“When you pass under the elevated train tracks just east of the Temple University campus,” the journalist Rob Gurwitt wrote a few years ago, “you find yourself on streets whose gutters are lined with trash and broken glass. Although in the minds of most Philadelphians this area is just a uniform sea of blight, that’s not the case; it’s much more variegated than that. There are mostly vacant blocks, with one or two scruffy, vulnerable-looking houses still standing amid weed-grown fields. There are gap-toothed streets on which half the houses have been torn down and the lots are strewn with junk—old tires, a cardboard box with wood scraps sticking out, a few rusted paint cans—but the remaining houses are in decent shape. There are streets of abandoned but intact row houses, their windows boarded up or jagged with broken glass. There’s a street on which the corner houses are vacant but the rest of the block is made up of small, two-story row houses with undamaged cornices and carefully planted bushes and well-painted shutters that hang straight. You can even find entire blocks of neatly kept row houses, their bricks pointed, their brass address numbers gleaming.” It is the houses with the straight shutters and the neatly planted bushes that are very difficult for the city to acquire, no matter how advanced the stage of decay around them.
A generation ago, Philadelphia’s Kensington neighborhood provided stable row-house homes to thousands of blue-collar families whose breadwinners worked in nearby factories. Today, with those factories closed, the row-house blocks are lined with abandoned dwellings fit only for demolition—along with a scattering of home owners trying to hang on or waiting for renewal. (photo credit 6.2)
THE RESULT of all this is an abandoned housing problem of staggering proportions. Philadelphia is, of course, far from the only major city in America to suffer from abandoned housing. On the East Coast, Baltimore’s problem is almost as serious. In the Midwest, St. Louis has large swaths of abandoned territory, and Detroit, as is well-known, has them in virtually every section of the city. But those cities with a strong enough job base—Chicago, Boston, New York—and overall demand for places to live have a chance to escape from this condition. New York’s South Bronx and portions of Brooklyn were wastelands in the 1980s; public and private subsidies and the overall scarcity of affordable places to live close to the center of the city revived many of these areas in the first decade of the new century.
But the sheer volume of abandoned housing in Philadelphia sometimes makes the problem there seem as intractable as Detroit’s. In the middle of the past decade, the number of abandoned properties approached sixty thousand in a city of 1.5 million people. In a study of eighty-three cities conducted by the Brookings Institution, Philadelphia was found to have the largest proportion of abandoned properties: 36.5 for every one thousand residential units. This is a major reason crime was slow to decline in Philadelphia the way it had in other large American cities. Boston and Chicago have crime to worry about, but they do not have huge swaths of abandoned territory for criminals to use as a breeding ground. Most of the residential buildings in these cities, even the blighted ones, have somebody who wants to live in them. In this respect, Philadelphia is simply different. It resembles Detroit more than it does the successful American cities of the twenty-first century.
And the crime statistics have consistently borne this out. Throughout the past decade, as murder rates were going down in most cities, they remained stubbornly high in Philadelphia—as witnessed by the 406 homicides recorded in 2006. Since then, the numbers have come down roughly in tandem with those in the rest of the country, but the level of violence on Philadelphia’s partially abandoned streets continues to be an embarrassment and a civic preoccupation. In 2010, the number of major crimes stood at 76,334—it had been over 100,000—but the city’s prison population remained over 8,000. New York, with more than five times as many people, had a prison population of less than 14,000.
None of this has had a major impact on Center City. As a local demographer points out, “No one sitting in a sidewalk café ever gets gunned down.… But the perception of crime is still a huge problem.” It is one more barrier that keeps the vibrancy of the center confined within a narrow (although gradually expanding) enclave.
