|
RURAL BOOMTOWNS: THE RELATIONSHIP BETWEEN ECONOMIC DEVELOPMENT (c) Housing Assistance Council, 2000 CONCLUSION The Impact of Rural Booms Communities that have become boomtowns typically have two distinguishing characteristics prior to the development: their population has declined in size, and they have been highly homogenous.5 Once a community becomes a boomtown, however, dramatic changes occur. Not only does the community experience a reversal of past population patterns and trends, but a rate of change occurs that is beyond anything previously encountered. The growth rate is accompanied by heavy demands on city/county services and facilities. Studies have shown that the rapid increase in population causes rural boomtowns to experience a period of crisis and a loss of traditional attitudes and values.6 This period of social disruption ultimately leads to the challenge of integrating large numbers of new inhabitants into the community. Each of the boomtowns studied above had unique circumstances surrounding their experiences with rapid growth. To begin with, the timing and trajectory of the four "booms" differ with each location. While Fremont County and Lawrence County (Deadwood) took off during the 1990s, Camden County and Washington County boomed considerably earlier (two decades earlier, in the case of Washington County). Deadwood´s growth trajectory was brief and meteoric, with a housing glut hitting the area after only one year of a booming gambling trade. At the other extreme, Washington County´s mammoth growth rate may finally be slowing, but the area´s economy and population are still projected to expand well into the next millennium. The areas experienced the same onslaught of outsiders, but the end result was different in each case. In Fremont and Camden counties, the incomers (federal prison employees and naval enlistees) promptly segregated themselves from the rest of the community, with the federal prison employees moving outside the county and the naval workforce living locally but buying elsewhere. In the case of Fremont, the new population (young African Americans and Hispanics) was in direct contrast to the homogeneously white community. In Deadwood and Washington County, the population changed either so abruptly or so relentlessly that integration between old and new was a moot point. In all cases, however, the rapid growth in population signalled a movement toward a more urbanized community and lifestyle, which typically caused a large degree of social or cultural disruption.7 When there was a persistent division between poorer old-timers and more affluent newcomers, the older community heads lost considerable influence, and were dismissed as outsiders and "hicks" by new elites who did not need their input.8 This particularly held true for Camden County, where local residents had no idea that there were community meetings being held for public input, and where activists were occasionally rebuffed. In fact, local officials were not even consulted about the location of the Kings Bay Naval Submarine Base at all. When the incoming industries radically jarred with the former small-town way of life, boomtowns had to move swiftly to enact local regulations restraining the incoming industry from mowing over major historical landmarks. In the case of Deadwood, local officials were able to use the town´s designation as an historical landmark to leverage taxes and building concessions from casino developers. Camden County was fortunate enough to have its own historical society in place to require naval construction to conform to environmental regulations concerning the preservation of the area´s live oaks. However, any grandfathered planning regulations from before the Navy´s arrival still have not stood in the way of massive new industrial park developments. Impact of County Economic Types The three main benefits that rapid growth brings to rural areas are population stability, economic growth, and more jobs. Many rural areas in the U.S. have been plagued by population loss, particularly of younger wage-earners who migrate elsewhere for job and education opportunities. However, that trend is currently reversing, particularly in the South and West. From 1990 to 1996, high-density metropolitan core areas lost a total of 4.5 million people to domestic migration to less-crowded areas. From 1992 to 1997, Utah, Colorado and Georgia rank fourth, fifth and sixth (respectively) in annual population growth (South Dakota as a whole was not even in the top 20). The impact of rapid growth on wages appears to be linked to the industry moving into the community. For example, in Camden County, most of the inmigrants moving in were active duty military personnel and the contractors associated with the base who, in addition to the Gilman Paper Company employees, made up a large, new core of affluent residents. In Deadwood, S.D., and Washington County, the vast majority of new jobs were in the service and retail sectors, in the form of low-paying casino positions, food and beverage service or low-end retail giants such as Wal-Mart. While the elderly population in Washington County did fuel a more lucrative health care industry and a strong municipal job market, these gains were not enough to offset the decline in average adjusted household incomes. The federal prison in Fremont County promised over 1,000 new positions; however, nearly all of them were taken up by out-of-towners, with locals taking the lower-paying (but still stable) state prison positions. Consequently, even though population, industry and employment gains were all hallmark traits of boomtowns, better jobs, higher salaries and industrial stability were not necessarily a part of the bargain. In fact, in many instances, the quality of employment declined as the boom took off. A prime example of this trend is Washington County, a retirement-destination area