RETHINKING AMERICAN URBAN POLICY INDONESIA

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RETHINKING AMERICAN URBAN POLICY
DAVID L. AMES

University of Delaware

NEVIN C. BROWN

American Association for Higher Education

MARY HELEN CALLAHAN
Urban Affairs Association

SCOTT B. CUMMINGS*
University of Louisville

SUE MARX SMOCK
Wayne State University

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JEROME M. ZIEGLER
Cornell University

ABSTRACT Sweeping changes have occurred in US cities since the 1960s.

Demographic shifts have increased the population and political strength of suburbs.
The economy has becomeglobalized and many urban areas have been seriously affected
by the reorganization of basic industry. Additionally, the nation is confronted with
a deficit of immense proportions. This paper examines the influence of these trends
on urban policy intiatives over the past four decades. US urban policy is criticallv
explored and analyzed. The need for a national urban policy is stressed. The authors
conclude that both major political parties have failed to place cities at the center of
domestic policy and suggest ways to create a national urban policy.

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INTRODUCTION

In May 1992, the riots in south central Los Angeles that followed the acquittal of four
white Los Angeles policemen accused of beating Rodney King, a black man, forced
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~~

*Direct all correspondence to: Scott B. Cummings, Center fur Urban and Economic Research, University
of Louisville. Louisville, KY 40292.

JOURNAL OF URBAN AFFAIRS, Volume 14, Number 3/4, pages 197-216.
Copyright Q 1992 by JAI Press Inc.
Ail rights of reproduction in any form reserved.
ISSN: 0735-2166.

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198 I JOURNAL OF URBAN AFFAIRS 1 Vol. 14/No. 3/4/7992

Americans to confront, at least momentarily, urban problems facing the nation. The

first response by the White House was to blame the riots on federal programs enacted
in the 1960s and 1970s to solve urban problems, Great Society programs that had
“failed” (Wines, 1992). The statement may have been politically motivated, but as
Nicholas Lemann (1992) was quick to point out, this is not a peculiarly Republican
worldview:

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In policy-making circles in Washington, the word “failed” has become permanently
grafted onto the War on Poverty and the Great Society. The general mental picture
is one of a concatenation of wacky liberal ideas that were launched for years, one
after another, with unlimited funding, and that not only didn‘t work, but actually
made things worse by creating today’s inner-city ghetto underclass (Abramowitz,
1992, p. HI).

As such, the characterization by the White House was only one more sign that the
riots in south central Los Angeles found many people (including some in positions of
great responsibility) confronting urban problems about which they were largely ignorant
and constrained by beliefs based on misconceptions of past policies that efforts to solve
such problems only make them worse.

The conviction that trying to solve a problem, even one involving direct and sustained
policy intervention, will only make it worse is not a common US reaction. For nearly
50 years after the end of World War I1 the United States had a clear foreign policy:
to oppose the spread of communism and to contain Soviet expansion by means of
military power. This policy was direct, unwavering, and unmistakable. As part of
fulfilling its Constitutionally mandated responsibility to “provide for the common
defense,” every Presidential administration and every Congress called upon the nation’s
people to support (to the tune of several trillion dollars) foreign policies in opposition
to communism. Later generations of historians will decide how much of the collapse
of the Soviet system was due to its internal malfunction and how much to US-led
opposition. However effective, this policy was clearly understood by the American
people and aggressively implemented by their political leaders.
One may wonder whether a similarly clear, direct, and focused domestic policy during
this same half-century would have produced a nation with far fewer of the grave social
and economic problems that many Americans now face. In particular, one may wonder
whether our nation’s urban landscape, both the central cities and the suburban areas
that surround them, would have become safer, healthier, and more humane places to
live and work if we had had such a consistent domestic policy and requisite financial
resources to implement such a policy.
The 1990 Census established that, for the first time, the majority of Americans now

live in suburbs. Whether people reside in the center of a city or in its far suburbs, the
entire metropolitan landscape has become an urban environment. It has become
impossible for political leaders to fulfill their Constitutionally mandated responsibility
to “promote the general welfare” while ignoring that environment. The United States
is an urban culture, with marvelous amenities for many but with severely damaged
neighborhoods and communities for others. How to eliminate or transform these
damaged communities, bringing all to a decent standard, is the object of an urban

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I Rethinking American Urban Policy 1 199

development policy. How to improve all aspects of the urban environment so that every
citizen will have the opportunity to enjoy a satisfying and healthy life is the object of
a comprehensive urban policy. Toward the better conceptualization and understanding
of such a policy by public officials, leaders in private business, and by the general

citizenry, the chapters of this volume are directed.

