Report proposes spreading city's poor in suburbs Plan's aim is to stop decline of Baltimore, cut poverty rate; Henson rejects premise; Author Rusk warns of 'point of no return'; mayor, others wary

THE BALTIMORE SUN

An article in the Oct. 15 editions incorrectly reported that the city of Baltimore's settlement of a suit brought by the American Civil Liberties Union on behalf of tenants at four city housing projects that have been demolished or are slated for demolition would force residents to move out of the city.

The Sun regrets the errors.

Baltimore can cut its rate of poverty in half by 2015 if Maryland adopts policies aimed at spreading more poor Baltimoreans, especially poor blacks, throughout six surrounding counties and funneling some property taxes from suburban growth back into the city, according to a new book by one of the nation's leading urban scholars.

Baltimore Unbound, the result of a two-year study funded by the Abell Foundation, is a guide aimed at saving Baltimore from what author David Rusk calls a "point of no return."

Mr. Rusk says the city's 31 percent share of metropolitan Baltimore's population is overwhelmed by the demands of caring for 41 percent of the region's poor whites and 86 percent of its poor blacks, fueling a cycle of middle-class flight, citywide decline and poverty among black city dwellers that is all the more persistent because of its concentration in certain neighborhoods.

As a result, city residents' median family income has fallen to only 59 percent of their suburban neighbors', down from 92 percent in 1950. Twenty-two percent of Baltimoreans live in poverty.

Mr. Rusk says none of the 24 U.S. cities where city dwellers' incomes are less than 70 percent of the average in nearby suburbs, and that have big population losses and minority populations twice as concentrated as in the suburbs, have ever recovered.

"Baltimore can't deal with a role as a warehouse for the region's poor," says Mr. Rusk, a former mayor of Albuquerque, N.M., and son of the late Secretary of State Dean Rusk. "With those [statistics], Baltimore can't win. Those cities keep on going down and down. Not one of those cities has ever closed the income gap with its suburbs by even one percentage point."

Baltimore Unbound is controversial even before most people have read it.

Black politicians in Baltimore scorn the 159-page book's emphasis on concentrations of poor black people as the root of many urban ills, and they are wary of sharing power with suburban politicians.

And some suburban leaders say Mr. Rusk has done practically no political spadework to sell his ideas to the suburbs.

"I disagree with the premise, and I'm insulted by it," said Baltimore Housing Commissioner Daniel P. Henson III, who has worked to break up concentrated communities of poor blacks by demolishing city housing projects. "His premise is that Baltimore is forced to be a warehouse for poor blacks. I don't see how he proves that the city can't survive because it's 60 or 75 percent African-American."

"I think it's interesting for discussion purposes, but is it reality? No," said Michael Davis, a spokesman for Baltimore County Executive C. A. Dutch Ruppersberger III. "He's already written a book, and he's coming to tell us what he's saying. That's not a way to get cooperative change done."

Even Mr. Rusk admits that the political road to reform will take years, as did the battles for Camden Yards, Harborplace and the Baltimore-Washington International Airport, now-established landmarks that had to overcome fierce opposition.

"I don't know of any region of the country where independent suburban jurisdictions have come around voluntarily to a program like this," he says.

'Elastic cities'

Abell Foundation President Robert C. Embry Jr. said Abell commissioned the book in 1993, impressed by Mr. Rusk's reputation for studying other cities. Mr. Rusk is a supporter of what he calls "elastic cities," which expand their boundaries by annexing territory around their borders as those areas begin to attract population and commercial development.

In cities such as Indianapolis and Charlotte, Mr. Rusk notes that annexation has stemmed the erosion of city fiscal bases and slowed the descent of inner-city neighborhoods toward concentrated poverty. He does not propose that Baltimore annex suburban counties, both because Maryland law prohibits it and because a consolidated metro Baltimore would be too big to run efficiently. "That would be crazy," he says.

Instead, Mr. Rusk proposes three big ideas that are already law in Montgomery County, Minneapolis-St. Paul, Minn., and Portland, Ore.:

* To move people out of the city, he wants the state to make metropolitan Baltimore adopt a version of a Montgomery County law that requires builders of communities of more than 50 new homes to build 15 percent of their homes for people with low and moderate incomes.

No resident would be forced to move out of the city under Mr. Rusk's plan, unlike the city's settlement last week of a lawsuit brought by the American Civil Liberties Union on behalf of 2,700 households among tenants at four city housing projects that have been demolished or are slated for demolition. Instead, counties would compensate builders for including cheaper homes in their developments by allowing them to build more homes per acre, as Montgomery does.

* To move money into the city, Mr. Rusk is pushing a version of a Minnesota law that requires suburbs to share tax revenues from new commercial development -- but not from homes or existing businesses -- with slow-growth communities like Minneapolis and St. Paul.

In Maryland, Mr. Rusk would also make counties share 40 percent of tax revenues from new homes that cost at least 50 percent more than the regional median house price. Each county and Baltimore City would keep all the tax revenue from buildings that already exist when the law takes effect, and each would continue to set its own tax rate.

