-844; Broadcasting Cable Yearbook 1989: 79-221). St. Louis is also the corporate headquarters for 57 national and international associations (RCGA's Profile of ST. Louis 1989:3). The city houses seventeen hotels and motels, including three luxury 124 hotels. However, the St. Louis region itself has over 80 hotels and motels. St. Louis has 18 retail centers (one is an historic railroad station converted to an enclosed mall called the Union Station) , 24 hospitals (one is a major research hospital, Washington University) , one airport (an international airport, Lambert-St. Louis International Airport, the 6th busiest in the U.S.) (RCGA's Profile of St. Louis Economy 1988-89:3-4).
St. Louis offers diverse recreational/cultural outlets which include restaurants, an active professional theatre/dance company, a symphony orchestra, art and science museums, major league professional baseball, a professional hockey team, and an indoor soccer team (15).
Governmental Activity
According to Moody's Bond Record rating for cities, St. Louis has a Baa bond rating in the credit market (Moody's Bond Record 1989:405) . The average property rate for the city of St. Louis is $6.038/$100 assessed value on residential and commercial properties (RCGA's Profile of St. Louis Economy 1988-89:5). The city of St. Louis does not have an income tax. Instead, it has what is called an earnings tax on which it relies for a significant amount of its total revenue (Confluence St. Louis Task Force Report 1987:11-12). The current earnings tax is "1% of the earnings of everyone who lives in the city and all residents who work in the city" 125 (11) and accounts for 30% of the city's total revenue (11). Moreover, the earnings tax accounts for 3 0% of the general fund budget (Johnson Interview 1990) . The city of St. Louis has a Mayor-Board of Alderman form of government with partisan elections (Stein [forthcoming
fall 1990] :10-11). Members of the Board of Aldermen are elected from 28 wards (10). The current Board of Aldermen is made up of 2 6 Democrats: 16 of the 2 6 Democrats are white and ten are black. The council also consists of one white male Republican, and one non-white male Independent. The mayor is a full-time position, and the current mayor is Democrat. Under the St. Louis charter, the mayor has weak formal authority, and for instance, does not have direct control over the city budget because "he must share budgetary and administrative authority with the Board of Estimate and Apportionment where he is one of three members. The mayor is
joined on this board by the comptroller and the president of Board of Alderman, both of whom are elected citywide" (11).
The current president of the Board of Aldermans is a Democrat with strong political support in the city's southside.
(C) Baltimore Demographic and Social Change
Baltimore is one of the oldest cities in the United States. Although established in 1729 and incorporated as a 126 municipal town in 1797 (Arnold Interview 1990), it did not obtain municipal home rule until 1898. Home rule was granted as the result of special legislation passed by the Maryland General Assembly and later signed into law by then Governor Lowndes (Vexler 1975:67-68; Baltimore Report 1987:9). Baltimore spans 80.3 square miles (County and City Data Book 1988: 720) and has remained this size because it is the only city in Maryland that is treated like a county (Arnold Interview 1990). Baltimore is treated like a county by the Maryland State Legislature because Baltimore historically is the largest and only real city in the state of Maryland. Because of its unique status in a small state, the city has became a major force in the state. In fact, according to Joseph Arnold, an urban historian and expert on the history of Baltimore, the city has traditionally been a dominant economic and political force in the state and has on some
occasions been treated almost like a co-equal with the state because of its size and its political and economic power
(Arnold Interview 1990). The city was treated like a county because it has generally exercised tremendous political influence in the Maryland Legislature where the city's
interest are represented by both Democrats and Republicans. In other words, Arnold believes that the city's interests at the state level are probably the most powerful force in both major parties. Because Baltimore is treated like a county, it cannot annex land from another county because Maryland 127 law states that no citizens can be transferred from one county to another without their approval (Arnold Interview 1990). Therefore, given this legal requirement, annexation
is increasingly difficult for the city to achieve. The median age of the population of Baltimore is 30 (Ash Interview 1990). Baltimore has a total population of 786,775, of which 45% is white and 55% is non-white; blacks comprise over 95% of the nonwhite population (Ash Interview 1990).
Since 1960 to present, the city's minority population has grown from 35% to 55%. For further illustration of the growth in minority population and the decline in non-minority population over a twenty year period in Baltimore, see Figure 9 on the next page. 128
WHITE 1960 NONWHITE
107D
1980
PBCENTABES
Source: U.S. Bureau of the Census, Census of Population: Characteristics of the Population, 1960-80. Figure 9 % Of Nonwhites In Total Population For City Of Baltimore From 1960-80. 129
The Increase In black population since 1960 can basically be traced to outmigration of the white middle class who left the city in large numbers between 1970 and 1980. For instance, the city lost over 20% of its white middle class population during this period to surrounding suburbs and to nearby counties (Levine 1989: 147). The areas of the city that have continue to attract a steady flow of middle income residential growth and investment dollars are such neighborhoods as Fells Point, Bolton Hill, and Canton (Levine 1989: 149; Lyall 1982: 18).
These areas continue to attract investment dollars and upper income residents, is because they have undergone gentrification and because of the historic value of the homes in these areas. Another plausible explanation why these areas have continued to attract investment is that they are in close proximity to Baltimore's showcase downtown development project, Harborplace, and have been able to reap the monetary spillover benefits of the growth in this area (Levine 1989:
149) .
Income. Education, and Employment The median family incomes for whites and blacks in Baltimore are $18,830 and $12,500 respectively (Bureau of Census 1980). The median family incomes for whites and blacks in Baltimore are below the national averages of $24,166 130 (whites) and $15,684 (blacks). One could infer that like St. Louis, Baltimore might be perceived by outsiders as a depressed area (Levine 1989: 147). The median school years completed for city residents is 11.7%, the percent of high school graduates is 48.4%, and the percent of college graduates for the city is 11.3% (Bureau of Census 1988) ; the latter two are below the - national averages of 66.5% and 16.2%. Again, a city's poorly educated workforce reduces the city's ability to attract those kinds of industries (especially high tech companies) that are needed to diversify its economy. Furthermore, this type of workforce may impede the city's developmental efforts because one of the basic requirements for attracting and retaining high tech industries is an educated workforce (Markusen et al. 1986:144-181; Malecki 1986: 128-142; Saxenian 1985: 81-106). As is the case in Columbus and St. Louis, the Baltimore school system is also shrinking. The Baltimore school system has experienced declining enrollments because of three major factors. First, 16% or (about 130,000) of the city's residents are Roman Catholics. Many of them send their children to parochial schools (Quinn 1982:136; Arnold Interview 1990; Hall Interview 1990).—
Second, increasingly middle class blacks and whites have elected to send their children to private schools and non-
Catholic parochial schools (i.e., Christian Academy schools) . 131 This population sends their children to private schools because they have lost confidence in the public school's ability to educate their children. Others (especially those sending their children to Christian Academies) do so, to
avoid local desegregation. 21,034 or roughly 16% of all the students in Baltimore are enrolled in private schools. The implication of a sizeable private school enrollment figure is that the prospective pool of school aged children is reduced. Moreover, a sizeable declining enrollment of any public schools system could raise questions in the minds of prospective private investors about the overall quality of the workforce in that particular city. In essence, if there is a public perception (valid or invalid) that the local school system is producing an inferior product, then this perception could influence a firms's decision to relocate outside the city. Third, the final factor that has precipitated a decline in school enrollment for Baltimore has been the outmigration of white population and some of the black middle class from the city to surrounding county suburbs over a period of time (Arnold Interview 1990). As a result of three factors, and with the city becoming predominantly black over a period of time, the city's school system is quickly also becoming predominantly black. Blacks constitute 79% of the school enrollment (Berry Interview
1990). The predominantly black school system reinforces already held racial stereotypical views about any type of 132 organization that is predominantly black.
Baltimore houses 14 colleges (one is a major research institution, John Hopkins University) and 18 community, technical, and business colleges (Patterson's American Education 1989:176-430). The primary areas of employment for residents of Baltimore are in the service, manufacturing, wholesale and public sectors of the local economy. Figure 10 on the next page, which illustrates the percentage of the city's population employed in non-manufacturing and manufacturing lated jobs over a twenty year period. 133
35 V////j
CONS MAN VDT F tfl PUB SERV
IhDUSTRIES
Source: U.S. Bureau of Census, Census of Population, 1960, 1970 and 1980, General Social and Economic Characteristics. Figure 10 City Of Baltimore % Of Population Employed In Key Industries From 1960-80. 134
Figure 10 reveals the following information about Baltimore's employment patterns in key industries over the last twenty years. First, the percentage of persons employed in manufacturing has dropped from 28% in 19 60 to roughly 18% in 1980. Overall since 1950, the city has lost over 30,000 manufacturing jobs (Levine 1989: 147; Levine 1987: 103-123). Second, the service sector of the economy has become a reliable source of employment for the city and is presently the largest employer in Baltimore, with employing almost thirty five percent of the population (Census of Population
1960-80). Third, other areas of the local economy that have become reliable sources of employment over this period are the wholesale and retail industries and public administration. The current unemployment rate for Baltimore is 6.2% which if compared to Columbus is slightly higher and if compared to St. Louis is lower. The city's current unemployment rate is higher than the state's rate of 3.7% and the nation's rate of 5.3% (Green Interview 1989). For further illustration of the unemployment rates see Table 7 on the next page which shows the unemployment rates for Baltimore, Maryland, and the nation for a ten year period. 135
Table 7 Unemployment Rates for City of Baltimore, State of Maryland and U.S. for 1979-89.
City, State and Nation 1979 1989
CITY OF BALTIMORE 6.1 6.2
STATE OF MARYLAND 5.5 3.7
U.S. 5.8 5.3
Source: Maryland Department of Employment and Training, Research and Analysis Division 1989.
Baltimore's unemployment rate exceeds the state's because the city's economy has traditionally been dominated by the manufacturing sector, and the elimination of entry level manufacturing jobs has adversely affected the city's unskilled black population. Indeed, the black unemployment rate in Baltimore is 14.5% while white unemployment is 5.4%
(Green Interview 1989). Furthermore, as indicated in the 136 analysis of St. Louis, the policy implication of an increase in long term black unemployment for the city is that it
eventually contributes to the rise of a black underclass. In other words, a long term reduction in employment options for a large segment of the black population that is already unskilled would only further aggravated their already precarious economic situation.
Crime
The overall crime rate for Baltimore is low compared to other cities in this study. For instance, the overall crime rate in Baltimore is 9,177.06 per 100,000 residents, and the rates in Columbus and St. Louis are 9,654.59 and 13,462.35 per 100,000 residents respectively (Uniform Crime Reports 1988:86-113).
Like the other cities, Baltimore is not listed among the top ten "drug related murder" capital cities of America.
Yet of the 262 homicides in Baltimore during 1989, roughly 45% of the 262 or 117 are believed by the local police to have been drug related (Jenkins Interview 1990). The primary reasons why Baltimore has few drug related deaths compared to cities such as Washington, D.c. or Los Angeles, according to Arlene Jenkins, a detective in the police department's narcotic division, the city has not had a major problem with gangs or "crips," and that drug "crack" cocaine has not been the drug of choice among the city's users. 137
Corporate and Cultural Activity Baltimore houses five Fortune 500 companies and twenty leading U.S. firms inside its political boundaries (Compact Disclosure USA 1990; Greater Baltimore 1988: 8). The Greater Baltimore area also has over fifty high technology firms and
major private research and development labs (Greater Baltimore 1988:10). Baltimore has four enterprize zones inside its borders and one Foreign Trade Zone that provides "a duty-free area for import/export firms involved in warehousing/distribution, light assembly, and manufacturing" (Brief Economic Facts 1989:1-4). In addition, Baltimore has 16 banks, seven TV stations, l cable-TV company, 29 am/fm radio stations, two
daily newspapers, (The Sun and Evening SUN) 86 weekly newspapers, and monthly periodicals (Rand McNally Banker's Directory 1988:1610-3463; Gale Directory of Publications
1989:641-844; Broadcasting Cable Yearbook 1989:79-221). The city houses twenty hotels and motels, which includes
four luxury hotels. However, the Greater Baltimore area has over sixty hotels and motels (Tourbook 1990: A81-A91). The
Baltimore area has over 2 50 shopping centers, one is a unique waterside shopping area called "Harborplace". The city has 28 hospitals (one is the internationally known John Hopkins
Medical Institution) and one airport (an international 138 airport, Baltimore Washington International Airport) (Baltimore Factual Overview 1985).
Baltimore offers diverse recreational/cultural outlets which include restaurants, an active professional theatre company, a symphony orchestra, art and science museums, the "National Aquarium," a major league professional baseball team, and an indoor soccer team. In addition, the city is recognized as being the Lacrosse capital of United States. Baltimore also offers boating on its inner harbor and Chesapeake Bay (Brief Economic Facts 1989:4). Governmental Activity According to Moody*s Bond Record Baltimore has a A1 bond rating in the credit market (Moody's Bond Record 1989: 389- 467). The average property rate for Baltimore is $6.00 per $100 on commercial real property (Brown Interview 1990). The city income tax is a piggy back tax of 50% of an individuals'state tax liability. The property tax accounts for 21% of the city's total revenue and for roughly 54% of the general fund budget (Brown Interview 199 0).
The city of Baltimore has a strong Mayor-Council form of government with partisan elections (Jones Interview 1989). Members of the council are elected from 19 districts. The current council is made up entirely of Democrats. The mayor is a full time position, and the current mayor is a young, black, male Democrat with strong political support in the white and black communities (Jones Interview 1989). The 139 current: President of Council is a white, female Democrat. The council is comprised of 12 whites and 7 blacks. Baltimore is practically a one party town. The dominance of the Democratic party can be traced initially to the period in Baltimore's history when the city was controlled by machine politics. According to Clarance Stone, a urban political scholar, Baltimore was not a reform city, and it was dominated by machine politics from the late 1870s until 1930s (Stone Interview 1990; Arnold 1978: 109-124). Moreover, the city was so dominated by machine politics that Maryland revoked some of the city's authority over its police department. For instance, the State of Maryland at one time appointed the police chief for the city because of abuses that occurred under machine rule (Stone Interview 1990). The dominance of the Democratic party can also be explained by the fact that the city is predominantly black and that many blacks are registered Democrats.
(D) Richmond Demographic and Social Change
Richmond was incorporated as a town in 174 2 and as a city in 1782 (Moeser Interview 1990) . In 1779 the state capital was moved to Richmond (Moeser Interview 1990). The
Virginia General Assembly voted to relocate the state capital because most assembly members felt that Williamsburg was not 140
centrally located and Richmond was. (Dabney 1976: 25-26). Richmond contains 60.1 square miles (County and City Data Book 1988:800). The city has remain this size since the early 1960s for three reasons: 1) In Virginia "cities are autonomous, primary, political subdivisions, governmentally independent of the county, or counties, in which they are geographically located" (Bain 1967: 24-36). Moreover, first-class cities are totally independent from the county. In other words, a first-class city does not share such judicial offices as a circuit court or other kinds of administrative offices or officers with a county (24-36). Therefore, given the constitutional separation between cities and counties in Virginia, Richmond cannot cross county boundaries to annex land in an adjacent county.