THE EMERGENCEOF AN URBAN CRISIS
The term urban crisis became firmly etched in US consciousness in the mid-l960s,
burned there by riots in several major cities, one of the first of which was in the Watts
area of Los Angeles. From then until after the assassination of Martin Luther King
in 1968,75 urban riots occurred (Goldfield & Brownwell, 1990, p. 360). Their combined
effect was to change our understanding of the word urban and to alter our perception
of cities: the problems they encompass, the people who experience these problems, and
the parts of the city in which they occur. Urban came to mean the central city, the
older cores of metropolitan areas. For most people the central city became a place to
leave: a place of high taxes dominated by slums, a place of deteriorating buildings where
people lived in old houses and apartments, a place of poverty and crime where the
streets became dangerous after dark. US cities became surrounded by more desirable
places, the suburbs, areas outside the old city limits where there were new housing,
new schools, new shopping centers and, increasingly, new jobs. The suburbs were mostly
middle income and virtually all white. The central city was where urban problems were
isolated and contained.
The contemporary urban region emerged at the turn of the 20th century as major
cities became ringed with residential satellite communities outside their legal boundaries.

This new type of settlement, the metropolitan area, was first recognized statistically
by the U.S. Census in 1910. From 1910 to 1970, nearly 95% of all population growth
took place in metropolitan areas; more than half of this growth took place in the largest
metropolitan areas, those with over one million residents. There were only six such
areas in 1910: New York, Philadelphia, Boston, Pittsburgh, Chicago, and St. Louis.
They were home to 16 million people. By 1970 there were 33 and they contained 80.6
million people, by 1990, 39 and half of the nation’s people.
The precursor of a metropolitan landscape with a declining central city and an
expanding suburban fringe first emerged in the 1920s when the automobile allowed
expanded residential choices outside the central city. Before World War 11, suburban
growth involved only a limited number of households, was geographically restricted,
and did not seriously threaten the dominance of the central city. This changed
dramatically after 1945 when the suburban landscape exploded as veterans sought new
housing in which to raise their families. They settled in the suburbs, in new single family
homes made possible largely by the mortgage subsidy programs of the Federal Housing
and Veterans’ Administrations as well as by cheap land and energy. Through its efforts
to promote home ownership and benefits created for veterans, the federal government
unwittingly undermined the vitality of central cities. The postwar suburbanization of
the nation took place in nearly all the nation’s metropolitan areas, thus starting the
process that would culminate in the racial and socioeconomic polarization of the 1960s.

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Suburbanization was driven not only by returning veterans but by a baby boom which
continued into the 1960s and which would increase demand for housing, schools, and
jobs. The exodus of white middle income families to the suburbs was accompanied
by businesses, especially retailing, a fact that permanently altered the tax and revenue
base of US cities (Mikesell, 1982). At the same time, northern central cities during the
1950s and 1960s were the destinations of a massive and long-ignored migration of blacks
from the rural South that resulted in the more affluent white population being replaced
by a poorer black population. Unlike prior immigration, African-Americans were

permanently segregated from the white population, first within selected neighborhoods
and then within the central cities of metropolitan areas (Glazer & Moynihan, 1963).
In the 1950s, some central cities, primarily in the Northeast and Midwest, began to
lose population, although the larger metropolitan areas of which they were a part
continued to grow. By 1970 "fifteen of the 21 central cities with a 1960 population of
one-half million or more had lost population.. . In fact, declining central cities lost more
people in the 1960s than were lost by declining rural counties" (Frey, 1990, p. 2). The
metropolitan balance had shifted: The suburban population was a majority (53.6%')
in metropolitan areas by 1970. The consequences of these major demographic changes
included growing conflict between city and suburb over metropolitan governance and
over regional tax policies, school district boundaries, and racial integration.
The economic decline of cities after World War I1 was real, if not immediately
apparent. Although the term urban crisis has been reserved for the 1960s, central cities
were in economic difficulties by the early 1950s. If the automobile and truck opened
up the suburbs, they also rendered the central city physically obsolete for many
economic activities. Manufacturers left their old multistory loft buildings for new
production line efficiencies in sprawling single-story suburban buildings. Large center
city department stores could not entice customers to brave streets saturated with
automobiles, nor could they store customers' cars once arrived.
The cause of economic decline of the central city was initially seen as the obsolescence

of the physical city. Raymond Vernon summarized this view in 1959:

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Almost from the moment the first house was erected, the first street laid, and the
first drainage ditch dug in any of these embryo cities, a process of obsolescence took
hold which dominated the pattern of subsequent development .. . Almost from the
first, then, there was a building and a rebuilding: a tearing down and a reordering
of structures (Wilson, 1966, p. 4).

According to this view, suburbanization had interfered with the normal process of
recycling in the central city and physical renewal was needed to reorder the competitive
balance between suburb and central city. The key to dealing with social problems was
to revive the city's economy and to attract the middle class back t o the city.
In the 1960s the perception of urban problems gradually changed to one which
emphasized social dimensions and economic causes over physical causes. While the
focus was on racial and economic social divisions of the urban landscape, there was
another unacknowledged, underlying cultural dimension: Suburbanization both
idealized and was made possible by a nuclear family in which the head of household

and sole breadwinner was male. The separation of suburban house from central city

