Mark Partridge Swank Chair in Rural-Urban Policy

Transcription

1 Building a sustainable rural Ohio: Leveraging growth through community cooperation Mark Partridge Swank Chair in Rural-Urban Policy partridge.27@osu.edu Department of Agricultural, Environmental, and Development Economics Mark Partridge 1

2 Building a sustainable rural Ohio: Leveraging growth through community cooperation Presented at: Regional Sustainability Forum OSU Extension Center, Wooster, Ohio April 13, 2007 Mark Partridge (614) Partridge.27@osu.edu Mark Partridge 2

3 Outline: Economic & community development 1. Summary of rural trends in U.S. and Ohio Myth and one-industry backward looking strategies 2. Summary of local trends 3. Implications for community development. Wishful thinking and good intentions is not realistic dev. strategy Should not be fad driven: jumping from value added, clusters, manufacturing, to bio-energy. 4. Moral: community develop. is hard work Get the foundation right and less worrying about strategic thinking and picking the right industry. A key element is building stronger regions Not just for Cleveland, but important for rural OH No magic bullets. Policy and AED Economics 3 Of course, I do not have the solution to every community s current woes and path to long-term sustainability. Yet, rural researchers have learned a great deal of looking at the path of North American development over the last 75 years. I am talking about how to increase community s odds of having a sustainable future. The way I would look at my advice as being akin to a doctor advising you not to smoke. Of course we can find smokers who live long healthy lives and we can find non-smokers who experience an early death, but quitting smoking greatly increases your odds of surviving a long time. Why discuss this issue now? Well, Ohio is getting closer to a tipping point where its communities will be under even more stress they currently are. Likewise, the evidence suggests that this region can take advantage emerging trends if it works closer together. Mark Partridge 3

4 Rural America and Rural Ohio Rural America is too diverse to simply characterize except that it is all changing Three rural Americas Amenity/recreation/retirement communities Metropolitan adjacent facing growth pressure Commuting and urban markets: I-71 corridor Rural remote Often more dependent on the primary sector Appalachia Ohio?, NW Ohio and the Great Plains The first two are faring quite well in terms of growth. Remote rural is the stereotype of a struggling region. Policy and AED Economics 4 Mark Partridge 4

5 Overall Rural America Today Rural America is much different than 1950 more diverse and less relient on the natural resource economy. Communities more linked to urban areas and urban influence than the natural-resource based economy of the mid-20 th Century. In 1950, linked to world markets and less to nearby communities. Policy and AED Economics 5 Mark Partridge 5

6 Overall Rural America cont. Rural America is very diverse 6.5% work in primary-sector farming Compared to 1/3 in 1950 In Ohio, about 9% of nonmetro jobs are in farming though includes life style farmers. About 15% of farmers are large enough to earn a large share of family income from farming. About ¼ of earnings are from manufacturing In nonmetro Ohio, about 20% of total jobs are in manufacturing. Policy and AED Economics 6 I follow the convention of defining Rural America as outside of metropolitan areas or urban centers of 50,000+ nearby counties with tight commuting links. Agriculture s influence is dispersed in rural and urban America. Food processing, distribution, wholesale, input manufacturing and R&D are concentrated in urban America, while agriculture has important international trade and competitiveness implications. Rural America is very diverse. Not just agriculture and natural resource primary sector. I would also argue that manufacturing based strategies are too narrow. The point is that strategies that emphasize one industry are too narrow to succeed in the 21 st Century. Sources for this analysis are U.S. Dept. of Agriculture, Economic Research Service, 2007 Farm Bill Theme Papers, Rural Development July Other sources include Partridge et al. (2006) Employment Growth in the American Urban Hierarchy: Long Live Distance. and Partridge et al. (2006), Does the New Economic Geography Explain U.S. Core-Periphery Population Dynamics? available at and The Geography of American Poverty: Is there a Role for Place- Based Policies?, by Mark Partridge and Dan S. Rickman, W.E. Upjohn Institute for Employment Research, Kalamazoo, MI, Ohio employment are for 2004 and are derived from U.S. Bureau of Economic Analysis data.. Mark Partridge 6

7 Policy and AED Economics 7 To illustrate the change in rural America, note that roughly all of Rural America outside of the Northeast and the West Coast was farm dependent in That rural economy was very influenced by global events such as the boom in commodity prices surrounding WW II and the Korean War. Mark Partridge 7