Crime and abandoned housing are interrelated problems that sometimes seem intractable in Philadelphia. The crucial role played by abandoned housing in maintaining Philadelphia’s “Bostroit” demographic has been a preoccupation of the city’s leaders for more than a decade. Former mayor John Street took over in 1999 determined to focus on the estimated sixty thousand abandoned properties that were the most obvious obstacle to the city’s broad-scale renewal. Deciding that the problem could never be dealt with on a piecemeal, block-by-block basis, he won passage of a $295 million city bond issue aimed at tearing down fourteen thousand abandoned buildings and replacing them with sixteen thousand new homes. He called it the Neighborhood Transformation Initiative.
“If you were to aggregate all the vacant land in Philadelphia,” Street’s chief of staff said at the time, “you would have a landmass the size of Center City. Some of the neighborhoods are so devastated that you look around and realize, if you just took down the two or three buildings left standing, you would have acres. And we might really be positioned to do something with this land if we just get a handle on it.”
Outside experts who came to look at the Neighborhood Transformation Initiative were impressed. “What you generally see is tinkering around the edges as Rome burns,” said Bruce Katz, director of the Metropolitan Policy Program at the Brookings Institution. “This is not your run-of-the-mill initiative here. It is highly unusual and very ambitious, and extremely smart in the way it has been designed.… It treats land as one of the fundamentals.”
In the end, though, Street’s initiative was little more than an ambitious failure. By the time of the mayor’s departure in 2007, twenty-one thousand new housing units had been created in Philadelphia, but many of these were condos in Center City and had nothing to do with the slum-clearance program. Only about five thousand existing buildings were demolished. Most of the bond money was spent on previously existing housing programs, largely to replace federal funding that had dried up.
What the Neighborhood Transformation Initiative was really good at was removing cars. By 2007, the initiative reported that it had taken 289,000 abandoned automobiles off Philadelphia’s streets. One might wonder how any city, even one of Philadelphia’s size, could possibly have that many junk-heap cars on the street. But that is beside the point. The bottom line is that Philadelphia has nearly as many uninhabitable neighborhoods today as it did a decade ago.
PHILADELPHIA’S ROW-HOUSE neighborhoods might have remained mostly intact had one thing happened: the arrival of immigrants. If the city, in the last quarter of the old century, had attracted a large cadre of newcomers from foreign countries, they might have been willing to settle in the houses at bargain prices, accept the safety concerns, and nurse the buildings themselves back to decent physical condition. But no such event occurred.
Philadelphia was once a city of immigrants, attracting Irish and Germans in the eighteenth and nineteenth centuries and Italians in the early twentieth—in 1910, a quarter of its population was foreign-born. But it did not become a magnet for immigrants in the years after immigration restrictions were lifted in 1965. While Los Angeles, New York, and Chicago were being remade during those years as multiethnic communities, Philadelphia remained through the 1990s a place where demography and politics were almost entirely a matter of black and white.
The number of new arrivals picked up considerably during the last decade, with the immigrant population of the area as a whole growing by 113,000 in the first six years of the new century. Indeed, it has been estimated that three-quarters of the region’s job growth in those years was the direct result of immigration.
Most of the recent immigrants have settled in the suburbs, but a fair number congregated within the city itself: Nepalese in the neighborhoods around the University of Pennsylvan
ia; Russians in the northeast; Liberians and Ghanaians in parts of west Philadelphia; and Mexicans in South Philly, where they have turned the legendary Italian Market into what should more properly be called the Italian/Hispanic Market.
But when it comes to reviving the most troubled neighborhoods, it has been too little and too late. In 2007, Philadelphia ranked tenth among the ten most populous American cities in the percentage of its population that was foreign-born, with only 9 percent. Among Eastern cities of any significant size, only Baltimore ranked lower. New York City, by comparison, was 37 percent foreign-born. And even though the numbers have picked up, what matters most is that during the years when the row-house neighborhoods were losing their original home owners, there was no significant immigrant cohort available to revive them. When the immigrants did start coming, early in the new century, many of these neighborhoods were simply too far gone for any purchaser, native or immigrant, to reclaim them.