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1 Rethinking American Urban Policy 1 201

job was also a separation of male employment and female residence. The loss of most
jobs in the central city was a loss of male jobs in the manufacturing sectors, a distinction
that was not unimportant in the patriarchal American society of the 1950s and 1960s.
By the end of the 1960s, the demographic and developmental patterns of metropolitan
areas were well established: growing metropolitan areas overall, within which suburbs
coexisted uneasily with a declining and economically struggling central city. The central
city was composed of a varying number of minorities, the poor, the elderly, and other
socially disadvantaged groups. The culmination of the trend was accurately captured
in 1968 by the National Advisory Commission on Civil Disorders, established to
investigate the urban riots: The United States was “rapidly moving toward two
increasingly separate Americas” comprised of a “white society principally located in
the suburbs,..and a Negro society largely concentrated within large central cities”
(Kerner Commission, 1968, p. 407). The Commission concluded that “within two
decades, this division could be so deep that it would be almost impossible to reunite”
(p. 407). The theme of the Kerner Commission was that the chief element of the crisis
was “the isolation of the poor and of minority members of central cities.. .a crisis of
opportunity for a substantial segment of the American people” (Weiher, 1989, p. 229).

THE TRANSFORMATIONS OF THE 1970s
Three long-term population trends dominated the 1970s: Population growth slowed
nationally, mostly because of declining birth rates; metropolitan population growth
slowed as, for the first time, eight of the largest metropolitan areas lost population;
more startling still, population outside of metropolitan areas began to grow more rapidly
than population inside metropolitan areas. The historic order of growth among large
and small metropolitan areas and nonmetropolitan areas was reversed. Nonmetropolitan areas became the fastest growing, followed by small metropolitan areas under
250,000. For the first time since 1910, the largest metropolitan areas (those over one
million) grew the slowest.
Not only did overall population growth slow nationally, it also slowed unevenly: The
industrialized Northeast and Midwest lost population to a rapidly growing South and
West. The economy was being transformed as well, shifting from manufacturing to
service employment, caused partly by increasing international competition in a world
economy the nation had previously dominated. Cities and entire metropolitan areas,
especially those in the frostbelt, were being asked to respond to the loss of population
and manufacturing jobs while making the transition to a service economy in an
international context. The impact of this double squeeze was serious for many cities
and catastrophic for some, especially for those heavily dependent on manufacturing.
By 1975, many cities were in the midst of full-fledged fiscal crisis, the most visible being
New York and Cleveland. Cities and their metropolitan areas started the decade in a
national economy and ended it trying to compete in an international economy. Some
succeeded; many did not.
The eight major metropolitan areas that declined (New York, Philadelphia, Detroit,
Cleveland, St. Louis, Pittsburgh, Milwaukee, and Buffalo) signaled the emerging
regional differences in population growth (Perry & Watkins, 1977; Sawers & Tabb,

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1984). Population growth in the Northeast and Midwest stopped, outmigration
balancing births, while the South and the West grew by annual rates of 1.8% and 2.2%,
respectively, and accounted for 90% of the nation’s population growth in the 1970s.
Many of the growing nonmetropolitan counties and smaller metropolitan areas were
in the South and West. Central cities in older metropolitan areas continued to lose
population in the 1970s; 25 central cities in metropolitan areas with more than one
million residents lost population, and four (St. Louis, Buffalo, Cleveland, and Detroit)
lost more than 20% of their population. Only in the West did the population of central
cities grow and then only at a rate of 1.5% annually.
Suburb population growth slowed in the 1970s, but it still accounted for most
metropolitan growth. By 1977, African-Americans had also begun to suburbanize in
significant numbers. Indeed, during the 1970s, the African-American population in the
suburbs increased at a rate faster than that of whites and much faster than that of the
black population in central cities, 46.1% as compared in 5.1% (Chinitz, 1991, p. 945).
Ironically, the beginnings of suburbanziation among working and middle class blacks,
a result of federal actions to end residential segregation, left some central city
neighborhoods with an intensified concentration of people with serious social and
economic problems, transforming ghettos into slums.
The structural shift in the US economy to a greater reliance on service industries
had a major influence on our cities. Far more than a shift in employment, it spelled
the abandonment of much of the industrial and urban landscape: “brick and concrete,
once symbolic of a nation’s industrial might, signify obsolescence in an emergent
‘postindustrial’ economy given less to manufacturing and more to service production”
(Jakle & Wilson, 1992, p. 57). The term deindustrialization was coined to describe the
twin processes of employment shift from manufacturing and disinvestment in its
physical plant. According to Bluestone and Harrison (1982), certain kinds of private
investment decisions, in tandem with sweeping demographic shifts, were undermining
the vitality of US cities. In pursuit of higher profits and lower investments in the cost
of labor, many corporations were abandoning cities altogether and relocating in rural
regions or, in some cases, other parts of the world. Downtown facilities and buildings,
fully depreciated and costly to renovate, were being abandoned without serious financial
losses. During the 1970s, plant closings and shutdowns devastated the employment base
of many cities and undermined the structure of neighborhood life and culture
(Alperovitz & Faux, 1984; Bingham & Blair, 1984; Bergman, 1986). Capital was mobile,
but US cities and their downtowns were not.
Northern and Midwestern cities and metropolitan areas were affected most severely
by the reorganization of industry. The restructuring of the economy and the
suburbanization of business and industry accelerated the demographic and political
changes occurring within the older industrial cities (Beauregard, 1989). Bluestone and
Harrison (1982) report that between 32 and 38 million jobs were lost during the 1970s.
The personal and social costs of deindustrialization were immense. In addition to lost
wages and productivity, many workers and their families suffered physical and
emotional disorders after losing their jobs. Cities lost revenues and became unable to
sustain the provision of services to residents. Businesses closed in response to a drop
in disposable income and ultimately in consumer spending. Higher levels of
unemployment strained the demand on federal programs providing benefits to

