Davenport Institute

Research Reports

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Common Paths: Connecting Metropolitan Inner City Opportunities

Thomas Tseng

May 1999

III. THE METROPOLITAN CHALLENGE

From the postwar period to the present, Southern California has been renowned for its astonishing economic growth. Real estate speculation and exploding population growth, combined with favorable land use, housing, and transportation policies supported by the federal government, assisted in fueling the "growth machine"¹ and led to the development of what is now the second largest metropolitan region in the United States.

Following the real estate boom at the end of the 1980s, regional development had achieved such astounding proportions that sprawl-the pattern of development characterized by low-densities and continued outward expansion around a metropolitan area-became the defining feature of Southern California's physical landscape. However, this pattern of growth, while a demonstration of LA's robust economic expansion, has also had its costs. This pattern of growth is now repeated in most metropolitan regions, particularly in the west and south.

The Issue of Urban Sprawl

Across the region, the consequences of sprawl have been well chronicled. Increased traffic congestion, air pollution, social and political fragmentation, fiscal disparities between city and suburbs, declining open space, environmental degradation, exclusionary zoning and segregated land uses, and the erosion of community values and sensibilities have all been attributed to sprawl in some degree.² Some of these issues, such as traffic congestion, have become daily occurrences in the lives of millions of Angelenos.

While the patterns of development created by sprawl have benefited surrounding areas and suburbs, which have increasingly captured the lion's share of employment and population growth, it has also indirectly aggravated conditions for inner-city urban neighborhoods like those in South Los Angeles. Continuing sprawl development has steered economic growth into peripheral areas surrounding the urban core, while neglecting the reinvestment and redevelopment of older communities, especially inner-city neighborhoods.

Although sprawling development is frequently proclaimed as a distinctly Los Angeles phenomenon, these patterns of land use and development are not a feature unique to Southern California. Across the country, growing metropolitan areas in Atlanta, New Jersey, Houston, Phoenix, and other "Sun Belt" regions are experiencing similar patterns of developing sprawl, inner-city decline, and environmental challenges produced by escalating, unfettered growth.³ In recent months, sprawl has expanded from a regional issue to one of national concern.

Suburban Flight and Urban Disinvestment

Beginning in the 1940s and accelerating through the 1970s and `80s, a mass exodus of people, jobs, and businesses occurred in central cities, inner-city neighborhoods, and older suburbs alike, producing a vacuum in once vibrant communities. This movement was observed in cities all across the country, and in some locations such as St. Louis and other "Rust Belt" cities occurred even more profoundly than in Los Angeles. This drain of resources stemming from suburban flight left behind poorer residents, mostly minorities, who possessed neither the resources nor the wherewithal to follow their wealthier neighbors to newly developed suburbs around the central city.

Although the process of developing sprawl had already begun as early as the 1920s, a number of federal government policies accelerated massive flight from the urban center after World War II:

(1) Federal government subsidies for new highway construction
Interstate highway policies during the 1950s subsidized massive highway construction across the entire region and nation. Under a national defense agenda, large-scale construction of freeways and highways were built and developed, extending out from the central city and opening outlying areas for new development. These roads stimulated economic growth farther outside cities.
New highways opened the urban perimeter and paved the way for inhabitants to leave the central city neighborhoods. Developers and homebuilders soon began to construct new residential subdivisions in raw, undeveloped land outside the urban core. This housing construction offered a retreat for middle-class residents from increasingly crowded and strained urban conditions into the more spacious and homogeneous living environments of suburban neighborhoods.

(2) Federal housing subsidies
Federal government initiatives in the postwar period also explicitly promoted suburban residential development. At the end of the war, a booming economy and accumulated wartime savings had created a large, pent-up demand for housing. Soldiers returning from military service and their families were eager to resume the next stage of their lives as homeowners-an integral component for realizing the American dream. With the accompanying "baby boom," large, detached housing units were in particular demand, driving the development of low-density suburban neighborhoods.
Federal Housing Administration (FHA) and Veterans Administration (VA) policies adopted in the 1940s and 1950s assisted in meeting the demand and favored the construction of new residential units. Government-backed mortgage insurance and income tax policies made it easier to purchase housing. Capitalizing on the nascent infrastructure and this enormous housing demand, builders created new suburban tract homes in neighborhoods farther outside the inner city. The accompanying demand for services and industry followed suit.
Although tremendous government support encouraged new housing development and homeownership, relatively little attention was paid to rehabilitating and maintaining the infrastructure of existing communities. As people gradually moved out of older neighborhoods to newly developed suburban communities, inner-city neighborhoods experienced deterioration and blight from abandonment and neglect.

Deindustrialization

In addition to the powerful forces of suburbanization and sprawl, restructuring of the local industrial economy had equally severe consequences for inner-city residents of Los Angeles. Between 1970 and 1980, a sharp decline in traditional manufacturing was observed all across the country. Large industrial plants, which produced a variety of durable goods, saw their role diminish as the economic climate shifted. Manufacturing plants significantly reduced their internal production or shifted operations to cheaper locales elsewhere. Reflecting these national trends in industrial downsizing, manufacturers in Los Angeles closed down their plants or drastically scaled back their labor force.

