Mr. Downs. I think that is a very good summary.

Senator BAKER. The government could then go further and provide by one method or another, whether it is by a system of tax credits or block grants or revenue sharing or the like, for the general strengthening of the existing structure of local governing units, whether cities or counties or States, retaining at the same time the traditional Federal techniques of special programs for special purposes to implement national objectives. Would these two concepts, that is a system of block grants or revenue-sharing of tax credits or some other device for reinvigorating local governments, together with the experimentative techniques, together with Federal programs for specified purposes, not produce in all likelihood the most effective mix of techniques for the overall structure of governments?

Mr. Downs. I think there is a great deal of truth in what you say. The specific program approach is particularly good to launch a new program, because it requires the municipality or the State to use those funds in a way that starts something which they haven't done before.

Then after that program, if it works, becomes established, it makes sense to me to merge that into a larger kind of block grant giving more discretion to the local government. Thus whether you use a specific program approach or a block grant approach partly depends on the stage of evolution of the particular program you are talking about. Senator BAKER. And the adaptability to particular problems? Mr. Downs. That is right. I think, therefore, that it would be important to attach quite a few strings on new programs. You should say, "You will get money, Mr. Local Mayor, if you adopt this program that is new with quite a few restrictions on how you do it." Then you will give him some more funds for older programs that aren't quite so restrictive. This has to be done, in my opinion, in connection with a great program to expend the capabilities of local government personnel. They need better training, better background, more money, to pay their people, so they can take advantage of and really give us full utilization of these programs that you are talking about.

Senator BAKER. Mr. Chairman, this is the last question, if I may. Dr. Downs, as much as a conflict or contradiction as this may sound, would you agree that the question of "poverty" as we conceive it, especially in urban areas, we are not dealing solely and explicitly with an economic concern, but rather with a meaningful quality of live concern as well as bricks and mortar and funds and fiscal policies or physical contours of particular neighborhoods, and that until we do engage ourselves in some meaningful laboratory type sociological experimentation, we are never going to properly identify and then be able to cope with those noneconomic factors which contribute so much to the quality or lack of quality of so-called slum and ghetto areas?

Mr. Downs. I completely agree with that. I would like to add that it is at least theoretically possible, although I wouldn't want to say this as a firm conclusion, that we cannot eliminate poverty by concentrating our efforts solely upon the poor themselves. Perhaps, as the Coleman Report suggests in education, it may be true in other facets of life that it is the mixing of people from this deprived culture with people from the middle class and the upper class which is the only way to really bring those deprived people into the mainstream of American life. I am not saying this as a conclusion but at least as a possibility.

If it is true, it means that our experiments and our final policies would not only involve the poor, but the middle and upper income groups. That is why I said at the very beginning that the ghetto is not simply a phenomenon of the poor. It is a part of our social structure, and we may have to change values in all parts of that social structure in order to eliminate the ghetto.

Senator BAKER. And the real meaningful consideration is the interaction or interrelationship between all of the elements within that community, rather than just an examination of the disadvantaged or unhappiness or deprivation of a particular area?

Mr. Downs. I believe that is the way we are tending, although that is still a tentative conclusion. I believe that it will provide to be correct. Senator BAKER. Thank you very much.

Senator RIBICOFF. Thank you very much, Mr. Downs. You have been a very interesting and provocative witness, and we appreciate your being here.

Mr. Downs. My pleasure.

(The statement previously referred to follows:)

STATEMENT OF ANTHONY DOWNS, "THE FUTURE OF AMERICAN GHETTOS"

I. INTRODUCTION

In response to a request by Senator Ribicoff, I am testifying here today concerning possible methods of approaching what I believe are the most serious problems of American cities. I presume the Senator asked me to testify because of my experience as an economic analyst of urban affairs, and a consultant to both private and public organizations concerned with real estate, housing, city planning, economic development, and other aspects of urban life. To briefly cite my background, I received a B.A. in Political Theory and International Relations from Carleton College in 1952, and an M.A. and a Ph.D. in Economics from Stanford University in 1956. I have worked for Real Estate Research Corporation, a national consulting firm with offices in twelve cities, since 1959. My assignments have covered all types of consultation regarding urban problems in the United States and abroad. I am currently a consultant to the Department of Housing and Urban Development, the Economic Development Administration, The RAND Corporation, the City of Chicago, and numerous other clients. I also am a member of the President's Commission on Urban Problems. However, my testimony here today is given solely as a private citizen, and not as a representative or spokesman of any of these other groups or clients, or of Real Estate Research Corporation.

