Population Growth Means a City Is Thriving, or Does It?

Public officials and reporters alike adopt the myth that bigger is better. That’s not always the case.
by | September 2017
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Every year, the U.S. Census Bureau releases its latest data on cities and population growth. The reaction is always the same: News outlets look at the numbers showing which places gained and which ones shed residents, and use them as instant proxies for a decline, a boom or a turnaround in cities all over the country.  

Population loss can become a symbol for other things people feel is going wrong in a city, such as rising poverty and unemployment rates, vacant and blighted housing, increased violent crime, the exit of pro sports franchises, racial segregation and police brutality. The “decline” in newspaper headlines may refer to the population, but it’s often shorthand for a host of complex problems, an easy-to-understand indicator that things are getting worse.

In Detroit, where the population fell 64 percent between 1950 and 2016, Mayor Mike Duggan told The Wall Street Journal shortly after he took office three years ago that “the single standard a mayor should be defined on is whether the population of the city is going up or going down.”

Pittsburgh Mayor Bill Peduto has pledged to add 20,000 new residents by 2025. Since 1950, his city’s population has dropped from a high of nearly 677,000 residents to about 304,000. “I’ve lived here my entire life,” says the 52-year-old Peduto, “and there’s never been a time that I’ve seen this city grow.” Each year, deaths outnumber births in Pittsburgh, and Peduto sees the recruitment of new residents as crucial to his city’s long-term economic outlook. “As people begin to retire, there isn’t a generation to take over those jobs, so we have to bring in more people,” he says. So far, the decline in both Pittsburgh and Detroit has slowed but not stopped. Their nearly seven decades of population loss continues.

Most journalists and academics tend to accept the arguments in favor of population growth as the most important thing -- or sometimes the only thing. And mayors and civic groups can reinforce that mindset. But the truth is that the health of a city may not be tied so intrinsically to the ebbs and flows of its population.

For the bigger-is-better crowd, the logic is clear enough: Adding people means an expanded workforce. New residents means new customers for local businesses, which in turn increases tax revenue; with more revenue, cities can invest more in roads, public transit, schools, the arts and parks.

But equally important for them, the mere fact of rising numbers is thought to imply fundamental desirability. People vote with their feet. Though such reputational benefits are harder to quantify than tax revenue, it’s no surprise that mayors would want their jurisdictions to be attractive. “There’s a psychology to this, obviously,” says Paul Levy, a longtime strategist for the Center City neighborhood of Philadelphia. “It’s as primal as, ‘Nobody wants to be my friend. Everybody’s going in the other group.’”

After decades of decline, Philadelphia is in a period of sustained, if modest, growth. But in May, the Census estimates showed Phoenix passing Philadelphia as the fifth-largest city in the country. Philadelphia added another 2,900 residents, but Phoenix added more than 32,000. So Philadelphia’s new numbers were treated as discouraging news by some media commentators, even though they were part of a consistent national pattern. Cities in the Snow Belt nearly all lag in growth behind those in the Sun Belt. Last year, 10 of the 15 fastest-growing cities were in the South, and four were in the West. Not one was in the Northeast. That didn’t make Philadelphians feel any better about their new sixth-place status.

In some cases, the negative publicity from the Census reports oversimplifies what’s happening on the ground. Chicago is perhaps the best example. It has been losing people steadily over most of the past generation. In the first decade of the new century, it suffered a net population loss of 210,000. At the same time, its downtown and adjoining neighborhoods were experiencing a renaissance and even becoming a magnet for large corporate headquarters. And because most of the departing residents were relatively poor, and the new ones tended to be well-educated professionals, the city was becoming more affluent even as it shrank. (The fact that most of the residents who are migrating out of Chicago are black, however, has raised new concerns that the city is simply exchanging struggling African-Americans for white gentrifiers.)

Interestingly, it’s the mayors of cities struggling to attract people who insist population numbers are the secret of success. The mayors of the fastest-growing cities tend to have a much different attitude about population gains. “Growth in itself doesn’t ensure that you have a great community,” says Tommy Battle, mayor of Huntsville, Ala., which has seen a 7.2 percent increase in population since 2010, and is projected to overtake Birmingham and Montgomery as the state’s largest city within the decade. Battle refuses to articulate growth as his administration’s objective. “Being the largest doesn’t make your citizens’ quality of life better, doesn’t make their education better and doesn’t make their commute time better,” he says.

Is Huntsville’s recent growth a crucial selling point to prospective employers? Battle doesn’t think so. He doesn’t offer it as proof that the city has some sort of special momentum. Instead, his pitch centers around quality of life. The average commute time in Huntsville is 18 minutes. The median price for a house is about $180,000, a fraction of prices in Boston or San Francisco. Battle likes to talk about the presence of Boeing, Airbus, GE Aviation and NASA in the Huntsville area. He touts the fiber-optic cable recently installed by Google. “We’re a smart city, we’re a Google city, we’re an aerospace city,” he says. “I would rather talk about that than size because there are a lot of cities that are bigger than us.”

