Built Environment, Demographics

How job sprawl keeps New Jerseyans impoverished (and how we might be able to fix it)

I often blog about the somewhat abstract problems that the high level of suburban sprawl has created in New Jersey. But a recent New York Times article written by Mikayla Bouchard highlights a very specific problem created by the increasing distance between people and jobs. In her article, Bouchard highlights the role that simply getting to and from work plays in determining whether or not those living in impoverished neighborhoods have a chance to escape poverty. She writes:

“In a large, continuing study of upward mobility based at Harvard, commuting time has emerged as the single strongest factor in the odds of escaping poverty. The longer an average commute in a given county, the worse the chances of low-income families there moving up the ladder.

The relationship between transportation and social mobility is stronger than that between mobility and several other factors, like crime, elementary-school test scores or the percentage of two-parent families in a community, said Nathaniel Hendren, a Harvard economist and one of the researchers on the study.”

While the focus for most people sharing this article has been the issue of the country’s inadequate transportation networks (and rightfully so; transportation of all sorts is not only inadequately funded not only at the federal level, but often at the state level, as is the unfortunate case in New Jersey), I think there’s a larger issue at play to consider. After all, transportation is merely a means to an end.

Screen Shot 2015-05-08 at 10.30.32 AM

The bigger issue here is that over the past decade, the distance between people and employment in metropolitan regions has increased. A study by the Brookings Institution published in March details that on average, “the number of jobs within the typical commute distance for residents in a major metro area fell by 7 percent” between 2000 and 20012. As the policies that encourage suburban sprawl have pushed people further and further from the urban core of regions, employers followed suit. The above chart effectively shows which areas of the Philadelphia-Camden-Wilmington metropolitan region have seen job loses and which have seen job gains. The findings of this study correlate to the experiences described in the New York Times article. The below table shows the raw numbers, including which groups saw the largest decrease in nearby jobs.

Screen Shot 2015-05-08 at 10.30.57 AMAs the numbers detail, the highest poverty areas saw larger-than-average decreases in nearby employment. What this translates to is that the most vulnerable population must travel increasingly further to find meaningful employment. And given that most “lower” and “middle” class jobs haven’t seen wage increases in quite a long time, this group is most likely to spend a large amount of what little money they make just getting to and from distant workplaces. What this means is that the chance to save money, to afford an apartment or house closer to your job, is extremely small. In the end, the cycle of poverty is solidified because sprawl has pushed jobs further and further away.

You can see this play out by looking at where residents of the city of Camden work. A study done by CamConnect revealed that an astonishing 79% of residents had to travel outside of the city to work, and that 53% of residents travel outside of Camden County for work. (And despite the proximity of and easy public transit connections to Center City, “only 4% of residents held their primary job in Philadelphia”, highlighting the similar lack of middle class jobs in that city as well.) In a city with a poverty rate that hovers around 40%, it isn’t unreasonable to assume that many people make their daily commute on public transportation. What this boils down to is the most poverty-vulnerable population in the county has to travel the furthest for work and spend more of their time and money getting there. Our pattern of suburban sprawl has guaranteed that, for the time being, their chances of escaping poverty are small.

So, why is this bad? Other than the moral argument that it’s unacceptable that the richest country in the world seemingly happily keeps large swaths of people imprisoned in toxic environments, what does it have to do with anything? Well, an argument can easily be made that this isn’t just a moral issue. Taxpayers end up spending millions upon millions of dollars on social services for those living in neighborhoods that don’t have easy access to the kinds of things that suburbanites take for granted, like good schools, clean grocery stores, and yes, access to jobs well-paying jobs. Some people would happily take those services away altogether, but, tattered though the fabric of our social contract is, that’s not going to happen. This means that at the same time towns attempt to keep building subdivisions and office parks in the middle of farm land, the state is going to keep trying to mitigate the negative social cost of doing so, and no one is much the better for it.

What can be done about this? I propose that we can stop the series of tax breaks aimed at wealthy companies to move to cities like Camden. Noble though the idea may be, there’s a large amount of skepticism that local city residents will be the recipients of the jobs coming in. Instead, these incentives should be used to support local businesses, which have a much higher chance of actually resulting in employment for people living in the city. That would wipe out the drag on households that having to travel to distant jobs engenders. It would result in people having more money invest in locally, which would enrich the community and eventually mean fewer people need to turn to costly social services and benefits, saving taxpayers millions in the long run.

We could further incentivize locating a business near transportation. Downtown Camden, for instance, is awash in a sea of parking lots located very close to both heavy and light rail in the form of the PATCO High Speed Line and NJ Transit’s River Line. And speaking of the River Line, there are many towns along its length that could benefit from increased investment and jobs.

Overall, anything that tilts the balance back toward areas accessible by more people than distant office parks, the better the general health of the region will be. As we’re learning, there is a very real financial and social cost to the sprawl that’s pushed us all apart. We don’t all have to live in cities, but moving jobs a little closer to where the people are would make a huge difference toward future prosperity.

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14 thoughts on “How job sprawl keeps New Jerseyans impoverished (and how we might be able to fix it)

  1. Those tax breaks do have a locational component to them to encourage employers to create jobs near transit and other existing infrastructure, something I think we want to encourage. If one “anchor” employer makes such a move (see Panasonic’s move to Newark, controversial thought it might have been), it can catalyze a good deal of additional commercial development nearby.

    • Also, encouraging physical investment in places close to transit helps revitalize those cities by expanding their property-tax base. That was the beauty of the now-defunct Urban Transit Hub Tax Credit. So there are valid reasons to offer various kinds of incentives, as long as we can quantify and track the desired outcomes, we design the incentives to produce those outcomes, and we don’t judge them on the outcomes they were never designed to produce.