Prior to this economic restructuring, manufacturing was a stable source of employment and decent wages for many residents of South Los Angeles. The blue-collar jobs created by manufacturing provided an opportunity for many inner-city residents to attain comfortable, middle-class lifestyles. However, downsizing of traditional manufacturing, particularly in high-wage durable sectors such as automobile parts, steel, machinery, and furniture, significantly diminished a critical source of income and job stability. Many of the largest manufacturers that ceased operations were located in or adjacent to South LA. As many as 124,000 workers lost their jobs as 131 plants closed between 1982 and 1989.⁴

These plant closings created joblessness and unemployment. Without this base of employment providing social stability, disenchantment and disillusionment spread widely among many in South LA. As discussed in later sections, manufacturing did not completely leave South Los Angeles, but the decline of traditional manufacturing sectors was replaced by the rise of new nondurable manufacturing sectors, which did not provide the same quality of employment. Jobs in these new sectors are characterized as nonunion, low-wage, and low-skilled.⁵

The Results of Suburban Flight and Deindustrialization

The inducements fostered by federal housing and transportation subsidies, combined with the escalating dependence on the automobile-the "great decentralizer"-and fundamental changes to the local economy, served to perpetuate decentralization and inner-city flight within Southern California in a powerful way.

Urban divestment from flight was also accompanied by joblessness due to deindustrialization. Although job and business flight had depressed the economic base of inner-city areas, employment losses generated by industrial downsizing further shrank the job pool and exacerbated already distressed economic conditions.

Undoubtedly, the population migration and ensuing departure of resources had damaging ramifications for LA's urban communities. These forces generated significant structural and economic blight. As wealth dried up or drained from the inner city, fewer resources were available to fight conditions of deterioration and neighborhood decline.

Among the results of decentralization were:

• Loss of an important population base - Suburbanization drained middle-income households from the area. This presence of this group also served as an important base of social stability.⁶ Although "white flight" was the prevailing phenomenon, significant population flight occurred among the African American community as well.⁷

• Loss of jobs and capital - Inner-city communities faced a shrinking employment base as businesses and jobs moved into areas outside the central city or experienced decline as in the case of traditional manufacturing. As businesses and jobs moved out, wealth followed.

• Loss of goods and services - Population flight reduced the consumer spending base, facilitating the move by many stores providing goods and services in inner-city neighborhoods.

• Concentrated poverty and urban isolation - As a result of abandonment, poverty became concentrated in inner-city areas, creating a wide disparity between suburban neighborhoods and inner-city communities. Poor residents became disconnected from mainstream social networks and viable economic opportunities.

At the same time, the relative decline of private industry and growing dependence of inner-city communities created a significant problem for local governments. As demands for services grew, the ability of local businesses and homeowners to pay for them declined. In many cases, city officials responded by raising fees on businesses and imposing costly regulations, unwittingly accelerating the flight from the inner city.⁸

The resulting concentration of poverty observed in inner-city communities has been a process lasting through several decades. It is the aftermath of a large-scale retreat and divestment from the inner city, spurred by public policies encouraging dispersal and suburban development into areas farther outside inner urban areas. The outcomes created by these forces are not easily ameliorated, and they continue to foster both sprawl and inner-city decline.

Linking Metropolitan and Regional Concerns with the Inner City

The process of outward migration and resulting physical sprawl reveals an intimate link between regional growth patterns and inner-city conditions. Though they are seldom discussed in interdependent terms among the general public, the vitality of older communities and inner-city neighborhoods is firmly interwoven with how growth occurs in the larger region.

Despite this interdependence, the connection between the inner-city core and periphery has been rarely considered by either side. Growth in the inner city provides an opportunity to reduce pressures for excessive development in the regional perimeter; similarly, a strategy curbing perimeter growth could provide new incentives for private reinvestment in urban core communities.

Increasingly, the instrinsically shared concerns between the regional periphery and the inner city must be reinforced. Continued population growth will produce heavy demands affecting all local communities in the region for years to come. A severe shortage of housing to meet projected needs currently exists, but many municipalities in the region are resistant to building new housing. Los Angeles County and Orange County have issued only a fraction of the home building permits necessary to keep pace with population growth demands.⁹ As a result, home building is being pushed farther out to the region's perimeter.

New residential development in areas such as San Bernardino County and Riverside County exacerbate the imbalance between the location of jobs and housing; generating lengthier commutes, aggravating environmental conditions, and compromising the area's quality of life. If unchecked sprawl continues, it will continue to impose heavy burdens and problems for all existing communities, inner-city neighborhoods, and both inner-ring and outer-ring suburbs.