The story is similar in Frisco, Texas, which happens to be the second-fastest-growing large city in the nation. In 1990, the municipality northeast of Dallas had barely 6,000 people. Now it has about 150,000. So much construction is happening that Mayor Jeff Cheney jokes about how the official bird of Frisco should be the crane. “If you drove through our city, you couldn’t help but notice it,” he says. “It’s definitely front and center in people’s minds.”

Growth and its impact on traffic was a chief concern in Cheney’s re-election campaign earlier this year. The city is adding roundabouts, updating its traffic lights and encouraging new developments to be mixed-use, so residents can live within walking distance of where they work. “We’re doing everything we can to get our city moving and to get traffic flowing,” he says.

With almost two-thirds of its land developed, Frisco is now trying to manage its growth. Over the summer, the city council passed an ordinance that requires all new commercial developments to set aside 10 percent of their acreage for open space. “While we are one of the fastest-growing cities in the country,” Cheney says, “we’re by no means trying to sprint to the finish. We’re looking to develop in the right way.”

Although the preponderance of media opinion has always been that more people make a better city, there has long existed a cluster of academics who challenge that wisdom. Perhaps the leading voice in this contrarian club is Paul Gottlieb, an economist at Rutgers University. He has argued for decades not only that local elected officials should take a measured approach to growth, but that metropolitan areas with stable or slow-growing populations are likely to have greater economic prosperity. Fifteen years ago, in a paper titled “Growth Without Growth,” Gottlieb called attention to 23 of the largest 100 metro areas, which he nicknamed “wealth builders.” Those were places with below-average increases in population and above-average increases in per capita income.  

Another group of metro areas, which Gottlieb labeled “population magnets,” had excelled at gaining residents but performed below average at increasing per capita income. The data seemed to suggest that mayors shouldn’t frame future population increase as a guaranteed path to a better economy, especially when it comes at the cost of greater congestion, pollution and the loss of open space. “My paper was controversial in the sense that it questioned the desirability of population growth in any way,” Gottlieb says now. “It’s not obvious why you would want population growth except as a means to the end of increased income or increased wealth.”

 

"I've lived here my entire life, and there's never been a time that I've seen this city grow," says Pittsburgh Mayor Bill Peduto. (David Kidd)

 

Gottlieb continues to insist that rapid population growth isn’t linked with income growth. In fact, several of the cities where leaders had long worried about lack of growth landed on his list of wealth builders. Pittsburgh was one of them.

Tom Murphy, a senior fellow at the Urban Land Institute, knows all about the idea of wealth builders. At the time Gottlieb’s paper came out, Murphy was mayor of Pittsburgh and had been trying to attract higher-paying jobs associated with the city’s universities and hospitals. “What we argued was that the measure of success of a city was not population growth, but the average income of the people,” Murphy says. He still thinks that’s true. “It’s the diversity and quality of jobs that you’re creating that determines success, more than quantity.”

Pittsburgh’s population continues to decline, but by many economic indicators, its situation is on an upswing. The city’s inflation-adjusted per capita income and median household income have increased each year since 2010. Google, Uber, Apple and Intel have all opened offices in the city, bringing millennial workers with them. It’s a stark difference from a few decades ago when the net loss of residents coincided with discouraging economic contraction. “When you’re looking now at fractions of percentages in population loss, it doesn’t feel that way,” Peduto says. “It feels like growth.”

The trick for cities is regaining population while improving the local economy in a way that’s inclusive to all residents, says Philadelphia’s Levy. In an ideal growth scenario, he says, “you want the incomes of your existing residents to go up.” Since 2010, Philadelphia has seen an annual job growth rate of 1.1 percent per year, but among the top 10 largest cities, it has the lowest median income at about $41,000 and has the highest adult poverty rate at 25 percent. The solution, Levy says, is more employers who can offer jobs for both high-skill and low-skill workers.

 

Gottlieb’s contrarian theory continues to have its adherents. In 2012, Eben Fodor, a land use planner and urban consultant, ran a similar analysis with more recent data. In an article in Economic Development Quarterly, Fodor compared annual population growth with three economic indicators: per capita income, poverty and unemployment. Among the 100 largest metro areas, faster growth rates were associated with lower incomes, greater income declines and more people in poverty. The 25 slowest-growing areas outperformed the 25 fastest-growing areas across all three measures.

Fodor has been saying these things as long as Gottlieb, if not longer. His 1999 book, Better, Not Bigger: How to Take Control of Urban Growth and Improve Your Community, was an early prescription for how to slow growth through specific policies, such as eliminating subsidies to developers. Instead of giving away tax breaks for new development, Fodor still believes local elected

officials ought to invest in existing parks, roads, schools and community centers. In other words, improve the quality of life for current residents, so that they want to stay in the city, rather than scrambling to find new ones. “Communities need to be thinking about stabilizing in the long term,” he says. “We need to get off the endless growth bandwagon.”