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I Rethinking American Urban Policy 1 203

individuals and families. The deindustrialization crises of the mid-1970s affected
members of the white working class most severely, especially those living in older,
industrial cities (Cummings, 1987). By the end of the 1970s, it was clear that urban
problems were no longer confined to minorities living in the core of US metropolitan
areas. Many of the negative economic and social conditions associated with the central
city spread over entire metropolitan regions, especially in the Northeast and Midwest.
It was also clear that serious urban problems were no longer confined to the largest
metropolitan areas. The urban crisis surfaced in small and medium-sized cities like Flint,
Michigan, Akron and Youngstown, Ohio, Gary, Indiana, Lowell, Massachusetts, and
Louisville, Kentucky. Louisville is a good example of what happened: Once a thriving
industrial center known for its high quality of human life, it lost 32,000 of its
manufacturing jobs during the 1970s and early 1980s, a decline matched in very few
other small cities. During the early 1980s major layoffs occurred at General Electric’s
Appliance Park and Ford Motor Company, two of Louisville’s largest industrial
employers. International Harvester, Seagrams, and Brown and Williamson, all major
industrial employers, left the city. Major downturns also occurred in some areas
traditionally assumed to be recession proof: the city’s tobacco and distillery industries
(Yater, 1987).
Other profound demographic changes were affecting US society and its metropolitan
areas. The baby boom came to an end in 1964. Birth rates and family size began to
decline, faster among white women than among black women and faster among more
well-todo women than among poorer women. This also corresponded with the
beginning of the women’s movement and a rapidly changing for role for women in
society most marked by their massive entry into the labor force.
Women tended to hold less skilled and well-paid jobs than men and were usually
paid less than men even when they held comparable jobs. Although they bore the
economic and childrearing brunt of a growing divorce rate in the nation, as they entered
the labor force, women were economic “shock absorbers” in the economy, blunting
its downturn in the 1970s. In the shift from manufacturing to service industries, as men
lost their jobs in manufacturing, they were replaced in the economy by women taking
service jobs. The 1970s brought stagnation in family income for the first time since
World War 11. After reaching a peak in 1973, median family income in 1984 was $1,734
less (in constant 1984 dollars) than it had been ten years before. Millions of women
entered the labor force to sustain their family’s income (Sternlieb & Hughes, 1986, p.
20). By 1980, the median family income for two-worker families with wives in the labor
force neared $27,000. For those in which the wife did not work, it was $19,000(Sterniieb,
Hughes, & Hughes, 1982, p. 51).
The decline in the birthrate changed the age composition of the population, reducing
the proportion of younger and increasing the proportion of older individuals. The
trough of the “baby bust” was felt in the 1970s in the loss of enrollments in elementary
and secondary schools. In the late 1970s and early 1980s it began to affect the economy
as the entry level labor force of 14-24 years of age was smaller than in the past, creating
labor shortages in many areas. Conversely, although the effects would not be strongly
felt until the late 1980s and 1990s, the baby boomers entered middle age, increasing
their interest in services such as health care and pensions.