Moreover, neglected urban conditions create heavy burdens on public spending for everyone. Problems affecting inner-city areas eventually spread and reproduce in older suburban neighborhoods if perimeter growth is not contained. This has already occurred in parts of northern Orange County.¹⁰ Combined with shrinking tax bases caused by continuous decentralization, these older suburban cities and neighborhoods will face the prospects of inadequate fiscal capacity and increased spending needs for services generated by sprawl's external costs.

Achieving Alternative Patterns of Development

Clearly, alternative growth patterns are required to mitigate the effects of urban sprawl. Around the country, movements are emerging that seek to curtail perpetual sprawl and its deleterious effects. Principles of smart growth, the new urbanism, the livable communities movement, civic environmentalism, and many others are advocating for more sustainable forms of growth. ¹¹

These various approaches contain subtle distinctions among them, but they each combine notions of higher densities, mixed uses, and in-fill development as measures to reduce continuous horizontal growth and curb their negative externalities. These approaches also support the redevelopment, reuse, and recycling of underutilized spaces in neglected areas and blighted neighborhoods. Reinvesting resources in existing communities, as opposed to the shortsighted practice of developing new neighborhoods, promotes more efficient land use.

Achieving alternative patterns of development will not be an easy task. It requires significant effort by multiple participants and stakeholders who must engage in cooperative planning: state and local government, planning agencies, real estate developers and investors, architects and urban designers, community groups, and neighborhood associations.

To ameliorate urban sprawl, concerned stakeholders must tackle the following issues:

• Addressing the jobs/housing imbalance

The spatial and geographic mismatch between where people work and where they live must be addressed. Development must integrate housing, retail, commercial, and industrial development in a comprehensive manner. Promoting development that corrects the jobs/housing imbalance achieves healthier growth by reducing vehicle miles traveled, commute times, and traffic congestion, all of which compromise the quality of life and environment for the entire region.

• Upgrading and maintaining the existing infrastructure and housing stock of developed areas, and promoting development opportunities in underutilized spaces

Rather than encourage more housing and highway construction along the metropolitan fringe, construction in developed areas should be promoted. Maintaining and upgrading the existing infrastructure of older neighborhoods can also serve to stimulate the reinvestment and redevelopment of underutilized land in inner-city areas. Reuse, rehabilitation, and other reinvestment measures for the existing infrastructure inventory should be applied.

• Encouraging innovative, efficient land uses—higher densities, mixed use, in-fill    development

Methods for integrating and compacting housing, employment, and commercial land uses in creative ways must be promoted. Building codes and zoning ordinances should encourage innovative projects that mix uses.

Postwar planning and development in Los Angeles have fostered the discrete separation of land uses that have widely distributed housing, commercial, and industrial patterns. General plans and zoning, which govern land use, have generally maintained these tendencies. However, many of these zoning ordinances and building codes regulating growth have been inflexible, inadequate, and outdated, and do not meet the new planning challenges facing the region ahead. Many discourage innovative developments that creatively mix uses, offer higher densities, or incorporate in-fill development.

The real estate community ought to embrace innovation and creative development as well. The existing mindset of banks and investors who finance development adheres to the tried and true. Investment decisions usually are based on the comparables of proven projects, making innovative development projects that veer from traditional paths difficult to finance.

• Allocating tax revenues more equitably between state and local government and reducing municipal reliance on sales tax revenue

The state tax revenue system must be restructured. As it currently exists in the post-Proposition 13 era, cities have little choice but to pursue retail strategies over residential or industrial development in order to expand their fiscal capacity. Since the ability of local government to generate revenues has been limited, they rely heavily on sales tax receipts as a vital revenue source.

This has created intense competition among cities to aggressively entice retail centers into their jurisdictions. The proliferation of "big-box" retail outlets and regional shopping centers have generated large tax revenues for some cities, but the demand for addressing important shortages in housing and industry is not being met.

• Reducing subsidies for projects that contribute to sprawl

Existing communities indirectly subsidize new developments in outlying areas that create significant external costs due to sprawl, such as an increase in traffic and decreased air quality. These costs should be factored into the financing of any sprawl-inducing projects; developers of sprawl ought to bear the full costs of their development. Both direct and indirect costs from project impacts should be included. Public incentives must be discouraged for any development in the perimeter areas of the region as well.

• Encouraging regional discussion and collaboration to address growth issues

Growth-related issues are essentially a regional concern with local ramifications. However, there is a lack of substantive dialogue among local municipalities to collectively address regional growth and amend conflicting regulatory and mitigation demands. Greater discussion among municipalities, citizens, and developers alike must be fostered to tackle growth issues through a collaborative, problem-solving approach.

Since inner-city concerns are so closely connected to regional growth and development, the fate of the urban core and the periphery are inextricably linked. Sprawling development threatens the quality of life for rural, suburban, and urban communities alike. As concerns grow about uncontrolled growth and how to best mitigate their external costs, both the marketplace and local governments must see the value of increasing investment in existing communities, especially in inner-city neighborhoods such as South Los Angeles.