      • Sure, I definitely agree that those tax incentives have the capacity to help create jobs in impoverished areas that might also be near transit. What bothers me about the Camden breaks specifically is that the city (or perhaps state?) declined to enter into a community benefits agreement with those receiving breaks, leaving them with no real leverage to force those companies coming into the city to employ local residents or improve conditions on the ground in any way. The only hiring requirement of the breaks is that companies bring a few hundred jobs to the city, but as is the case with the Philadelphia 76ers practice facility, most of those jobs already exist and are just moving states. At that point we have to rely on the goodwill of the individual companies to hire locally, which I feel isn’t a great position to be in.

        Speaking of tracking desired outcomes, I was disappointed to see that Governor Christie vetoed a bill that would try to determine the effectiveness of those tax breaks (http://www.nj.com/politics/index.ssf/2015/05/christie_vetoes_bill_scrutinizing_corporate_tax_br.html). In our highly analytical world, how can we not try to keep track of how well these breaks work or not? Unless there’s something glaringly wrong with the legislation I don’t realize, that doesn’t do us any favors.

      • Agreed on the second point, although these tax benefits are meted out over time, based on performance against requirements, so yearly tracking, while desirable, may not paint a complete picture, particularly in the early years of an incentive award.

        Re your first point, these are state incentives, and I think that what a recipient must do in order to have access to them is baked into the legislation and regulations, so the time to address those is before the incentives bill becomes law.

        There is, however, a third tool, which we were just talking about at lunch today: the PILOT. This is a local tool that guarantees a specified “tax” rate to a developer for a certain period of time. It may not actually be less than the property’s market-rate property tax would be, but it’s spelled out for whatever its effective period is, so the developer has guaranteed predictability, AND the entire payment goes to the town (with a little bit to the county), while none goes to the school district. (In Abbott districts, which I believe include Camden, the state is by court order obliged to make up the difference in school funding, so it’s a no-loss proposition for the municipality.) A city could certainly include a CBA as part of granting a PILOT.

      • It depends. They can be VERY good — as much money as property taxes would yield, but nothing “diverted” to schools. It all depends on how they’re structured. In non-Abbott districts, they’re not so good because the town might need to raise property taxes IF school costs went up as a result of the new development (an argument for limiting them to commercial property only, not currently required). However, most school districts currently have lots of extra capacity — another topic ripe for analysis! — so the incremental cost of one more student is minimal.

    • Phil says:

      No, PILOTS are not good for a community. Most of the retail centers that are boarded up or vacant are the results of PILOTs that have expired. If you want to provide tax incentive to companies, do something along the lines of, say, 75% of assessed value or something and make it permanent. My town has a shopping center that is nearing 10 years old, i.e., it’s PILOT is getting ready to expire. A number of stores have already closed or moving to other, PILOT based centers, because the lease has doubled to account for the new tax payment. Same thing is happening in a number of industrial parks all over. States, not just NJ, give out these tax incentives thinking they are permanent fixes when they aren’t, they are a decade fix and then you no longer have that business in the community.

      • I am agnostic about PILOTs in the abstract; I think it depends entirely on the individual set of circumstances. It sounds from your comment like perhaps it’s more strip retail centers that aren’t good for a community, and if they had been asked to pay market rate, whether PILOT or tax, they wouldn’t have been built. (IMO there is no question that in New Jersey we are over-retailed; a change in zoning to allow other kinds of development may well bring these centers back.) I also can’t speak to industrial parks suffering the same fate, but I would ask whether that is to do with PILOTs, or with the underlying secular changes in the manufacturing sector overall.

        It’s possible that part of the problem is that many municipalities are not knowledgeable about how PILOTs work, or how to negotiate them. PILOTs don’t have to be discounted below what the equivalent tax payment would have been; part of their point is to provide the developer with certainty. Certainty can be at market rate. And PILOTs probably shouldn’t be subsidizing what wouldn’t be able to survive in the free market anyway, unless there is a larger social good associated with the development. But again, each circumstance is different.

  2. Tim Evans says:

    A big contributor to the problem is that, throughout the 1980s, 1990s, and most of the 2000s, the suburbanization of employment meant that jobs were moving into places that are accessible only by car, while places with good transit accessibility were often losing jobs. (I wrote a report about this in 2008 — see here: http://www.njfuture.org/research-publications/research-reports/getting-to-work-reconnecting-jobs-with-transit/.) Given that the places with the best transit accessibility — the state’s older urban centers — also tend to have higher concentrations of lower-income households, the migration of jobs away from transit effectively moved jobs away from the populations that most desperately needed them.

    The good news is that this trend has started to reverse itself, with some of our older cities actually gaining jobs in the last decade or so. This is also why New Jersey Future were such big fans of the Urban Transit Hub Tax Credit (which Elaine mentions above) — it provided incentives for employers to relocate into transit-accessible areas, which not only enables people to get to work via transit rather than driving but which also puts jobs back within easier commuting distance (often within walking distance, since transit-friendly places also tend to be dense and pedestrian-friendly) of the lower-income populations that tend to cluster in transit hubs.

    • Absolutely. I like the idea of incentives for very specific things, like locating near transit. I know we’re only at the beginning of this shift, but I really hope it makes a positive difference in the state over the next few decades. The state’s economy really needs it.

    • Disclosure for anyone who hasn’t figured it out: Tim and I are both employed by New Jersey Future, http://njfuture.org, and we have a great interest in (and in Tim’s case, a wealth of knowledge about!) this issue. Really great to see a local media outlet pick it up and address it in detail.

  3. Pingback: A Plea for States Like Ohio to Wake Up to the “New Reality” | Streetsblog.net

  4. Pingback: Amazon’s Robbinsville Fulfillment Center and the Real Life Negative Effects of Job Sprawl | South Jerseyist

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