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THE BIFURCATED 1980s

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Metropolitan growth revived in the 1980s. The nation’s 284 metropolitan areas grew
by 11.6% to reach 192.7 million residents by 1990, accounting for 77.5% of the US
population (U.S. Bureau of the Census, 1991, p. 1). Particularly striking was the fact
that three of the eight largest metropolitan areas (those with populations over one
million) that lost residents in the 1970s (New York, Philadelphia, and St. Louis) started
to grow again (Frey, 1990, p. 11). Five continued to lose population, and except for
New Orleans, all were in the industrial Northeast and Midwest: Detroit, ClevelandAkron-Lorain, Pittsburgh, and Buffalo. The six fastest growing of the 39 largest
metropolitan areas, all in the South and West, grew by more than 30% and included,
in order of growth, Orlando, Phoenix, Portland, San Diego, Dallas-Ft. Worth, and
Atlanta. Metropolitan areas of under one million grew more slowly in the 1980s than
in the 1960s and 1970s.
Although this pattern of growth seemed to conform to the frostbelt-sunbelt
differences that emerged in the 1970s, in fact a new regional urban geography emerged
in the which “metropolitan growth increased most rapidly in areas near the Pacific or
Atlantic coasts, while nonmetropolitan declines became increasingly concentrated
within the nation’s interior” (Frey, 1990, p. 16). This new pattern reflected those areas
that had been most adept in making the transition to a postindustrial economy and
competing internationally. Indeed, in the 1980s a new hierarchy of US cities emerged:
world cities, national command and control centers, specialized areas, and smokestack
areas (Frey, 1990; Noyelle & Stanback, 1984). World cities are those that are strong
financial and trading centers in the world economy: Los Angeles, Chicago, and San
Francisco qualify in addition to New York. Miami, although smaller than other
international cities, has become the financial capital of the Caribbean Basin. National
command and control centers are foci of national and regional finance devoted to
advance service activities which serve as distribution centers for national consumer
markets: older centers like Philadelphia, Boston, and St. Louis and new ones like
Atlanta, Dallas-Ft. Worth, and Minneapolis-St. Paul. Specialized areas rely heavily
on one or two major economic sectors and are vulnerable to turndowns in those sectors.
Houston is an example: Its economy boomed during the 1970’s oil shortage and crashed
in the 1980s when oil prices fell. Detroit, Cleveland, and Pittsburgh, great specialized
manufacturing areas decimated by deindustrialization, are in the final category.
In the late 1970s and early 1980s, there were signs that some interpreted to mean
that general revival of the central city was in the offing. If the fiscal crisis was not over,
cities were at least solvent; young professionals had begun to rehabilitate and move
into older sections of the city; some major central business district revitalization projects
were taking hold, reflecting a successful adaptation to a postindustrial economy. Socalled festival markets in cities like San Francisco, Baltimore, and Boston seemed to
be a replacement for lost retailing and a model for other cities to follow.
Although these trends continued throughout the decade, they did not augur a revival
of the central city, but the rise of a dual level or bifurcated economy, a context in which
“a number of observers conclude[d] that problems of central city poverty, racial
isolation, crime, out-of-wedlock births [were] unabated if not worse” (Weiher, 1989,
p. 233). Ames and Callahan (1988) found that many urban problems had not only

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I Rethinking American Urban Policy I 205

intensified but changed ominously. As examples they cited AIDS, the emergence of
the homeless, a deteriorating environment, a growing shortage of trained labor, and
economic and social disparities that in the 1960s and 1970s had been between declining
central cities and suburbs and that were now, “during a period of general economic
expansion.. .growing.. .between regions, metropolitan areas and individuals” (Ames &
Callahan, 1988, p. 2).
By 1990, the urban landscape of the United States had evolved into a geography
of metropolitan winners and losers without a typical metropolitan area. Moreover,
metropolitan areas, especially the largest ones, had broken up and become terminally
fragmented, no longer tied together economically and socially by a dominant central
city. The once supplicant suburbs had become economically and socially independent,
frequently exceeding the political and economic power of the central city. Some called
it postsuburban (Kling, Olin, & Poster, 1991), others edge city (Garreau, 1991).
Los Angeles in 1992 highlights the growth of this bifurcated economy in which
poverty and ethnic isolation persist in the midst of a booming economy. The second
largest metropolitan area with a 1990 population of 14.5 million, Los Angeles grew
26.4% in the 1980s. Writing shortly after the riots in south central Los Angeles in the
Washington Post, Abramowitz tried to answer the question of who benefited from the
urban boom. The proudest achievement of Mayor Bradley in his 18-year tenure,
reported Abramowitz, was the revitalization of downtown as evidenced in 25 million
square feet of office space built during the 1980s, “creating the gleaming skyline familiar
to addicts of television’s L.A. Law” (Abramowitz, 1992, p. HI). In spite of the new
development, however, jobs in the downtown core grew at a rate of less than one-third
of 1% annually. Far from an effective economic strategy, downtown development
provided corporations with the opportunity to move to newer quarters, leaving older
buildings vacant. There was no trickle down of jobs to south central Los Angeles.
Much the same happened in other booming cities. Communities like Lawndale in
Chicago and Anacostia in Washington, D.C., were still mired in poverty and blight.
Even if the downtown redevelopment projects did not create new jobs, they did generate
millions in new revenues to the cities. Much of these funds went to replace lost federal
funding, to cushion inflation, to pay for the increasing costs of labor intensive services
such as fire and police, and to deal with new problems such as AIDS, the homeless,
and drug-related crime.
Abramowitz also points out that during the so-called urban renaissance of the 1980s,
the number of Americans living in poverty increased from 27.4 million to 3 1.7 million,
or 12.9% of the total US population in 1990. Of those 31.7 million people, nearly threequarters (24.5 million) lived in metropolitan areas. Although much of the increase in
poverty population was in central cities, urban poverty was no longer a central city
phenomenon. By 1990,42% of all metropolitan poor lived in the suburbs, Indeed, in
1990, the suburbs of metropolitan areas contained a larger poverty population than
nonmetropolitan areas, 10.2 million compared to 9.0 million. Two-thirds of the
metropolitan poverty population were white (67.1% white, 32.9% black). Hispanics,
a nonracial census category, accounted for 23.6% of the metropolitan poor.
Although there were more whites living in poverty in central cities than blacks (7.7
million compared to 5.8 million), the black poverty population was much more highly
concentrated: 76.3% lived in the central city. Some 60% of Hispanic poor also lived