8 Policy and AED Economics 8 In terms of rural development, it is the green counties that would mostly benefit from expanded farming employment. Other rural counties are much more tied to nearby urban areas in an interdependent relationship. By 2000, farm dependent counties were mostly limited to the Great Plains. Other remote rural counties that have often struggled include natural resource dependent counties usually in mining or forestry. The rapid increases in productivity in farming and natural resources have put these regions at a disadvantage in terms of employment opportunities (e.g., we need fewer farmers to produce the same amount of food as we did in the 1940s). Farm productivity is good for feeding the world, but has put many rural communities under stress. Another problem is the tremendous changes in rural America have gone mostly unrecognized in key circles. Policies are often designed with the 1950 vision of rural America, not the current much more diverse version. Farms are increasingly tied to the rural economy as stated by USDA: While agriculture is a small part of the rural economy, farm households have become increasing dependent on off-farm income. In 2003, 68 percent of farm households reported that the operator or spouse or both worked off the farm. In aggregate, almost 89 percent of U.S. farm household income reported in 2003 came from off-farm sources. Dependence on off-farm work has led many to observe that agriculture is far more dependent on the rural economy than the rural economy is on agriculture. Source: United States Department of Agriculture 2007 Farm Bill Theme Papers, Rural Development July 2006, p. 7, July Mark Partridge 8

9 Voting with their feet and diversity Population change reflects underlying community health, quality of life, and economic conditions. Rural America experienced net population inmigration from metro America during the 1990s and the first-half of this decade. Rural America is NOT dying though growing less than metro America (6% vs. 2% pop growth 2000 to 2005) Yet, about ½ of non-metro counties lost pop. from 2000 to 2005 shows rural diversity. Policy and AED Economics 9 Rural America is often unfairly characterized as in persistent decline. This is not accurate. The best indicator of a region s vitality is net migration or people vote with their feet. If more people are moving in than moving out, something must be good about the region, which could reflect a combination of quality of life and economic activity. On this score, rural America does well and the stereotype is misleading. Mark Partridge 9

10 Policy and AED Economics 10 Rural population loss in Great Plains and S. Manufacturing dependent regions that are struggling with global competition. Rural population gains are centered in mountains and metropolitan adjacent. Mark Partridge 10

11 Plains States Engines of Growth Population Growth Policy and AED Economics 11 Engines of Growth are defined as MAs > 500,000 population, 2003 definition. Population change over the period using U.S. Census Data. 100km and 200km rings. 100kms is one hour commuting distance. Great Plains really show the 3 Americas due to its dispersed population settlements. Also the catalyst for much of Congressional discussion on rural policy. Growth is heavily concentrated in these rings around engines of growth. Growth also occurs in mountains, Black Hills, Ozarks High Amenity growth! Some small engines of growth are Fargo-Moorhead, Bismarck, Sioux Falls/Sioux City, and the I80 corridor across Nebraska. Mark Partridge 11

12 Ohio growth patterns. Ohio population growth is lagging the national average, but this is primarily in metro Ohio. A key feature is proximity to the core of one of Ohio s largest 5 cities or its many urban areas. Rural OH would greatly benefit if metro OH performed better. Linkages to urban support regions Capture urban growth spillovers Policy and AED Economics 12 Urban areas are a Census Bureau classification. They are roughly a city of 50,000 people but see below. Urbanized Areas The Census Bureau uses published criteria to determine the qualification and boundaries of urbanized areas (U.S. Department of Commerce, 2002). They currently define an urbanized area as consisting of a central place(s) and adjacent territory with a general population density of at least 1,000 people per square mile of land area that combined have a minimum residential population of at least 50,000 people. Mark Partridge 12

13 Percent Population Growth, 95-00, United States MEDIAN Ohio Michigan Wisconsin Illinois Indiana Percent Growth Percent Growth Policy and AED Economics 13 Mark Partridge 13