2) Richmond's annexation movement has been slowed since the legislature changed the annexation laws in 1979 (3). The new law requires all annexation proposals to be examined by and decided upon by three special judges (3). In essence, municipal annexation is judicially determined. 3) Annexation in Richmond was slowed again by a decision of the U.S. Supreme Court in Holt v. Citv of Richmond (19711 or as it is commonly referred to in Richmond political circles, as Holt I (Moeser 1982: 50-188). According to Thomas Murphy's classic article on the annexation dispute between the city and its black community, entitled "Race Base Accounting," the 141 Court ruled that "The annexation of 2 3 square miles of Chesterfield County by the city of Richmond in 1970 was entered into primarily for the purpose of maintaining white control" (Murphy 1978:169). In essence, the court simply concurred with the opposition's perception of the proposed
annexation as being racially motivated or an attempt by the white political elite to dilute the strength of the black
political majority (Moeser et al. 1982: 1-29; Murphy 1978: 169-194).
The median age of the population for Richmond is 30.3 years (County and City Data Book 198 3: 800). Richmond has a total population of 219,214, of which 48% is white and 52% is non-whites; blacks comprise over 95% of the nonwhite population (Moeser et al. 1982: 29-30). Since 1960, the city's minority population has grown from 42% to 52%. For
further illustration on the growth in minority population over a twenty year period in Richmond see Figure 11 on the next page. 142
WHITE 1350 r a s r e a NONWHITE
191D
199D
T I ~ T I ~ r 10 20 90 40 90 SO
PERCENTAGES
Source: U.S. Bureau of the Census, Census of Population: Characteristics of the Population, 1960-80. Figure 11 % Of Nonwhites In Total Population For City Of Richmond From 1960-80. 143
The increase in black population since 1960 can basically be traced to the steady migration of southern rural blacks to southern urban centers such as Richmond in search of jobs and upward mobility (Moeser et al. 1982: 2-49) and to outmigration of the white middle class who left the city in large numbers between 19 50 and 1980. For instance, since 1950 the city has been consistently losing an average of at least 5% to 10% of its white population (29-31) (See Graph
7). Figure 11 clearly illustrates that the city lost 10% of its white middle class population from 1970-80 while black population increased by the same amount. Moeser believes that Richmond's declining white population has been absorbed by the nearby counties of Henrico and Chesterfield (Moeser 1982: 29-31).
The areas of the city that have continued to attract a steady flow of upper and middle income residents are the "Fan
District" and Church Hill. The "Fan District" is located near
Virginia Commonwealth University and Monroe Park. According to Mr. John McClintock a graduate student at The Ohio State University and a lifelong resident of Richmond, the "Fan District" derived its name from the fact that the residential streets in this particular neighborhood extended outward like a fan. The Church Hill area is located east of the downtown Richmond. These areas continue to attract investment dollars 144 and upper income residents because both have undergone gentrification over the last twenty five years and because of the historic value of the homes in these areas. The "Fan District" in particular also has continued to attract upper income residents, according to McClintock because, it has been a major beneficiary of the expansion in and around Virginia Commonwealth University (McClintock Interview 1990) . In other words, because of their close proximity to the downtown and VCU areas, these neighborhoods have been able to share the benefits of the growth in these area (McClintock Interview 1990).
Income. Education and Employment The median family incomes for whites and blacks in Richmond are $16,820 and $12,643 respectively (Bureau of Census 1980). The median family incomes for whites and blacks in Richmond are below the national averages of $24,166 for whites and $15,684 for blacks. One could infer that like St.
Louis, Richmond has experienced some degree of economic decline (Moeser et al. 1982: 2-3).
As in the case of Columbus, St. Louis, and Baltimore, the Richmond school system is also shrinking. For instance, in 1982 2 3,000 students enrolled in the Richmond City school district, however, the figure projected for 1990 school year is 19,000 (Arkin Interview 1990). The Richmond school system has experienced declining enrollments for three major 145 reasons. First, the Richmond public school system has lost a sizeable portion of its student population to private schools (For the number of private schools and their enrollment see Endnote 4). According to John Moeser, Associate Professor of Urban Studies & Planning at Virginia
Commonwealth University, the large presence of private schools in and around Richmond, and the increasing number of black and white middle class who send their children to private schools and parochial schools (e.g.. Catholic schools, Christian & Military Academies) because they have lost confidence in the public schools have contributed significantly to the decline in school enrollment (Moeser Interview 1990). According to Mike Williams, a state and
local government reporter for the Richmond Dispatch Times, when one of Richmond's Fortune Five Hundred corporations relocated twenty two of its upper level management executives to Richmond, only six of the twenty two moved into the city (Williams Interview 1989). The six managers who elected to
live in the city did not have school age children (Williams Interview 1990).
Second, there has been a steady outmigration of white and some black middle class from the city to nearby Henrico and Chesterifeld counties because the county school systems are perceived by the outmigrating families as offering a better educational experience for their children (Arkin
Interview 1990; Moser Interview 1990). As a result, the 146 city's school system is quickly becoming predominantly black with blacks constituting over 85% of the school enrollment (Moeser Interview 1990). Moeser further states that in some of Richmond's schools, blacks constitutes as much as 95% or even 100% of the school age population (Moeser Interview 1990). The emergence of a predominantly black school system implies that whites have fled the system in order to avoid desegregation. Moreover, as in Baltimore, those who left the public school system in order to avoid desegregation probably did so because they felt socially threatened by a predominantly black school system. In essence, a predominantly black school system probably exacerbated or reinforced some preconceived racial stereotypes about blacks or any predominantly black institution. Richmond houses five colleges (one is a major research institution, Virginia Commonwealth University) and five community, technical, and business colleges (Patterson's American Education 1989: 176-430).
The primary areas of employment for residents in Richmond are in the service, manufacturing, wholesale, and public sectors of the local economy. Figure 12 on the next page illustrates the percentage of city's population employed in non-manufacturing and manufacturing related jobs over a twenty year period. 147
i960
1970
1980
MAT F m PUB SERV ircusrniBs
Source: U.S. Bureau of Census, Census of Population, 1960, 1970 and 1980, General Social and Economic Characteristics. Figure 12 City of Richmond % Of Population Employed In Key Industries From 1960-80 148
Figure 12 reveals the decline in Richmond's
manufacturing sector. According to Christopher Silver Assistant Professor of Urban studies and Planning at Virginia Commonwealth University, in his text Twentieth-Centurv Richmond, the manufacturing sector at one time played a significant role in shaping Richmond's economy. The two
industries that helped shaped Richmond's economy were tobacco and ironmaking (3) . For instance, Richmond's tobacco industry has historically been a major employer of unskilled workers (Silver 1984: 34). According to Silver, "[I)n 1905, the tobacco industry supplied jobs for nearly four thousand unskilled wage earners in thirty Richmond plants" (34) . Ironmaking was an important contributor to the city's economy during the latter half of 19th century. For instance,
Richmond's ironmaking contributed significantly to the South's war efforts, Richmond was once dubbed the "ironmaking center" of the South (3 6). The percentage of persons employed in manufacturing has dropped from 20% in 1960 to roughly 15% in 1980. Although a decline of five percent is not precipitous, it does indicate that employment in this sector of the economy is degenerating. Second, as in Baltimore, St.Louis, and Columbus, the service sector is quickly becoming a reliable source of employment and is, in fact, presently the largest employer in Richmond. Almost thirty 149 seven percent of the population is employed in this sector (Census of Population 1960-80). Third, other areas of the local economy that have become reliable sources of employment during the last twenty years are the wholesale and retail trade industries and public administration.
The current unemployment rate for Richmond is 5.4%, lower than St. Louis, but slightly higher than that of Columbus. Richmond's unemployment rate is slightly higher than that of the nation Richmond (Green Interview 1989). The city's current unemployment rate is higher than the state's rate of 4.1% and the nation’s rate of 5.3% (Green Interview 1989). For further illustration of the unemployment rates see Table 8 below which shows the unemployment rates for Richmond, Virginia, and the nation for a ten year period.
Table 8
Unemployment Rates for City of Richmond, State of Virginia and U.S. for 1979-89.
City, State and Nation 1979 1989
RICHMOND 4.0 5.4
VIRGINIA 4 . 3 4.1 in 00 U.S. • 5.3 Source: Virginia state Employment Commission, Economic Information Services. 150
Richmond's unemployment rate exceeds the state's because of over reliance on the manufacturing sector. Although Richmond's loss of manufacturing jobs over ten years has not been as devastating to its economy as in Baltimore and St. Louis, a precipitous loss of any proportions can still have a sizeable impact on the availability of the number of entry level jobs, especially for the city’s black population and working poor. Moreover, in Richmond, a reduction in the number of entry levels jobs over a period of time, has reduced the employment options for its working poor and black population. Black unemployment in Richmond is at 9.7% while white unemployment stands at 5.3% (Bureau of Labor Statistics 1988). Furthermore, as was indicated in the analysis of
Baltimore and St. Louis, the policy implication of an increase in long term black unemployment is that it eventually contributes to the rise of a black underclass population in the city. In other words, a reduction in employment options for any length of time for a large segment of the black population that is already unskilled, would only further aggravate their already marginal economic situation. Therefore, temporary unemployment for this group only exacerbates the overall unemployment picture for the city. 151
Crime The overall crime rate for Richmond is low compared to other cities in this study. For instance, the overall crime rate for Richmond is 9,184.47 per 100,000 residents while
the rates in Columbus and St. Louis are 9,654.59 and 13,462.35 per 100,000 residents respectively (Uniform Crime Reports 1988: 86-113). One plausible explanation of why the Richmond rate is lower than that of Columbus and St. Louis, is that Richmond is much smaller than the other two cities. One could expect that a smaller city would have less crimes. Although Richmond has a lower overall crime rate, it does in fact have a very high homicide rate for a city of its size. For instance, during 1989-90, the city recorded a record high of 102 homicides (Richmond Times-Dispatch 1989: A7-8). The record number of homicides in Richmond has led to the city being labeled as the "Murder Capital" of the south
(Fields Interview 1989). According to the December 31st edition of the Richmond Times-Dispatch, of the 102 homicides committed in the city during 1989, roughly 27% or 27.4 were believed by the local police to have been drug related (A7- 8). According to Mr. Robert Fields, Senior Planner for city of Richmond, one plausible explanation for the sudden increase in homicides and drug related deaths is that
Richmond has become a major drug distribution center for the 152 South and Southeastern seabay primarily because of its
proximity to a major interstate highway i.e., 1-95 (Fields Interview 1989). The number of homicides and drug related deaths are higher in Richmond than in Columbus, but the city has been able to avoid a much higher rate of drug related deaths because it has not had a problem with gangs and "crack" cocaine (Fields Interview 1989).
Corporate and Cultural Activity Richmond houses 13 Fortune 500 companies and the major corporate divisions of two leading U.S. firms, Philip Morris and DuPont Plant, inside its political boundaries (Compact Disclosure USA 1990; Nordenson Interview 1990). Although the
corporate headquarters of Philip Morris and DuPont Plant are located elsewhere, both are important contributors to Richmond's economy because the two employ approximately 16,000 people (Nordenson Interview 1990). In addition, Richmond has 14 banks and is also head office for the Fifth
District of Federal Reserve Bank of the United States (McClintock Interview 1990). Richmond has six TV stations, 1 cable-TV company, 2 3 am/fm radio stations, three daily newspapers (one of which is a regional black newspaper
entitled "Richmond Afro-American"), 37 weekly newspapers and monthly periodicals (Rand Banker's Directory 1988: 1610- 3463; Gale Directory of Publications 1989: 641-844; 153 Broadcasting Cable Yearbook 1989: 79-221). The city houses eighteen motels and hotels, which includes five luxury hotels (Hyatt Richmond, Omni Richmond Hotel, Richmond Mariott, John Marshall, and Commonwealth Park Hotel). However, the Greater Richmond area itself has over 50 hotels and motels (Tourbook 1990: A150-A156). Richmond has six covered malls (one is a unique enclosed downtown shopping area called the "Sixth Street Marketplace") and shopping centers (Nordenson Interview 1990). The city has 18 hospitals (one a major care facility and research hospital, the Medical College of Virginia Hospital), and one airport (an international airport, Richmond International airport) (McClintock Interview 1990). Richmond offers diverse recreational/cultural outlets which include restaurants, an active professional theatre company, a symphony orchestra, an art museum, the Confederate Museum, a Black Cultural Museum, and a minor league professional baseball team.
Governmental Activity
According to Moody's Bond Record rating, the city has an Aa bond rating (Moody’s Bond Record 1990: 389-467). The average property tax rate for Richmond is $1.53 per $100 on
commercial and residential property (Wray Interview 1990). The city does not have an income tax or a wage tax because it is not allowed by the state (Wray Interview 1990) . The property tax accounts for 3 0.75% of the city's total revenue 154 and for roughly 30.75% the general fund budget (Wray Interview 1990). The city of Richmond has a council manager form of government with non-partisan elections (Office of Council, City of Richmond 1989). Members of the council are elected on a non-partisan basis from single member districts. The mayorship and council membership are part-time positions. The current mayor and president of council is a white female. Richmond's council is comprised of 5 blacks and four whites.
Richmond's city council has a slim black majority because the city is predominantly black. Given the presence of a large black voting electorate in Richmond, one would expect a sizeable number or even a majority of city council members to be black. Another reason Richmond has a black majority of council members is the decision of U.S. Supreme Court in 1975 in the case of Richmond v. U.S. f!974). The
Court ruled that Richmond's annexation of additional land in
Chesterfield County, coupled with an at-large council system, was evidence of the city's attempt to dilute the voting strength of blacks (Moeser Interview 199 0). In other words, the annexation movement along with an at-large council electoral system made it extremely difficult for blacks to be elected to city council (Moeser 1982: 159-188) . Therefore, the Court resolved the councilmatic electoral matter by
"accept[ing] [Richmond's] ward plan as equitable, but 155 returned the case for further study by the Special Master of the evidence for economic and administrative benefits (Murphy
1978: 172-173). In essence, the Court accepted the city's decision to switch from an at-large system to a single member ward or district system to insure black representation on city council (Moeser 1982: 159-188). When the city was forced to adopt a single member district system, blacks were able to elect a black majority to council, second, no political party dominates the city council. The absence of a dominant political party in Richmond basically can be traced to Richmond's reform movement of 1948 (Moeser Interview 1990). According to Moeser, in 1948 the city reformed its city council by amending its charter and switching its style of governance from a bicameral city council arrangement to that of an at-large nonpartisan system (Moeser Interview 1990). Moeser states that the primary reason for the switch was that the reformers believed that an at-large system was more efficient and effective than old system. Moreover, they
further believed that the new system would benefit the city as a whole because they perceived the old system to be highly fragmented and politically divisive.
SUMMARY Based upon the profile presented of Columbus, St. Louis, Baltimore, and Richmond, the following conclusions about each city's demographics, economy, educational system, employment 156 trends, crime rate, and government activity.
Demographic and Social Change The demographic and social changes of the four cities, reveal that with the exception of Columbus, because their states have elected to treat them like counties and because of legal difficulties involved in annexing other areas, annexation in Richmond, Baltimore, and St. Louis has been significantly curtailed. The immediate implication of slowed annexation movement in these three cities is reduced available land for development. Once again, except for Columbus, the cities have witnessed a sizeable outmigration of their white middle class over a period of time to adjacent counties, and a steady influx of minorities (especially blacks). The immediate impact of outmigration of whites from Baltimore and Richmond, is that the lost population has resulted in both cities quickly becoming predominantly black and poor. With the exception of St. Louis, all of the cities have relatively young populations.
Finally, all four cities have some degree of residential segregation. All but Columbus are highly segregated in terms of residence and are polarized on issues that have racial undertones.