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206 I JOURNAL OF URBAN AFFAIRS I Vol. 74/No. 3/4/1992

in the central city. Conversely, slightly over half (51.2%) of all poor whites in the
metropolitan areas lived in the suburbs. By the 1990s, although some of the most visible
and worst concentrations of poverty were found in central cities, the geography of
poverty in metropolitan areas was much more complex than it had been 20 years before.
Urban poverty was also a national phenomenon, occurring in all regions and all
metropolitan areas. Metropolitan poverty was somewhat greater in the South than in
other regions of the United States (South, 31.396, Northeast, 21.196, Midwest, 21.2%,
West, 23.0%). The South also held the largest metropolitan population by 1990. The
metropolitan poverty populations of the South and West were almost evenly divided
between the suburbs and the central city. In the Northeast and Midwest, about twothirds of the poverty population lived in the central city.
People living below the poverty line were only part of a population losing ground
in the 1980s; the near-poor also increased. Although the median family income rose
during the decade, the number of households living on incomes of less than $25,000
increased from 31% in 1979 to 42% in 1989. The Census Bureau reported that the
percentage of families living on middle incomes declined from 71% in 1969 to 63% in
1989 (Vobejda, 1992). Increasing living costs, especially for housing, further cut into
income. Median mortgage payment, adjusted for inflation, increased 26.9% to $737
a month during the decade and median rent rose 16.1% to $581. As housing costs
outpaced income growth, the portion of households paying more than 30% of their
income for housing (the “affordability” standard defined by the federal government)
grew to more than 40% (Vobejda, 1992). The number of people who reported having
no health insurance in 1990 (34.6 million) included almost 12% of the population above
the poverty line.
Another major change in the 1980s was that many central cities resumed their role
as hosts to new immigrants: Nearly 8.6 million people entered the country during the
decade, “almost as many migrants as arrived from 1900 to 1910, the previous high water
mark of American immigration” (Barringer, 1992). Historically, New Y ork,
Philadelphia, and Boston have been the major magnets for immigration. In the 1980s,
however, as greater numbers of immigrants came from Latin America and Asia, the
large metropolitan areas on the West Coast and in the Southwest and Florida became
immigrant magnets as well (Frey. 1990, p. 20). Some inland cities, like Detroit, became
destinations for specific national and ethnic groups, primarily from Middle Eastern
nations. In 1988, the metropolitan areas with the greatest number of immigrants were
New York, Los Angeles, Miami, San Francisco, and Chicago. This immigration
introduced a new ethnic diversity into many metropolitan areas, one that was not
without conflict.

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NATIONAL RESPONSETO URBAN PROBLEMS: 1948-1980
From 1948 through the early 196Os, the federal response to urban problems was
primarily through housing and community development policy, an orientation actually
begun under the New Deal but fully articulated in the Housing Act of 1948, sponsored
by Senator Robert Taft, a conservative Republican. Slum clearance and the building
of public housing was translated into downtown revitalization through urban renewal

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I Rethinking American Urban Policy I 207

with the 1954 amendments to the 1948 act. Modification of the interstate highway
program in the late 1950s and early 1960s placed a priority on building interstate
highways in urban areas. Federal urban policy during the 1950s and early 1960s was
one of bricks and mortar.
The Great Society programs that followed were less a response to urban development
strategies than to broader social issues: civil rights, poverty, and the health care needs
of the elderly. The major pieces were the War on Poverty (OEO), the Economic
Opportunity Act passed in 1964 (as much a response to Appalachian as urban poverty),
the Model Cities and Metropolitan Development Act of 1966, and the Housing Act
of 1968. Of these, only Model Cities was exclusively focused on metropolitan areas
and central cities. Although highly visible, these programs were never well funded:
OEO’s highest-ever budget was $1.5 billion, which it achieved under a Republican
President, Richard Nixon. Model Cities, originally a demonstration program
concentrating resources on a few cities, ended up spreading its resources over 300 cities
as the political price for its passage. It is ironic that these programs are recalled now
as being well funded. At the time, the federal government’s inability to fund even the
authorizations was seen as testimony to the failure of Johnson’s guns and butter policy:
Financing the war in Vietnam did not leave enough for the domestic programs he
sought. Although it may be difficult to assess how great the Great Society was, there
is no question that its duration was short.
The highest levels of federal aid to urban areas, and all local governments, actually
came under the Republican administrations of Richard Nixon and Gerald Ford. Nixon
revolutionized the pattern of federal aid by introducing revenue sharing and community
development block grants, thus changing the basis from categorical grants to entitlement
grants. The Comprehensive Employment Training Act (CETA) and Urban Mass
Transit Grant Programs were also Nixon initiatives. Nixon’s administration was also
the only one ever to propose a family assistance plan that would establish minimum
family incomes. As Altman (1978) pointed out, urban areas fared better under the
general entitlement and block grant programs than under urban categorical grants
because they received funds proportional to their population while avoiding the political
cost of being a special interest.
The Carter administration essentially continued the “new federalism” initiated by
Nixon in 1972. Carter did shift more block grant funds to cities in the Northeast and
Midwest, order the Department of Housing and Urban Development to use 75% of
CBDG funds in low income areas, and establish the Urban Development Action Grant
(Goldfield & Brownell, 1990, p. 392). The Carter administration’s urban policy achieved
few results, however, possibly because of the greatly increased economic stresses urban
areas faced during his term. Partly as a result, the Carter White House became
increasingly ambivalent toward urban areas and by 1979 had moved away from a
specific urban policy in favor of a national economic policy under which all cities would
presumably benefit.
The critique of federal urban programs from 1948 to 1980 has been severe. Federal
urban policy consistently lagged far behind the demographic and development trends
that altered US cities and transformed them into metropolitan areas. Policy initiatives
were sporadic and uncoordinated (Gorham & Glazer, 1976; Kaplan & James, 1990;
Loewenstein, 1971). Many critics contended that urban problems were treated in

