The foreclosure crisis that followed the 2008 housing crash has resulted in a high volume of vacant properties across the nation. According to U.S. Census Bureau data for the last quarter of 2013, 10.2 percent of all housing units — 13.6 million — were vacant year-round. And while the housing market may be showing signs of improvement, more than 1.2 million properties are still in some stage of foreclosure, according to RealtyTrac, a real estate information firm specializing in foreclosed and defaulted properties.
High foreclosure and vacancy rates are not only symptomatic of economic problems; they contribute to them and are linked with increases in crime and declines in home values and local property tax revenue.
In response, some states — including Indiana, Kansas, Michigan, Nebraska and Ohio in the Midwest — have instituted local land banks: public entities that acquire and manage tax-foreclosed properties.
For every 100 children born to a poor family in Iowa’s largest metropolitan area, Des Moines, about 11 will eventually reach the nation’s top quintile of income earners. In Indiana’s most populous metro area, Indianapolis, the rate is much less: Fewer than 5 of every 100 low-income children rise to the top rung of the income ladder.
These large variations in economic mobility occur across the country — among different cities, states and regions. What is the cause?
When it comes to economic development, investment does not necessarily equal performance. This was one of the themes heard at the Midwestern Legislative Conference’s Economic Development Committee meeting in July.
A topic of particular interest was the value of state business incentives. States spend up to $80 billion on incentives in hopes of attracting or keeping businesses — and the jobs and economic activity that come with them.
But Peter Fisher, research director for the Iowa Policy Project and professor emeritus at the University of Iowa, cautioned that these incentives (such as tax cuts and credits) are often arbitrary and possibly unnecessary.
A report by the Kauffman Foundation reveals some surprising results with regard to the “geography of entrepreneurship,” both in terms of where high-growth companies and innovations tend to be located and the factors that drive concentration patterns.
Under a new set of recommendations in Ohio, half of the state’s funding for higher-education institutions would be based on how well they contribute to a key economic goal: boosting the number of college graduates in the workforce.
In late November, Ohio Gov. John Kasich and a state panel released a higher-education finance framework designed to give greater weight to degree completion in determining funding for the state’s public colleges and universities.
For 100 years, employees injured on the job have been provided guarantees through state workers’ compensation systems that cover the cost of medical and rehabilitation services, as well as lost wages. In return for carrying this mandatory insurance, employers are protected from potentially costly lawsuits. But have the systems themselves become too costly for business and inefficient?
Lawmakers across the Midwest are seeking ways to support and expand existing and new economic development programs. In North Dakota and Michigan, bills recently signed into law will ensure those states’ commitment to technology-based economic growth will continue.
The Midwest, once the national leader of the industrial economy, is now floundering in the knowledge- and innovation-driven global economy. The way back to economic vitality and growth, says James Duderstadt in a report for The Chicago Council on Global Affairs, will require changes in another traditional strength of the region: “our extraordinary array of colleges and universities.”