* He says Maryland should create an elected metropolitan council to administer housing, planning and tax-sharing policies in Baltimore, its suburbs and Queen Anne's County, modeled on a similar body in metropolitan Portland. Each county would continue to manage its own basic municipal services such as the police, fire fighting and education.

"If you stay with this for 20 years, the poverty in Baltimore would be cut in half," Mr. Rusk said. "There would probably be no high-poverty neighborhoods anywhere in metropolitan Baltimore."

Four-decade decline

Mr. Rusk begins the book by sketching Baltimore's four-decade decline in stark terms.

In 92 of Baltimore's 203 census tracts, more than 20 percent of residents fall below the poverty line, he said. And he insists, to a degree that insulted Mr. Henson and prompted a wary reaction from Mayor Kurt L. Schmoke, that the most intractable problem is poverty among blacks.

"There may be those -- black and white -- who take offense at the racial focus of this report's analysis and characterizations," Mr. Rusk concedes in the preface to the book, "but solving Baltimore City's constant decline must begin with a frank discussion of poverty and race. Being poor and black isn't just an economic problem, as many would have us believe. Poor urban blacks drop out of school more, draw more welfare, have more illegitimate babies, use more drugs, commit more crimes, and murder each other more than do poor urban whites."

Mr. Rusk insists that being poor and white is different from being poor and black because three-fourths of poor whites do not live in poor neighborhoods. He insists that makes all the difference.

"Poverty is not so sustained [among poor whites] because of this broader integration of poor white people into a structure of opportunity," he said. That means poor whites grow up in better-functioning, lower-crime neighborhoods and attend better schools than most poor blacks, he said, and that helps them escape poverty more quickly.

"People make themselves a success in a successful environment," he says, and that neither Democratic urban programs nor Republican-inspired enterprise zones would turn cities around.

Mr. Schmoke said he thinks Mr. Rusk emphasizes poverty more than race, but that he understands why linking race and class "will be offensive to some." But the mayor credited Mr. Rusk for exploring the racial divide and the tensions created by the flight of middle-class blacks and whites from increasingly impoverished city neighborhoods to the suburbs. "Race is a key issue, and we've got to grapple with the issue," the mayor said.

Not all that radical?

As he makes his rounds of business groups, editorial boards and county executives' offices around Baltimore, Mr. Rusk is at pains to assure everyone that his ideas are really not all that radical. They all, he says, have been tried somewhere.

Where his main ideas have been tried, they remain popular. But few see them as panaceas. "They moaned when it was first introduced, but they don't moan now," said Eric Larsen, administrator of Montgomery County's Moderately Priced Dwelling Unit (MPDU) program. "I can show you developments with MPDUs next to houses that cost $400,000, $500,000, and they've been able to sell those units."

Montgomery County's plan works fairly simply: If a builder wants to build more than 50 homes, 10 percent of them must be sold to moderate-income households (in 1992, the average purchaser earned $27,539 annually and paid $70,176 for the house) and 5 percent must be sold to the county Housing Opportunities Commission, which rents them to poor families at heavily subsidized prices. In exchange, the county lets the builder build up to 22 percent more homes than zoning would otherwise allow.

The result: a moderate rise in overall poverty to about 4.5 percent in a county where the median income for a family of four is about $70,000. Poor families are spread throughout the county, mostly in newly developed areas: Even ritzy Potomac has 290 moderately-priced housing units and 70 homes owned by the Housing Opportunities Commission.

Mr. Rusk estimates that Anne Arundel and Howard counties initially would have to allow about 100 deep-subsidy units annually under a Montgomery-style plan.

Tom Gancsos, vice president of the Ryland Group, the nation's third-largest home builder, said Montgomery customers accept their lower-income neighbors because those neighbors don't change the character of neighborhoods and because all builders have to make the same allowances for cheaper homes.

Mr. Gancsos himself used to live in a full-priced house in a Gaithersburg development that included the lower-cost and subsidized homes, and he managed to resell his home easily and profitably in the mid-1980s.

"It wasn't something I thought about at all," he said. "I didn't see the deterioration that people would legitimately have concern about because of fear of the unknown."

No one believes selling the Montgomery plan to suburban Baltimore will be easy, especially since fast-growing Howard and Anne Arundel counties have only small poor black populations now.

"I think it's going to be very difficult, but I'm open to discussion," Howard County Executive Charles I. Ecker said. "But Baltimore City needs help, and some of the suburban areas need help."

But the Montgomery program is no miracle. It has made no real dent in Washington's poverty, in part because people who live or work in Montgomery get preferential treatment in lotteries that distribute the available units. And it has done limited work as a vehicle of minority opportunity: Only 17 percent of MPDU buyers in 1992 were blacks, a smaller percentage than in the regional population.

Mr. Rusk concedes that the housing changes he advocates are much more important than the tax proposals, which are similar to plans offered in Maryland by Baltimore Del. Samuel I. "Sandy" Rosenberg in the past two sessions of the General Assembly.

Mr. Rosenberg said he plans to try again in 1996, and that he may modify his plan to reflect the Rusk report.

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