14 Ohio and U.S. Population Change by County Type Pop Change Ohio% Pop Change U.S% change Metropolitan 9,149,958 9,230,063 80, % 5.7% 3-largest metros 5,326,805 5,423,616 96, % 5.8% 5-medium metros 3,092,255 3,086,074-6, % 8 small metros 730, ,373-10, % 4.9% Non Metro 2,254,894 2,271,052 16, % 2.1% Micropolitan 1,709,490 1,721,369 11, % 2.8% Non Micro 504, ,610 8, % 1.2% Statewide 11,364,401 11,470, , % 5.1% Policy and AED Economics 14 Ohio s growth is especially lagging in smaller/medium sized MAs in Ohio. Large metro areas are also lagging with only Columbus being near the national norm. Ohio s smaller Micropolitan areas cities 10,000-50,000 people and counties with tight commuting links are somewhat lagging the nation. Core rural Ohio is actually exceeding the national average despite headwinds of weak urban Ohio economic growth. Definitions: U.S. equiv change is defined for comparison. 3 Largest metropolitan areas are Cincinnati, Cleveland, and Columbus more than 1million population in Medium metropolitan areas are Akron, Canton, Dayton, Toledo, and Youngstown-Warren 2000 population between 400,000-1 million. 8 Small metropolitan areas are Huntington-Ashland, Lima, Mansfield, Parkersburg-Marietta, Sandusky, Springfield, Weirton-Steubenville, and Wheeling less than a population of 400,000 in Mark Partridge 14

15 Estimated Pop 2005 Percent Pop Change, Percent Pop Change, Ranking relative to all US metros in size category All METROS 9,230, Metro - All Large 5,423, Cincinnati-Middletown metro 1,588, Cleveland-Elyria-Mentor metro 2,126, Columbus metro 1,708, Metro - All Medium 3,086, Akron metro 702, Canton-Massillon metro 409, Dayton metro 843, Toledo metro 656, Youngstown-Warren-Boardman metro 473, Metro - All Small 720, Huntington-Ashland metro 63, Lima metro 106, Mansfield metro 127, Parkersburg-Marietta-Vienna metro 62, Sandusky metro 78, Springfield metro 142, Weirton-Steubenville metro 70, Wheeling metro 69, ALL NONMETROS 2,233, Micropolitan 1,721, Non-Metro 512, Policy and AED Economics 15 Note the poor performance across the board except for Columbus. Better growth in Mansfield or Akron-Canton would spillover and help the greater Wooster region. Mark Partridge 15

16 8 % Population Growth by five mile increments from Ohio's five largest cities, Percent Population Growth Distance in Miles from the nearest core of a big-five city Policy and AED Economics 16 This shows why rural growth is linked to urban growth. Explain growth relative to the distance from the core of Columbus, Cincy, Cleveland, Dayton, and Toledo. Growth is negative within 5 miles of the core of these cities. Accelerates to rapid growth sprawl at about miles from core, then falls rapidly and growth is even negative after 50 miles from the core. Thus, while rural Ohio is doing better, remote rural Ohio is struggling. Mark Partridge 16

17 Percent Population Growth by Distance % population growth Distance from metropolitan or urbanized area center Change, Change, Policy and AED Economics 17 This is distance from the nearest urbanized area roughly a city of 50,000. Mark Partridge 17

18 Overall Ohio Growth It is remarkably uniform across OH Faster along I-71 corridor Slower to the NW & SE of the corridor. Appalachia is improving Points to emerging clusters- E. of Columbus; SW of Columbus; Lima-Findlay Wayne, Holmes and Ashland counties have the critical mass together but not alone. A question, how to build links to Canton/Mansfield Policy and AED Economics 18 Research at OSU suggests that growth greatly declines as counties are more remote from urban areas with as few as 10,000 people, while there are additional incremental distance penalties to reach the nearest metropolitan area (MA), and MA of at least 250,000, 500,000, and 1.5 million people. Mark Partridge 18