Why did Philadelphia fail to attract the immigrants who could have done it so much good? One explanation is that in recent times, immigrant magnets have all possessed hub airports and regularly scheduled international flights, and Philadelphia has been stuck with a regional airport with few flights to anyplace outside the United States. For Asians or Latin Americans seeking to relocate, Philadelphia has simply been hard to get to. The cities that attracted the largest share of immigrants between 1970 and 2000 were all cities with decent air connections. When Atlanta’s Hartsfield-Jackson airport inaugurated nonstop service to Rio de Janeiro, traffic on the route reached fifty thousand passengers within one year, and the majority of these were Brazilians seeking to settle in the United States. Philadelphia offered no such service, to Rio or virtually any other foreign capital. As of 2010, there was still no direct service from Philadelphia’s airport to anywhere in Asia.
But immigration is not primarily a matter of travel connections. Until very recently, Philadelphia not only didn’t lure in many immigrants, it didn’t seem to want them very much. In the words of Feather Houstoun, of the William Penn Foundation, “Philadelphia has traditionally not been very tolerant of immigrants.” When a member of the city council tried a few years ago to create an Office of Immigration, arguing that the city was losing out on an important source of economic vitality, the move attracted noisy political opposition from nativist council colleagues and had to be abandoned. The current mayor, Michael Nutter, ran for office on a pledge to bring more immigrants to Philadelphia as a way of increasing the number of jobs, and later issued an executive order maintaining that all immigrants, even undocumented ones, were to receive city services. But none of this will do much to revive the neighborhoods that needed help so badly in the 1970s, 1980s, and 1990s.
There is another explanation for the slow rate of immigration in the crucial decades of the late twentieth century, and it may in the end be the most important one. Immigrants create jobs, but they also show up in places that are already creating jobs, and Philadelphia simply has not done this very well in the past thirty years. During that period, Chicago actually lost more manufacturing jobs than Philadelphia—almost six hundred thousand of them. But Chicago essentially replaced these with other jobs; Philadelphia did not. As the Metropolitan Philadelphia Policy Center complained in 2001, “We simply don’t have enough economic vitality to draw immigrant entrepreneurs in large numbers.”
Philadelphia has enough well-paying jobs in Center City to keep that part of town affluent and lively, but the hollowing out of the manufacturing sector in the 1970s and 1980s was a calamity from which Philadelphia, unlike other major cities, has been unable to recover. As the University of Pennsylvania’s David Thornburgh puts it, “The game is not keeping people; it’s bringing people in. Not enough people have wanted to come here.”
THAT, OF COURSE, begs the question of why people have not wanted to come to Philadelphia. It is a bit of a cause-and-effect question: Have newcomers been repelled by all the blighted neighborhoods, or did the neighborhoods become as blighted as they did because the newcomers were so few? This is not an easy question to resolve.
One of the first points to make in partial explanation of Philadelphia’s lackluster economic development is that it is not really the heart of any region or segment of the economy. As economic development commissioner Alan Greenberger said in 2010, “New York considers itself the capital of the known universe. Boston is the capital of New England; Chicago is the capital of the Midwest. Philadelphia isn’t the capital of anything.” The one economic engine that seemed to make Philadelphia a commercial powerhouse, its port, has long since ceased to play that role. Today, the port of Philadelphia is only the fifth-busiest on the East Coast, behind New York, Boston, Baltimore, and Norfolk. In Greenberger’s view, the failure of Philadelphia to establish itself in modern times as the “capital” of anything has had an impact that stretches well beyond the problem of job creation. While the remnant of a corporate elite still exists, it is not robust enough, many Philadelphians feel, to support massive revitalization projects on the order of Millennium Park, the joint public and private initiative that has reinforced Chicago’s status as a global city in the new century. “We don’t have the economic juice to do things other cities do,” Greenberger argues. In other words, too little private economic development means a lack of ambition in the public realm. And the lack of ambition discourages the attraction of new private players, in a spiral of negative feedback that is very difficult to escape from.