Income. Education and Employment 157 Information on the four cities * income, education, and employment levels reveals that only Columbus is close to the national median income levels. The other cities are well below that level. St. Louis and Baltimore were identified in a national study as having a sizeable portion of their population persistently in poverty from 1974 through 1983. According to a study conducted and published by Adams et al., entitled "The Persistence of Urban Poverty," in St. Louis, 53,461 or 12.0% of the city's total population were persistently poor from 1974-83; and in Baltimore, 97,688 or 12.7% of the city's total population from 1974-83 was listed as being persistently poor (Adam et al. 1988: 89-92; Tackett
1990: 21)). In terras of education, Columbus has the highest median school years completed, percent of high school graduates, and percent of college graduates within its borders. St. Louis has the lowest marks in those categories. Although the cities differ in terms of school years completed, percent of
high school graduates, and college graduates within their respective borders, all of the cities' school districts are
shrinking and becoming predominantly minority. Moreover, all of the cities' school districts have been perceived by their
general publics as having failed in terms of achieving their educational mission. In the employment, all of the cities have witnessed a steady erosion of their manufacturing base over a period of 158 time. The cities that have lost the most manufacturing jobs are St. Louis and Baltimore. Although each of the cities has lost a sizeable portion of its manufacturing base over a period of time, they have also witnessed a steady increase in service sector jobs during the same period. The cities that have witnessed the greatest increased in service sector jobs, are Columbus and St. Louis. Even though the cities have witnessed an increase in service sector employment, all of the cities have high minority unemployment rates. In fact, in each city the minority unemployment rate is twice that of whites.
Crime In crime, with the exception of St. Louis, the cities in this study have a relatively modest crime level. But all of the cities have experienced an increase in the number of homicides and drug related deaths. In fact, Baltimore and
Richmond have experienced the sharpest increase in homicides and drug related deaths over a one year period.
Government Activity
With the exception of St. Louis, all of the cities had at least an A bond rating. St. Louis had a bond rating in the "B" category. Only Richmond and Baltimore depend almost exclusively on the property tax as a major source of revenue.
All of the cities had women and minority representation on 159 council. Only Baltimore had a black mayor. Moreover, with the exception of Richmond, all of the city councils were dominated by Democrats.
The data in this chapter illustrates that each city has a different set of demographic, social, economic, and political characteristics; and that because of the different characteristics of the cities, the type of social, economic, demographic and political constraints that a regime faces when constructing their particular development policy will vary. The variations among the cities in this study will be incorporated into the analysis of the next chapter to identify the type of regimes that exists and the development policy styles that are being pursued in each city. 160
ENDNOTES
1. According to Dr. Lundman, Professor, Department of Sociology at The Ohio State University, the crime rate is computated in the following manner: (a) Assume that City A has a total population of 763,000. (b) Divide the total population figure of 763,000, by 100,000. (Note: Because the federal government derives its crime rate based upon a population figure of 100,000). (c) Dividing 100,000 figure into 763,000 = 7.63. (d) To obtain the over all crime rate: assume a crime index figure of 70,021. After obtaining the crime index figure, divide it by 7.63 or 70,021/7.63 = 9,177.06. The number 9.177.06 is actual crime rate. The crime rate is expressed as 9,177.06 crimes per 100,000 residents in that city (Lundman Interview 1990). 2. According to Lana Stein in Holding Bureaucrats Accountable: Politicians and Professional in St. Louis, the establishment of St. Louis as an independent city or like a county, was probably precipitated largely because "A number of St. Louis residents felt that the rural areas of the county inhibited municipal activity and absorbed too many resources. It was widely believed that the city was being exploited by an incompetent, extravagant county administration. Because of this 187 6 divorce, the city of St. Louis itself had to assume the functions of a county and set up certain county officials" (Stein [forthcoming fall 1990] : 4-5).
3. The term "Transactional City," according to Dr. Henry Hunker, Professor, Department of Geography, The Ohio State University, originated from the research of Gottman an American geography professor at the University of Maryland at College Park. Hunker and Gottman define "Transactional City" as a city whose economy is based upon the production of non-tangibles items. In other words, a "Transactional City" is a city that has shifted its economic base almost completely from a secondary sector dominated economy to one that is almost completely dominated by the tertiary sector. The one major city that fits this description is the city of San Francisco (Hunker Interview 1986). 161
4. According to Mr. Daniel Arkin, Richmond Public Schools; Hal , Gruber, Director, Management Information Systems Department of Education, State of Virginia, Mr. George McCoy, President, Virginia Council of Private Education, and Dr. Larry Bussey, U.S. Office of Civil Rights, Richmond or the state of Virginia does not keep adequate or reliable data on the number of private schools or students enrolled in private schools because the state does not require private schools to register with the state or city (Arkin Interview 1990; Bussey Interview 1990; Gruber Interview 1990). In other words, although most trained observers of Richmond school politics agree that the city has lost a sizeable portion of its students to private and suburban schools, there is no reliable data to substantiate the claim. The only evidence is that the school system has lost four thousand students over an eight year period. The only plausible explanation of where these students are going is to private or suburban/county school districts (Arkin Interview 1990). 162
List Of Personal Interviews
Personal Interview with Pat Brady, Division of Economic Development, City of Columbus, Columbus, Ohio, 13 February 1987.
Personal Interview with Bill Habig, Executive Director, Mid Ohio Regional Planning Commission, Columbus, Ohio, 29 August 198 9. Personal Interview with Dr. Henry L. Hunker, Professor, Department of Geography, The Ohio State University, Columbus, Ohio 21 September 1989. Personal Interview with Dr. Richard J. Lundman, Professor, Department of Sociology, The Ohio State University, Columbus, Ohio 19 December 1989. 163
LIST OF PHONE INTERVIEWS
Arkin, Daniel, Ph.d Candidate Department cp Urban Studies and Planning, Virginia Commonwealth University, and Analyst, Department of Information Services, Richmond Public Schools, Richmond, VA 21 March 1990. Arnold, Dr. Joseph, Professor, Department of History at the University of Maryland at Baltimore, Baltimore, Maryland, 8 February 1990. Ash, Jesse, Research Analysts, Maryland Department of State Planning, State of Maryland, Baltimore, Maryland, 23 January 1990. Baker, Linda, Maryland Department of Education, State of Maryland, Baltimore, Maryland, 9 March 1990. Baker, Bryan, Ohio Bureau of Employment Services, State of Ohio, Columbus, Ohio, 1 December 1989. Berry, Geraldine, Survey and Data Collection Service, Office of Civil Rights, U.S. Department of Education, Washington, D.C., 16 February 1990. Brown, Douglas, Bureau of Budget, City of Baltimore, Baltimore, Maryland, 18 January 1990.
Bussey, Dr. Larry, Survey and Data Collection Services, Office of Civil Rights, U.S. Department of Education, Washington, D.C., 21 March 1990.
Carson, James, Research Associate, Ohio Data User Center of the Ohio Department of Development, State of Ohio, Columbus, Ohio, 13 November 1987. Charity, Burrell T., Office of Management and Budget Strategic Planning, City of Columbus, Columbus, Ohio, 1 December 1989. Green, Maureen, Bureau of Labor Statistics, U.S. Department of Labor, Washington, D.C. 21 December 1989. 164 Gruber, Hal, Director, Management Information Systems, Department of Education, State of Virginia, Richmond, Virginia 8 March 1990.
Hall, Virginia, City Councilwoman, City of Baltimore, Baltimore, Maryland, 26 February 1990. Hunker, Henry, Director School of Public Policy and Management at The Ohio State University, Columbus, Ohio, 19 January 1990.
Jenkins, Arlene, Detective, Narcotics Division, City of Baltimore Police Department, Baltimore, Maryland, 8 January 1990.
Johnson, Frank, Budget Office, City of St.Louis, St. Louis, Missouri, 8 January 1990. Jones, Debbie, Office of Council, City of Baltimore, Baltimore, Maryland, 15 March 1989.
McClintock, John, Graduate Student, City and Regional Planning Department at The Ohio State University, Columbus, Ohio, 7 March 1990. McCoy George, President, Virginia Council of Private Education, Richmond, Virginia 13 March 1990. Moeser, John, Associate Professor, Department of Urban Studies and Planning, Virginia Commonwealth University, Richmond, Virginia 16 February 1990.
Moore, Kenneth, Employment Commission, Economic Information Services, Virginia State Employment Commission, Richmond, VA 1989.
Nordenson, Rick, Vice President, Business and Economic Development, Richmond Metro Chamber of Commerce 8 March 1990.
Office of Board of Alderman, St. Louis Board of Alderman, St. Louis, MO. 15 March 1989.
Office of Clerk of Council, Richmond City Council, Richmond, VA. 15 March 1989.
O'Neil, Tim, Reporter, St. Louis Post Dispatch Newspaper, St. Louis, Missouri, 23 January 1990. 165 Patton, Richard H., Associate Professor, Department of Political Science at University of Missouri at St. Louis, St. Louis, Missouri, 21 December 1989. Signorino, Russell, Missouri Division of Employment Security, State of Missouri, Springfield, Missouri, 15 December 1989. Strieker, Jeanne, Clerk Assistant, Office of City Council, City of Columbus, Columbus, Ohio, 13 February 1987.
Stone, Clarence N., Professor, Political Science Department at the University of Maryland at College Park, College Park, Maryland, 30 January 1990. Williams, Mike, Staff Writer, Richmond Dispatch Times, Richmond, Virginia, 2 March 1990. Wray, Bernard, Budget and Strategic Planning Department, City of Richmond, Richmond Virginia, 19 February 1990. CHAPTER V INTRODUCTION
The purpose of -this chapter is first, to ascertain how a regime's political and economic attitudes influence urban development policy choices and interactions with the institutions responsible for executing urban development policies. The attitudes of the regimes along with their interactions with the institutions responsible for executing development policy will be established primarily through analyzingfive research questions that were presented in chapter three. Moreover, the Urban Development Policy Model presented earlier will be reproduced and used briefly to establish the linkages between key components of the model and some of the research questions, in order to further explain the influence of regimes on the shaping of urban development policy. In order to accomplish this task, the first part of this chapter will focus exclusively on determining the type of regime that prevails in each city. The intent here is to ascertain the composition of the regime and to determine whether the public or private sector dominates the local regime. The second part of this chapter will primarily examine
166 the three remaining questions. Moreover, four working hypotheses also presented in chapter three will be restated in the closing portion of this chapter and analyzed to further ascertain the extent of the regime's influence on the direction of development policy in the four cities. Figure 13, the expanded version of the UDPM is on the next page. 168
Demographic & Environmental Factors Demographic 1.Racial Composition 2.Education Levels 3.Crime Rate
Environmental 1.Research Institutions 2. Territorial Groups < — 3. Business Groups 4. Labor Groups
Political Variable Regime Type 1. Composition of Regime 2. Attitudes of local regime
City Structure Development Policy Choice 1. Attitudes of local officials Development 2. Administrative Policy Strategy Setting
URBAN ECONOMY 1. Type of Economy 2. Unemployment Rates
Figure 13 Expanded Version of UDPM Model 169
If the reader will recall, the primary underlying assumption of this model is that urban development policy choices are shaped by the regime type's political/economic
orientation and by the market condition of the community. The secondary assumption is that the demographic and environmental features of a particular area place constraints on the type of development policy initiatives that a regime can adopt. Given these two assumptions, those elements of the UDPM that are significant to the four research questions will now be identified, along with the rationale for their use in this chapter. The elements of the UDPM diagram that establish the linkages through the questions are as follows: First, the subcategory regime type under the political variable is used to explain question one; second, the subcategory development policy strategy under development policy choice variable is used to explain questions two and three; the subcategories
city structure under the political variable and environmental
under the demographic/environmental variable will be used collectively to explain question four. Finally, the subcategory demographic under the environmental/demographic variable will be used to partially explain the significance of demographic and environmental factors to future research
in the field. Question five is discussed separately and in the conclusion. In essence, based on the UDPM, those subcategories that were cited are clearly linked to the 170 research questions. The analysis begins with question one.
Analysis Of Research Questions
What Is The Composition Of The Local Regime? The composition and type of regimes that prevail in Columbus, St. Louis, Richmond and Baltimore are explained below.
The regime in Columbus was identified by several sources as the dominant factor in most major urban development or redevelopment projects (Hunker Interview 1989; Habig Interview 1989; Nelson interview 1989; Lumpkin Interview 1988; Campbell Interview 1988; Edwards Interview 1988). Most of the individuals interviewed consistently identified several key individuals from the business community as being the "movers and shakers" behind most major urban development projects. Those individuals cited by interviewees as belonging to the Columbus regime were also identified by the
Columbus Monthly (a city magazine) as members of the local power structure. Those individuals identified as influential members of the community have appeared in every issue on that topic for the last ten years. The Columbus regime is politically conservative, and its primary focus is on revitalizing the city's downtown economy. This emphasis is consistent with the definition of a privatist regime and was substantiated during several 171 personal interviews with local community leaders, academician\scholars, and community activists. The Columbus regime appears not only to dominate urban development matters, but also the political process. The regime was so influential in local politics, that it could support and get elected to public office candidates supportive of the regime's pro-growth policies. And the regime could defeat very easily candidates who were either publicly critical or opposed to the regime's pro-growth projects. An illustration of this occurred when the late John A. Meysenburg, Jr. , a small entrepreneur who was often highly critical of and publicly opposed to most of the regime's major urban development projects, was soundly defeated by the regime when he ran for a seat on city council. According to an administrator for a Columbus public interest organization, the primary reason why Meysenburg and other candidates opposed to the regime's policies were consistently defeated in general elections, was that the regime could successfully discredit them is the newspaper and on T.V. by labeling them malcontents and accusing them of being opposed to growth in the city (Edwards Interview 1988; Colbert Interview 1988; Willis Interview 1988).
The examination of the Columbus regime reveals that a privatist regime does exist in the city, and that it exercises significant influence in the development and political arenas. 172 A fusion regime prevails in Baltimore (Stoker Interview
1989; Gray Interview 1989) . The origins of this regime is traceable to Mayor Donald Schaefer's tenure as mayor. According to Robert Stoker, noted urban development scholar and authority on Baltimore politics, the fusion regime emerged from Schaefer's trustee system, advisory group of public and private elites whose primary mission was to assist the Schaefer administration in circumventing the formal bureaucracy of Baltimore on major development policy decisions (Stoker Interview 1989). Schaefer established his trustee system to bypass the formal bureaucracy because Schaefer as well as his opponents acknowledged that the Baltimore bureaucracy was ineffective and inefficient.