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isolation from their demographic, political, and economic causes. Urban renewal,
according to critics, was implemented without regard to a growing historic preservation
movement. Significant historic structures were demolished by urban renewal programs,
the architectural integrity of many cities being tragically undermined in the process
(Wilson, 1966). Urban renewal was pursued in isolation from an overall downtown
redevelopment plan and without adequate attention to the housing needs of residents
displaced by the “federal bulldozer” (Anderson, 1964; Fried 1968; Gans, 1972).
Many policy analysts observed that federal initiatives lacked coordination and
produced unintended consequences. Federal housing programs were implemented in
isolation from school desegregation policy and other important initiatives in the civil
rights arena. While the federal government sought to provide more shelter for low and
moderate income families, housing officials and community activists paid little or no
attention to the fact that most federal programs actually reinforced existing patterns
of racial segregation. Efforts to provide equality of educational opportunity and
desegregate the nation’s schools were actually undermined by HUD programs designed
to expand housing choices among the urban poor (Rubin, 1975). It was not until the
latter years of the Carter administration that efforts were made to bring a moderate
degree of coordination among urban policies in housing, education, and civil rights
(Falk & Franklin, 1976).
Community development programs, many contended, were implemented in an
uncoordinated and sporadic manner. In the face of long-term urban development
trends, neither the Community Development Block Grant program nor Urban
Development Action Grant funds could alter the growing polarization between city
and suburb. Nor could they reverse the outward migration of people and capital to
the suburbs. Federal revitalization programs were poorly conceived in Washington,
badly coordinated between various governmental jurisdictions, and inadequately
monitored at the local level (Pressman & Wildavsky, 1980). Funds often were spent
on questionable projects or maneuvered into programs not initially authorized by
federal legislation (Tabb & Sawers, 1978).
Social welfare policies were implemented without adequate attention to the erosion
of jobs in the manufacturing sector. While many welfare programs designed during
the War on Poverty era made important contributions to the lives of the urban poor
(Levitan & Taggart, 1976), they did little to bring the marginal classes of urban society
closer to the economic mainstream and programs to enfranchise the urban poor in city
politics were not coordinated with established party processes. As a result, community
action programs conflicted with local party machinery in many cities and produced
what Daniel Moynihan (1975) called a “maximum feasible misunderstanding” over how
to manage the War on Poverty.

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BIPARTISAN FEDERAL DISENGAGEMENT FROM THE CITIES

By the 1970s,the federal government began to disengage from urban issues and policy.
In December 1980, one of the last acts of the Carter administration was to publish
the final report of the U.S. President’s Commission for a National Agenda for the
Eighties (1980, p. 6), Urban America in the Eighties, Perspectives and Prospects. It
opened with this declaration: “A unified and coherent national urban policy designed

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1 Rethinking American Urban Policy 1 209

