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Declining Economy Threatens Prosperity of US Cities - 2001-10-27


Many American cities became safer and more prosperous during the 1990s, as the U.S. economy was expanding. A declining economy now threatens the gains of the past decade. Two experts on urban affairs recently offered some advice to local leaders.

Henry Cisneros said the U.S. economy was already slowing when the September 11 terror attacks gave it a further jolt. Mr. Cisneros was a four-term mayor of San Antonio, Texas, and was the U.S. Secretary of Housing and Urban Development under President Clinton. Today, he is chairman of American City Vista, a joint venture with the Kaufman Broad company. The real estate venture builds affordable homes in the downtown section of cities. "At the end of the decade, we confront this new potential of an economic turndown and, of course, the events of September 11," said Mr. Cisneros, "so that cities that had been making good steady progress and are right on the edge, now have real challenges before them.

Mr. Cisneros outlined some of those challenges for civic and business leaders in an address to an organization called Town Hall Los Angeles. Appearing on the podium with Mr. Cisneros was Bruce Katz, an urban researcher with the Brookings Institution, a private policy institute in Washington.

Mr. Katz said Los Angeles, like many U.S. cities, is a suburban metropolis where urban sprawl now threatens the city's future. Ongoing immigration has led to ethnic enclaves, at first in the downtown region and later in some of the suburbs. He said large distances between the places where people live and the places where they work has led to crowded freeways, air pollution and other problems. "Enormous stress on the environment, enormous stress on fiscal issues, enormous disparities between places like the cities, which have the lion's share of the poverty, and some of these newer communities," said Mr. Katz. "I think our admonition is that this is not a time for cities to feel that they're out of the woods yet, particularly in the aftermath of September 11th and given the fact that we have a recession compounded by terrorism."

Mr. Katz says cities like Chicago, New York and Atlanta have consolidated gains made during the 1990s and are in a better position today than Los Angeles. Chicago, for example, hosts a metropolitan mayor's caucus that brings together leaders from the city and its suburbs. The local officials cooperate on issues such as air quality and economic competitiveness. In Los Angeles, however, there is little communication among the hundreds of communities in region.

Los Angeles spends less for housing subsidies than most other U.S. cities. And despite an impressive new subway line, the region as a whole has poor public transit. Private transit is even worse. A growing population has led to more cars on the roads, but few improvements to the city's freeways.

Analyst Bruce Katz said many proposals to deal with urban problems find broad support across the political spectrum. He noted one measure to boost the income of low-income workers who are concentrated in cities, the earned income tax credit, provides low-wage earners with annual cash rebates from the federal government. "Is that a Republican program or is that a Democratic program? Actually it was increased substantially during two periods. One was during Ronald Reagan's presidency, because the Republicans thought it was a program that rewarded work, and second was during Bill Clinton's presidency, because he was focusing on the equation of people not being able to make ends meet," said Mr. Katz.

Mr. Katz and Mr. Cisneros say such federal programs can help workers in the cities, but many urban problems can be addressed informally through better coordination by local officials. The two men note that Los Angeles is home to a troubled public school system, and also to some of the country's finest universities and leading corporations. They say other cities have formed more effective links between universities, schools, and local businesses.

The say cities must focus on added security since the attacks September 11, but that is not their own only concern. They argue that cities must concentrate on basics, such as housing and transportation, to weather the current economic downturn.

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