Schaefer created a process that would craft and execute development policy without becoming bogged down with bureaucratic inertia and red tape (Hall Interview 1989; Stoker Interview 1989; Mufume Interview 1989). What emerged from the trustee system was an informal or ad hoc decision-making body that made major development policy decisions for would the city. Over time, the trustee system evolved from an ad hoc group into a fusion regime. A fusion regime exists in Baltimore because the regime is not dominated by either the public or private sectors of the city. It is difficult to determine which sector dominates in Baltimore because of the regime's secrecy. Their secrecy makes it difficult to evaluate their decisions; and the ad 173 hoc decision-making style makes it difficult to hold someone or a group accountable for a failed policy. Therefore, because of secrecy and the ad hoc decision-making style,
Stoker believes that no clear authority emerges from this type of arrangement (Stoker 1987: 261-265). The regime in Baltimore is a coalition of elite public and private bureaucrats who dominate urban development initiatives and projects. Stoker maintains that although the membership of the regime is not commonly known, the origins of this group are still traceable to those agencies/companies loyal to Schaefer and to the Greater Baltimore Committee (For further elaboration on the role of the GBC in Baltimore's development see endnote one). The fusion regime has maintained its influence over major development policy projects in Baltimore by using quasi-public corporations to implement them. Such key development projects as the Inner
Harbor, Baltimore Economic Development Corporation (BEDCO),
Market Center Development Corporation, Lexington Street
Market, and Baltimore National Aquarium are all quasi-public corporations which became operational under Schaefer's administration and were enthusiastically supported by the GBC (Stoker Interview 1989). The use of quasi-public corporations has been justified by their supporters who maintain that quasi-public corporations are neutral or apolitical. They
assume that if you remove politics from the policy process, then it will unfold in a more quickly. The supporters of 174 quasi-public corporations argue that they avoid unreasonable citizen demands and bureaucratic red tape (Stoker 1987: 247) . Unlike the Columbus regime, the Baltimore regime seems to confine its political influence to development matters. The regime's influence appears to be restricted to city-wide urban development policy. One plausible explanation for the restrictions, is that city council members in Baltimore are elected from wards, and as a result they do not have to
conduct a city-wide campaigns. The significance of this is that if the regime did encounter city council candidates or incumbents opposed to the regime's policies, the regime would
have to invest time and resources in an expensive media city- wide campaign to defeat those candidates, who might be perceived as being hostile to its interest. Stoker and Kweisi Mufume, a former council member and the current U.S. Representative from Baltimore, believe that
although the regime does not exercise significant political influence city council elections, they believe that the council does not pose any serious opposition to the regime
because city council was so politically divided during and still after Schaefer's administration that it could not seriously challenge Schaefer or the fusion regime's policies. Moreover, Mufume argued that another reason why individual members or even the collective council was not a political
threat to the fusion regime was that each member was
constantly trying to negotiate personal political deals with 175 the Schaefer administration (Mufume Interview 1989; Stoker Interview 1989). The composition of the Richmond and St. Louis regimes and their relationship with local public officials are somewhat different from their regime counterparts in Baltimore and Columbus. The St. Louis regime is privately directed or dominated by what some long-term political observers refer to as the "downtown money" group (Woodson Interview 1989; Judd Interview 1989; O'Neil Interview 1989).
A privatist regime exists in St. Louis because according to Dennis Judd, noted urban scholar, the group that dominates major development projects in the city is an elite called "Civic Progress Inc." These observers describe "Civic Progress" as money men or big shots, the official voices for the corporate community, and the silk stocking CEOs of major corporations headquartered in St. Louis (Judd Interview 1989;
O'Neil Interview 1989; Woodson Interview 1989). Judd and others believe that the privatist regime in St. Louis consists primarily of members from "the Brewery" (i.e., beer manufacturers), major banks, KMOX radio station and the corporate giants headquartered in the city (e.g., Monsanto, McDonald Douglas and Union Electric) (Judd Interview 1989; O'Neil Interview 1989; Woodson Interview 1989).
Carter Woodson, a Ph.D candidate in political science at the University of Missouri at St. Louis, maintains that
"Civic Progress" is influential in local development policy 176 because of their close working relationship with a another civic minded research group called Confluence St. Louis (Woodson Interview 1989). Woodson states that although this group is a separate entity, on several occasions it has prepared working policy position papers on key tax initiatives and other important policy issues on behalf of
Civic Progress. This type of relationship has led Woodson and others to speculate that Confluence St. Louis is probably a research/policy arm of "Civic Progress" (Woodson Interview 1989). This relationship provides the regime with an additional resource in the form of technical policy skills. For further elaboration on Confluence St. Louis, see endnote. The research arm of "Civic Progress," illustrates that the description of the regime as an organization is consistent with some of Matthew Holden's preconditions for an effective and successful policy organization. For instance, some of the preconditions that appear to have been met in St. Louis are: unlimited resources, and technical,
bureaucratic skills. Given these important resources, it is
apparent why the privatist regime dominates major development policy initiatives.
Although the St. Louis regime exercises political and economic influence in the development arena, its relationship with elected officials could be described as strained because the city's politics are highly fragmented. According to Judd, the city's politics are highly fragmented because of the 177 Inability of the aldermen to cooperate with one another on major policy decisions. Moreover, the city is racially divided because St. Louis is still perceived by its residents as well as by observers as a "Southern city” with strong traditional views on race relations (Judd Interview 1989); Stein Interview 1989); Miller Interview 1989). The city's
poor race relations image is further illustrated by three current Democratic aldermen who are alleged to have been publicly identified with or at least to have empathized with
a local "White citizens Council" group (Judd Interview 1989). Moreover, the city is highly segregated, and racial conflicts occur when person of another race accidentally or intentionally enters a "wrong" section of town. In one such incident in 1989 in a St. Louis working class neighborhood called "Bevo," a black couple was physically attacked and verbally abused by a band of white youths for entering their
neighborhood (St. Louis Post Disptach 1989: 3A) . The incident was perceived by blacks to be racially motivated because the youths were shouting "Niggers, get out of our neighborhood
" (3A). Judd believes that the aldermen do not cooperate with one another primarily because they are preoccupied with their ward politics. Judd states that the concern of the aldermen "Is on fixing parking tickets, bailing a constituent's son out of jail at two in the morning, and chasing housing
inspectors away from their constituent's homes" (Judd 178 Interview 1989). Another reason why the aldermen do not
collectively or individually cooperate with the regime, is that they resent the regime because they perceive it as being an "arrogant and uppdity group of individuals who look down
upon them" (O'Neil Interview 1989). With a fragmented political environment and the aldermen's resentment of the
local regime, it is clear why the two do not cooperate. Finally, the elected official's relationship with the regime is strained and the city's politics are fragmented because of the presence of the current mayor of St. Louis and Congressman Clay in local politics. Clay has contributed to the fragmented political environment of St. louis by intentionally and unintentionally retarding the political development of the black community especially in his district. Clay has been accused by his opponents of retarding the political development of his district by conducting the political affairs of his district in the fashion of a "political machine" (Judd Interview 1989; Woodson Interview
1989; O'Neil Interview 1989). He has been accused of dividing the black community into two camps, pro-Clay and anti-Clay forces, and thus making it difficult for blacks to unify and make a legitimate push for black political empowerment in that city.
Mayor Schoemehl, a Democrat, has been described as a "maverick" politician with an abrasive leadership style
(O'Neil Interview 1989; Woodson Interview 1989). According 179 to O'Neil, Schoemehl*s leadership style has generally placed him at odds with some aldermen and with some members of the regime, especially "Brewery" over whether the city should build a domed stadium for the St. Louis Cardinals baseball
team. The controversy surrounding the building of a domed stadium is significant to St. Louis politics because "Brewery" and some civic leaders believe that Schoemehl's decision not to support the building of a domed stadium for the St. Louis Cardinals football team contributed to the city
losing its team to Phoenix, Arizona. These same leaders believe that if a domed stadium is not constructed, then the city might also lose its baseball team to another city, the nearby suburbs, or to St. Louis County. The relationship between the regime and the public sector in St. Louis appears to indicate that although the
regime is a dominant actor in major development matters, the
elected officials appear to exercise some political
independence in the fringe areas of development, neighborhood development. Elected officials dominate in this area because they are not dependent upon the regime for their political support or approval. But in spite of their political independence in the neighborhoods, aldermen still depend upon the regime for financial support for overall economic development of their city. Therefore, although elected officials are politically independent in the fringe areas of development, they still cannot afford politically to alienate 180 or Ignore the needs of corporate and business community# or to create a business climate perceived as "hostile" to their specific interests.
The regime type in Richmond is privatist. However# its political arrangement with the elected officials of Richmond is complicated primarily because of the racial polarization in city's political and social affairs. A privatist regime prevails in Richmond, traditionally a politically, socially and economically conservative city. According to Moeser "As Virginia's [special place], Richmond and its policies are inextricably entwined with the state. Consequently, a challenge to Richmond's political order
constitutes, by definition, a challenge to the state's" (Moeser 1982: 7). Next, the regime in Richmond is private directed and consists primarily of "business elites and top officers of major corporations that are headquartered in the
city" (Drake and Holsworth 1989: 26-27). When 10 respondents were asked to identify the regime and its composition, seven
cited major corporate officers of companies headquartered in
the city and business elites (i.e., bank officials and major chain store merchants) as comprising the regime in Richmond (Drake Interview 1989; Silver Interview 1989; Moeser Interview 1989; Williams Interview 1989).
The political relationship between the regime and the elected officials is defined solely on the basis of race;
Richmond has a longstanding tradition of practicing racial 181 politics. For instance, according to Moeser, "White leadership wanted the politics of paternalism to govern black-white relations in general and black-white political relations in particular. Black leadership recognized and accepted certain aspects of that paternalism and accommodated itself to that structure as a necessary strategy" (Moeser 1982: 6-7). The longstanding tradition of racial polarization in Richmond's politics and society has led some members of the business elite and the general white community to actually believe that a black political majority is incapable of running city government efficiently and effectively.
In spite of the regime's negative perception of the black political majority's ability to govern, the two races have forged a political relationship around congruous interests, e.g., maintaining the economic vivacity of Richmond. For instance, Avon Drake, a political scientist at Virginia Commonwealth University, states that although the black political majority tries to insure that the black community's interests are not ignored in the development of the city, they have consistently framed their policies to accommodate the needs of corporate Richmond first (Drake Interview 1989). In other words, Drake believes that the development priority in Richmond is "Main to the James
(historic white business district) first and Jackson Ward (historic black commercial artery) second" (Drake Interview
1989). Drake's description implies that although a black 182 political majority might prevail in the city, that majority recognizes that it must craft its policies and programs to accommodate the needs of the privatist regime. Therefore, given the historic stereotypical racial beliefs about the ability of blacks to govern, one can understand why the political relationship in Richmond is fashioned along racial lines. Moreover, the political arrangement between the privatist regime and the black political majority could best be described as a marriage of convenience or a senior/junior partnership relationship. For further elaboration on the origins and application of the term senior/junior partnership relationship to describe the relationship between Richmond city council and its business community see endnote three. The information presented on the different cities regime types and their regime compositions shows that except for
Baltimore, all the cities have privatist regimes. Most of the individuals interviewed for this study clearly stated that major development projects launched in their cities were generally started and dominated by the regime. The type of regime that exists in each city is as follow: Baltimore has a fusion regime, St. Louis, Columbus and Richmond, all have privatist regimes.
The findings also reveal that most of the cities' politicians/elected officials do exercise some political independence and influence over periphery areas of 183 development, e.g., neighborhood development. For instance, St. Louis, has developed and implemented a housing incentive program to attract middle class, income producing citizens to the city by providing them with affordable housing. In essence, the St. Louis housing program involves paying an individual's "housing closing points" (Stein Interview 1989) . This type of program reveals that elected officials do exercise some political latitude in peripheral areas of development it also reveals that even though the regime is consistently pursuing market oriented policies to stimulate overall development in the city, the public sector on some occasions does the opposite. Except in Columbus, most locally elected officials exercise some political independence from the local regime. The independent of the regime and the elected officials, is most noticeable in St. Louis and Richmond because the local officials must respond to their particular set of political ward/district constraints. For instance, in St. Louis the aldermen were preoccupied with addressing the basic needs of their constituents, while in Richmond, the black political majority was consistently trying to fulfill the political and economic expectations (i.e., affirmative action and set aside programs for minority businesses) of the black community.
The type and composition of the regimes in each of the cities will now be used to determine what type of development 184 initiatives head the local regime's political/economic agenda.
What type of development initiatives are at the top of local regime's political/economic agenda?
In order to identify and explain the type of development policy initiatives which dominate the St. Louis, Baltimore, Columbus, and Richmond regimes's economic agendas, a two part explanation is required. The two part explanation examines the kinds of fiscal initiatives that are employed by all of the cities and the initiatives unique to each city. Presenting the material in two parts also allows graphic illustrations to make cross-city comparisons of the types of initiatives that are used by each city. The intent here is determine the type of development policy strategy being employed by a particular regime.
Part one of the explanation begins with Table 9 which illustrates the types of fiscal incentives and their frequency of use in all of the four cities. The information for Table 9 was obtained from interviews with 37 individuals in four cities. The individuals included informal representatives from professional and community-based organizations, business groups, urban academician scholars, elected and non-elected officials. (A) Fiscal incentives Employed by All of Cities
TABLE 9 Type of Fiscal Incentives Used in Four Cities.
TYPE NUMBER OF OF RESPONDENTS = 37 FISCAL INCENTIVES GREAT SOME VERY DEAL LITTLE Tax Abate 54% 22% 24%
Ind Bond 35% 28% 37% Tax Exempt 30% 13% 57%
Gen Oblig 25% 55% 20% Mark Asst 25% 50% 55% Low Cost 20% 26% 54% Dev Fin 19% 29% 55%
Entrp Zone 16% 30% 54% Vent Cap 14% 8% 78%
Imp Fees 0% 14% 86% Source: Personal interviews conducted Baltimore, Columbus, Richmond, and St. Louis. Tax Abate - Tax Abatement Tax Exempt - Tax Exemption on Capital Improvement Entrp Zone - Enterprise Zones Ind Bond - Industrial Bond Financing Gen Oblig - General Obligation Bonds Dev Fin - Developer Financing Low Cost - Low Cost Loans to Business Mark Asst - Marketing Assistance Imp Fees - Impact Fees Vent Cap - Venture Capital Support Programs 186
Table 9 reveals first that the fiscal incentives employed most frequently in all of the cities are Tax Abatement, Tax Exemption on Capital Improvement, Industrial Bond Financing, General Obligation Bonds and Marketing Assistance. Tax Abatement is used more frequently than any other fiscal incentive and was listed by 54% of the respondents as the dominant type of fiscal incentive employed to stimulate development or retain economic expansion. One plausible explanation why these fiscal incentives are employed more often than Developer Financing, Low Cost Loans, Entrprize Zones, Venture Capital Support Programs and Impact Fees is that these incentives do not involve raising taxes and they are not redistributive policies. The significance of the use of these kinds of incentives from the perspective of local officials is that they are not perceived as being major political liabilities for one's reelection to council.
In essence, the policy makers perceive these kinds of incentives as being "politically safe," and they create the impression that the city is doing something. The data also reveals that Impact Fees and Venture Capital Support Programs are the least used fiscal incentives in all of the cities because Impact Fees are perceived by city officials as potentially retarding development efforts, and Venture Capital Support Programs are deemed too costly 187 to start up. Upon examining Table 9 more carefully, one could tentatively conclude that all of the cities appear to be pursuing a market based approach to development. The frequency of use of fiscal incentives in all of the cities in Table 9 is consistent with a market based approach to development. Examining the types of fiscal incentives employed by the individual cities will help to determine whether all or some of the city's fiscal incentives are consistent with a market based approach or a neo-market approach to development.
(B) Fiscal Incentives Employed by Baltimore, Richmond, St. Louis and Columbus.