to solve the problems of the nation’s communities and those that live in them is not
possible.” In the 1980s, the “almost universal trend.. .[was] toward political
decentralization and fragmentation, toward deregulation of the private sector and
relocation of functions and responsibilities from the public to the private sector”
(Bourne, 1991, p. 188).
After assuming the Presidency in 1980, Reagan began to move rapidly to privatize
public sector institutions and programs (Savas, 1982). Urban policy under Reagan, and
later during the Bush administration, relied heavily upon economic development shaped
by private investment decisions and a tax reform package that required state and local
governments to raise more of their own revenues. In 1980, direct federal aid to cities
stood at $47 billion; by 1990 it had dropped to $19.8 billion. The Reagan administration
promoted private enterprise, corporate ingenuity, and business leadership as solutions
to the problems confronting the nation’s cities, effectively making private entrepreneurs
the urban planners of the 1980s and public officials the working partners of private
investors.
As part of a widespread movement to privatize government institutions producing
and distributing public goods and services, many of the social programs of the preceding
30 years were systematically dismantled. Between 1981 and 1983, expenditures allocated
to nondefense programs steadily dropped as both a percentage of the gross national
product and in absolute dollar figures (Aaron & Associates, 1983). The major targets
for budget reductions included Social Security, Medicare and Medicaid, higher
education and student loans, aid to disadvantaged school districts, unemployment
insurance, housing assistance and grants for urban development, grants for job training
and creation, financial aid to the poor and the elderly, grants for urban social services,
and legal assistance for the poor. Because the beneficiaries of these programs were
disproportionately located in cities, urban areas were severely affected by Reagan’s
transformation of public policy.
The federal budgets for 1984 and 1985 also revealed significant cuts in social program
expenditures. Budget reductions in 1986targeted the Department of Housing and Urban
Development, the Small Business Administration, the Community Development Block
Grant program, the Urban Development Action Grant program, Aid to Families with
Dependent Children (welfare) and other social welfare services and benefits, Medicare
and Medicaid, education, training, and employment assistance programs, and urban
transportation for additional cuts in federal assistance (“Summary of Fiscal,” 1985,
August 3 1). The systematic federal underfunding of social programs was coupled with
the transfer to state and local governments of the responsibility for administering those
programs according to federally mandated levels. Primary among the programs turned
over to state government were food stamp and AFDC benefits. These administrative
changes were allegedly implemented in pursuit of greater efficiency and to reduce the
amount of federal tax dollars invested in the provision of services to the poor.
At the same time that federal funding of urban and social programs was being cut,
the federal budget deficit burgeoned. In 1983, an Urban Institute report examining the
US economy predicted that the annual federal deficit was on a course that would
ultimately exceed $200 billion by 1984, and $300 billion by the end of the decade (Mills
& Palmer, 1983). Their projections proved accurate through 1986. In 1985, the deficit
was approximately $212 billion; it rose to $221 billion in 1986. With the passage of

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the Gramm-Rudman bill, efforts were made to bring the federal deficit under control,
thus creating even more political pressure to cut urban programs. In 1987, the deficit
dropped to $149 billion, and it remained relatively stable through 1989. In 1990,
however, the federal deficit exceeded $220 billion, and in 1991 it increased to a record
$268 billion. By 1992the Bush administration presided over the largest deficit in history.
Currently, the deficit exceeds $300 billion.
Large deficits not only eroded the social safety net but also exacerbated the effects
of deindustrialization. Investment activity is depressed by spiraling deficits in the federal
budget: “The capital markets are concerned about the impact of the deficits on interest
rates and on the rate of capital formation, which in turn will have significant effects
on the growth and stability of the economy” (Pechman, 1982, p. 2).
By the mid-1980s even some of Reagan’s closest advisors were questioning the wisdom
of his economic policies. Reagan’s first director of OMB, David Stockman (1986),
warned that large deficits and a revolutionary transformation of the tax structure could
push the economy to the brink of another major downturn. In retrospect, Stockman’s
observations seemed prophetic. As federal budget cuts in social programs continued
to deepen in the late 1980s, the fiscal strains on state and local government sharply
escalated. Efforts to cut the deficit apparently had little or no effect on investments
related to the creation of more jobs, especially in the nation’s cities. Fiscal insolvency
at all levels of government limited the ability of public officials to manage and divert
an increasingly serious economic downturn that was inaugurated in the decade of the
1980s.
The fiscal crisis also affected the ability of cities to provide basic services. Without
adequate resources at the state and local level, many jurisdictions, particularly older
central cities, were increasingly unable to make needed infrastructure improvements
or efficiently manage the provision of elementary amenities. Without adequate
investments in infrastructure and urban transportation systems, utilities and basic urban
services, education and workforce preparation, many cities became less and less able
to attract service industries to replace the manufacturing firms they had lost to
deindustrialization. Competition between and within metropolitan areas for new
economic activities led some jurisdictions to compromise seriously their already
precarious revenue base (Bluestone & Harrison, 1982; Feagin, 1989). Many jurisdictions
mortgaged their future with lucrative tax abatement incentives or made rash
commitments to finance infrastructure improvements or initiate land use changes
through high-risk public indebtedness or fiscally questionable bonding programs
(Squires, 1989).

URBAN REALITIES OF THE 1990s
By 1990, few policy analysts harbored any illusions about the problems of urban
America being confined to minorities living in the inner city. While minorities continue
to suffer disproportionately, the scope of the contemporary urban crisis affects a wider
range of individuals, groups, and classes, and is more dispersed geographically. The
Environmental Protection Agency reported, for example, that the number of
metropolitan areas failing to meet ambient air quality standards for carbon monoxide
and ozone has increased sharply since 1960.Problems of toxic waste disposal complicate

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the water service policies of entire urban regions. Development of appropriate waste
disposal policies and standards have been made more complicated and expensive by
suburbanization. The quality of the urban environment is a political issue that
transcends class, racial, and jurisdictional boundaries. Other urban problems have
assumed new dimensions during the 1990s.
The problem of substance abuse is extremely serious among urban minorities. Street
gangs involved in drug trafficking have emerged in most major US cities. Contrary
to conventional wisdom, however, Huff (1990) found that youth gangs have emerged
in small-to