"It couldn't happen here." Not in Minneapolis-Saint Paul. We thought we were immune to the urban decline, inner-suburban decay, and urban sprawl that had blighted so many other American cities. We were reform minded. Our philanthropic and governmental centers were coordinated and responsive. But with the 1980s, the all-too-familiar patterns of metropolitan polarization—the push of concentrated poverty and the pull of concentrated resources—indisputably showed up right here at home.
Polarization begins with the initial concentration of poverty in the city core and the consequent disinvestment and middle-class flight. Waves of socio-economic decline roll outward from the city center astonishingly fast, with deeply distressed communities, like disposable cities, marking their passage. Strict zoning rules and competition for tax base by developing fringe communities lead to wasteful, low-density overdevelopment. Spending on infra-structure, such as highways and sewers, in the developing suburbs drains more resources from the built community. The increase of property wealth in prosperous outer suburbs and the decline of property wealth in central city and inner suburbs represent an inter-regional transfer of tax base from some of the poorest and most troubled communities in American society to some of the most thriving and affluent.
Since the 1993 session of the Minnesota state legislature, a powerful reform coalition in the Twin Cities has been fighting back. Spurred by the advent of cheap, accessible cartographic software whose mapping of demographic and economic data graphically delineated their shared plight, the central core, the older suburbs, and the developing low-tax-base suburbs on the periphery have joined forces. They have stretched across the metropolitan divide in support of a regional reform agenda that includes fair housing, property tax-base sharing, reinvestment, and revitalized regional governance.
The Push of Concentrated Need
During the 1980s, Minnesota's Twin Cities became the nation's fourth fastest "ghettoizing" region. Inner-city tracts with more than 40 percent of their residents in poverty tripled from 11 to 32; their population grew from 24,420 to 79,081. Surrounding these ghetto neighborhoods, "transitional" neighborhoods (between 20 percent and 40 percent of their people in poverty) expanded from 43 to 57 census tracts, from 102,682 to 153,700 people.
As it does in every city it visits, the residential concentration of poverty in the Twin Cities created social repercussions far greater than the sum of its parts. Physical separation from jobs and middle-class role models, as well as dependence on a dysfunctional welfare system, devalued education and work in the eyes of inner-city residents. Social isolation fostered what some experts have termed an "oppositional culture" and contributed to soaring crime.
By 1994, both Twin Cities' central cities were struggling under a disproportionate share of concentrated poverty—and racial segregation. More than half the children in the Minneapolis school system were on free or reduced-cost lunch. Minority student enrollment had risen to 59 percent. Saint Paul suffered the same lot. Both core cities lost one-third of their preschool white children.
Crime and joblessness soared. In the poorest neighborhoods of the Twin Cities, violent crime rates were 10 times the metro average, 30 times the suburban average. And as social needs multiplied in the inner city, the financial resources to address them dwindled. In Minneapolis, residential property around the expanding poverty core lost 10-25 percent of its value over a five-year period, and businesses decamped for the exclusive suburbs.
The chaos did not stop neatly at central-city borders but spread into working-class inner-ring suburbs. By 1994 most inner-suburban school districts were gaining poor children—and minority children—faster than Minneapolis. Eighteen of 29 inner-ring cities had lost large numbers of white preschool children. The inner suburbs were the only place in the region except the city core where crime was increasing. And lacking the central city's business district and elite neighborhood tax base, social welfare and police infrastructure, and organized political network, the inner suburbs faced prospects even bleaker than those of the core cities.
The Pull of Concentrated Resources
At the edge of the Twin Cities metropolitan region, the most prosperous developing communities used restrictive zoning to exclude "undesirables" and build a broad, rich tax base to keep services high and taxes low. The "favored quarter" (a term coined by the real estate industry) dominated economic growth. During the 1980s the Twin Cities' prosperous southern and western edge suburbs, with 27 percent of the region's people, had 61 percent of the region's new jobs. They also enjoyed the region's largest property tax base growth. Two communities in particular, Eden Prairie and Minnetonka, together had the same commercial-industrial tax base as Saint Paul ($1.5 billion), but only one-third as many residents and, unlike Saint Paul, virtually no poor people. Southwestern suburban schools enjoyed insulated, stable prosperity and high achievement. Neighborhood crime rates, already low, steadily declined.