Different types of fiscal incentives are used by
Columbus, St. Louis, Baltimore, and Richmond (Table 10). The types of incentives employed in Columbus and St. Louis to stimulate development and attract private investment are similiar. Respondents in St. Louis and Columbus perceive their cities as using Tax Abatement (TB) as a development policy more than the respondents in Baltimore and Richmond do. For instance, Columbus uses TB 79%, and St. Louis uses it 88% more frequently, in comparison to 63% for Baltimore and Richmond. Columbus and St. Louis are also similiar in their use of Tax Exemption on Capital Improvement, Industrial
Bond Financing, and General Bond Financing. St. Louis and Columbus seem to employ these incentives more extensively than do Baltimore and Richmond. The comparision between St. Louis and Columbus is significant because both cities are employing more frequently those kinds of incentives that are consistent with a market based approach to development. Columbus and St. Louis rely more on market based incentives and less on neo market based incentives. 189
TABLE 10 Type of Fiscal Incentives and Perceive Use in Columbus, St. Louis, Baltimore and Richmond. COLUMBUS ST. LOUIS TYPE N = 13 TYPE N = 8 OF OF FISGD SVL FIS GD SVL
TB 79% 23% 23% TB 88% 0 12% TEX 54% 23% 23% GOB 25% 25% 50% IBF 23% 54% 23% TEX 25% 0 75% EZ 23% 31% 46% IBF 25% 0 75% GOB 15% 85% 0 EZ 12% 25% 63% DF 7% 46% 46% LCL 12% 12% 75% LCL 7% 31% 62% MA 0 25% 75% MA 7% 23% 69% IF 0 25% 75% IF 0 0 100% DF 0 12% 88% VCSP 0 0 100% VCSP 0 0 100%
BALTIMORE RICHMOND
TYPE N = 8 TYPE N = 8 OF OF FISGD SVL FIS GDS VL VCSP 63% 25% 12% IBF 63% 25 12% DF 50% 37% 12% MA 63% 0 37% MA 37% 50% 12% GOB 50% 25% 25% LCL 37% 25% 37% LCL 37% 24% 38% IBF 37% 12% 50% EZ 12% 25% 63% TB 25% 63% 12% TEX 12% 25% 63% GOB 12% 62% 26% DF 12% 12% 75% EZ 12% 25% 63% TB 12% 0 88% TEX 12% 0 88% IF 0 25% 75% IF 0 12% 88% VCSP 0 12% 88%
TB - Tax Abatement VCSP - Venture Capital Support IF - Impact Fees Programs TEX - Tax Exemption on DF - Developer Financing Capital Improvement FIS - Fiscal Incentives EZ - Enterprise Zones MA - Marketing Assistance IBF - Industrial Bond Financing G - Great Deal GOB - General Obligation Bonds S - Some LCL - Low Cost Loans to Business VL - Very Little N - Number of Respondents 190
The type of incentives used and their perceived use support the preliminary conclusion that the Columbus and St. Louis regimes employ fiscal incentives that are consistent with a market based approach to development. Two types of fiscal patterns emerge from the data in Table 10. The data reveals that Baltimore relies extensively on fiscal incentives consistent with a neo-market based approach to development. For instance, Baltimore is the only city in this study that relies frequently on Venture Capital Support Programs to stimulate development. One plausible explanation of why Baltimore uses this particular incentive to stimulate development is that the city is attempting to diversify its economy and to capitalize on the high tech industry expanding in and around the city (Stoker Interview 1989). Another reason why Baltimore seems to be heading in the direction of a neo-market based approach to development is that four of its most frequently used fiscal incentives are clearly consistent with a neo market based approach to development. Baltimore's neo market based approach can be substantiated further because the type of incentives least employed by the city are those that are consistent with a market based approach to developemnt.
The second pattern that emerges from the data is that Richmond appears to be pursuing simultaneously a market based and neo market based approach to development. The Richmond 191 data show that the four types of fiscal incentives employed most frequently by the city are a combination of incentives that are consistent with the market and neo market approaches to development. For example, Industrial Bond Financing and Market Assistance are used most frequently as indicated by 63%. The Richmond data further reveal that the city's selection and use of fiscal incentives constitutes mixed pattern. The top and bottom five types of fiscal incentives used by Richmond immediately reveal this trend. Table 10 further, shows that Richmond is the only city in this study that seems to implement both approaches to development. After these preliminary conclusions, several questions remain. For instance, if Richmond's development policy is dominated by a privatist regime, then how can Richmond's regime produce a mixed strategy? Also, are St.
Louis and Columbus actually employing a market based approach to development? These two questions are addressed below.
Does the local regime rely solely on the market or does it use public authority and resources to stimulate urban development projects?
The data from the field research suggest that local regimes do not rely solely on the market to stimulate urban development projects. Instead the research visits revealed that public authority and resources were used on several 192 occasions to stimulate most development initiatives in all of the cities. The author discovered that those individuals interviewed for this study consistently provided brief, rich sketches of how regimes publicly espoused belief in the virtues of the free enterprise system, while simultaneously committing millions of public monies and creating quasi public authorities to support major privately initiated development projects (Stoker Interview 198 9; Hunker Interview 1989; Drake Interview 1989; Judd Interview 1989). Such use of public resources is illustrated in two brief development cases, the Capital South Project in Columbus and the Coldspring Project in Baltimore.
(1 ) Capital South Project The case in Columbus centered around the construction of an inner-city mall called "Capital South" because it is located south of the state capital (Campbell Interview 1988). Initiated originally by the privatist regime in 1972, the goals of the project were to halt the spread of blighted conditions in the area and to enhance and expand downtown retail activities. The plan also called for construction of office space and hotel facilities (Edwards Interview 1988). According to Edwards, the backers of "Capital South" had assured the city officials that Columbus would play a minimal role in the development of the project. The only role required of the city was to use its power of eminent domain to acquire the 76 needed parcels of land for the project. However, when the private sector was unable to meet its financial commitments for the project, the organizers of "Capital South" went to the city for financial assistance (Colbert Interview 1988; McDowell Interview 1988; Edwards
Interview 1988; Willis Interview 1988). The backers of the project approached the city for a bail-out because they believed that it was unrealistic to expect the private sector to finance a risky endeavor especially when interest rates were increasing and market studies were showing downtown retail sales decreasing (Colbert Interview 1988). In other words, the private sector was unwillingly to invest its own resources in a financially risky project. Moreover, when the organizers obtained financial backing from Columbus for this project, the city's minimum role was transformed into a major role in financing. Columbus was no longer relegated to using its eminent domain authority to acquire parcels of land; instead, its role now expanded to include (a) providing tax abatement for 20 years for commercial property and 30 years for residential; (b) extending credit up to $29.5 million for property and relocation of former occupants; (c) financing the relocation of utilities at an estimated cost of $2 to $3 million to be repaid at 10 percent simple interest (Colbert Interview 1988; McDowell Interview 1988). When the "Capital
South" project was finally completed in 1989, the city had provided roughly $30 million dollars for the project, and as 194 of December 1989, city officials estimated that Capital South Community Urban Redevelopment Corporation owed the city approximately $42.4 million dollars (Miller 1989: IB). Although this might be interpreted by some as a good investment, the city is not expected to start receiving repayments on its investments until the year 1995 or possibly 2000 (Colbert Interview 1988). The political and policy implication of this kind of repayment plan is that the Center
City Mall could easily turn into a "White Elephant" project; and if this were to occur, Columbus might lose its investment.
(2 ) Coldsprings Project In Baltimore public resources were used frequently to stimulate private development projects and on some occasions to support projects deemed economically disadvantageous by private investors (Stoker 1987: 244-266; Stoker Interview 1989; Levine 1987: 117-119; Levine 1987:133-138; Levine
Interview 1990). An instance of public resources used by the city to stimulate private investment and to support a project perceived by some private investors as being economically disadvantageous, was the "Coldspring" project (Stoker 1987: 244-246). According to Stoker, the "Coldspring" project was intended to create a "New Town" or planned community in the city. Investors and developers were attempting to build a community of homes, retail centers, office spaces, and an 195 elementary school in order to lure the white middle class
back to the city with affordable housing and a controlled environment (Stoker 1987: 258-261). This project resembles the Capital South Project in Columbus. For instance, just like "Capital South," "Coldspring" began during the early 1970s, and it too was delayed by the recessions and high interests rates that plagued the U.S. economy during the 1970s (Stoker Interview 1989). When it became apparent that
the project was not proceeding according to the investors' schedule, the project was eventually funded by the city. Baltimore's decision to bail-out the project is relavant to this study because the same pattern occurred in Columbus. Baltimore used federal monies earmarked for neighborhood improvement programs to save the "Coldspring" project; directed $30 million dollars in CDBG and Neighborhood Development Program Funds to support "Site preparation, design work, relocation costs, and the laying out of physical facilities" (Stoker 1987: 259); sold "$11.9 million dollars
in privately insured tax-exempt bonds to provide below- market financing (7.5 percent) to home buyers" (259); issued $5.5 million dollars in General Obligation Bond to bail out the first stage of the project, and borrowed $7 million from a local bank to save the second stage of project (259). In attempts to rescue the project, the city eventually paid $3.8 million dollars to buy-out the developer's interests in order to salvage parts of the project. As of 1989, the 196
project has been revised and scaled down. In these two brief illustrations, it is obvious that both cities' decisions to bail out "high risk" private sector initiated projects was a clear indication of the two cities'
redevelopment agenda priority of satisfying the needs of the business and corporate community first and neighborhood needs
second. Although Columbus' privatist regime and city officials publicly espouse the virtues of the market system, their policy actions reflect a neo market based rather than a
market based approach to development. This conflicting policy pattern was clearly exemplify in the "Capital South" project, and it can be demonstrated again when St. Louis' housing development strategies are examined. For instance, if the reader will recall, St. Louis lost a sizeable portion of its white middle class over a period of
time, and as a result the city has an enormous amount of
vacant land and housing. St. Louis has been unable to stimulate private investment interest in this area through traditional market oriented solutions. Private developers
and real estate investors have not been attracted to invest in these areas of the city (Judd Interview 1989; Stein Interview 1989; Kindleberger Interview 1989). Therefore, St. Louis is attempting to correct this particular housing market problem by initiating and implementing an aggressive housing and neighborhood development program designed to attract and 197 retain middle income families, couples, and singles into the city. The program being implemented by the city involves rehabilitation of historic neighborhoods and incentives to encourage people to move back into the city. For example, the
city will assist prospective residents with paying closing costs and points (Stein Interview 1989). Given the active involvement of the St. Louis city government in the housing market, it is apparent that the city is pursuing a neo market approach in this area. St. Louis and Columbus publicly espouse a market based approach but in reality are actively implementing a neo market approach to development in some areas of its local economy.
This point, along with the case illustrations presented earlier, are significant because they provide additional insight into how the political and economic realities of cities such as Richmond, St. Louis, and Columbus may force temporary abandon most of market based beliefs about urban
development, in favor of policies and programs clearly
inconsistent with a market based approach and more consistent
with a neo market based approach. The case illustrations presented thus far, implicate that the four city regimes do not rely solely on market forces to stimulate development. That local regimes frequently use public authority and resources to stimulate urban development and to bail-out
risky projects clearly reveals a contradictory policy pattern. 198 In essence, public officials' persistent use of public resources and authority to stimulate development definitely contradicts their market-based assumptions about the role of government in development. The cities' contradictory development policy styles are illustrated further by Table 11 which reveals the inconsistent approaches in overall development of city and in neighborhood development.
Table 11 Type of development policy approaches used by each city in overall development and neighborhood development.
DEVELOPMENT PO]jlCY APPROACH CITY OVERALL NEIGHBORHOOD Market Neo Market Market Neo Market
BALTIMORE X X — >
COLUMBUS X <------> X
ST. LOUIS X <------> X — >
RICHMOND x <------> X -->
Source: Personal interviews conducted in Baltimore, Richmond, Columbus, and St. Louis during 1989.
Table 11 reveals three important patterns: (1) Baltimore is pursuing a neo market approach to neighborhood development and overall development; (2) Columbus, St. Louis, and 199 Richmond are shifting back and forth between a market and a neo-market approach to overall development. The cities are using public resources and authority to stimulate development 1 or to rescue risky privately initiated projects. The arrows pointing in both directions are attempts to illustrate the conflicting in the three cities; (3) Richmond and St. Louis are defintely pursuing a neo-market based approach in neighborhood development, while Columbus relies on the market-based approach to stimulate neighborhood development.
From the types of incentives used by the four cities, and from the development policy styles of each city, it is obvious that local regimes do not rely solely on the market to stimulate major development projects. Therefore, the next question to be addressed is: Who is responsible for initiating and implementing development policy in the cities?
Who is responsible for initiating and implementing economic development policy in the city?
The issue of who is responsible for initiating major development policy initiatives in each city will be addressed through three interconnected questions. The questions are interrelated because collectively they attempt to ascertain what group or groups dominated urban development initiatives policy a given city. The questions are: Who is responsible for initiating and implementing economic development policy in the city?; Are the organizations responsible for 2 0 0 initiating and implementing economic development policies in
the city quasi-independent?; Do the policies reflect the needs of the total community or of a small segment of the city?
The group consistently identified by most of the respondents in all of the cities as the dominant player in launching major development policy initiatives, was the business/corporate community. For elaboration of why the business/corporate community was perceived by city residents as being dominant in development policy projects see endnote four. The perception of the business/corporate community as the dominant player in initiating major development policy projects is substantiated and illustrated by Tables 12 and 13. Both Tables illustrate who the respondents perceived as the dominant or minor initiators of major development policy projects in their cities. TABLE 12 Dominant Players in Development Policy Initiatives in Four Cities.
TYPE NUMBER OF OF RESPONDENTS = 37 CITY GROUPS MAJOR MINOR NONE PLAYERS PLAYERS
BG 84% 16% 0 CG 16% 43% 41% NDG 8% 73% 19% LG 8% 14% 78% CBO 5% 89% 6%
LURG 5% 41% 54% Source: Personal interviews conducted in the four cities. BG - Business Groups CG - Church Groups LG - Labor Groups NDG - Neighborhood Development Groups LURG - Local University Research Groups CBO - Community Based Organizations 202
TABLE 13 Dominant Players in Development Policy Initiatives for Baltimore, St. Louis, Richmond, and Columbus. RICHMOND ST. LOUIS
TYPE NUMBER = 8 TYPE NUMBER = 8 OF OF CGS MaP ^ MiP Z CGS MaP MiP Z BG 100% 0 0 BG 88% 12% 0 CHG 25% 75% 0 LG 37% 13% 50% LG 25% 0 75% CHG 25% 75% 0 NDG 12% 75% 13% NDG 12% 88% 0 LURG 0 50% 50% LURG 0 75% 25%
CBO 0 100% 0 CBO 0 100% 0
COLUMBUS BALTIMORE
TYPE NUMBER = 1 3 TYPE NUMBER = 8 OF OF CGS MaP MiP z CGS MaP MiP Z
BG 77% 23% 0 BG 75% 25% 0
NDG 0 69% 31% CHG 37% 50% 12% LURG 0 31% 69% CBO 25% 75% 0 CHG 0 15% 85% LURG 25% 12% 63%
LG 0 0 100% NDG 12% 63% 25%
CBO 0 0 100% LG 0 25% 75%
BG - Business MaP - Major Players CHG - Church Groups MiP - Minor Players LG - Labor Groups CGS - City Groups NDG - Neighborhood Development Groups LURG - Local University Research Groups CBO - Community Based Organization Z - No Role 203
The data in Table 13 shows that 84% of respondents viewed business as the dominant player in initiating major development policy projects. The only other group perceived by the respondents as being a major player in development policy arena were church groups. For instance, church groups were identified by only 16% of the respondents as being a dominant player in the development policy arena. One plausible explanation of why churches were identifed as being a dominant player in the development policy arena, is because in some cities like Baltimore, ministers (i.e., especially black ministers) generally tend to dominate the leadership ranks of the black community. In fact, in Baltimore two black ministers served as elected officials. The groups that were consistently identified by the respondents as being minor players or having no role whatever in the development policy arena were labor, neighborhood development groups, community based organizations, and local university research groups. These responses partially confirm a generally held assumption by urban scholars and political scientists that these groups are generally secondary actors in urban development policy. (Stone 1987: 3-20; Elkin 1987: 25-50; Stoker 1987: 244-265; Fainstein et al. 1983: 1-23;
Lindblom 1977). Examining the cities individually, the data in Table 13 is aligned very similiarly to the data in Table 12. For 204
instance, the respondents in Table 13 once again identified business/corporate groups as being dominant in their
respective city's development policy. For instance, in Richmond, 100% of the respondents felt that business was a major player; in St. Louis 88%: in Columbus 77% ; and in Baltimore 75% felt that business was a key player in development. The same respondents identified church groups
and the remaining groups as being minor players or having no role whatsoever in development policy. The significance of these responses is that the data in Table 13 appears to closely parallel (i.e., in terms of allignment) the data in Table 12. Although the two Tables indicate that business and corporate groups appear to play the dominate role in launching major development policy initiatives, this does
not suggest that elected officials have absolutely no input into major development policy decisions. Instead, the Tables reports the perceptions of the respondents on the issue of
what groups they perceive as being major players in their community's development policy arena.
