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URBAN CHANGE AND POVERTY Michael G. H. McGeary and Laurence E. Lynn, Jr., Editors Comrn~ttee on National Urban Policy Commission on Behavioral and Social Sciences and Education National Research Council NATIONAL ACADEMY PRESS Washington, D.C. 1988

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National Academy Press . 2101 Constitution Avenue, N.W. Washington, D. C. 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research. dedicated to the furtherance of science and technology and to their use for the general welfare. upon one authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Frank Press is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Robert M. White is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Samuel O. Thier is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Frank Press and Dr. Robert M. White are chairman and vice chairman, respectively, of the National Research Council. _ _ _ O O . . ., ~ .. , . ~ .. .. _,, i, ~ . . . . . The work that provided the basis for this document was supported by funding under a contract with the U.S. Department of Housing and Urban Development. The substance and findings of that contract work are dedicated to the public. The author and publisher are solely responsible for the accuracy of statements or interpretations in this document. Such interpretations do not necessarily redect the views of the government. Cover Photograph: 6) THE STUDIO INC./UNIPHOTO. Library of Congress Catalog~g-in-Publication Data Urban change and poverty / [edited by] Michael G.H. McGeary and Laurence E. Lynn, Jr., editors; Committee on National Urban Policy, Commission on Behavioral and Social Sciences and Education, National Research Council. p. cm. Bibliography: p. Includes index. ISBN 0-309-03837-5 1. Urban policy- UnitedStates Congresses. 2. Urban poor United StatesCongresses. 3. Urban economics Congresses. I. McGeary, Michael G. H. II. Lynn, Laurence E. III. Na- tional Research Council (U.S.). Committee on National Urban Policy. IV. National Research Council (U.S.). Commission on Behavioral and Social Sciences and Education. HT123.U7425 1988 88-1556 362.5'0973dc19 CIP Printed in the United States of America First Printing, May 1988 Second Printing, December 198 9

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COMMITTEE ON NATIONAI, URBAN POLICY LAURENCE E. LYNN, JR. (Chair), Dean, School of Social Service Administration, University of Chicago ROY W. BAHL, Maxwell Professor of Political Economy, Maxwell School, Syracuse University MARY JO BANE, Professor of Public Policy and Director, Center for Health and Human Resources Policy, John F. Kennedy School of Government, Harvard University ROBERT B. CERVERO, Associate Professor, Department of City and Regional Planning, University of California, Berkeley GREGORY L. COLER, Secretary, Florida Department of Health and Rehabilitative Services, Tallahassee MARGARET T. GORDON, Director, Center for Urban Affairs and Policy Research, and Professor, Medill School of Journalism, Northwestern University THOMAS J. KLUTZNICK, Co-Managing Partner, Miller-Klutznick- Davis-Gray Co., Chicago HERMAN B. LEONARD, George F. Baker, Jr., Professor of Public Management, John F. Kennedy School of Government, Harvard University WILLIAM C. MCCREADY, Associate Director, Public Opinion Laboratory, and Professor, Department of Sociology, Northern Illinois University SYLVESTER MURRAY, Manager, State and I,ocal Government Consulting Division, Coopers & Lybrand, Columbus, Ohio ELINOR OSTROM, Codirector, Workshop in Political Theory and Policy Analysis, and Professor, Department of Political Science, Indiana University PAUL E. PETERSON, Director, Center for the Study of American Government, and Benjamin H. Griswold ITI Professor of Public Policy, Department of Political Science, Johns Hopkins University, Washington, D.C. JOHN M. QUIGLEY, Professor of Economics and Public Policy, Graduate School of Public Policy and Department of Economics, University of California, Berkeley FRANKLIN D. RAINES, General Partner, Lazard Freres & Co., New York MICHAEL G. H. MCGEARY, Study Director ANN TASSEFF, Administrative Secretary SMELLY WESTEBBE, Staff Consultant - 111

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Preface The Committee on National Urban Policy was established by the National Research Council at the end of 1985 at the request of the U.S. Department of Housing and Urban Development and the other federal agencies that contribute to the biennial President's Re- port on National Urban Policy: the U.S. Department of Health and Human Services, the U.S. Department of Labor, the Urban Mass Transportation Administration, and the Economic Development Ad- ministration. Over a 3-year period, the committee has been asked to describe the uncertainties facing cities and their economies and populations; identify the urban policy issues facing state, local, and federal policy mallets; and assess possible policy responses at each level of the intergovernmental system. When the committee met for the first time in January 1986, it identified in a preliminary way a number of emerging and persisting urban problems that seemed to be facing national, state, and loch policy makers (National Research Council, 1986~. These problems in- cluded growing poverty in central cities, the lack of response of some urban economies to national economic recovery, the potential adverse effects of ~creative" capital finance techniques, the capacity of state governments to increase their responsibility for urban problems, and inadequate data for assessing urban conditions. The committee de- cided, however, that it was necessary to examine closely and carefully the most recent information on the underlying demographic, social,