19 Figure 4. Percentage population change by county, Policy and AED Economics 19 The five big city metropolitan areas (Cincinnati, Cleveland, Columbus, Dayton, and Toledo) are outlined in orange. Pink is population loss, darker shades of green is population gain. Yellow highlights the 5 metropolitan areas for Cincinnati, Cleveland, Columbus, Dayton, and Toledo. Major interstates are in light yellow. [Thanks to Jill Clark of AEDE, who produced the map. She calculated growth from April 1, 2000 to July 1, 2005] The Ohio story is well-known. Growth in the 3 C s corridor and near exurban Toledo. Ashland, Wayne, and Holmes counties are well positioned to leverage urban growth for commuting or recreational tourism. Weaker population change on the Western and Eastern borders. Appalachian Ohio is showing some signs of growth. As someone new to Ohio, Appalachia strikes me as a region poised for takeoff with its natural amenities (and as it works through the final restructuring in its legacy of old economy industries). One trend is the rapid exurban growth around the 3 C s: Warren, Medina, and Delaware counties. But, there is hollowing out or slower growth in the cores: Hamilton, Cuyahoga, and Franklin counties. Rural Ohio has few remote areas like the Great Plains, which is good in terms of growth, but it is currently being pulled down by the very weak state performance, especially in urban Ohio. Mark Partridge 19

20 Growth by Local classification Growth occurs in townships and smaller CVs. Ohio s large core cities (50,000+) continue to struggle. OH s governance helps facilitate a low-density settlement. not leveraging agglomeration econ causing sprawl and higher cost gov t Policy and AED Economics 20 Mark Partridge 20

21 Population Growth by Muni Type 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Village Small City Large City Townships ,682 2,621,582 3,581,641 2,713, ,041 3,170,157 3,578,548 3,044, ,357 3,301,047 3,150,027 3,488, ,104 3,354,802 3,036,729 3,615, ,698 3,641,248 2,985,918 3,860,763 Est ,902 3,675,551 2,916,757 3,973,143 Policy and AED Economics 21 Data confirms story of decentralization of Ohio s population with growing townships This is despite: Annexations and slow overall growth in Ohio Large cities are shrinking. (50,000+ is large city) Projected slight increase in village population The overwhelming majority, 93.6%, of village population increase is occurring within 18 miles of Ohio urban core areas Demonstrates governance issues that aren t getting any easier for both small and large townships. Small population townships need to think about relationship to county government Large townships need to consider own infrastructure and how to best utilize agreements with neighboring municipalities The problem is that township residents often do not want the growth as it leads to congestion and ultimate annexation. Likewise, Townships lack the capacity for planning and infrastructure and it costs more to fix these problems later. Township growth also leads to de-populating urban core and the low population density strains OH s local infrastructure and gov t services. Urbanized Areas The Census Bureau uses published criteria to determine the qualification and boundaries of urbanized areas (U.S. Department of Commerce, 2002). They currently define an urbanized area as consisting of a central place(s) and adjacent territory with a general population density of at least 1,000 people per square mile of land area that combined have a minimum residential population of at least 50,000 people. Ohio Cities, Villages and Townships These 2,239 legally defined places encompass all areas of the state and represent the three primary sub-county forms of government. The Ohio Code recognizes two different types of incorporated places, cities (with population of 5,000 or more) and villages (population less than 5,000 residents). Both cities and villages are authorized with a variety of powers to govern and manage their local areas. In contrast, townships are unincorporated administrative units of state government and sub-territories of counties. In Ohio, townships have limited authority to manage their local area in comparison to cities or villages. Governance When discussing local policy in Ohio, it is important to note that Ohio is a home rule state. Ohio municipalities are granted home rule powers; counties and townships are not. That means that county and township governments may only act as specified by Ohio law, and therefore are limited in their ability, through statute, to affect local land use. Therefore, counties and townships are dependent on the state and the powers it authorizes explicitly to them to handle population and land use change. Mark Partridge 21