Having identified who initiates development policy in each of the cities, the next question is: Who is responsible for implementing the development policy initiatives? The field research and personal interviews revealed that most development policy initiatives were being implemented by quasi-public corporations and city departmental development 205 agencies. For example, in almost of all of the cities quasi public corporations appeared to be the most dominant organization in terms of planning and implementing major development policy initiatives (Hunker Interview 1989; Stoker Interview 1989; Mufume Interview 1989; Judd Interview 1989).
Baltimore has 13 quasi-public corporations to promote tourism and support economic development (Stoker 1987: 244-265); Columbus has a department of development and three quasi public corporations. One of the quasi-public corporations, Downtown Development Corporation, has total responsibility for developing the downtown area. In fact, this corporation is accountable only to the city council (Hunker Interview
1989; Habig Interview 1989). Although the Downtown Development Corporation is legally accountable to the city council, some long standing observers of city politics believe that the corporation's accountability to the council is a weak relationship at best (Hunker interview 1989; Me Dowell Interview 1989; Colbert Interview; Edwards Interview
1989) ; In St. Louis and Richmond, the organizations that play a major role in implementing and developing policy initiatives are two quasi-public corporations, the Economic Development Corporation of St. Louis and Richmond Renaissance in Richmond.
The increase in number and authority of quasi-public corporations in the economic development has significant policy implications for local communities. For instance, one 206 specific policy matter that might occur as the number and responsibilities of these kinds of organization increase is
the accountability. In Baltimore, for example, it appears that the quasi-public corporations were not only not accountable to the public but some members of the city
council questioned whether they were really accountable to them. This issue will be discussed upon further in the final chapter.
Quasi-public corporations appear to dominate the planning and implementation of development policy initiatives in all of the cities. Furthermore, based upon the perceptions of those individuals who were interviewed, the group that seems to initiate most major development policy initiatives is the business and corporate communities. Therefore, given the rise in the number of quasi-public corporations especially in development, and the perception of business as
a major player in most development policy initiatives, some local observers and scholars have concluded that the policies
adopted and implemented by the local regime may not reflect the needs of the total community because the respondents seem to indicate that the needs of community are often excluded or ignored.
This chapter identified the regime types and their composition of each city. In addition, the types of fiscal
incentives used by the different cities were identified and employed to explicate the development policy approach of each 207 city. Furthermore, the groups or offices responsible for implementing the development policy strategy were also examined. Before closing, this chapter will now reintroduce and briefly discuss the four working hypotheses to see whether their examination provides additional information on the role of regimes in development policy.
Analysis Of Working Hypotheses Hypothesis 1 If a city has a privatist regime, then that city will employ a market based approach to urban development.
Based upon the field research, personal interviews, and the data collected and presented in this chapter, the author cannot fully accept the proposition that a city with a privatist regime will employ a market based approach to urban development. This study clearly reveals that although a privatist regime may consistently and publicly espouse belief in applying market solutions to urban development policy, the political and economic complexities in revitalizing a declining downtown economy and in sustaining a stable economy, often defy simplistic policies or solutions. In other words, even privatist regimes armed with what appears to them as the strongest market-oriented arguments and solutions to combating decline and stimulating development, are not immune from the complex problems that can beset a city. 208 In essence, the complex urban environment has forced privatist regimes and public officials to increasingly apply non-market oriented approaches to urban development. As a result, regimes that espouse a market-oriented approach to development may actually use a neo-market approach. The analysis also reveals that a city can simultaneously take a dual approach to development. For instance, a city can pursue a market approach to the overall development of the city, while at the same time advancing a neo-market approach to neighborhood development. The dual policy approach that emerged from the analysis occured in cities whose councilmen/alderman are elected from wards or districts. The ward or district system seems to perpetutate the dual policy approach because of the political and economic constraints that the ward or district system places upon local representatives.
Given the political and economic constraints in most urban communities and especially those in the four cities examined in this study, the data do not support the claim that a privatist regime will employ a market based approach to development.
Hypothesis 2 If a city has a fusion regime, then that city will pursue a neo market approach to urban development. Although only one city in this study was indentified as being a fusion regime, the study did reveal that a fusion 209 regime did in fact pursue a neo market based approach to development. However, in order to draw any further conclusions from this particular working hypotheses, a larger sample size along with additional research will have to be conducted to see whether other fusion regimes exists and whether they are pursuing a neo- market approach to development. Hypothesis 3 If the local regime is dominated by the private sector, then the administrative office responsible for implementing economic development policy will take a passive role in the formation of local development policy.
Hypothesis 4 If the local regime is dominated by the public sector, then the administrative office responsible for implementing economic development policy will take an aggressive role in the formation of local development policy.
Because of limited access to officials responsible for implementing local development policy, the author is reluctant at this time to conclude whether the administrative office or offices responsible for implementing economic development will in fact be passive or aggressive in the formation of local development policy under a private directed regime or a public directed regime. In order to provide a satisfactory response to working hypotheses three and four, additional research is required. The rationale for future research in this area will be explained further in 21 0 chapter six. The exploratory findings related to working hypotheses one and two reinforce the conclusion that cities' do not rely solely on the market to stimulate development policy. Data did not permit tentative conclusions about exploratory hypotheses three and four. Therefore, the concluding chapter will focus on the significance of the findings and future research. 211
ENDNOTES
1. According to Katharine Lyall, in her article "A Bicycle Built-for-Two: Public-Private Partnership in Baltimore," The GBC was " [A]n elite group consisting of the chief executive officers of the one hundred largest corporations in the Baltimore metropolitan area, who could speak for their firms and make on-the-spot commitments to action. GBC would support individual civic improvement projects approved by a majority of the members" (Lyall 1982: 27-31). 2. Confluence St. Louis can best be described "A sort of policy oriented Jaycees group that produces a lot of policy action and position papers" (Stein Interview 1989). Carter Woodson describes the organization as a "policy analysis arm of the group Civic Progress" (Woodson Interview 1989). According to the charter of Confluence St. Louis, the organization's mission is to "[IImprove the quality of life in the St. Louis metropolitan area through broad-based participation by interested citizens in study and action on issues of importance to the region" (Confluence St. Louis 1987: 62). Clearly the Confluence St. Louis is committed to influencing the policy process of St. Louis.
3. Equating the relationship between the business/corporate community and the black political majority on Richmond's City Council with that of a junior/senior partnership, stems from a personal discussion with Clarence Stone and is also based in part on his article "Race and Regime in Atlanta," and on a conference paper presented by his graduate student, Marion Orr (Stone 1990: 130; Stone Interview 1990; Orr 1990: 22). According to stone, "Blacks are incorporated [in the political coalition], but as subordinate members" (Stone Interview 1990; Orr 1990: 22).
4. One plausible explanation of why the business/corporate communities are generally perceived by city residents as being the driving force behind major development projects is that most people equate wealth with influence (Dahl 1961: 1- 311). This impression of business as a dominant actor in the policy arena also stems from the fact that most individuals actually believe that because the business/corporate community provides a significant amount of employement within a particular community, then business community must have political clout in their community. In other words, as Charles Lindblom, noted political scientist, stated in his classic text, Politics and Market, business exercises its authoritative control by being the largest employer. Therefore, business enjoys a powerful authority to affect the economic quality of life and to define what "quality" will mean (Randolph 1984: l). 213
List: Of Personal Interviews
Personal Interview with Richard Campbell, former Editor, Citizen Journal, Columbus, Ohio, 14 April 1988.
Personal Interview with Paul Colbert, Administrator, City of Columbus, Columbus, Ohio 12 May 1988.
Personal Interview with Dr. Avon Drake, Professor, Director, Afro American Studies Program, VCU, Richmond, Virginia, 11 September 198 9. Personal Interview with Ms. Larralyn Edwards, Reporter, WCMH- TV (NBC Affiliate) Columbus, Ohio 8 April 1988.
Personal Interview with Dr. C. Vernon Gray, Professor, Department of Political Science, Morgan State University, Baltimore, Maryland, 6 September 1989. Personal Interview with Bill Habig, Executive Director, Mid Ohio Regional Planning Commission, Columbus, Ohio, 29 August 1989. Personal Interview with Vera Hall, City Councilwoman, City of Baltimore, Baltimore, Maryland, 7 September 1989. Personal Interview with Dr. Henry L. Hunker, Professor, Department of Geography, The Ohio State University, Columbus, Ohio 21 September 1989.
Personal Interview with Mr. Bill Habig, Executive Director, Mid Ohio Regional Planning Commission, Columbus, Ohio 29 August 1989.
Personal Interview with Dr. Dennis Judd, Professor, Chair, Department of Political Science, University of Missouri at St. Louis, St. Louis, Missouri, 18 September 1989. Personal Interview with Mr. Charles Kindleberger, Director, Planning Division, St. Louis Community Development Agency, 20 September 1988. 214 Personal Interview with Nr. Clarance Lumpkin, Community Activist, Columbus, Ohio, 15 July 1988. Personal Interview with Hr. Pete McDowell, Associate Director, Ohio Public Interests Campaign, 11 September 1988.
Personal Interview with Dr. John Moeser, Associate Professor, Department of Urban Studies and Planning at VCU, Richmond, Virginia, 11 September 1989. Personal Interview with Ms. Marian Miller, City Alderwoman, City of St. Louis, St. Louis, Missouri, 18 September 1989. Personal Interview with Dr. William E. Nelson, Jr., Professor, Departments of Black Studies and Political Science, The Ohio State University, Columbus, Ohio February 1989. Personal Interview with Tim O'Neil, Staff Writer, St. Louis Post-Dispatch Newspaper, St. Louis, Missouri, 18 September 1989.
Personal interview with Dr. Christopher Silver, Assistant Professor, Department of Urban Studies and Planning at VCU, Richmond, Virginia, 11 September 1989.
Personal Interview with Dr. Lana Stein, Assistant Professor, Department of Political Science, University of Missouri at St. Louis, St. Louis, Missouri, 18 September 1989. Personal Interview with Dr. Robert Stoker, Associate Professor, Political Science Department, George Washington, Washington, D.C., 13 September 1989. Personal Interview with Michael P. Williams, Staff Writer, Richmond Times-Dispatch, Richmond, Virginia, 11 September 1989.
Personal Interview with Mr. Roy Willis, Small Businessman, Columbus, Ohio, 15 July 1988.
Personal Interview with Mr. Carter Woodson, Ph.d Candidate, Department of Political Science, University of Missouri at St. Louis, St. Louis, Missouri, 15 September 1989. 215
LISTS OF PHONE INTERVIEWS
Levine, Marc V., Associate Professor, Urban Research Center, Department of History at The University Of Wisconsin- Milwaukee, Milwaukee, Wisconsin, 16 February 1990. Mufume, Kweisi, U.S. Representative 7th Congressional District, U. S. House of Representative, Washington D.C., 25 September 1989. Stone, Clarence N., Professor, Political Science Department at the University of Maryland at College Park, College Park, Maryland, 16 January 1990. CHAPTER VI INTRODUCTION
The primary goal of this chapter is to examine and to assess the achievement of the objectives presented earlier in chapter one. In addition, this concluding chapter will also briefly explain the contributions of this research to previous research in the urban subfield, and will reexamine the urban development policy model. The intent here is to determine whether the research findings in this study have altered parts of or the entire model. This chapter also examines new information revealed as a result of this study, along with its research implications. Finally, the chapter presents the research lessons from this study, along with an explanation of unanswered questions from the research and recommendations for future research.
Assessment of Research Objectives The objective of this study was to examine how the political and economic attitudes of regimes shape their urban development policy selections and how their political and economic attitudes influence their interactions with the
216 217 institutions responsible for executing urban development policies. The reason for focusing on the role of regimes was to determine whether regimes relied solely on the market to stimulate growth and redevelopment efforts, or whether they advanced policies that required public and private cooperation in development. Also, this dissertation explains why regimes favored one type of urban development policy rather than another, and what the political and policy implications of their choices are for their cities. Finally, this dissertation explains how the development policies of regimes vary from city to city and how circumstances cause a regime's urban redevelopment policy to succeed or falter.
This study has provided several plausible explanations of the role of regimes in urban development policy and how their political and economic attitudes shaped their development policy selections. For instance, most of the respondents interviewed for this study perceived their regime as being very conservative in its approach to development and they constantly identified the regime as dominated by local business executives and leaders of corporations headquartered in their respective cities. Moreover, when the same respondents were asked to identify which group in their city dominated development policy, most of them consistently identified business/corporate groups as being the dominant players in development policy, and they clearly stated that major development projects launched in their cities were 218 generally started and Implemented by the regime. Through the application of four research questions that centered around development policy, the author was able to determine whether the regimes relied solely on the market to stimulate growth and redevelopment efforts or whether the regimes advanced policies that required public and private cooperation in development. The data from the field research clearly indicated that regimes did not rely solely on market solutions to stimulate growth and major development projects.
In fact, the findings demonstrated the opposite. For instance, in three cities where regimes espoused a market based strategy to development, the data and personal interviews showed that the three cities nevertheless were clearly applying non-market solutions to stimulate urban development projects. One plausible explanation for this obvious policy contradiction is that some cities have gradually realized and accepted the imperfections of the market, and are simply responding to the urban development arena by adopting and applying non market oriented solutions to address their specific development problems.
The idea of a contradictory development policy was supported even further by those individuals interviewed for this study. For instance, the respondents consistently provided brief, but rich sketches of how public authority and resources were frequently used to stimulate urban development and to bail-out risky projects. The immediate political 219 implication of this kind of conflicting policy pattern is that it revealed not only an obvious contradiction in the regime's market-based assumptions about the role of government in development, but it also revealed that regimes did not rely solely on the market to stimulate development. Host of the respondents interviewed for this study felt that several major urban development projects did not reflect the interest of the total community. Some felt that policy makers had simply catered to the needs of the local regime and had ignored the needs of the total community. The issue of why regimes favored one type of urban development policy over another and how the development policies of the regimes varied from city to city was also addressed in the research. The research material presented in chapters four and five clearly demonstrated that regimes basically adopted one approach over another based upon their political and economic attitudes towards development. For instance, the data in chapter five illustrated conclusively how the regime's policies concerning the use of fiscal incentives varied from city to city.
Before discussing the contributions of this research to previous works, a brief discussion on the linkage between this study and previous studies is required. The discussion allows the reader to recognize how the body of knowledge obtained from this study replicates aspects of previous studies and expands our understanding of the urban 220 subfield.