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V1 PREFACE economic, and political trends shaping urban conditions before de- ciding which urban policy issues to explore in depth in subsequent years. This volume includes a set of background papers comrn~ssioned in the spring of 1986 to address these issues, which were the basis of a 2-day workshop held by the committee in July 1986. The volume also contains the committee's report summarizing its assessment of the workshop discussions and findings and their implications for policy makers and researchers. The committee concluded that the most serious trend deserving special attention from policy makers and researchers ~ the increase in concentrated urban poverty in large central cities. With the concurrence of its federal sponsors, the committee has embarked in its second year on a study of urban poverty, which will be completed later in 1988. On behalf of the committee, ~ would like to thank the federal officials who have supported and worked with us during the first year, including June Q. Koch, Kenneth J. Beirne, John P. Ross, and George Wright of the U.S. Department of Housing and Urban Devel- opment; Beverly Milkman, Brandon Roberts, and Mary Kate Smith of the Economic Development Administration; Patrick J. Cleary and Gary Reed of the U.S. Department of Labor; Kenneth W. Butler, Larry Schulman, Kenneth Bolton, and Fred Williams of the Urban Mass Transportation Administration; and Richard Shute, Marlys Gustafson, and Michael Fishman of the U.S. Department of Health and Human Services. The committee is also deeply appreciative of the efforts of the authors of the workshop papers, which were commissioned on very short notice but nevertheless were of high quality and usefulness to the committee in assessing current socioeconomic conditions in urban areas. The committee would like to thank those who attended the workshop and lent their experience and expertise by participating in the discussions; workshop attendees are listed in the appendix to the report. The committee is grateful for the support of the staff of the Commission on Behavioral and Social Sciences and Education, in- eluding executive director David A. Goslin, associate executive di- rector P. Brett Hammond, and associate director for reports Eugenia Grohman, who edited the report. Shelly Westebbe took care of the many administrative details of committee meetings and workshops with unfailing good cheer, and Barbara Darr, Michelle Daniels, and Ann Tasseff assisted in the production of the report and papers.

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PREFACE . V11 ~ would especially like to acknowledge the hard and able work of Michael G. H. McGeary, the study director, who was primarily responsible for organizing the workshop, commissioning the back- ground papers, and preparing this volume for publication. Finally, ~ would like to thank the other committee members for their invaluable contributions in planning and participating in the workshop and producing the report contained in this volume. John C. Weicher, who resigned to take a position in the federal government, was an especially active member of the committee who will be missed. LAURENCE E. LYNN, JR., Chai?. Committee on National Urban Policy

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Contents PART I COMMITTEE REPORT OVERVIEW WELL_BEING AND POVERTY URBAN ECONOMIC TRENDS URBAN F ISCAL CONDITIONS . . TRENDS IN URBAN GOVERNANCE... URBAN INFRASTRUCTURE. . 12 ..24 33 42 44 POLICY IMPLICATIONS 51 REFERENCES ee ee e ee.~ e e 55 APPENDIX A REGIONAL CLASSIFICATIONS ; 59 APPENDIX B WORKSHOP PARTICIPANTS . e . e 61 IX

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CONTENTS PART II BACKGROUND PAPERS INCOME, OPPORTUNITIES, AND THE QUALITY OF LIFE OF URBAN RESIDENTS Mark C. Berger and Glenn C. Blomquist 67 FAMILY STRUCTURE, POVERTY, AND THE UNDERCLASS Sara McLanahan, Irwin Garfinkel, and Dorothy Watson ... 102 JOBS, MIGRATION, AND EMERGING URBAN MISMATCHES John D. Kasarda .e ~ LOCAL AREA ECONOMIC GROWTH PATTERNS: A COMPARISON OF THE 1980S AND PREVIOUS DECADES Daniel HI. GaTnick............................................ FISCAL CONDITIONS IN LARGE AMERICAN CITIES, 1971 - 1984 Philip M. Dearborn........................................... STATE FISCAL CONDITIONS Steven D. Gold............................................... URBAN INFRASTRUCTURE: P ROBLEMS AND SOLUTIONS Richard R. Mudge and Kenneth I. Rabin. URBAN GOVERNANCE: THE NEW P OLITICS OF ENTREPRENEURSHIP John J. Kirlin and Dale Rogers Marshall INDEX 148 199 255 .284 308 .. 348 . . 375

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URBAN CHANGE AND POVERTY

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