that maintained the largest and longest economic boom of the four case studies. The majority of households in the county were owner-occupied, owned by seniors (and later Californians) with high incomes. Attracting retirees is often touted as a smart growth strategy for declining rural areas because of an incoming population with better buying power that does not compete for local jobs. However, by 1997 the average monthly wage in the county was 77 percent of the average Utah wage -- which was, in turn, 85 percent of the U.S. average. In Camden County, the military and manufacturing also created a two-tiered economy, with the bottom tier a rapidly expanding service sector catering to the needs of more affluent arrivals. In Deadwood, those who were not involved in property speculation or casino ownership and management were often left with low-paying, unstable work as casino employees. Fremont County is probably the only case out of the four where the bottom did not drop out of the lower half of the economy; however, this was because the county already had a stable employment base in the form of the Colorado State Department of Corrections long before the federal prison arrived. County types also affected the degree to which any of the counties were able to exact concessions from incoming businesses. In the case of Fremont County, the monolithic federal prison bureaucracy barely yielded any concessions, in spite of the fact that the federal site was a large drain on local infrastructure. Of course, local leaders did not help in this regard by not negotiating with the Federal Bureau of Prisons in the course of trying to lure them to the county. The Navy paid Camden County millions of dollars for infrastructure improvement; however, these funds were still nowhere near sufficient to deal with the military presence and the military families that came along with them. Camden County also had a handsome tax base thanks to homeowning military and industrial employees -- which made for a state-of-the-art school curriculum. However, the great influx of children has still outstripped the capacity of the school system, which has had to use temporary classrooms. Not only does the industry itself drain local resources, but occasionally the people drawn to the area in its wake need resources as well. In Camden County, for example, people would arrive in the county with no money, food, housing, or job and then seek temporary supportive services from local social service agencies. Another concern is that when this happens, small towns may not have the capacity to provide supportive services, such as temporary shelter and food for these people. Boomtowns and Affordable Housing Affordable housing is a critical need in almost every community around the country, and is becoming more so. The 1998 State of the Nation´s Housing report by Harvard University relates that, although homeownership is up due to the buoyant U.S. economy, the supply of affordable housing for low-income populations has sunk to an all-time low. As of 1995, over 10 million households pay more than half their incomes for housing, with the vast majority of severe cost burden falling on those with extremely low incomes (nearly four million renters and 2.5 million homeowners). Nationally, the affordable housing stock has shrunk by 67,000 units since 1985, while the number of low-income households needing affordable units outstrips the supply by a factor of three.9 Since there is no single trajectory that all locations follow when they experience dramatic growth, it is extremely difficult to predict the path that housing affordability will take during that process. In Urban Fortunes (1987), John R. Logan and Harvey Molotch frame the process by which communities benefit or are burdened by growth in terms of four "determinants":
In other words, when a locale is targeted by outside industry either because of its amenities, its incentives or its lower cost of labor, the boom created by the industry´s arrival results in sky-rocketing exchange values for people who own property or are in a position to buy it. The resources that the locale will be able to capture for ongoing municipal spending and protection of resident interests will depend on its unique position as a site, the ability of local officials to bargain with the industry through incentives and demands, the relative power of local officials and residents compared to the influence of the industry, and the degree to which residents even want to bargain in the first place (as well as what concessions they desire). One study showed that when in-migrants were surveyed by the Department of Social Services, the reasons most frequently given for leaving the prior location were "too expensive," followed by "lost apartment," which was found in other research to be connected to its being too expensive. Boomtowns appear to low-income in-migrants as offering a solution to their housing problem.12 In the areas studied for this report, with the exception of Lawrence County, S.D., many of the in-migrants moved to the community to obtain government jobs, to retire, or to buy real estate in a much better locale. As a result, they have decent salaries or savings, which allows them to become property owners who can benefit from rising property values in the form of equity. However, either before the boom or in its wake, there is still a population of renters for whom rising property values only mean higher rents and a steeper cost of living. This same population is more likely to concentrate at the low-paying service or retail end of the economy, so that either renters are blocked from homeownership or low-income homeowners are trapped in dilapidated housing due to their inability to afford major repairs. Some homeowners, such as those in Deadwood, S.D., are able to take advantage of the bull market, sell their homes and move