II. THE BASIC NATURE OF THE "GHETTO" PROBLEM

As previous testimony before this Subcommittee indicates, there are dozens of major problems connected with both present urban conditions in the United States, and future urban growth. However, as an admitted oversimplification, I find it useful to group these problems around two focal points. The first concerns the so-called "ghettos" in our central cities. The second focal point concerns the rapidly-growing areas in our suburbs. In my testimony today, I would like to concentrate primarily upon the first focal point, although methods of coping with ghettos are intimately related to policies concerning future urban growth, as I shall indicate.

In the past few years, responsible authorities at many levels of government in the United States have increasingly focussed their attention upon the widening gap between conditions of life enjoyed by most Americans and those prevalent in the ghetto areas of our central cities. Earlier hearings conducted by this Subcommittee have dramatically described the complicated tangle of problems and undesirable conditions which dominate life in these ghettos. The apparent failure of existing federal, state, and municipal programs to stem certain adverse

trends in ghettos has led some observers to conclude that the present individualprogram approach is qualitatively wrong. That is, the past federal policy of developing a specific program carried out by a particular agency in response to some identifiable need-such as the need for vocational education, or for public housing-has not succeeded in stemming the disadvantageous trends in any large city. Therefore, it is suggested, some alternative, entirely new approach should be developed in the future.

In my opinion, this conclusion does not necessarily follow from the failure of existing programs to stem the tide of deterioration, blight, cultural malaise, and violence in ghetto areas. It is at least equally conceivable that such failure results from the puny scale of past and present programs in relation to the magnitude of the adverse forces involved. Thus, it may not be the type of approach used by the federal government which has been wrong, but rather the unwillingness of the federal government and local governments to develop the full potentialities of those programs which are part of that approach, by operating them at much larger scale. Or perhaps both these factors are involved in the evident failure of our efforts to "turn the tide."

This conclusion that scale is just as imporant as quality of program is supported by an examination of the role of slums and ghettos in human history. No society in history which contained large urban settlements has been without miserable slums in which conditions were far worse than those in U.S. central cities today. Moreover, no society has ever even attempted to eliminate both poverty and all social discrimination against particular ethnic and nationality minorities. Ideological statements asserting that elimination of poverty and discrimination is official policy have been made in many societies, including our own and the Soviet Union. But merely stating a desired outcome is certainly not the same as pursuing an effective program to achieve it.

It is certainly true that the U.S. has reduced the incidence of poverty to lower levels than in any previous society. Nevertheless, for the United States government to adopt an official objective of eliminating slums and ghettos in our cities is an extraordinarily serious step. Pursuing such a policy effectively would involve changes in our economy and social structure of a profound nature. These changes would not only require major reallocations of money and manpower, but also alterations in the value structures of both the poor and racial minority groups on the one hand, and the middle- and upper-income and racial majority groups on the other. Furthermore, since no society has ever seriously attempted to attain such a goal before, there are really no precedents to follow. Personally. I am very much in favor of our adopting such a goal. But I believe we should do so with full recognition of the depth of change which a commitment to this objective actually involves.

Today there is a great deal of talk about a "crisis" in our cities. It is difficult to measure the quality of life in cities at any time; so it is doubly difficult to determine whether conditions are any worse today than they have been in the past. As far as I know, most conditions of life in cities have been steadily improving if looked at over any relatively long perspective, such as 50 to 100 years. The two glaring exceptions to this generalization are the levels of mass violence and air pollution, which have certainly grown worse in the past few years. However, with these exceptions, I believe it is misleading to speak of a "crisis” in our cities as though most trends are at some point of discontinuity which poses a grave and immediate threat to society. On the contrary, in terms of absolute standards of living, the vast majority of persons living in both cities and suburbs have in the past decade experienced rapidly improving conditions in almost every respect.