But this argument can be taken only so far. If Philadelphia has ceased to be the capital of anything, it is arguably the best-located city on the eastern seaboard: squarely in the middle of the most populous corridor in the United States, halfway between Washington and New York, and a comparatively short distance from Boston. Philadelphia is so close to so many capitals of different kinds, one wonders why it really needs to be the capital of anything itself. It is a short ride from virtually everything. Not being a capital city may have slowed down the pace of economic development, but the mere fact of Philadelphia’s physical centrality seems to have been sufficient to attract and keep the affluent population that has revived Center City in the past decade.
So if we are looking for reasons Philadelphia has been unable to break out of its “Bostroit” box, it is necessary to seek out other factors as well. It is necessary to look at factors that pertain more directly to government and public policy.
ANY DISCUSSION of Philadelphia’s economic development problems has to focus on the wage tax. No one in public life defends it, but it has remained on the books since 1939, when the Pennsylvania legislature allowed jurisdictions in the state to impose it as a temporary means of managing Depression-era fiscal shortfalls. Residents of Philadelphia who work in the city currently pay 3.928 percent of their earned income to the city, deducted automatically from their paychecks. Nonresidents who work in the city pay about 3.5 percent. These rates reflect modest reductions enacted during the past decade, but as we’ve seen, the tax remains the single largest source of public revenue, making Philadelphia unique among major American cities. In a city where an unusually large percentage of voters are owners of small row houses, the property tax is almost impossible to increase. Mayor Nutter found that out in 2009, his first year in office, when he sought to trade a wage tax reduction for a modest property tax increase, and ended up having to trade it for a sales tax increase instead.
So the wage tax remains even though it is a flat-out incentive for employers to move outside the city. Philadelphia law firms and other Center City businesses routinely locate their back-office operations in the suburbs to avoid it, costing the city job growth it badly needs. As political scientist David Thornburgh puts it, “Our employment trajectory has been shaped by our tax structure.”
But it isn’t just the structure that holds Philadelphia back: It’s the amount of tax that its residents and workers pay. In 2009, according to the Philadelphia Research Initiative, a family of three making $50,000 a year paid 17.3 percent of i
ts income in taxation. This compared to 8.5 percent in New York, 7.8 percent in Boston, and 7.1 percent in Chicago. Philadelphians were paying these taxes to support a system of public employee benefits that strains the city budget even in prosperous times.
The amount of its budget that Philadelphia spends on pensions for its former employees has long exceeded that of almost every other large American city. This is a function of very generous contracts agreed to by a whole succession of mayors in order to buy labor peace, but it is also a function of the sheer number of workers. In 1955, with a population of more than 2 million, the city had 24,560 employees. In 2000, the population was 31 percent smaller, but the number of employees had increased.
Philadelphia’s two most serious fiscal burdens—the wage tax and the benefits—could probably be solved by reform-minded leadership that possessed the concentrated political power to make responsible decisions in the face of popular opposition. For a variety of complex reasons, Philadelphia has not had that in recent years, and may not have it in the foreseeable future.
When it comes to politics, Philadelphia has the worst of both worlds: It is a machine city without a boss available to run the machine. “It’s a ridiculously weak executive form of government,” says John DiIulio. “It’s not that the problems should be worse than other places. It’s the leadership.”
The machine seems to function on residual energy, and in anachronistic fashion. The city council has ten members elected by district who treat their districts as virtual fiefdoms, and who have the effective power to veto any project within their constituency that they or their constituents don’t like. When a program is proposed, its benefits usually have to be spread around all the council districts in order for it to be enacted. This is one reason Mayor Street’s Neighborhood Transformation Initiative was largely a disappointment: Instead of targeting a small number of neighborhoods that needed it most, it had to be extended virtually citywide, thus diluting its impact on any one part of Philadelphia.
The Great Inversion and the Future of the American City Page 16