22 Townships by Exurbanization Legend Core City Suburb Inner Exurb Outer Exurb Rural Policy and AED Economics 22 Note that OH is amazingly urbanized, yet it only has 11.5 million residents. It is very low density. The greater Wooster area is Inner and Outer Exurbia. Good, close enough for commuting and shopping in cities. This is likely why rural OH is faring relatively well. Bad, sprawl, bad planning, environmental problems, more costly gov t services. Identifying Exurbia To identify Ohio s rural-urban fringe, a simple distance model was created, structured according to what were determined as reasonable commuting distances to the State s largest urbanized areas (urbanized areas with 50,000 residents). This approach has drawbacks, but is consistent with that of other rural-urban fringe researchers (Audirac, 1999). In practice, the rural-urban fringe is located just beyond the boundary of each of the state s urbanized areas and those urbanized areas in neighboring states. The outer limit of the fringe is what might be considered a reasonable commuting distance back to the urbanized area. The commuting distance was determined by analyzing commuting data from the 2000 U.S. Census. First, the average commute time was calculated for all areas of Ohio. Given the great range in sizes of the state s urbanized areas, commuting times were anticipated to vary according to the population of the urbanized area. Analysis of commuting data verified this expectation, with average commutes longer around the largest urbanized areas and shorter around the smallest. To account for this variation, the commuting field was defined as 35 miles from the edge of the largest urbanized areas (one million or more residents); 25 miles from the edge of urbanized areas with a population between 500,000 and one million people; and 15 miles from the edge of urbanized areas of less than 500,000 residents. To distinguish the inner and outer zones of the rural-urban fringe, a break was created at half the distance from the urban edge and the outer portion of the rural-urban fringe (this break was at 17.5 miles for urbanized areas of over one million people; 12.5 miles for urbanized areas of between 500,000 and one million people; and 7.5 miles for all other urbanized areas). While there is no right way to demarcate the fringe, we believe our approach is both intuitive and practical. We do note that alternative buffer distances are possible and we expect to be able to partially evaluate this matter during the course of our analysis, particularly when examining the inner and outer fringe zones. We focus on legally defined units of geography since community decision-making is associated with cities, villages, and townships in Ohio. Once the inner and outer portions of the rural-urban fringe were determined, the 931 cities or villages (incorporated places) and 1,309 townships (unincorporated places) were classified as urban, suburban, inner fringe, outer fringe, or rural. Ohio s 17 central cities of urbanized areas were classified as urban. Cities other than core cities, villages and townships with at least 25% of their land area within the urbanized area were defined as suburban. Inner fringe cities, villages, and townships were those places not defined as suburban with at least 25% of their land base in the inner fringe. Outer exurban cities, villages and townships were those places not assigned to the inner fringe and with at least 50% of their land base within the outer fringe. Finally, rural cities, villages and townships were those places with less than 50% of their land base in the outer fringe. The result is that 17 core cities were defined as urban, 268 cities and villages and 82 townships were classified as suburban, 235 cities and villages and 482 townships were classified as inner fringe, 206 cities and villages and 340 townships were classified as outer fringe, and 205 cities and villages and 404 townships were classified as rural. Mark Partridge 22

23 Townships by Exurbanization Population Population Growth (persons) Population Growth (%) Muni Type Core CVs 2,805,276 2,857,665 2,746,287 52, , Suburb CVs 2,820,663 3,069,380 3,097, ,717 28, Suburb Townships 1,143,130 1,282,153 1,299, ,023 17, Inner Exurb CVs 661, , ,638-52,994 78, Inner Exurb Townships 1,360,901 1,475,269 1,562, ,368 86, Outer Exurb CVs 533, , ,557-10,505 15, Outer Exurb Townships 503, , ,671 50,597 15, Rural CVs 419, , ,974-4,402 2, Rural Townships 607, , ,470-58,400-7, Policy and AED Economics 23 Township growth continues Township growth occurs in favored corridors More growth estimated to be taking place in medium-size townships versus the trend in the 1990s in large townships Suggests a trajectory of change Most growth occurring in all exurban muni types Governance capacity issues Mark Partridge 23

24 Trends in Greater Wooster Region Ashland, Holmes & Wayne Counties are a region. The counties move together, not like Stark or Richland counties Common interests suggest gains from more cooperation. The region has fared very well. It needs ways to inoculate itself from weaker NE Ohio trends. Working as region is one way to do it. Policy and AED Economics 24 Mark Partridge 24

25 Selected "Greater Wooster" County Populations Population Year Ashland Holmes Wayne Policy and AED Economics 25 Source: U.S. Bureau of Economic Analysis, 2006 REIS Data for populations, with population from the U.S. Census Bureau (note this leads to a slight interpolation problem as the data was updated by Census but not shown. The changes would be way! too small to detect with the naked eye.) Stating the obvious, but these counties have almost 210,000 people, or it has critical mass to provide services and attract economic development if it works together. Compare to Great Plains. Mark Partridge 25