But it’s hard to get off the bandwagon. Residents might not reap the presumed rewards of growth, but other interest groups do. Retailers, the real estate industry and even local media have incentives to encourage growth. Developers, who tend to write the biggest checks in local elections, are influential players in shaping local land use policy. Fodor’s consulting firm sometimes works with governments to model the impact of new development. “You’ve got costs associated with serving growth,” he says. After factoring in the cost of building and maintaining the requisite roads, schools and other infrastructure, “rather than a windfall for local government, it actually ends up being fiscally negative.”

Local governments themselves face incentives to promote population growth because it generates immediate development revenue in the form of permit fees, utility fees, property tax increases and sales taxes. In the short term, developers shoulder the burden of building much of infrastructure, such as roads in new subdivisions, so the financial obligations cities will face are still years away. But when the bills come due, they often can’t afford it.

The American Society of Civil Engineers has tallied up the unfunded liability for infrastructure maintenance across the country, excluding sidewalks and other smaller projects, and it’s more than $5 trillion. Charles Marohn, a civil engineer and founder of the organization Strong Towns, calls this a “growth Ponzi scheme.” “You see cities becoming obsessed with growth and it becomes growth at all costs,” Marohn says. “But if you’re not growing in a way that actually makes you wealthier, you’re just bankrupting yourself and that’s the crisis we see in cities all over the country.”

Population growth isn’t the way Strong Towns defines a successful community. Marohn uses a 10-question “strength test” that readers can take to determine whether their communities are growing in a healthy or a corrosive way. One question asks, if a revolution occurred, would residents know where to gather? Another asks, is it safe for children to walk or bike to school without adult supervision? “A lot of what makes cities work doesn’t show up in standard economic or demographic statistics,” Marohn says. “One of the signs of strength in a community is the sense of being part of something. That’s really hard to measure.”

 

When mayors talk about population growth or decline, they’re talking about the people in their city, not the surrounding suburbs. The reasons are obvious: They have to worry about empty storefronts, abandoned housing, fewer taxpayers and shrinking budgets in their jurisdiction. They have no control over policies in nearby municipalities and the surrounding counties.

One problem with measuring a city’s success by its population trend is the way it treats a city as an island, isolated from its neighboring communities. The economies of central cities and the areas around them are so interconnected, Gottlieb says, that it’s irresponsible to assess one without the other. When both Gottlieb and Fodor studied the relationship between population trends and economic indicators, they looked at the scale of a metropolitan statistical area, which includes large cities, counties and towns. “City residents can access jobs in the suburbs,” Gottlieb says, “and of course, jobs in the central business district are frequently filled by suburban residents.” The only way to get a clear picture of whether population growth translates to broader prosperity, he says, is to look beyond the city itself.

 

In 1990, Frisco, Texas, had just 6,000 people. Today it has about 150,000. There's so much construction, Mayor Jeff Cheney jokes, that Frisco's official bird should be the crane. (AP)

 

“Cities are part of a broad region, and what is often as important is that regional growth and the city’s place in that region,” says Bill Frey, a demographer at the Brookings Institution. To the extent that cities can enter into partnerships with their neighbors, they can benefit from shared revenue and services that smooth over some of the differences in population trends across the region. However, there are political realities to consider as well. “Mayors get elected on the health of the city,” Frey says. “They’re not the mayor of the metropolitan area.”  

In the Detroit metro area, Census estimates show stable or modest growth since 2010, but that’s not how Mayor Duggan or the local media interpret the data. They focus on the city. One headline last year noted that the city’s population was at its lowest point since 1850. The story played up the symbolic significance of the fact that Detroit was no longer among the nation’s 20 most populous cities. “A lot of Detroiters really think of themselves as being in one of the country’s biggest cities,” a local history professor told The Detroit News. “And that’s just not true anymore.” Duggan himself has called the annual population drops disappointing and correctly predicted that they would become a talking point for political opponents during his re-election bid this year.

Even advocates of slower growth don’t argue that big population losses are a good thing. “Outright decline is a different matter,” Gottlieb says. With decline, “you strand infrastructure. You have vacant lots. Extreme population decline is not a cause, but a symptom of economic problems.” Mayors, he says, are correct to want a turnaround in population decline. They just need to avoid going too far in the opposite direction.

Since publishing his paper on growth without growth, Gottlieb has moved on to study suburban sprawl, rural economic development and natural resource policy. Reflecting on his original thesis, he says the recent shortages in affordable housing and income inequality were developments he didn’t foresee. He concedes that if slow-growth policies usher in greater wealth, but that wealth isn’t shared equitably, some benefits of population stability are lost.

Fodor, meanwhile, continues to stress his ideas about growing better, not bigger. It’s been almost two decades since he published his book on the subject. Asked if cities approach growth differently today, he says, “not as much as you might have hoped. That’s the calamity. You’d like to think that we’re smart and can work off information, but we tend to avoid changing until we really have to. In the meantime, we’re still very much part of the growth model.”