Contributions To Previous Research
Part (A) of the explanation briefly presents and
examines those research findings that are consistent with certain aspects of previous research. Part (B) of the explanation explicates how the findings of this research enhance the current body of knowledge in this field.
(A) The research conducted on the four cities revealed from similarities to previous urban development studies.
(1) The downtown investment strategy in Fainstein ' s et al. classic study of five cities was replicated in this study. For instance, this study revealed that cities are still trying to revitalize their economies and image by continuing to invest public resources into the downtown business district area. In spite of the increased suburbanization and
further outmigration of city and suburban residents into rural areas (a process known as "ruralbane") that has
occurred over the last thirty years, urban leaders are still committed to the economic premise that their city's economic salvation lies in revitalizing the central business district core. The idea of cities employing a development policy strategy of investing in the downtown business district is not new to the urban development field. For instance, 221 Fainstein et al. in their landmark study clearly illustrated that most major cities had at one time or another employed
a downtown development strategy to halt further spread of economic decline in their city (Fainstein et al. 1983). This type of strategy had been employed by Baltimore, Richmond, St. Louis, and Columbus at some point during the cities' development history. In essence, this research reveals that the downtown investment strategy endures as a development strategy for cities that have experienced economic decline, and that wish to recapture their previous position within the political and social hierarchy among cities in a particular region. One plausible explanation of why this strategy continues to endure is that, as shown by the research findings of this study, along with the current literature surrounding this field, downtown areas play a special role within the community as symbols of community pride and vigor. Moreover, Victor Gruen describes communities as having a soul (Gruen
1973: 158-160). He defines soul as "the force which, more than any other, ties together the inhabitants in an emotional attachment or love for their city" (158-160). According to Gruen, the symbols of that soul are the downtown area and the structures and natural resources that exist there (158-160). Thus, the symbols attached to the downtown area, along with its historic economic importance to a city's economy, are two primary reasons why the public sector continues to invest in 222 the area and to offer incentives to developers to locate their efforts in the central business districts. (2) The next area of this research that supports assumptions from previous urban development policy studies is the role of regimes in the urban development arena, stone, Elkins, Judd, and Stoker have all revealed that regimes tend to dominate the formulation of development policy. The information obtained from this research indicates the same trend. For instance, in Columbus and Baltimore the dominant role of the regimes in development policy arena was defintely noticeable. Moreover, the role that regimes play in development policy in general and especially in the four cities is also relevant to Dahl's anlysis of New Haven. For example, although Dahl's analysis of New Haven refuted the elitist theory of community power arranagement, Dahl recognized that the average voters in New Haven did not exercise direct influence over redevelopment policy. (Dahl 1969: 115-140). Instead, he stated, "Urban redevelopment has been the direct product of a small handful of leaders" (115). This research indicates that development policy continues to be dominated by a "small handful of leaders" (115) . (3) The third area of this study that is similar to previous research findings was the type of political relationship that exists between black elected political majorities and the local regime. Previous research on race and regime has indicated that the relationship between the regime and the 223 black political majority, in some cities, can best be described as a junior/senior partnership. The idea of a subordinate /superordinate or junior/senior partner relationship bewteen the regime and the black elected majority stems from Stone's current research on the politics of Atlanta and Jones' previous and recent research on Atlanta. (Stone 1990: 130; Jones 1978: 117; Jones 1990: 138). Both scholars support the concept and description of this type of relationship. Moreover, when respondents were asked in Richmond to describe the composition of the local regime and its relationship with the local elected officials, the respondents consistently supported the junior/senior partnership type of arranagement. (4) The final area of this research that is similar to previous research in urban development policy involves tax abatement. Previous urban research in urban fiscal matters has consistently indicated that the one tax incentive frequently used by cities to stimulate their development efforts is tax abatement (Swanstrom 1985: 136-153; Harrison and Kanter 1978: 424). The findings of this study support this observation when the cities were examined for their frequency of using certain kinds of fiscal incentives, tax abatement was used more frequently than any other kind of incentive. One possible explanation for the continued use of tax abatement in spite of its flaws is that local officials perceive that this type of incentive does not cost their city 224 anything and that elected officials continue to believe that tax abatement stimulates investment. The following assertions about cities and their development efforts were not assumed at the start of this study: First, cities are still heavily investing public resources in their downtown areas and thus using the downtown as a catalyst to revitalize the city's image and to attract additional investment dollars and trade. Second, local development policy is dominated by the regime. Third, when the race of the regime is different from that of the dominant local elected governing body, a subordinate/superordinate relationship seems to prevail. Finally, the dominant type of
fiscal incentive that is still being used by cities to stimulate redevelopment efforts is tax abatement.
(B) Contribution To Current Research and Literature The study has contributed four findings to current research in the urban development development subfield and
to its literature in the following manner. First, the presentation and application of the exploratory urban
development policy model to the problem of urban development has enhanced the subfield by providing a visual display of how development policy is crafted by cities and their regimes. The significance of using the model to examine the urban development arena is that it allows the researcher to explore several kinds of variables in this area. In other 225
words, the application of the urban development policy model to this study allowed this researcher to examine the importance of such factors as race, crime, and specific city agencies on a city's development policy. Second, this research has contributed the use and application of development related questions to the study of urban development. For example, using questions that identify the type of fiscal incentives used, along with their frequency of use, enhances this field by providing additional information that can be used to determine: (1) which type of development approach is being used by cities and their regimes to stimulate growth and redevelopment efforts; (2) what kinds of fiscal incentives are being used most
frequently by cities and their regimes to stimulate investment.
Third, this exploratory study has enhanced the field and its literature, in the area of regimes. This study amplifies our understanding of regimes in several ways. The
consolidation and reclassification of different types of regimes has contributed to the literature by reducing the overlapping descriptions prevalent in most of the literature. The literature was enhance again when the linkage between race and regime was explored during the examination of
Richmond's regime and its relationship with the black elected political majority. This contribution to the literature provides another source of documentation for what appears to 226 be a hidden and ongoing important political issue. Fourth, this study contributes to our understanding of the urban subfield through the field research conducted in the four cities. As a result of the field research, the subfield will now better understand the type of fiscal incentives and development policy appraoches that are actually being employed by cities to stimulate growth and to attract investment dollars. This exploratory study provides a basis for expanding our understanding of why cities and their regimes favor one type of fiscal incentive or development approach over another. Moreover, this type of study is an excellent starting point for future research. 227
Demographic & Environmental Factors Demographic 1.Racial Composition 2.Education Levels 3.Crime Rate Environmental 1.Research Institutions 2. Territorial Groups < — 3. Business Groups 4. Labor Groups
Political Variable Regime Type — > 1. Composition of Regime 2. Attitudes of local regime
---> City Structure Development Policy Choice 1. Attitudes of local officials Development 2. Administrative Policy Strategy etting
URBAN ECONOMY
1. Type of Economy 2. Unemployment Rates
Figure 14
Reexamination of UDPM Original Version of UDPM Model 228
Demographic & Environmental Factors Demographic 1.Racial Composition 2.Education Levels 3.Crime Rate
Environmenta1 1.Research Institutions 2. Territorial Groups 3. Business Groups 4. Labor Groups
Political Variable Regime Type 1. Composition of Regime 2. Attitudes of local regime City Structure 1. Attitudes of local officials Development 2. Administrative Policy Choice Settings Development Development Office/ Policy Strategy Organization Type 1. Composition of Dev. 2. Attitudes of Dev.
URBAN ECONOMY 1. Type of Economy 2. Unemployment Rates
Figure 15
REVISED UDP Model 229
There are slight modifications in the second model. The modifications that have occurred in the second model are in the demographic and political variables. For instance, in the second model, the environmental factors were rearranged, because the data consistently revealed that the dominant players in initiating development policy were business groups first, church groups second, and the other groups last. In Baltimore and Richmond, the church may have been incorrectly perceived by the respondents as being the second dominant player in development matters because the respondents equated the political influence of a few active black ministers in local politics with the influence of churches in general. The perception of the influence of certain groups of ministers might account for the high ranking received by churches in development policy matters. The political variable was modified to illustrate the important and expanding role that quasi-public corporations have been given in implementing development policy in most of the cities. Most of the respondents indicated that the role of corporations in crafting and implementing development policy had been expanded in urban development policy. With the exceptions of these changes, the model itself remained intact. The linkages, along with the primary and secondary assumptions underlying the model, also remained unchanged.
The changes made in the model are applicable to all four 230 cities studies. One aspect of the model that needs further clarification is the significance of the race, crime, and education demographic variables. Their impact on urban development policy will be explained further in the portion of this chapter that presents recommendations for future research.
New Information and Its Research Implications
This research revealed that quasi-public corporations are increasingly becoming a key factor in the crafting and implementation of urban development policy. Quasi-public corporations are gradually replacing formal bureaucracies in the progression and implementation of urban development policy. For political scientists, because the role of the quasi-public corporations raises such important questions as: How is policy conducted? Is urban development policy developed and conducted differently under quasi-public corporations? How is policy implemented under quasi-public corporations? These kinds of questions are relevant to the field of implementation, an area of the policy process dominated by political scientist. Political scientists defintely have a vested interest in this area. The need for future research on the role of quasi-public corporations in the urban development policy arena is examined in the section of this chapter on future research. 231 The other new information revealed by this study was the perception of the role of race and drug related crimes on the type of investment that a city receives. The issues of race, quality of education, and the occurrence of drug related crimes were uncovered during the field research visits. During the interviews, some respondents actually stated that
if their cities continued to be identifed as "black" with poor educational systems and major drug problems, then their
cities could not compete with their predominantly white suburbs in retaining businesses and in attracting new businesses. The respondents felt that if the negative perceptions persisted, then their cities could face major economic consequences if the issue of race were used by their surrounding suburbs in the battle for attracting investment dollars.
If the concerns of the respondents are proven correct
and a race-baiting battle erupts between cities and their
» suburbs and or counties over limited investment dollars, then the political as well as the policy implications are enormous not only for cities but also for this country as well. The potential impact of the aforementioned variables and concerns on the well-being of cities will be elaborated further in the future research section of this chapter. 232 Lessons from The Research and Unanswered Questions
Research/Methodological Lessons Research in the urban development policy subfield should focus more on demographic variables because such pressing social problems as drugs, race, poverty, crime, and
homelessness will have an impact on cities' development policies. The inclusion of these kinds of variables in future studies can only enhance inquiries. In addition to focusing on the influence of demographic variables on development policy, researchers should also explore the attitudes of city councils and the officials who manage quasi-public corporations. Finally, the questions used for field research interviews should be carefully scrutinized and pre-tested to eliminate biased or vague questions.
Unanswered Questions The primary issues that remain unresolved as a result
of this study are working hypotheses three and four. These two working hypotheses remain unresolved because officials of the quasi-public corporations were reluctant to be
interviewed at all and were extremely hesitant to discuss the operations of their corporations. Their reluctance may stem from previous negative experiences with other researchers, or perhaps they do not perceive that a study of this kind could contribute to their organiztions. Second, although the 233 research did reveal the dominance of regimes in development policy the research findings still did not permit an actual and eyewitness account of how regimes craft policy. An eyewitness account of how regimes conduct policy may be
difficult to achieve, this point is unresolved. Finally, although the impact of race on development policy was briefly discussed in this study, the matter of race is also unresolved. However, the potential importance of race on development policy is great, and the implications of this variable should be explored by future research.
Recommendations For Future Research Political scientists should continue to examine the linkage between politics and development identified in the existing literature and by the results of this study. For example, the linkage between politics and development was evident in the brief development project case studies presented in chapter five. The cases demonstrate very clearly the political and economic contradictions that occur in the development policy arena when elected and private officials to grapple with complex development policy issues. The Capital South Project, for instance, clearly revealed the policy inconsistencies in the city's approach to urban development. Moreover, when community based leaders publicly opposed this type of development policy scheme, the regime either ignore them or, if the regime felt threatened, 234 politically opposed them, especially those who ran for public office. In fact, in some cases the regime used its political and economic resources to defeat their opposition. The
Columbus regime's ability to defeat its opposition when challenged in the development arena illustrates the connection between politics and development. Examining these two factors further in this kind of "real world" research enables urban scholars to use the urban development policy arena as a laboratory to gain additional insight in developing heuristic approaches to solving complex urban proble ms.
Political scientists should continue to probe this because it potentially provides the discipline with additional research areas and issues to examine. For instance, as long as local officials continue to use public resources to support privately initiated projects, political scientists are needed to conduct research to assess the political and policy implications of local development policy decisions on a city's fiscal health. Political scientists are needed in this area because many issues in urban development are political and policy oriented.
Finally, given the diminishing role of the federal government in the urban area, along with the major social and economic problems that have beset cities in recent years, it is clear that cities will increasingly have to rely on academia (especially social scientists) to provide 235
alternative approaches and or solutions to their specific problems. The respondents interviewed during the field research consistently stated that more applied research was definitely needed to help cities address such pressing
problems as neighborhood development, the illegal drug trade, and youth violence.
The two areas of this research that need to be explored in the future are the impact of demographic variables and quasi-public corporations on the development policy, and the kinds of investment that a city receives. Demographic variable may be significant to future research endeavors in urban development policy because of the information uncovered during the field research visits. The fifth research question that respondents were asked, was: "How do the demographic and
environmental features of a city indirectly influence the type of development policy initiatives that are advanced by the local regime?" For the origins and use of this particular question, see endnote one.
Thirty seven respondents in this study were asked whether they thought that demographic variables could impact their city's development policy or influence the type of investment their city receives. Only ten agreed that the demographic features of a city could influence a city's development policy. They argued that the most important factor that could influence their city's development policy was the quality of their local school system because it 236 educates and prepares the work force for prospective employers (Judd Interview 1989; Moeser Interview 1990; Hammond Interview 1989; Hall Interview 1989). Moreover, the respondents stated that the public at large and prospective employers in particular rated their local school system as being poor in quality. This particular point was substantiated and supported earlier in chapter four of this study. Although ten individuals is not a large number, suggests that education, especially the training of a city's workforce is a key ingredient to the success of a city's development policy and to the type of investment that it could receive. In other words, if the private sector perceives that the school system is producing an inferior product, then that prospective employer may very well locate his firm or business somewhere else. In essence, these respondents believed that if the school system does not improve the basic skills level of its graduates, then the city may lose some of its expanding tertiary investment because of its workforce.
Another factor identified by some of the respondents as potentially having a damaging impact on the amount of investment that a city's receives, was the issue of crime. Although some observers of cities generally use the crime index as an indication of how the safe the city is for its residents, in this study the crime index itself did not seem to be major item of concern for the respondents. But the 237 crime that was consistently identified by the respondents as posing a threat to the city's investment health was the high number of drug related deaths/killings that occur in the city. In other words , those respondents believed that the escalation in the reporting and number of drug related murders could retard the city's efforts to develop its tourist industry. These individuals felt that unfavorable publicity of this magnitude for the city could result in the city losing valuable investment and tourist dollars. The two demographic variables previously mentioned are important and should be examined further to ascertain whether the quality of the educational system and the occurrence of drug related crimes are interconnected to a city's redevelopment efforts and to the type of investment that a city receives. Some urban scholars believe that the two may be interconnected because of the issue of race (Judd Interview 1989; Williams Interview 1989; Hammond Interview
1989; Gray Interview 1989). The respondents believed that race may link education, crime and development because each city's school system was predominantly black, and all were perceived by the public as being poor in quality.