26 Ohio & Selected County Relative Population: 1969= Population Year Ashland Holmes Wayne Ohio Stark Policy and AED Economics 26 Source: U.S. Bureau of Economic Analysis, 2006 REIS Data. People vote with their feet to places with high quality of life and/or strong economies. People reveal the wellbeing of a location by moving. Note that Stark county and the state have barely grown since 1969, while the U.S. has grown about 50%. Richland county s performance is about the same as Stark county. Ohio and NE is not doing well in terms of well being. Yet, overcoming this problem, this region is growing and Holmes county is literally thriving. It seems to be a strong region with mutual interests. Mark Partridge 26

27 1993 and 2004 Per Capita Income: Ohio and Surrounding Counties Per Capita Income--Nominal Ohio Ashland Holmes Wayne Policy and AED Economics 27 Source: U.S. Bureau of Economic Analysis, 2006 REIS Data. Ohio is about 90-92% of U.S. average. The Wooster region has lower per capita income, possibly reflecting higher quality of life. Indeed, Wayne county has had slower growth of per-capita income. Note that to some extent, this is not a failing!!!! Indeed, with people continuing to move to Wayne county, this suggests they are willing to trade off a little lower income for higher quality of life (Roback theory). They are voting with their feet for this lifestyle. Mark Partridge 27

28 Rural Dev is about supporting institutions and is hard work Described Below: The problem with development cycles and fads such as clusters or bio-energy is it makes us lose sight of the real changes that are needed. Wasteful competition among communities. Policy and AED Economics 28 Mark Partridge 28

29 What can create jobs and opportunity? Don t Do. A. Chasing fads and looking at the past history of the local economy is not fruitful for the future growth and development. B. Tax poaching undercuts other businesses with higher taxes and/or reduces QOL from a weakened tax base. Policy and AED Economics 29 Mark Partridge 29

30 Do: A. A high quality of life with efficiently provided private and public services B. When the local foundation is right, opportunities come to you. You don t need to out-think the market! Realistically, it is hard to out-guess the market. C. Planning should be about assets and what is feasible: does a cluster make sense? E.g. when and how does agro tourism make sense? BRE & OSU extension help in this case. D. The biggest asset is untapped cooperation E. More regional cooperation in OH Build critical mass Policy and AED Economics 30 Low taxes and efficiently provided services is an example of building a good foundation. Quality of life and lower taxes promote household well being and firm profits. Mark Partridge 30

31 Building Critical Mass & Regions U.S. economic geography centers around closer ties with larger cities. Wages and housing prices inversely linked to distance to cities as small as 10,000 people Population and job growth is inversely linked to distance to cities as small as 10,000 people Additional distance penalties to reach metro areas (MAs) and MAs > 250k, 500k, and 1.5 million people. Policy and AED Economics 31 There is a sweet spot for growth not too fast, not too slow. This can depend on community tastes for growth, but communities face real-world constraints. A key feature is that communities need critical mass to have effective gov t, economic development, and private services. One reason is rising thresholds for gov t and private services. Once a community starts falling below a population threshold, they can begin a vicious cycle of decline. Distance Penalties for rural America: Job Growth: Given the mean distance of rural counties to the nearest urban center of 59.9 kilometers, this produces a mean distance to nearest urban center penalty of 5.4% lower job growth. In total, all else equal, the penalty at the mean distances from all urban center tiers equals 11.8% of job growth, or the typical rural county has about 11.8% lower job growth due to its remoteness to the nearest urban center of 10-50,000, a Metropolitan Area of any size, a Metropolitan Area of at least 250,000, a Metropolitan Area of at least 500,000, and a Metropolitan area of at least 1.5 million residents. Median Earnings and Housing Costs: For example, for every km farther away that a nonmetropolitan county is from its nearest urban center of at least 10,000 residents, median earnings fall by about 0.08% while median housing costs decline about 0.23%. The total distance penalty for the average nonmetropolitan county is about 8% lower median earnings and about 20% lower average housing costs than for a nonmetropolitan county immediately adjacent to a metropolitan area of 1.5 million. This is the total remoteness penalty to reach the nearest urban center of 10-50,000, a Metropolitan Area of any size, a Metropolitan Area of at least 250,000, a Metropolitan Area of at least 500,000, and a Metropolitan area of at least 1.5 million residents. Sources: Partridge, Mark D., Dan S. Rickman, Kamar Ali and M. Rose Olfert Employment Growth in the American Urban Hierarchy: Long Live Distance. OSU Swank Program. AED Economics. Partridge, Mark D., Dan S. Rickman, Kamar Ali and M. Rose Olfert Agglomeration Spillovers and Wage and Housing Cost Gradients across the Urban Hierarchy. OSU Swank Program. AED Economics. Mark Partridge 31

