The 2% Solution: Drawing a Critical Mass of Residents Downtown is Key to Urban Revival

Bruce Katz
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University

November 26, 2006

As Eliot Spitzer prepares to take office, the energetic governor-elect has been notable among gubernatorial candidates and incumbents in laying out a promising agenda to revitalize his state’s distressed metropolitan areas.

Indeed, many aspects of Spitzer’s plans to boost the fortunes of Upstate New York can be boiled down to one simple notion, albeit with many ramifying effects: Strive to attract at least 2 percent of each metropolitan area’s population to live downtown.

Reviving the four major Upstate metropolitan areas—Buffalo, Rochester, Albany and Syracuse, where 3½ million New Yorkers live—requires systematically building on the region’s assets. To compete in today’s innovative, knowledge-based economy, Upstate metros need to rebuild their city centers, creating a critical mass of highly educated residents and workers, enterprise, urban amenities and vibrant public space.

As Spitzer said in a major urban policy address in Syracuse in March, “In a knowledge economy, cities are more important than ever.” After World War II, these four cities were vibrant urban centers, catalysts of America’s postwar boom and home to innovative industrial giants like Kodak, General Electric and Xerox. Today, these once-proud cities are caught in a spiral of economic and demographic decline. Buffalo’s core population is half what it was when Harry Truman was president; Rochester, Syracuse, and Albany are each 33 percent smaller today than they were in 1950.

The decline of Upstate’s urban cores has created an economic centrifuge, spreading development over 425,000 acres of newly urbanized land between 1982 and 1997 alone, even as the region’s population has decreased. Today, just 0.66 percent of Buffalo’s population and a mere 0.15 percent of metro Albany’s population live downtown. Vacant homes and industrial sites project an image of despair—dramatically different from the postwar glory days and strikingly different from what these historic cities once again could be.

How can this “2 percent” solution be achieved? Three strategies stand out: encourage residential development and the preservation and adaptive reuse of historic structures; leverage the region’s remarkable concentration of academic institutions and cutting-edge research centers; and make significant transformative investments in downtown infrastructure.

At a time of profound economic restructuring and demographic change, bringing residents downtown would have seismic implications. Just imagine the economic, fiscal and psychological impacts of housing 16,500 residents in downtown Albany, 23,400 residents in downtown Buffalo, 20,750 residents in downtown Rochester and 13,000 residents in downtown Syracuse.

The critical massing of people would attract amenities that lure businesses and jobs for downtown and metro-area residents, shoppers and tourists and help stem the exodus of young workers. Appealing new housing with street-level cafes and shops would bring life and a virtuous cycle of growth to metropolitan hubs. Research has shown that the physical clustering of talented people is critical for economic growth, an agenda that has been embraced for Syracuse by the Onondaga Citizens League.

Targeted incentives such as housing tax credits could encourage employers to help their workers with downpayments and create incentives for home buyers, businesses and developers to locate in, preserve and redevelop historic urban centers.

A complementary way to convert older cities to innovative economies is to locate new college and university campuses in downtown centers. This has begun in Syracuse and Schenectady, and more of Upstate’s 206 colleges should be encouraged to expand their presence in existing downtowns or even develop downtown satellite campuses.

Higher education institutions are not only major employers but incubators of new, creative businesses—and jobs. Albany, for example, has developed a new biotech center at Rensselaer Polytechnic Institute, and the University of Albany’s NanoTech Institute employs more than 1,000 people.

As low-wage service-sector jobs replace industrial jobs, encouraging the expansion of tech ventures and health-care facilities is essential to expanding the number of Upstate New Yorkers earning a good living in reborn downtowns.

Investments in infrastructure also are a key ingredient for success. New York state and Upstate cities need to identify and demolish the obsolete freeways that hold these downtown centers in a choke-hold. Transforming eyesore freeways into human-scale boulevards, as cities like Providence have done, will reconnect downtowns with the surrounding city and markedly improve the visual landscape.

For example, the Rochester Inner Loop divides downtown from older and emerging neighborhoods, and Interstate 81 in Syracuse cuts off University Hill from downtown. Reclaiming river waterfronts and investing in open, attractive public space and urban streetscapes are keys to downtown revitalization.

Renewing Upstate New York is one of the most difficult challenges facing the new governor. A “2 percent solution” can help jump-start the economic recovery of these proud metropolitan areas and help restore and rebrand now-struggling cities as innovative hubs of creativity and innovation. It is a plan uniquely aligned with our times and Eliot Spitzer’s beliefs and priorities.