elsewhere. However, homeowners in areas such as northern Camden County are outside the area where real estate is in most demand or are bound to their homes through social ties. In areas such as Deadwood and Fremont County where conditions eventually led to a housing bust, the increasing availability of housing did not necessarily spell enhanced affordability. The economic boom that created the housing was also the same boom that provided jobs for low-income residents. When (as in Deadwood) the boom went bust or (in the case of Fremont) better-paying jobs did not filter down to older residents, unemployment and low incomes meant that the percentage of monthly wages spent on housing stayed the same. With Section 8 and welfare reforms, low-income families will be able to use rental vouchers to live in newly constructed homes; however, the wages that they are likely to earn as they transition off welfare will still make housing a major problem. A recent study from the Center on Budget Priorities demonstrated that in the 12 states that have welfare-to-work programs, former welfare recipients who find work are typically paid less than $8 per hour and earn between $8,000 and $10,800 per year -- well below the poverty line for a family of three.13 Another study from the Children´s Defense Fund relates the following:
Next Steps, Lessons Learned The numerous boomtown studies conducted during the past two decades have not answered many questions about the consequences of rapid growth as they relate to housing. While a large body of literature exists about rural boomtowns, the existing literature focuses primarily on the social changes attributable to growth. Overall, research conducted about boomtowns reports a connection between the large and rapid influx of population and a variety of social disruptions.15 Although the case studies conducted for this report do not provide conclusive evidence that rural boomtowns experience negative affordable housing circumstances, they do seem to indicate a general pattern for how the housing market responds in rapidly growing economies. Despite forecasts that predict growth, many rural communities find that there is not a great deal of interest by private developers to build affordable housing until there is an identifiable market. Even if a market is identified, low-income housing is typically not a business in which for-profit developers wish to invest, due to the fact that the lower rents make it very difficult for them to make a profit. Consequently, most of the new housing that enters the housing stock is either single-family, owner-occupied or upscale rental complexes. Low Income Housing Tax Credits may provide considerable incentive for developers, but these complexes are still scarce, and there is no protection against the property being converted to market rate after the tax credit is used up. Many municipal governments, strapped for cash and without Section 8 funds, are not able to get into the affordable housing business either. The only other sector left to provide funds -- the nonprofit sector -- cannot reasonably be expected to absorb crisis-level low-income demands. Consequently, a strategy of partnership may be one of the last and best hopes for low-income housing development. While any one sector cannot (or will not) take on the task, a combination of for-profit loans, government grant funding and nonprofit technical assistance will vastly improve local capacity to provide quality low-income housing. It is important that communities recognize the need for cooperation and have a willingness to bring in other players, so that incoming businesses are brought into the fold as "good corporate neighbors," rather than as antagonists to local leaders and residents. However, residents and grassroots organizations must also have an equal place at the table, and "power players" need to make an active effort toward inclusiveness if any coalition is to meet residents´ needs. Local leaders who are considering attracting new businesses/industries for the purpose of economic development also need to decide whether a particular industry is right for their community in the first place. Once the community has decided to attract a business, there are ways to ensure a congenial fit between the community and the business. Basic facts to remember are that some industries pay no taxes (such as prisons and military entities) and do not fall under local planning and zoning ordinances (unless, in the case of prisons, they are run by private corporations). Thus the community must plan to capture money from these entities through their contracts with local businesses, their employment of local residents, and increased sales and sales tax revenues to visitors and employees who arrive from elsewhere. The community must also make sure the industry. s impact on local infrastructure, government services, and quality of life are positive or neutral. Most governmental agencies, such as the military and state and federal prisons, are also part of large bureaucracies with their own policies and procedures, some of which are required by law, others of which are long-standing habits. Consequently, it may be difficult for small communities to pressure them into new ways or to impose preconditions in conjunction with offering incentives. Private corporations coming into a small community have more flexibility to enter into partnerships and invest in the community. In-depth research about any potential corporate neighbor will provide municipal players with more leverage. Finally, local officials and businesspeople need to have sufficient organizational capacity in order to undertake planning at all. National nonprofits and state/government agencies are critical in this regard, in order not only to provide good technical assistance, but also to promote their programs well enough so that the information reaches rural areas.
|