But these neighborhoods are closed to all but the prosperous. The zoning practices of the southwestern suburbs—almost no new apartment buildings, large lots for single-family homes, and other regulatory barriers—prevent lower-income workers from reaching for opportunity and keep the marketplace from responding to their quest for affordable housing. Not surprisingly, a metropolitan mismatch has developed between where the jobs are and where the people who need them are. More and more people are bused—on what one worker riding them dubbed "Soweto Expresses"—from the city to minimum-wage jobs in the southwestern suburbs. Thousands of jobs go unfilled for lack of workers.
What's more, over the past two decades, state, metropolitan, and local governments in Minnesota have spent billions of dollars building freeways and sewer systems in the Twin Cities' southwestern suburbs. Of the $1.1 billion spent during the 1980s on new highways for the entire metropolitan area, 75 percent went to the southwestern suburbs. In addition, in the mid-1980s, the state legislature adopted a system of sewer financing by which the core of the metro region subsidized the construction and operation of new sewer capacity in the most exclusive suburban areas. By 1992, the central cities were paying more than $6 million a year to help move their middle-class households and businesses to the edge of the region.
But not all the communities on the periphery are doing so well. Opposite the favored quarter lie blue-collar developing suburbs. They too tried to win the fiscal zoning battle. But instead of expensive housing and commercial industrial properties, they had to settle for modest homes, apartment buildings, and trailer parks, and few businesses. The patterns of metropolitan polarization played a cruel joke on these middle-income families. Fleeing the breakdown of the central cities and inner suburbs, they arrived in rapidly growing school districts with small tax bases. The results are poorly planned, badly functioning communities. Their schools, for example, have some of the highest drop-out and lowest college attendance rates in the Twin Cities region.
A Regional Agenda
The forces of metropolitan polarization exact immense costs in terms of human and governmental waste, an overtaxed and overregulated business climate, environmental destruction through poor land use, and balkanization of political life. Although polarization takes its toll on cities as a whole, the spotlight most often shines on the havoc wreaked on the inner cities.
Traditionally both Democratic and Republican policymakers have tried—the former through government-aided empowerment, the latter through private strategies to impose discipline—to solve the problems of America's inner cities in place by turning their disadvantaged residents into more successful, more middle-class people. Most people agree that a strong middle-class presence is indeed necessary for healthy, stable communities. But transforming dense clusters of poor people into middle-class people is extraordinarily hard. The difficulty is not poor people themselves, but the unnatural concentration of poverty and the attendant flight, disinvestment, and crime. Only by deconcentrating poverty can these other problems be addressed.
Deconcentration helps solve the problems of poverty on two levels. For individuals, it opens access to opportunity in the form of jobs, unstressed schools, and adequate local services. For a community, it breaks poverty down into more manageable pieces. By alleviating overwhelming social and fiscal stress on cities and older suburbs, it stabilizes community decline and creates metropolitan stability.
Most of the nation's urbanologists know what needs to be done to deconcentrate poverty. Regional reform in fair housing is the first step. The regulatory barriers to affordable housing in prosperous edge suburbs must come down. Once affordable housing is built at the metropolitan periphery, the expansion of the urban and suburban distressed areas will slow and ultimately stop. And a little "pull" in terms of affordable housing continually achieved at the edge of a metropolitan area can make a huge difference. In a study of 40 of the nation's largest cities, Brookings's Anthony Downs found that if 5 percent of the new development in the 1980s had been set aside for subsidized housing, it would have allowed almost 13 percent of the inner-city households in distressed neighborhoods to move to developing, job-rich communities. Over several decades, progress could be considerable.