In terms of crimes, all of the cities had experienced an increase of drug trafficking and related crimes: in each city both the victims and perpetrators of these crimes were usually black or hispanic. The respondents felt that a city that was perceived as being predominantly black, whose school 238 system was perceived as being inferior, along with a perception of being a "drug trafficking haven" or "drug murder capital" could seriously tarnish the image of the city or retard its development efforts (Judd Interview 1989; Drake
Interview 1989). The respondents were not blaming the black populace for the ills of their cities. Instead, they are suggesting that firms or companies that wish to avoid relocating to a city with a predominantly black workforce, may do so if they perceive in the aforementioned problems a threat to profit. For further elaboration on this issue see endnote two.
By exploring these concerns in future research endeavors, political scientists could develop new models or improve upon old ones to better understand the problems of urban development policy; that could produce innovative solutions to major social and economic urban problems confronting cities. Moreover, information from further research could determine whether the race of city residents is the driving force behind the kinds of investments that a city receives or whether these demographic factors along with race can account for the type of investment that a city receives.
The final area of the research that needs to be examined for further research is quasi-public corporations. Quasi public corporations should be examined because their role in the crafting and implementation of development policy has been expanding. Furthermore, the exact role of quasi-public corporations in development policy is important to political science and especially to urban politics because the use of these corporations to implement public development policy decisions could eventually involve the issue of political accountability. In Baltimore the use of these corporations did in fact involve the determination of accountability. For instance, Dr. Robert Stoker of George Washington University acknowledged that Baltimore's use of these types of corporations circumvented the authority of the city bureaucracy on more than one occasion and excluded . the interests of the public in development matters. If it is true that the formal authority of the local bureaucracy is being challenged or circumvented by these kinds of groups, then political scientists ought to examine these organizations and determine whether in fact they are being accountable to the public and to the city councils that created them. Political scientists should also examine more closely the rise of quasi-public corporations in cities and their increasing role in urban development policy because their presence seems to lend credence to some scholars and community activist's claim that a colonial relationship may exist between suburban communities and central cities. Those who would support this argument are inclined to do so because they are convinced that the dramatic changes in central cities' demographics and the rise( of black political control of central cities, 240 coupled with the use of these kinds of corporations in the development policy arena leads to the perception that they are potentially undermining the political power of black political majorities. In other words, supporters of the colonial model believe that the real motive behind the use of quasi-public corporations, is simply another ploy by white suburban interests to maintain political and economic control over the resources of central cities (Ripley Interview 1990). The importance of race and the accountability of quasi public corporations in the crafting and implementation of urban public policy are two areas of urban development that definitely need to be examined by future research.
In closing, conservative political and economic analyst concluded that the New York fiscal crisis of 1975 would be interpreted by future urban historians and political economist as being the liberal's Viet Nam. If the conservatives are correct about the fiscal crisis of New York being the Achilles’ heel of the liberal social agenda of the late 1960s and early 1970s, will they also interpret such urban redevelopment projects as Capital South in Columbus or the Sixth Street Market Mall in Richmond or the market oriented development policies of the last decade as being the conservative's Viet Nam of the 1980s and 1990s? ENDNOTES
1. Research question five was developed to ascertain the impact of specific demographic variables on a city's development strategy or the type of investments that a city would receive and to determine whether the racial make up of a city, along with the occurrence of certain kinds of crimes, could also impact the type of investment. Question five was discussed in the conclusion, instead of in chapter five because the small number of responses to this question made it difficult to generalize or express the results with authority. 2. The issue of race and its impact on development locations decisions is not new. The idea of using race as a component of this research stemmed originally from a personal telephone conversation with and the research of Ann Markusen, an economist and author of High Tech America. Markusen's research revealed that high tech companies were locating whether there appeared to be a small concentration of blacks (Markusen 1986:144-181). During our telephone conversation, she stated that race seemed to be an emerging factor in location decisions. According to Markusen, several military officials who make important location decisions, during her interview sessions expressed racial and stereotypical ideas about blacks. These individuals influence future location decisions and the awarding of governmental contracts of the military. Therefore, one could assume that their role in making these decisions is significant (Markusen Interview 1988). The other source that prompted this author to consider the influence of race as a potential factor in development policy was an article in the New York Times. According to this article, "Industrial development specialists have disclosed that it was not uncommon for businesses to eliminate Southern communities from consideration for new manufacturing plants and other facilities in the 1960s and 1970s if they had large black populations" (Stuart 1983: 9). The article revealed that the practice was initiated primarily because prospective employers believed "That black workers were less reliable and skilled than white workers and easier to unionize. The companies also wanted to avoid the race issue in community relations and affirmative action programs" (9). 242
List of Personal interviews
Personal Interview with Dr. Avon Drake, Professor, Director, Afro American Studies Program, VCU, Richmond, Virginia, 11 September 1989.
Personal Interview with Dr. C. Vernon Gray, Professor, Department of Political Science Department, Morgan State University, Baltimore, Maryland, 6 September 1989. Personal Interview with Vera Hall, City Councilwoman, City of Baltimore, Baltimore, Maryland, 7 September 1989. Personal Interview with Mr. Jerry Hammond, President of Columbus City Council, City of Columbus, Columbus, Ohio, 26 September 1989. Personal Interview with Dr. Dennis Judd, Professor, Chair, Department of Political Science, University of Missouri at St. Louis, St. Louis, Missouri, 18 September 1989.
Personal Interview with Dr. John Moeser, Associate Professor, Department of Urban Studies and Planning at VCU, Richmond, Virginia, 11 September 1989.
Personal Interview with Dr. Randall Ripley, Professor, Chair, Department of Political Science, The Ohio State Univrsity, Columbus, Ohio, 2 August 1990. Personal Interview with Michael P. Williams, Staff Writer, Richmond Times-Dispatch, Richmond, Virginia, 11 September 1989. LIST OF PHONE INTERVIEWS
Markusen, Ann, Professor of Management and Social Policy, Center for Urban Affairs and Policy Research, Northwestern University, Chicago, Illinois, 21 July 1988. APPENDIX A
MATERIALS RELEVANT TO CHAPTER ONE
244 245 c ' G , x
Figure | a ff6C,0JnDo^XVn'^/oncy 246
CF
CF
CF,
Pre-Tax Cut Post-Tex Cut 1964 1964
Figure 17 Relation Between Domestic Income and Foreign Goods Consumption 247
IS, (Gf)
IS0 (Gp)
Figure 18 Effect on IS-LM of Fiscal Stimulus 248
Ll“i
LM
r 1
V,
Figure 19 v Effect on IS-LM of Monetary Stimulus 1967-71 249
Table 14
NET IMPACT OP FEDERAL TRANSFER PROGRAM AND TAX REDUCTIONS, I?8 j
U.S. families grouped by fifths of total U.S. income received (is million families per fifth) Next Next ______Poorest Fifth Poorest Fifth Middle Fifth Highest Fifth Highest Fifth Threshold between fifths 17,168 113,709 121,573 132,730 Reductions in cash transfers, in dollars 80 90 50 40 50 Reductions in in-kind benefits, in dollars 178 106 67 40 12 Additions to income from tax reduc tions, in dollars 10 n o 330 690 2,080 Total net impact, average family -IMS -186 + 1213 + 1610 + 12,018 Total cash income of average family after all changes 13,760 19,450 115,370 122,680 139,200 Share of that income derived from cash transfer* from federal government (in percent) 56 26 13 6 3 Resulting share* of total U.S. income (in percent) 4.2 10.4 17.0 25.1 43.4
AsiuumoMt: Spending endc m nduaions ciuctcd far ipl) spplifd to ecnuliplr income. S ousa: Reconstructed by the author Son data reportedNtrion*! in Jottmdl, i j October ty ls, 1718-55. Original sourcei include U.S. Census, Congres sional Budget Office, and Joint Economic Committee. For comparison, tee Marilyn Moon and Isabel V. SswhiU, ‘ Family Incomes: Gainers and Losers,* in The Reeyen Record.- An Assessmenr 0A / m rrica 'iC i s s j i q D om ttlk friorititt, cd. JohnL. Ptlmer end Isabel V. Sawhiil (Cambridge, Mass.: Bal- linger, Ipt*), J17-48.
r APPENDIX B: Questionnaire Preparation
MATERIALS RELEVANT TO CHAPTER THREE
Sample Cover For Elected Official's Questionnaire. Sample Cover Letter For Non Elected Official's Questionnaire. List Of The Kinds Of Individuals To Be Interviewed For The Study. Opening Statement For Research Quest ionna ires Questionnaire For Elected Officials Questionnaire For Organizations Reponsible For Economic Development. Questionnaire For Formal and Informal Representatives From Professional and Community Based Organizations.
250 SAMPLE COVER LETTER TO ELECTED OFFICIALS
August: 24, 1989 Honorable Mayor Kurt Schmoke Office of Mayor 250 City Hall 100 North Holiday Street Baltimore, MD 21202 Dear Mayor Schmoke: My name is Lewis Randolph. I am a Ph.D candidate in political science specializing in urban politics and public policy. In the next few weeks, I will initiate a field research project for my Ph.D dissertation. I am hoping I can complete my work this academic year and meet the graduate school deadline for March graduation.
I am writing this letter to request your assistance in my dissertation research. I have already discussed this matter with your appointment secretary. I would deeply appreciate your consenting to an interview dealing with the policy issues discussed below. My Ph.D research will examine how the political and economic attitudes of local civic leaders shape their urban development policy selections, and how their political and economic attitudes influence their interactions with the institutions responsible for implementing urban development policies. The study will focus on four cities: Baltimore, Maryland; Richmond, Virginia; St. Louis, Missouri; and Columbus, Ohio. These cities have been selected because their geographic mix will potentially provide a large amount of descriptive data that will generate information for a comparative exploratory study. The study will also attempt to understand why leaders favor one type of urban development policy rather than another, and what the political and policy implications of their choices are for their cities. I plan to visit Baltimore during September 6-11, 1989. If a date during this period is convenient for you to see me, I would appreciate a reply as 252 soon as possible, so that I will know just exactly how to schedule my activities during my forthcoming visit to Baltimore.
Before closing, I would like to assure you that the contents of any conversations that I might have with you will be held in strictest confidence.
Thank you very much for your cooperation. I look forward to meeting you. Sincerely,
Lewis A. Randolph Ph.D candidate 253
SAMPLE COVER LETTER TO NON ELECTED OFFICIALS
DATE Name Address City, ST ZIPCODE Dear:
This letter to follow up our telephone conversation of DATE1. It also indicates briefly my area of interest and study. I am conducting a study that will examine how the political and economic attitudes of local civic leaders shape their urban development policy selections, and how their political and economic attitudes inf? ^nce their interactions with the institutions responsible fu. implementing urban development policies. The study will focus on four cities: Baltimore, Maryland; Richmond, Virginia; St. Louis, Missouri; and Columbus, Ohio. These cities have been selected because their geographic mix will potentially provide a large amount of descriptive data that will generate information for a comparative exploratory study.
This study will also attempt to understand why leaders favor one type of urban development policy rather than another, and what the political and policy implications of their choices are for their cities. It is my understanding that you are interested and involved in issues that pertain to urban development policy matters. Accordingly, I am writing to confirm my interview appointment with you on DATE2. Before closing, I would like to assure you that the contents of any conversations that I might have with you will be held in strictest confidence.
Thank you very much for your cooperation. I look forward to meeting you.
Sincerely,
Lewis A. Randolph Ph.D Candidate 254
List Of The Kinds Of Individuals To Be Interviewed For The Study
The following kinds of individuals will be interviewed for this study: 1. Two elected officials - Mayor and a city councilperson who are actively engaged in local urban development matters. 2. One public official- Director or representative from the organization that is responsible for implementing urban development policy. 3. One Representative from each of the following groups: a) Business group or local Chamber of Commerce. b) Community-based Organizations. c) Local Professional Organization (i.e.,local technology association). d) Local noted urban academician scholar. e) Local media expert on developmental matters. f) Local Growth Coalition.
4. One representative from the city bureaucracy. 255
Opening Statement For Research Questions
The following kinds of questions will be used to ascertain the role that regimes perform in the crafting of urban development policy or whether they rely solely on the market to stimulate growth and redevelopment efforts, or whether they advance policies that require public and private cooperation in development. QUESTIONNAIRE FOR ELECTED OFFICIAL 1. How would you describe the local leadership's approach to urban development?
2. Could you please explain the type of fiscal initiatives that are currently being employed by your city to stimulate private investment? (Probe) How much importance do you attach to the following kinds of initiatives or incentives? Great Deal Some Very Little Tax Abatement Impact Fees
General Obligation Bonds
Tax Exemption on Capital Improvement Marketing Assistance
Enterprize Zones
Low Cost Loans to Business
Developer Financing
Industrial Bond Financing Venture Capital Support Programs 257
3. What role do the following kinds of groups play in the crafting of urban development? (Probe) Are they major or minor players?
Major Minor None Players Players a . Community Based Organizations b. Neighborhood Development Groups c. Business Groups
d . Church Groups e. Local University Research Groups f. Labor Groups
4. Please describe the kind of private investment activity that is currently taking place in your city? To what extent does the socioeconomic and demographic characteristics of your city determine the type of investment that you receive?
Significant Not significant QUESTIONNAIRE FOR ORGANIZATION RESPONSIBLE FOR ECONOMIC DEVELOPMENT 1. Could you please explain the direction of the city's economic development policy? (Probe) How much importance do you attach to the following kinds of fiscal incentives or initiatives?
Great Deal Some Very Little Tax Abatement Impact Fees General Obligation Bonds Tax Exemption on Capital Improvement Marketing Assistance Enterprize Zones
Low Cost Loans to Business Developer Financing
Industrial Bond Financing
. Venture Capital Support Programs 259
2. Could you explain how the city is attempting to diversify its economic base? What kinds of policies are being used to diversify the local economy?
3. Please describe the type of private investment activity within your city? To what extent does the socioeconomic and demographic characteristics of your city determine the type of investment that you receive?
Significant Not Significant
4. What role does the staff play in the formation of local development policy? 5. What role do the following kinds of groups play in the crafting of urban development? (Probe) Are they major or minor players? Major Minor None Players Players
Community Based Organizations
Neighborhood Development Groups Business Groups
Church Groups
Local University Research Groups
Labor Groups QUESTIONNAIRE FOR FORMAL AND INFORMAL REPRESENTATIVES FROM PROFESSIONAL AND COMMUNITY BASED ORGANIZATIONS
1. Could you please explain the direction of the city's economic development policy? (Probe) How much importance do you attach to the following kinds of fiscal incentives or initiatives? Great Deal some Very Little Tax Abatement Impact Fees General Obligation Bonds Tax Exemption on Capital Improvement Marketing Assistance
Enterprize Zones Low Cost Loans to Business Developer Financing Industrial Bond Financing
. Venture Capital Support Programs 2. Could you please describe the composition of your local civic leaders? Is leadership group dominated by the private or public sector officials? 3. What groups initiate major development projects in the city?
4. What role do the following kinds of groups play in the crafting of urban development? (Probe) Are they major or minor players? Major Minor None Players Players
Community Based Organi zations
Neighborhood Development Groups
Business Groups
Church Groups
Local University Research Groups
Labor Groups 263
5. How could you best describe the political and economic attitudes of the local leaders?
6. How would you describe the local leadership's approach to urban development?
7. Which organization or office is responsible for implementing urban development policy in your city?
8. Could you please describe the type of relationship that exists between the organization that is responsible for implementing urban development policy and the local civic leaders? (Probe)
Passive Aggressive
What is the staff like?
9. Please describe the kind of private investment activity that is currently taking place within your city? To what extent does the socioeconomic and demographic characteristics of your city determine the type of investment that you receive?
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