However, it is true that the aspirations of some groups-particularly those who have been at the bottom of the economic heap for so long-have risen even faster than their actual living standards. In the past, most revolutionary violence has occurred only after actual standards of living have begun to improve for even the poorest persons-but their expectations rose even faster. So if there is a crisis in our cities, it should be viewed as resulting from a disparity between aspirations and performance, rather than a complete failure of performance. In fact, I do not believe our response to the ghetto problem should be based upon conceiving of it as a crisis which momentarily threatens us. Rather, I believe we should take a much longer-run view. We should treat our response as requiring a major alteration in the very structure of our society designed to eliminate or at least substantially improve a fundamental but undesirable condition which has existed in all urban societies since history began.

III. KEY BACKGROUND FACTS

Before discussing possible strategies for reacting to ghetto conditions, I would like to set forth certain fundamental facts which any strategy must take into account. These can be briefly summarized as follows:

1. Ambiguity of the term "Ghetto"

The word “ghetto” has two very different connotations which are easily confused. Historically, it meant an area in which certain ethnic groups were compelled to live. This meaning today carries over into the concept of a ghetto as an area to which members of an ethnic minority, particularly Negroes, are residentially restricted by social, economic, and physical pressures exerted by the rest of society. In this meaning, a ghetto can contain wealthy and middle-income residents as well as poor ones. However, the word "ghetto" has also recently come to mean an area in which urban poor people live, regardless of race or color. Since most urban poor people are white, this meaning has very different connotations from the first meaning.

Thus, in 1960 there were 10.3 million nonwhites living in central cities. Since they were highly segregated residentially, this number serves as a good estimate of the 1960 ghetto population derived from the first or racial meaning of this word. This means that about half of all U.S. nonwhites lived in central-city ghettos in 1960. On the other hand, if we take the poverty definition, the total number of poor persons in 1960 (those with 1959 incomes under $3,000) who lived in central cities was 8.2 million. Moreover, approximately 66 percent of these persons were white and 34 percent were nonwhite.

Nonwhites as a group have a much higher incidence of poverty than whites and a much higher fraction of nonwhites live in central cities. Hence there is clearly an important relationship between these two definitions of "ghetto." Nevertheless, they are not the same, and considerable confusion arises from fail. ure to distinguish clearly between them. In the remainder of my own analysis, 1 will use the word in its racial sense unless otherwise noted.

2. Racial ghettos are now rapidly expanding

Any policies designed to cope with the ghetto must recognize the fact that concentrations of nonwhite population-particularly Negroes-in our central cities are not only failing to shrink, but are growing rapidly. In 1950, there were 6.3 million nowhites living in central cities. In 1960, there were 10.3 million. This represents an increase of 63.5 percent, or an average of 400,000 persons per year. In the same decade, the white population of central cities went from 42.0 million to 47.6 million, an increase of 5.6 million, or 13.3 percent. However, in the largest central cities, the white population actually declined while the nonwhite popu lation rose sharply.

Since 1960, Negro populations of central cities have continued to grow rapidly, and Negroes have continued to reside almost entirely in segregated neighborhoods. Our field surveys in Chicago show that 1,080 blocks were more than 25 percent Negro in 1950. From 1950 to 1960, 1,344 more blocks shifted from less than 25 percent Negro to more than 25 percent Negro, or 2.6 blocks per week. From 1960 through 1966, 1,101 additional blocks so shifted, or 3.5 blocks per week. There has been no significant drop in the number of dwelling units per block involved, so Negro expansion has apparently not slowed down at all.

Some recent tentative estimates we have made indicate that the central city nonwhite population for the whole U.S. will be about 14.3 million in 1968, and could rise to as high as 20.4 million by 1978. These estimates assume continued nonwhite immigration to central cities at about the same rate as occurred from 1950 to 1960. But even if we cut our estimate of net inmigration in half, the 1978 nonwhite central city population would still be about 19.2 million.

