5.31.12 | BRR Network member Todd Swanstrom was quoted in an interesting article this week in The St. Louis Post-Dispatch about St. Louis County’s declining population over the past decade and the $3.41 billion in resident income that left along with the population.
Both the city of St. Louis and the suburban St. Louis County have been hit hard by the recession and the foreclosure crisis.
Swanstrom, a professor of public policy at the University of Missouri-St. Louis, and the editor most recently of “Justice and the American Metropolis” with Clarissa Rile Hayward, has studied how the foreclosure crisis is affecting cities and regions.
Swanstrom has also looked specifically at the spillover effects of this crisis on neighborhoods and local governments. He has called for more flexible federal funds so metros can pursue their own targeted recovery strategies and build the capacity of local governments to take advantage of these federal dollars.
Swanstrom told the Post-Dispatch that factors that have historically drawn people from the city to the suburbs are waning.
“People are being pulled to places by markets,” he said. “That’s what drew people to suburbs. People were attracted by larger, more modern homes with big yards.” But with a weak housing market and a continuing foreclosure problem, that’s less often the case. ”That demographic that was driving sprawl and suburbanization is declining,” he said.
But meanwhile what Swanstrom calls the “push factors” (crime, poverty, struggling schools) continue to drive people away from communities in the city of St. Louis and the northern part of the county. The result is a population and income decline that leave these areas at risk of further neighborhood destabilization.
The Post-Dispatch analyzed Internal Revenue Service figures and census data and found that more people have moved out of the county than have moved in over the past decade and that those who left earned an average of $8,000 more annually than those who are moving in. This is a much greater income differential than between migrants in and out of the city of St. Louis, which is also losing population overall.
The result of this kind of migration, the article says, is a big a financial loss. The paper found that “440,000 people earning more than $10.64 billion in income moved into St. Louis County from other areas during the last decade, but that fell short of the 492,000 people and $14.05 billion that left.”
The analysis found that the city of St. Louis also suffered a net loss of resident income — $760 million, though not nearly as great at the county’s.
The neighborhoods in the hardest shape are in the northern part of the county that experienced the biggest population decline. But the paper found that portions of the county in the west – suburbs like Chesterfield, Wildwood, and Eureka actually saw a population growth between 2000 and 2010.
We’ve written before about the suburbanization of poverty and the difficulties local governments and social service providers are having in meeting the needs of residents facing what used to be primarily urban problems — like hunger or joblessness. But this kind of financial analysis helps see the effects of the foreclosure crisis through an even broader policy lens, and helps us understand the impact the crisis has had on place.
In a recent blog post, Swanstrom estimated that in 2010 alone, foreclosures cost property owners in St. Louis County close to a billion dollars. This includes direct losses plus lost tax revenue and the costs to local governments and the broader metro area – including bureaucracies like community colleges, school districts, the police force, and even the zoo:
Lost property tax revenue alone from foreclosures in St. Louis County was $970,000 in 2010. Other tax funds were equally hard-hit. Community colleges in the county lost $404,000 in funding, the zoo/museum district lost $475,000. The special school district, which funds special services for handicapped and other students throughout the county, lost nearly $2 million in forgone tax revenue. Because school districts rely more on property tax revenue, they have been even bigger losers. Using the average property tax rate across the 23 school districts in St. Louis County, I estimate that schools lost $8.2 million due to foreclosures in 2010. In sum, last year foreclosures cost local governments and school districts in St. Louis County almost $12 million in lost revenue.
Swanstrom says that “everybody loses when a foreclosure happens,” and makes the case for mediation programs that bring together homeowners on the brink of foreclosure with lenders and neutral mediators to negotiate to avoid foreclosure.
You can read more of Swanstrom’s work at BRR Network.
Photo/ Michael Allen.