It's no secret that Upstate New York has seen better days.
Our population is aging, and its growth is all but stagnant. Manufacturing jobs that once drove the nation's economy have been leaving for a generation now. The Information Age opportunities that were supposed to follow them haven't materialized, or at least not in the numbers needed to sustain economic growth in places like Rochester, Buffalo, and Syracuse.
What caused this situation is less clear. And so are steps the region can take to reverse it. Politicians, business and labor leaders, and advocacy groups from across the spectrum point fingers in all the predictable directions. Into this fray step two Cornell University city and regional planning professors, bent on bringing the tools of academia to the task of diagnosing and fixing the region's economic ills.
Rolf Pendall and Susan Christopherson released the report Losing Ground: Income and Poverty in Upstate New York, 1980-2000 this fall. It's the fourth in a series of reports produced by Pendall for the Washington, DC-based Brookings Institution on the health of Upstate New York. (You can find those reports at the organization's website, www.brook.edu; a fifth and final report --- on the state of education Upstate --- is due next spring.) We met recently with Pendall and Christopherson to discuss the results. Following is the first part of an edited transcript of that conversation:
City:You mention in "Losing Ground" that while cities and some rural areas of Upstate are suffering, other rural areas are becoming more affluent and more populous. Where are some of these places?
Pendall: The Hudson Valley is certainly one area. Then there are the high-amenity areas around the Finger Lakes, where you have populations spreading out toward Canandaigua, formerly rural areas that are entering the exurban fringe. The widening of the Thruway from 490 to Canandaigua has made it a lot faster for people to get down into Ontario County. That's another trend.
There may still be seriously impoverished people in these counties. Those people may have a worse situation now because they're fighting in a housing market that has suddenly escalated dramatically with an influx of urban equity and urban housing value. And the new urbanites are also bringing with them a taste for public services that is quite a bit different from what is traditionally provided in those counties. So the counties may start incurring snowplowing costs and police costs that wouldn't have been demanded by the local residents previously.
Christopherson: Canandaigua is a good example. And Ontario County in general, because they encouraged the development of a big shopping center right across the border from Monroe County, they were able to attract the customers and probably the labor force from Monroe County. That's also stimulated office-park development. So they're able to attract business because they have a lower property-tax rate due to sales-tax revenues because of the shopping center. They're in a very favorable condition for handling these service costs. But it's sprawl.
City:Does this type of exurban migration mask the poverty that's left behind in the cities and the poverty that might still be around places like Canandaigua?
Pendall: Maybe the latter. It may mask the poverty of communities that are around Canandaigua, the former rural poverty. It may also ameliorate economic distress just enough in those rural counties with the creation of new retail jobs, for example, that some families get lifted out of poverty.
In the areas where people are leaving, I think the maps in Losing Ground show that the areas transitioning to higher poverty are those tracts that are immediately adjacent to the tracts that were already high poverty in 1990. And what's the dynamic here? The dynamic is that some of these neighborhoods are shifting from being either 20 to 30 percent poverty --- or being over 40 percent poverty --- to being 30 to 40 percent.
City:So some of the worst poverty eased a little bit, but areas that hadn't been that bad have gotten worse? It sounds almost like New York's solidifying a base of urban poor.
Pendall: Yes, and that's actually a trend that runs directly contrary to the rest of the nation. In the US as a whole, the biggest growth has been in the lowest poverty neighborhoods, whereas Upstate the highest population growth has been in the neighborhoods that have between 30 and 40 percent poverty. By anyone's definition, that is pretty severe poverty. I mean, more than 40 percent poverty is a devastated neighborhood, but 30 to 40 percent poverty is also an extremely difficult condition.
City:What's so bad about having these concentrated high-poverty districts?
Pendall: There are repercussions for the people who live there; there are fewer opportunities in neighborhoods like that. The schools tend to be poorer. For kids who go to school with classmates who are all below poverty, most of the findings suggest that their learning environments aren't great, and their home environments aren't great. Their parents are often not able to give them the kind of support they need to succeed in school. There's a set of findings about school children in concentrated poverty that I think are pretty persuasive.
Christopherson: When you get a concentrated-poverty neighborhood you can't attract retail services, because there's not a sufficient market. And when you do attract, for example, grocery stores, they charge higher prices. So that becomes a problem. People don't have access to the kinds of services they need to carry out their daily life. And if they do have access to those services, they're more expensive.
Another indirect consequence has to do with civic leadership. Where you have a mixed-class neighborhood with some ministers and teachers and bus drivers, you have some community leadership that could help people make arguments for better services to the city government, to urge better representation for their interests. In a very, very high-poverty neighborhood you don't have that kind of leadership. That's very important for the community.
Pendall: The idea that so much poverty is concentrated in a limited number of cities is very difficult because it means that these cities continue to be locked in a spiral. Try as they might, they can never put together the resources that are necessary to serve the people who live there. As people who have the means to move out do so, the city has to do something to pay for the services needed by those who are left behind.
Really the only device that cities in New York State have to deal with those increasing costs and demands is raising the local property tax. We don't have local sales taxes for cities. We don't have local income taxes for cities. Pretty much everything you get in a discretionary form is from the property-tax rate, but every time you raise the property-tax rate, you make yourself a little bit less appealing to potential homebuyers and businesses, who might locate inside your borders. And when you have high property-tax rates and increasing property-tax rates, your home values are lower to compensate for that.
There's an inverse relationship between property tax and home values, so if you have high property-tax rates, it robs community residents who own their own homes of wealth; because they have to pay more in taxes, they can afford less for the price of a house. So that means that low-income people living in high-poverty neighborhoods who own their own homes, they are, if not trapped there, they certainly don't have the mobility of people in other parts of the city and other parts of the region where tax rates are lower.
Christopherson: And if you get depopulation in these cities, you get the phenomenon of people who are left paying for infrastructure that's too large for the actual population of the city. The most prominent case of this is Buffalo. People laugh about this and call it the incredible shrinking city, but it's got a population that's half of the size that it once was, and the infrastructure is still there so they're paying for this much larger infrastructure: streets and roads and municipal buildings and all kinds of things.
Pendall: And again, it's not just that it's an unequal burden, they're also the least able of anyone in the whole region, and in the state to pay for these things. To me this is one of the most significant messages to the whole series: Cities in Upstate New York are really in serious trouble. And it's no wonder, because there are a whole bunch of rules and laws and practices and traditions in New York State that are heavily biased against cities, especially the small cities
City:What specifically do you say is biased?
Pendall: There are state laws and regulations, and funding practices. What I don't want to do is make it seem like this in an inevitable process, because it doesn't have to continue. There are things that could change to turn around the fate of the cities in Upstate.
City:You say in the report that in the long term there's going to need to be significant changes in federal policies, but that the state can help right away. What can the state do?
Christopherson: I think one big problem is that New York has a whole set of overlapping jurisdictions that come from the township system, and there haven't been very strong incentives to combine for inter-jurisdictional cooperation, which could save some costs.
City:Earlier you said that legislation should be passed by the state to encourage that...
Christopherson: Yes, and to discourage competition. The state has economic-development policies and economic-development funds like the Empire State Funds, and those funds are not being used very wisely. The Empire Zone case is a very good example of this: New York State has set up a system in which every jurisdiction is competing with every other jurisdiction to attract jobs, so that jobs can move from Cortland to Ithaca and vice versa and they're simply getting tax benefits while not creating new jobs in the regional labor market.
Next week: More on Empire Zones, regional planning, and Upstate's low wages. Also: Kent Gardner from the Center for Governmental Research weighs in on the findings in "Losing Ground."