Such growth has critical implications for a great many policy objectives connected with ghettos. For example, it has been suggested that school district boundaries should be manipulated so as to counteract de facto segregation by creating districts in which many Negroes and many whites will jointly reside. This solution is practical over the long run only when there is reasonable stability in the total size of these two groups. But when one group is rapidly expanding in a city where there is no vacant land to build additional housing, then the other group must contract, unless there are sharp rises in density, which are not occurring. Therefore, as the nonwhite population expands in cities where vacant land no longer exists, the white population inevitably falls. So possibilities for ending de facto segregation in this manner inexorably shrink as time passes.

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For this and other reasons, no policy towards ghettos can afford to ignore this rapid expansion of the nonwhite population.

3. The total size of ghettos in relation to the Nation

Although a great deal of attention has been focussed upon ghettos in the last few years, they are still a relatively small fraction of the total population in the U.S. Taking the racial definition of ghettos as central-city nonwhite population. there were about 10.3 million persons in ghettos in 1960, or only about 5.7 percent of the total U.S. population. Furthermore, the number of persons now in ghettos, and the likely increase in that number in the future, are very small compared to the number of persons who will be added to the second focal point of urban problems-the suburban growth area-in any given future period. The Census Bureau Series D population estimate indicates that the total U.S. population in 1980 will be 226 million, as compared to 180.6 million in 1960. If we assume that about 90 percent of this increase will occur in the suburban portions of our metropolitan areas, that indicates a growth of approximately 40.9 million persons in those 20 years. In contrast, the ghetto (i.e., nonwhites in central cities) can be expected to increase by about 11.2 million from 1960 to 1980 (under a high immigration assumption) to a total level of about 21.5 million. Thus, the growth of the ghetto will be only one-quarter as large as the growth of suburban population. In fact, the growth in suburban population from 1960 to 1980 will be twice as large as the total ghetto population by 1980.

These facts are significant for two reasons. First, it may be difficult to create widespread political support for ghetto-improvement programs which have a very high per capita cost but are aimed at well under 10 percent of the total population. Second, it would be a mistake to focus all of our leadership talents, financial resources, and policy energies devoted to urban problems on ghettos alone when peripheral expansion of metropolitan areas will involve vastly more people. However, it is certainly true that the people who will be involved in the growth of suburbs have tremendously greater capacity to look out for their own interests than those who reside in ghettos.

4. The complexity of ghetto problems

No single category of programs can possibly be adequate to cope with the tangled problems that exist in ghettos. In my opinion, any ghetto-improvement strategy must concern itself with at least the following kinds of issues: jobs and employment, education, housing, health, personal safety and crime prevention, and income maintenance for dependent persons. A number of other programs could be added, but I believe these are the most critical.

5. The location of new jobs

Most new employment opportunities are being created in suburban portions of our metropolitan areas, not anywhere near central city ghettos. Furthermore, this is a trend likely to continue indefintely into the future. It is true that downtown office-space concentrations in a few large cities have created additional jobs near ghettos. But the outflow of manufacturing jobs has normally offset this addition significantly-and in some cases has caused a net loss of jobs in central cities. If we are going to provide jobs for the rapidly expanding ghetto population, particularly jobs which do not call for high levels of skills, we must somehow bring these potential workers closer to the locations of new employment opportunities. This can be done in three ways: by moving job locations so new jobs are created in the ghetto, by moving ghetto residents so they live nearer to the new jobs, or by creating better transportation between the ghetto and the locations of new jobs. The first alternative-creating new jobs in the ghettowill not occur in the future under normal free-market conditions, in my opinion. However, any ghetto-improvement strategy must face the problem of linking up persons who need employment with those firms which can provide it.

IV. BASIC ANTI-GHETTO STRATEGIES

There are three basic strategies which the United States may adopt towards ghettos. Before describing them, I want to point out that these strategies apply to individual metropolitan areas. Therefore, it is at least theoretically possible to adopt different strategies toward the ghetto in different metropolitan areas. In fact, I believe that there are some strong reasons why this would be an excellent idea. Moreover, since these strategies are not mutually exclusive, they can