Michigan Economy Blog

Comparing Charm City and the Motor City: Lessons from the Latest Reinventing Our Communities Conference in Baltimore

February 4, 2019

Some cities, such as Detroit, are still at the beginning stages of their turnaround efforts. In contrast, other cities, such as Baltimore, are decades into theirs—but still well short of a complete rebound. Baltimore, like many other industrial cities seeking to increase their social and economic appeal, has undertaken several major infrastructure projects over the past few decades. For instance, the transformation of Baltimore’s Inner Harbor, which began in the 1980s and still continues to this day, put Charm City in a new light. However, there are many areas within Baltimore that have yet to see such positive changes. After spending a few days in Baltimore, I couldn’t help but think about where that city and the Motor City currently stand in their respective revitalization efforts. Moreover, I found myself wondering about how well these cities have done at shedding their negative reputations, which have dogged them, rightly or wrongly, for several years.

On October 1–3, 2018, the Federal Reserve Bank of Philadelphia, other Federal Reserve Banks, and additional sponsors and supporters convened the eighth biennial Reinventing Our Communities conference in Baltimore. The conference allowed me and other attendees to learn about the progress several cities have made during the current economic recovery and what still needs to be done. Also, this conference gave me opportunities to examine how different communities and organizations are dealing with keeping housing affordable in spite of gentrification, among other factors. In this blog entry, I will discuss what I took away from the conference while drawing comparisons between Baltimore and Detroit.

Background

Below are key statistics for the cities of Baltimore and Detroit.

1. Statistical Comparison: Baltimore vs. Detroit, 2017

Baltimore Chicago
Demographics
Population 611,648 673,103
% Population Loss Since 1950 Peak1 35.6 63.6
African-American/White Ratio 63/30 79/15
Economics
Labor Force Participation Rate 61.7 53.0
Unemployment Rate 7.6 15.8
% of Workforce, Private/Government 78/17 87/10
Median Household Income (current $) 47,131 30,344
Povery Rate 16.9 28.0
Education Attainment (% of Population)
High School Graduate 84.3 81.2
Bachelor's Degree 30.6 14.6
Graduate/Professional Degree 14.6 6.2
Housing
% of Housing Stock Vacant 18.4 27.3
% of Housing Stock Build Before 1949 57.5 57.1
Median Home Value (current $) 154,400 50,200
% of Housing with Mortgage 66.8 30.6
Source: U.S. Census Bureau, 2017 American Community Survey.

By the metrics alone, Baltimore appears to be better off than Detroit. Baltimore has suffered substantial population loss, but not to the same extent as Detroit. Economically speaking, Baltimore has a stronger foundation, with a lower unemployment rate and higher labor force participation rate and median household income. Baltimore’s relatively stronger economic base is partly due to the city having a more-educated population than Detroit.

This stronger base is reflected in the housing market statistics. Baltimore’s housing market seems to be functioning better than Detroit’s; Charm City has a lower rental vacancy rate and a greater prevalence of home mortgages than the Motor City. But like Detroit, Baltimore still has a blight problem: There are approximately 16,000 vacant houses and numerous abandoned industrial sites that could be transformed into community spaces within Baltimore2. Even so, the percentage of land in Baltimore that meets the definition of blight is lower than in Detroit.

Other facts not included in the table above include the land area and the local budget of each city. According to my calculations using data from the Census Bureau, Detroit’s land area is 72% bigger than Baltimore’s. This is no surprise given where each city’s population maxed out in the mid-twentieth century (1,849,568 for Detroit, and 949,708 for Baltimore).3 What is a bit surprising is the size of each city’s budget. For this past fiscal year, Detroit’s budget was $1.9 billion.4 Excluding its contribution to the city school district, Baltimore has a budget of $2.5 billion for fiscal year 2019.5 While smaller in terms of land mass and population, Baltimore’s budget is larger than Detroit’s. This surprises me not just because Baltimore is smaller in terms of land mass and population, but Baltimore never approached Detroit’s peak population.

Walking North Avenue in Baltimore

When attending any conference, I look forward to the field trips that are offered. Among the options provided at the Reinventing Our Communities conference, I chose a walking tour exploring the core of Baltimore, given by tour guides with The Central Baltimore Partnership. The Central Baltimore Partnership is just that: This coalition of community groups, neighborhood associations, universities, nonprofits, and developers came together 15 years ago, and it is revitalizing the area around North Avenue—one of the major commercial corridors of Baltimore. Not only do all of these groups work together, but they also share the same building, which helps streamline communications so that everyone’s always on the same page. The tour guides highlighted the coalition’s community engagement strategy, which started with low-hanging fruit projects that residents wanted to have done, such as improving sanitation services. Now, the coalition has expanded its efforts, using city receivership auctions to purchase commercial property, which is then sold back to developers. Sometimes through this process, back taxes and property liens are forgiven, making the property more attractive to developers.

According to Ashley Wallace, deputy director for the Central Baltimore Partnership, it’s easier working with the State of Maryland than the City of Baltimore as the latter tends to be stricter on code enforcement. She shared her excitement that the area may be poised to take off because of expected developments. First, Amtrak owns 17 acres in the neighborhood, and Baltimore’s Penn Station sits at the southern edge of the area. Amtrak is set to invest $1 billion in neighborhood redevelopment, which can only help. In addition, Johns Hopkins University and the Maryland Institute College of Art (MICA) moved into a vacant neighborhood space within the area; in fact, both schools now occupy the same building there. Wallace admitted that boosting pedestrian street traffic has been a challenge despite the proximity of Penn Station and the state’s planned investment of $27 million into bus rapid transit that will include routes serving the North Avenue corridor. What may help increase pedestrian traffic is improving the Jones Falls Trail. Currently, the trail is mostly marked sidewalks between the Inner Harbor and Central Baltimore. Unfortunately, it isn’t as pedestrian-friendly as the Inner Harbor itself—which I found out in person through my daily jogs.