A second, and complementary, step is property tax-base sharing. For example, a certain portion of commercial, industrial, or residential property taxes on high valued homes could be shared regionwide. As long as basic local services are dependent on local property wealth, property tax-base sharing is a critical component of metropolitan stability. Its purposes, all interrelated, are fivefold. Property tax-base sharing: (1) creates equity in the provision of public services, (2) breaks the intensifying metropolitan mismatch between social needs and property taxþbased resources, (3) undermines local fiscal incentives supporting exclusive zoning, (4) undermines local fiscal incentives supporting sprawl, and (5) ends intra-metropolitan competition for tax base.
Part of the revenue could go into a redevelopment fund to increase housing opportunities in the suburbs and help the market rebuild the core. The fund would be a self-correcting solution to the problem of regional investment skewed disproportionately to the wealthiest suburbs, for the wealthy communities that have gained the most from recent regional infrastructure investment would be the largest contributors to the fund.
The redevelopment fund could be used to construct a variety of market-rate housing in affluent communities for households earning more than 50 percent of the metropolitan median income. For those earning less, the market will not, by itself, provide opportunities. Outside resources will be needed to underwrite low-income housing-based on a system of portable rental vouchers and scattered as broadly as possible to forestall mini-concentrations of poverty.
Finally, these steps toward deconcentration and revitalization should take place as part of a regional master plan approved by a regional governing agency or, in its absence, by the state legislature.
In an ideal world, regional reform, as envisioned by the experts, would grow naturally out of popular consensus emerging from a broad regional perspective based on the common good. But the common good and the regional perspective, like truth, beauty, and justice, do not exist in some ideal form. In the end the closest approximation to a regional perspective comes from a fair contest of ideas, values, and perspectives among the elected representatives of the people. From these contests, real reform can emerge, but the process is always hard and often controversial.
Pundits have argued that regional reform of the nation's metropolitan areas is impossible because of the political dominance of the suburbs. While suburban dominance is as much in evidence in the Twin Cities as elsewhere, it is also true that the region's suburban communities are not a monolith with common experiences and political needs. Indeed, what prompted the building of the Twin Cities reform coalition was the discovery of the commonality of interests between the city core and the inner and low tax-base suburbs.
Americaþs working-class suburbs have been a loose cannon politically since Hubert Humphrey lost the White House in 1968—and since Archie Bunker became a Republican. As E. J. Dionne, Stanley Greenberg, Kevin Phillips and others have noted, these communities are central to holding and maintaining a ruling political coalition nationally. They also hold the balance of power on metropolitan issues.
On the merits, these blue-collar suburbs are the biggest prospective winners in regional reform. To them, regional fair housing policy means, over time, fewer units of subsidized housing crowding their doorstep. Property tax-base sharing means lower property taxes and better services, particularly better-funded schools. Once understood, this combination is unbeatable.
In 1993, after two years of constant cajoling and courting—and after constant reminders of the growing inequities among the suburbs—the Twin Cities' working-class suburbs joined the central cities and created a metro-majority coalition in the state legislature. In 1994, the coalition passed the Metropolitan Reorganization Act, which placed all regional sewer, transit, and land use planning under the operational authority of the Metropolitan Council of the Twin Cities. In doing so, it transformed the Met Council from a $40-million-a-year planning agency to an $600-million-a-year regional government. In both 1993 and 1994, the legislature passed sweeping fair housing bills. Both were vetoed by the Republican governor, but in 1995 a weakened version was finally signed. In 1995, the legislature also passed a bill that significantly increased the existing regional tax-sharing system known as "fiscal disparities." That bill too was vetoed.
The legislative road has been controversial and bumpy, but the reform movement is growing. In 1994, regional churches, environmental groups, communities of color, community development agencies, and other good-government groups formed the Alliance for Metropolitan Stability. As the alliance gains visibility and develops a common language and agenda, the potential for broad-based regional action increases.
The lessons learned in the Twin Cities are transferrable. Policymakers who face rapid polarization in metropolitan communities elsewhere can take advantage of them as well. The local coalitions that are beginning to take action in the Twin Cities can be built over and over again.