32 Regionalism Builds Critical Mass Regions provide (say 50 miles in radius): Critical mass to support private development E.g., agro-tourism needs a region to have a marketable product. Economies of scale in econ. dev and providing high-quality low-cost gov t services Better planning for a region. Environment, zoning, transportation. Gives a region voice to influence Columbus and Washington. The status quo hurts OH agriculture. Policy and AED Economics 32 For example, funding gov t services is often more cost effective in large regions. One small community cannot develop a tourism strategy, but an entire region can develop a program. A small town cannot provide transportation and road network, but a regional approach with effective regional taxation tools can provide this service. Communities need expertise in defining their regions. Regions are functions of many factors including commuting behavior. Agriculture in Ohio would be better served if more regional approaches stopped chopping up farmland and created non-farm job opportunities, whereas more efficiency in providing gov t services would reduce business tax burden. Mark Partridge 32

33 Regions-cont. More federal & state support is needed to form regions. Often communities don t even know their regions Regions defined as having mutual interests Often defined by shared livelihood or commuting sheds Also defined by transportation, environment, commerce Communities need to put aside petty jealousies Not every community benefits equally, but all benefit. Policy and AED Economics 33 Gov t funding to encourage larger regions to form--as well as for communities to identify their regions--would be useful policy initiatives. Funding could encourage consolidation in some cases or service sharing arrangements. Mark Partridge 33

34 Conclusion Rural America is very diverse and increasingly linked to urban America. OH lags the U.S. in growth, but rural OH faring better. Rural development needs to focus on getting the foundation right, not chasing next boom or the next fad. A key opportunity is more regional collaboration. Policy and AED Economics 34 Rural communities need to get there basic foundation correct and jobs will follow. This is everything from efficient gov t to quality schools, healthcare, and environment. Not chase after the current new fad industry. This is wishful thinking and not sustainable economic development. Mark Partridge 34

35 Thank you Presentation will be posted at The Ohio State University; AED Economics; Swank Program: (under presentations) Policy and AED Economics 35 Mark Partridge 35

36 Reference Map Policy and AED Economics 36 Mark Partridge 36

37 Ethanol trends Ethanol production increased by more than 4 fold between In 2006, production totaled about 5Billion gallons (about 6B gallons in 2007) Now mandated to increase to 7.5B gallons in 2012 (under 2005 act) and President Bush proposed a 35B gallon mandate by Policy and AED Economics 37 Mark Partridge 37

38 As of January 2007, 73 new plants under construction many are the 100 million gallon plants. 110 existing plants that are smaller. New plants employ about 40 to 50 workers in a mixture of jobs. Many impact studies suggest very large effects. One typical study suggests that 257 new jobs support 5,613, or a multiplier of over 20. Using the term supported is not the same as net job creation. Treats inputs as if they would not be produced otherwise and does not consider spillovers on other sectors such as poultry. Credible net job multipliers are usually in the 1.5 to 2 range. Policy and AED Economics 38 Mark Partridge 38

39 Within agriculture, there are winners (corn growers) and losers (poultry and hogs) from the ethanol boom. 73 new ethanol plants implies about 3,500 new jobs at the plant (I believe slightly optimistic). A multiplier of 2 (on the high side) suggest 7,000 new total jobs in rural America out of 26 million total jobs (assuming none of these workers reside in metropolitan America). Moral: ethanol will not broadly reinvigorate rural America though some communities may get a small net positive impact especially for next generation facilities. Why I stated Ethanol needs to be justified on environmental and energy security grounds not for rural development. Policy and AED Economics 39 Mark Partridge 39

40 Growth and Change Diving into the micro-data Mark Partridge 40

41 Outline of slides Population Growth by Municipal Type Percent of Ohio population choosing to reside in townships Township population, 2005 Township pop. change, 2000-Est. 05 Township pop. growth by region by size Population growth by muni type and exurbanization Policy and AED Economics 41 Mark Partridge 41

