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Cascade: No. 81, Fall 2012

What Makes Cities Resilient?*

How older industrial cities can become resilient cities was the focus of the Federal Reserve Bank of Philadelphia’s fifth biennial Reinventing Older Communities conference, which was attended by over 430 community development leaders from nonprofits, banks, foundations, government agencies, and businesses from 24 states, the District of Columbia, Puerto Rico, and Canada.

The conference, held May 9 to 11, 2012, in Philadelphia, was co-sponsored by the William Penn Foundation, the Penn Institute for Urban Research, the Ford Foundation, HUD’s Office of Policy Development and Research, the Federal Home Loan Bank of Pittsburgh, and the Federal Reserve Banks of Boston, Chicago, Cleveland, New York, Richmond, and St. Louis.

Conference attendees heard from some of the nation’s leading practitioners and researchers in 24 plenary and concurrent sessions and toured workforce development sites in Philadelphia’s Kensington neighborhood, economic revitalization projects in Chester, PA, and waterfront development along the Delaware River.

Opening speakers probed why some cities, rather than others, are resilient. Charles I. Plosser, president and CEO of the Federal Reserve Bank of Philadelphia, said that one definition of community resilience is “the individual and collective capacity to respond to adversity and change. It is a community that takes intentional action to enhance the personal and collective capacity of its citizens and institutions to respond to and influence the course of social and economic change.”1

Photo Credit: Jeff Stewart Photos(Photo credit: Jeff Stewart Photos)

Plosser said that people are the ultimate source of opportunity and growth and asked, “How do we improve education and equip them for a more knowledge-based economy? And how can we unleash the creative and entrepreneurial spirit of all our citizens?”2

He also noted that “government regulations on small and emerging companies can have a stifling effect on economic growth and, despite our best intentions, the law of unintended consequences can loom large in any effort to direct or control economic activity.”

Plosser explained that the Philadelphia Fed’s Research Department has begun a research project to measure urban resilience. He said, “Resilience is based on the response of local economic activity to an economic shock — whether it be a temporary shock (related to the business cycle or some other temporary factor) or a persistent shock (related to long-run trends in technology, productivity, or preferences).

“Our researchers are examining two working definitions of resilience that are grounded in economic theory. According to the first measure, an area is considered more resilient to the extent that it experiences milder fluctuations in employment over the business cycle. According to the second measure, resilient areas are those that experience faster employment growth than could be expected based on national growth rates given their industrial structure. The aim of the research project is to combine these two measures into an index that we will then be able to track over time.”

Plosser said that the project, thus far, looks “promising” and that the next step “is to examine how the indexes change over time and see whether there are certain metropolitan area characteristics that are correlated with resilience.”

Jeremy Nowak, president of the William Penn Foundation and chairman of the board of directors of the Philadelphia Fed, said that resilience in its Latin roots means to jump back or snap back to a prior state of being. He invited the audience to think about people and communities through a “resilience lens” that looks for strengths, rather than a liability or pathology lens that is self-limiting.

Drawing on the research literature in psychology and ecology, Nowak found that resilience has themes of internal capacity, enabling social connections, diversification, self-organization, and disruptive change. An urban policy or development practice that followed these themes would build on authentic strength, allow for social connections across barriers, and invest in ways that favor diversification and self-organization, he said.

In another plenary address, HUD Secretary Shaun Donovan said that some smaller cities have emerged as resilient communities by diversifying their economies, coordinating their approach to workforce development, leveraging private-sector investment, and engaging new partners and anchor institutions.

The lessons learned about cities during the past century, Donovan said, are one size doesn’t fit all; good partners recognize opportunities as well as problems; and no city can succeed without strong local leadership and institutional capacity.

Last year, the Obama administration started a Strong Cities Strong Communities pilot program to bring together 14 federal agencies in six diverse communities, including Chester, PA. A team of federal officials work full-time on-site to help these cities navigate existing federal programs and build local government capacity.

Donovan observed:

  • Poverty grew almost five times faster in the nation’s suburbs than in cities during the past decade, and there are 1.5 million more poor people living in suburbs than in cities;
  • “When it comes to the way cities manage transportation, building and land use, it isn’t always federal barriers that get in the way, but often that every community in a region has a different set of rules and codes.”

Following Donovan’s remarks, Bethlehem, PA, Mayor John Callahan; Tamar Shapiro, senior director of the German Marshall Fund; and Susan Wachter, co-director of the Penn Institute for Urban Research, explored how cities are using planning and strategic investment policies to ensure their resilience over time.

Edward L. Glaeser, professor of economics at Harvard University, said that cities tend to reverse decline by adopting one of four main strategies: make physical capital improvements; provide tax incentives; attract and train talented workers; or shrink the physical footprint and reduce the costs of city services.

The core basics of successful cities are good schooling, safe streets, and quick commutes, Glaeser said. He added that human capital is the bedrock of a city’s success and that “education is close to urban destiny.”

Other plenary sessions were on the changing role of philanthropy, with the presidents and CEOs of the Annie E. Casey Foundation, the Skillman Foundation, and the William Penn Foundation, and the perspectives of Philadelphia Mayor Michael A. Nutter; Lancaster, PA, Mayor J. Richard Gray; and former New Bedford, MA, Mayor Scott W. Lang.

“In Philadelphia’s Shadow: Small Cities in the Third Federal Reserve District,” a special report released at the conference, describes the history and trajectory of 13 small formerly industrial cities in the District. It was written by Alan Mallach, a visiting scholar at the Philadelphia Fed.

A book on major conference themes, to be published in 2013, is being co-edited by Susan Wachter, co-director of the Penn Institute for Urban Research, and Kimberly Zeuli, vice president and community development officer at the Federal Reserve Bank of Richmond.

Audio and video recordings of plenary sessions, audio recordings of concurrent sessions, and some speakers’ presentations are available at http://www.philadelphiafed.org/community-development/events/.