New Report Examines the State of Philadelphia in Preparation for the 2007 Municipal Election

Philadelphia has made considerable progress in a number of areas over the last eight years, but its economic and social problems are still troubling, according to a new study released today by The Pew Charitable Trusts.

The report, Philadelphia 2007: Prospects and Challenges, evaluates Philadelphia's strengths and weaknesses relative to six comparable American cities: Atlanta, Baltimore, Boston, Cleveland, Detroit and Pittsburgh. The Pew-commissioned study, written by Basil J. Whiting with Tony Proscio, defines the factors that are working for and against these cities and identifies issues that most affect their future trajectories.

Philadelphia 2007 updates a 1999 report commissioned by Pew and written by Whiting and Proscio, allowing the authors to compare Philadelphia today to its situation eight years ago.  They were struck by two positive changes—the surge in development in Center City and surrounding neighborhoods and a new sense of optimism in the city's leadership.  They note that, for the most part, the 39 civic and political leaders interviewed for the new report “reject the fatalism and negativism that we found so common eight years ago.”  

The study goes on to say, however, that the city's ongoing problems—job and population losses, high rates of poverty, low education levels, the recent rise in violent crime—raise questions as to whether the leaders' new-found optimism will prove to be justified.

“The Pew Charitable Trusts is pleased to issue this report to help inform policy makers, civic leaders, journalists and the public in this election season,” said Donald Kimelman, managing director of Information and Civic Initiatives at Pew.

“It is rare that we see Philadelphia examined in its totality and in comparison to similar cities.  And there is added perspective in being able to compare the findings with a similar study by the same authors at the time of the last race for an open mayoral seat.”  

The study enumerates both successes and challenges for Philadelphia.  Among the developments:

• “Philadelphia has traded in much of its negative, pessimistic civic leadership corps for what is in effect a bifurcated leadership,” the authors write. On one side of the divide are the Street administration and its allies, “feeling misunderstood and mistreated.”  On the other is a decentralized civic and community leadership that is “positive and bustling with projects.”  Contact between those two realms is limited.           
• An expansion of Philadelphia's tax abatement program allowed Center City and surrounding neighborhoods to share in the nation-wide housing boom of the first half of this decade, helping create an exciting, 24-hour environment downtown that has contributed to the city's sense of forward momentum.           
• Mayor Street's five-year Neighborhood Transformation Initiative has had signal successes, including the speedy execution of the car removal program and thousands of market-rate units built, planned or under construction. The initiative's goal of demolishing 14,000 vacant buildings has been missed, however, with only 4,551 demolitions completed.           
• Philadelphia's institutions of higher education, which have long made major economic contributions to the city, have “stepped up” further in recent years by working successfully to improve their surrounding communities.           
• Tourism, the Navy Yard and the airport have become important drivers of economic growth.

On the other hand:

• The high tax burden and cost of doing business in Philadelphia remain economic drags.           
• School test scores, while improving, are still among the worst in the state with double digit disparities between whites and African Americans. Since 2002, retention and graduation rates have increased, and more schools are meeting the standards of the federal No Child Left Behind legislation.           
• Philadelphia is still losing both people and jobs. The city's population of 1.5 million declined by 55,000 between 2000 and 2005, and 37,000 jobs were lost in that same time period.           
• A quarter of the population lives in poverty, up by 2 percent since 2000.           
• Recent data indicates that crime is rising again in Philadelphia. 2006 was the city's worst year for homicides since 1997, with 406 murders, up from 380 in 2005. 

The report seeks to place Philadelphia's “prospects and challenges” in the context of comparable American cities.  It stresses the importance of mayoral leadership, which has contributed to significant improvements in Atlanta and Baltimore in recent years.  It describes how traditional business leadership is declining virtually everywhere, but that a more decentralized leadership structure is taking its place.  It notes that once-cloistered “Eds and Meds”—universities and hospitals—have emerged as major players in city after city.  It talks about the increased role that philanthropies are playing in helping cities grapple with their biggest problems.  And the report finds that even the efforts of the most enlightened civic leaders can be undermined by demographic problems or weak regional economies.

Because of these varying factors, the seven cities have moved along different trajectories in the eight years between studies, making it difficult to draw sweeping generalizations about the state or direction of “urban America.” 

Among the conclusions drawn for the six comparable cities:

• Eight years ago, Atlanta was reported to be corrupt and stagnant; but is now enjoying a turnaround. The city is experiencing its first increase in population in 50 years, the highest average household income in the study ($69,000, despite a 28 percent poverty rate), and development that is at an all-time high.           
• Baltimore was a contradiction eight years ago with a booming Inner Harbor economy in contrast with the rest of the city, which had lost 34 percent of its population in the previous 20 or so years and was beset with social problems. But the city has stopped losing population and jobs, development is going on all over town, crime has dropped 40 percent, and school test scores and graduation rates are up.         
• In the last study, Boston was “off the chart” in a positive direction, and it remains a city that is enjoying singular success on most measures.  But a few developments have caused angst in the city: It now has arguably the nation's highest cost of living, insufficient affordable housing and increasing transportation problems.           
• Cleveland was considered a “comeback” city in the past, but this report finds that it has fallen on harder times. The absence of a driving coalition in civic affairs leaves the city feeling adrift at a time of rapidly deteriorating fundamentals. The city has lost 27,000 jobs in the last decade, and its population is down 10 percent in just the past half-decade. On the upside, the foundations and business leadership have created the Fund for Our Economic Future, a $30 million fund aimed at high-impact economic development initiatives.            
• Detroit is, if anything, even more troubled than it was eight years ago. The big three automakers recently announced plans to reduce their hourly workforces by some 200,000 jobs. In the last few years household incomes in the city have fallen at the rate of 6.4 percent per year, and one out of every three citizens lives in poverty. But some progress is evident as urban condo conversions and new office construction occurs downtown and along the Detroit River.           
• In many ways Pittsburgh rivals Boston and Atlanta as a desirable city to visit, live, work and invest in. The crime rate is among the lowest of the top 25 U.S. cities; the downtown is growing and vibrant; only 19 percent of the population is poor. But, the city lies in Southwestern Pennsylvania, an area that is shrinking, both economically and in population. Pittsburgh is losing population more steeply than any other city that was examined; it has the smallest percentage of foreign immigration; and its finances remain precarious.

Methodology and Additional Data

To compile Philadelphia 2007: Prospects and Challenges, the authors, as they did in 1998, split the cities between them, collected available studies and relevant news reports, and interviewed a wide range of observers and decision makers in each city about the major factors that seem to be governing their city's economic and social health. Whiting visited and reported on Atlanta, Baltimore, Boston and Philadelphia; Proscio did the same for Cleveland, Detroit and Pittsburgh.  The authors also engaged the Urban Institute to collect and analyze a wide array of data on the seven cities and their surrounding regions.

Additional data comparing the cities and metropolitan regions for both the prior and present reports (this time drawing on several new databases) was provided by G. Thomas Kinglsey, Peter A. Tatian and Leah Hendey of the Urban Institute, and can also be found on Pew's Web site.

The opinions expressed in the reports are those of the authors and do not necessarily reflect the views of The Pew Charitable Trusts.

The Pew Charitable Trusts is driven by the power of knowledge to solve today's most challenging problems. Pew applies a rigorous, analytical approach to improve public policy, inform the public and stimulate civic life. We partner with a diverse range of donors, public and private organizations and concerned citizens who share our commitment to fact-based solutions and goal-driven investments to improve society.