42 Population Growth by Muni Type* Pop Chg, Pop Chg, % of total OH Muni Type 2000 Est (net) 0-05 (%) Pop, 2005 Village 861, ,902 33, Small City 3,641,248 3,675,551 34, Large City 2,985,918 2,916,757-69, Townships 3,860,763 3,973, , Total 11,349,627 11,460, , *Small Cities categorized as cities with population less than 50,000, Large cities contain population greater than 50,000 Note: Classification of small city and large city based on 2000 population levels, classification of villages based on 2000 political classification. Policy and AED Economics 42 Mark Partridge 42

43 Population Growth by Muni Type 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Village Small City Large City Townships ,682 2,621,582 3,581,641 2,713, ,041 3,170,157 3,578,548 3,044, ,357 3,301,047 3,150,027 3,488, ,104 3,354,802 3,036,729 3,615, ,698 3,641,248 2,985,918 3,860,763 Est ,902 3,675,551 2,916,757 3,973,143 Policy and AED Economics 43 Mark Partridge 43

44 Growth in Percentage of Ohioans Choosing to Live in Townships 40% 35% 30% 25% 20% 15% 10% 5% 0% Est Policy and AED Economics 44 Mark Partridge 44

45 Growth and Change Data confirms story of growing townships Consistent and steady increase This is despite: Annexations Slow overall growth in Ohio overall Projected slight increase in village population The overwhelming majority, 93.6%, of village population increase is occurring within 18 miles of Ohio urban core areas Policy and AED Economics 45 Mark Partridge 45

46 Township Population, 2005 Policy and AED Economics 46 Mark Partridge 46

47 Estimated Percent Township* Population Change, *County-level effects as a result Mark of data Partridge, collectionswank Chair Rural-Urban Policy and AED Economics 47 Mark Partridge 47

48 Population Growth by Region 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , Est , , ,000 - Cleveland Area Townships Columbus Area Dayton/Cincinnati Toledo Area Northwest Townships Southeast Townships Townships Area Townships Townships Policy and AED Economics 48 Mark Partridge 48

49 Township Population Growth Township population is uneven Pop growth is a regional phenomenon favored versus less favored corridors and regions Two stories Growth outside major urban areas Stagnation in Northwestern and Southeastern townships Policy and AED Economics 49 Mark Partridge 49

50 Township Population by Size Townships by Size Estimated 2005 N under ,848 25,476 26, , , , , ,000-2, , , , , , , , ,000-10, , , , over 10,000 1,162,406 1,213,480 1,220, Policy and AED Economics 50 Mark Partridge 50

51 Average Township Population Growth by Size*, & 2000-Est Est under ,000 1,000-2, ,000 5,000-10,000 over 10,000 Grand * Size determined by 2,000 population Policy and AED Economics 51 Mark Partridge 51

52 Average Township Population Growth by Size*, & 2000-Est Estimated population change for complicates basic township trajectories Largest townships 55 townships account for most township population Grew rapidly during the 1990s Estimated to be leveling out, filling-in at dictated density levels These townships literally function as cities If so, places need to look at the places further along to see if they want to become that. Negligible population growth in our smallest townships There are small townships getting smaller Raises about minimum threshold for effective service upkeep and delivery Demonstrates governance issues that aren t getting any easier for both small and large townships. Small population townships need to think about relationship to county government Large townships need to consider own infrastructure and how to best utilize agreements with neighboring municipalities Policy and AED Economics 52 Mark Partridge 52

53 Townships by Exurbanization 3,500,000 3,000,000 2,500,000 2,000,000 1,500, Est ,000, ,000 - Core CVs Suburb CVs Suburb Townships Exurban CVs Exurban Townships Rural CVs Rural Townships Policy and AED Economics 53 Mark Partridge 53

54 Townships by Exurbanization Exurban city and villages strike back Most growth occurring in first (inner) ring of exurbia Estimated decline in core cities Continued decline and stagnation in rural areas Policy and AED Economics 54 Mark Partridge 54

55 Some Initial Conclusions Township growth continues Township growth occurs in favored corridors More growth estimated to be taking place in medium-size townships versus the trend in the 1990s in large townships Suggests a trajectory of change Most growth occurring in all exurban muni types Governance capacity issues Policy and AED Economics 55 Mark Partridge 55