New Philadelphia Fed Study Outlines Strategies for Reviving Post-Industrial Cities in DE, PA, NJ

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Alan Mallach’s May 2012 research publication contrasts the development strategies of model post-industrial cities like Bethlehem, PA, with the failed renewal plans of cities like Trenton, NJ, to reveal how today's planners can spark self-sustaining private sector growth.

Since the decline of their manufacturing sectors in the 1950s, 13 cities in the Third Federal Reserve District – Allentown, Altoona, Bethlehem, Camden, Chester, Harrisburg, Lancaster, Scranton, Trenton, Wilkes-Barre, Wilmington and York – are facing varied prospects for the future.

In a report by the Federal Reserve Bank of Philadelphia’s Community Development Studies and Education Department titled, “In Philadelphia’s Shadow: Small Cities in the Third Federal Reserve District,” Visiting Scholar Alan Mallach divides the 13 cities into four categories based on their varying present-day conditions and identifies six themes that should drive their policy choices in the future.

Mallach argues that, rather than undertaking costly public projects, maximizing everyday private investments can help renew these declining cities, whose challenges mirror those faced by ex-manufacturing cities throughout the country, namely a shrinking manufacturing base, a loss of status as a retail hub to surrounding suburbs, plummeting real estate values, and either a declining population or an underemployed labor pool.

Mallach highlights the “Rebounding Cities” of Bethlehem, Wilmington and Lancaster as models of successful renewal. They have rebuilt a strong middle class in the wake of manufacturing’s decline by leveraging their rich histories and quaint neighborhoods, building appealing downtown commercial hubs, and generating a strong base of professional service sector jobs. He contrasts these “Rebounding Cities” with the “Struggling Cities” of Trenton, Reading, Camden and Chester, whose inability to compete with nearby suburbs and failed reliance on public investment for renewal may have allowed them to cross a “point of no return.”

Mallach concludes with “Six Themes for the Future.”

  •     Leverage existing public and non-profit resources to spur local private investment
  •     Improve residents’ access to jobs throughout the region
  •     Generate a strong, locally based middle class
  •     Integrate newly arriving communities and heal ethnic disparities
  •     Build effective community leadership and partnerships
  •     Encourage state reforms that compliment local efforts

Mallach is a senior fellow at the Center for Community Progress, a nonresident senior fellow at the Metropolitan Policy Program of The Brookings Institution in Washington, D.C., and a visiting scholar at the Federal Reserve Bank of Philadelphia. He has been engaged in housing, planning, and community and economic development as a public- and private-sector practitioner, advocate, and scholar for over 40 years. He served for nine years as director of housing and economic development in Trenton, New Jersey; has taught at Rutgers University, the Pratt Institute, and the New Jersey Institute of Technology; and is serving had served as a Brookings scholar at the University of Nevada, Las Vegas for the 2010-2011 academic year. He is a member of the College of Fellows of the American Institute of Certified Planners and received a bachelor’s degree from Yale University.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.

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Katherine Dibling
Federal Reserve Bank of Philadelphia
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