The walking tour highlighted the different commercial properties that have been transformed. Some of the properties used to be auto dealerships, as indicated by some of the remaining commercial markings on the old buildings. One former dealership is now an incubator, housing meeting space that can be used by nonprofit organizations. A former market now houses a pop-up retail store that sells locally made products. Multiple spaces have been turned into entertainment venues, which help MICA faculty and students make connections with the wider neighborhood. For instance, these venues give MICA students a chance to showcase their work and make a difference in the area through community service and other means. The coalition is doing all it can to keep the area affordable so that local artisans and artists can stay.

Watching the documentary Charm City

A last minute inclusion to the conference was a screening of the documentary film Charm City, which would be officially released to the public later that week. The documentary focused on the relationship between city government, police, and residents during the period 2015–17. One particular neighborhood was highlighted in which residents engage in do-it-yourself (DIY) services—specifically, the counseling of young adults and street cleanup—because they feel if they don’t do it, no one else will. DIY development is also prevalent in Detroit, and it’s discussed in detail in a 2016 book written by Kimberley Kinder. While the documentary left many questions unanswered, it depicted a challenging relationship between the police force and minority resident base. Detroit has a more diverse police force that has made a concerted effort to engage with its citizens. This has been a contributing factor to why racial tensions have not boiled over in Detroit, unlike in Baltimore, Ferguson, and in other places across the country.6 The documentary gave me the impression that conversations among city stakeholders (whether they be government officials, firefighters, or police) have just gotten started in Baltimore, whereas they’ve been going on a while in Detroit. The documentary also showed a city where many of its neighborhoods remain racially segregated. Again, I experienced this firsthand as I jogged daily through various parts of Baltimore.

Takeaways from conference sessions

In a keynote speech at the conference, Baltimore Mayor Catherine Pugh outlined the initiatives her administration is investing in (or would like to invest in) to improve the quality of life in her city. Mayor Pugh indicated that a $57 million fund was generated from leasing parking garages—$50 million of which will go toward community development. In addition, East Baltimore was awarded a $30 million grant, and a $20 million affordable housing trust fund for the city was started. In order to increase population density and growth, the University of Maryland is offering $16,000 for employees to move into the city; separately, the City of Baltimore is offering $5,000 for workers to reside in the city. Mayor Pugh said that over longer term, she plans to budget $1.2 billion for 28 new schools and $200 million annually for community development projects.

To improve the upward mobility of households in cities across the nation, affordable housing providers are delivering additional services, which I learned in one conference panel. A study co-written by Enterprise Community Partners and the Urban Institute concluded that affordable housing providers should offer services that may lead to more positive outcomes for participants. First, residents should be paid for receiving training, such as to learn construction and manufacturing skills. Also, not only should property management and resident services (workforce development) be better integrated, the services provided should be individualized as much as possible so residents can meet their professional goals while still meeting housing providers’ goals. Lastly, the length of time that such services are offered should be extended given that the beneficial effects from them aren’t often quickly realized.

In a separate panel, the specific challenge of affordable rental housing was addressed. One important question that was posed was how to keep housing affordable in gentrifying communities. As with the discussion on general housing affordability, the panel recommended greater and longer use of affordable housing and population density bonuses (such as those offered by the University of Maryland or the City of Baltimore), as well as more inclusionary zoning.7 Also, building more market-rate housing might allow more existing space to be used for affordable housing. Generally, housing inventory is low so the thinking is that an increase in total supply would boost inventory levels of market rate and affordable housing.

Multiple panels examined workforce training from different angles. Panelists agreed that employees’ ability to critically think, problem solve, and work in teams would increase their chances of getting hired. Steven Kase, founder and managing director, ASK Power, focused on helping workers improve the aforementioned skills—which helped raise their productivity and compensation. Another way to increase access to good jobs that panelists investigated was to steer private equity investment to firms that would improve job quality. Theoretically, private equity investors would find this appealing because they would find it profitable.

Once again, this conference delivered informative field trips, panel discussions, and speaker presentations. If you haven’t attended yet, keep your calendar open for the end of September or beginning of October in 2020 for the ninth biennial Reinventing Our Communities conference.

Footnotes

1 Author’s calculation using data from the Census Bureau.

2 Available online.

3 U.S. Census Bureau, 1950 Census of Population: Volume 3. Census Tract Statistics.

4 See p. 2 of this City of Detroit 2017–2018 Budget in Brief document, available online.

5 See p. 23 and p. 89 of this City of Baltimore Fiscal 2019 executive summary document, available online.

6 Detroit’s police share that is African-American as of 2013 is 62.6%; see this Governing magazine webpage. Baltimore’s police share that is African-American as of 2016 is 39.9%; see this January 2017 Baltimore Sun article.

7 For an explanation of inclusionary zones, see CityLab’s primer.

The views expressed in this post are our own and do not reflect those of the Federal Reserve Bank of Chicago or the Federal Reserve System.

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