Newark: The Present and Newark: The Present and BeyondBeyond

Honors SeminarHonors Seminar

Professor BarrProfessor Barr

Newark’s Economic HistoryNewark’s Economic History

Previous lectures have shown:Previous lectures have shown:– Economic forces: low transport costs, Economic forces: low transport costs,

comparative advantage, agglomeration comparative advantage, agglomeration economies, technological skills and spillovers, a economies, technological skills and spillovers, a workforce with variety of skills created a robust workforce with variety of skills created a robust Newark.Newark.

– Economic forces and policy decisions caused Economic forces and policy decisions caused Newark’s decline. These forces were both Newark’s decline. These forces were both macro and micro in nature.macro and micro in nature.

State of the CityState of the City

Improvements/“Renaissance”Improvements/“Renaissance”– PopulationPopulation– HousingHousing– Big Projects: NJPAC, Bears, DevilsBig Projects: NJPAC, Bears, Devils– Office Real Estate PricesOffice Real Estate Prices– Reduced CrimeReduced Crime

2.50

2.60

2.70

2.80

2.90

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Newark's Population, 1990-2005 (100,000 people)

0

600

1200

1800

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

0

30

60

90

120

150

Building Permits

Maket Value ($Million)

Permits

Value

Newark: Housing Units Built and Value of Units, 1980-2004

Downtown Real EstateDowntown Real Estate

““NewarkNewark boasts one of the more remarkable stories. Once boasts one of the more remarkable stories. Once seen as an urban wasteland, the city has recently seen as an urban wasteland, the city has recently blossomed with new projects.blossomed with new projects.

Just last month, Matrix Development Group of Cranbury Just last month, Matrix Development Group of Cranbury announced it will soon break ground on a $400 million announced it will soon break ground on a $400 million mixed-use development called the mixed-use development called the NewarkNewark Riverfront Riverfront Center. The project, one of the largest in the city, will feature Center. The project, one of the largest in the city, will feature a 14-story tower with 430,000 square feet of Class A office a 14-story tower with 430,000 square feet of Class A office space, and 500 condo and rental units in four adjoining space, and 500 condo and rental units in four adjoining buildings. buildings. New JerseyNew Jersey law firm McCarter and English has law firm McCarter and English has signed for 230,000 square feet for its headquarters.”signed for 230,000 square feet for its headquarters.”

-Crain's New York Business, October 17, 2005 -Crain's New York Business, October 17, 2005

Crime Rates (per 100,000 residents), 1985-2002

0

10

20

30

40

50

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

0

750

1500

2250

Murder

Robbery

Murder

Robbery

0

500

1000

1500

2000

2500

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

Newark

DC

Phili

NYC

Robbery Rates for Four Cities, 1985-2003

Problems Still RemainProblems Still Remain

UnemploymentUnemployment Poverty/Income Poverty/Income EducationEducation Performance versus other cities.Performance versus other cities.

92

96

100

104

108

112

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

0

3

6

9

12

15

18

Employment (000)

Unemployment Rate (%)

Newark Total Employment and Unemployment Rate, 1990-2004

Employm

ent

Unem

ployment R

ate

NumberTested Partial Proficient Advanced

2003-04 2181 71.70% 24.30% 4.00%2002-03 2038 75.80% 22.40% 1.80%

Language 2003-04 2209 51.20% 45.50% 3.20%2002-03 2082 54.00% 42.60% 3.40%

High School Proficiency

Mathematics

Proficiency PercentagesYear

Category Rank% Own Occ. 70/70Median HH Inc. 61/70% in Poverty 2/70% 25 years + with Bachelors or higher 68/70Travel to Work Time 3/70% Working Outside County of Residence 8/70Employment / Pop (16-64) 67/70

American Community Survey - America's 70 Largest Cities

Median Household Income

% of people below poverty line

% Unemployed

% of families with female head w. children in poverty

Framework for Economic RevitalizationFramework for Economic Revitalization

Import vs. Export EconomiesImport vs. Export Economies– Newark is “net importer.”Newark is “net importer.”– Needs to be net exporter.Needs to be net exporter.– Needs to foster entrepreneurship and Needs to foster entrepreneurship and

business ownership.business ownership. Jobs and Education: Matching Jobs and Education: Matching

capabilities with needs.capabilities with needs. Expectations: Confidence for FutureExpectations: Confidence for Future

– Crime, Quality of lifeCrime, Quality of life– Image and reputationImage and reputation

Urban Trade: Import versus ExportUrban Trade: Import versus Export

Import: when $ leaves local economyImport: when $ leaves local economy– Downtown firms employ suburbanites.Downtown firms employ suburbanites.– Jobs leave for other locations.Jobs leave for other locations.

Export: when $ enters local economyExport: when $ enters local economy– NJPAC and arena and tourismNJPAC and arena and tourism– Locally owned and operated businesses.Locally owned and operated businesses.

Newark in 21Newark in 21stst Century Task Force Century Task ForceNovember 2000November 2000

Improve Newark’s ImageImprove Newark’s Image– Clean up eyesoresClean up eyesores– Get the word out about good stuffGet the word out about good stuff

Newark and the regional economyNewark and the regional economy– Private-public cooperation to foster Private-public cooperation to foster

developmentdevelopment– Develop job skills of residents.Develop job skills of residents.– Residents must view city as part of larger Residents must view city as part of larger

region.region.

Task Force Cont.Task Force Cont.

Residents Need to Participate in RenaissanceResidents Need to Participate in Renaissance– Develop skill of residents to match job needs.Develop skill of residents to match job needs.– Construction work goes to local companies.Construction work goes to local companies.– Business formation for minorities and immigrants.Business formation for minorities and immigrants.

School systemSchool system– Citizen’s panel to monitor management.Citizen’s panel to monitor management.– New construction and resources.New construction and resources.– Preschool. Preschool.

Last QuestionsLast Questions

Where does urban America fit in in the Where does urban America fit in in the American social and economic fabric?American social and economic fabric?

Do we want our cities to succeed? Do we want our cities to succeed?

Do we see cities as a force of good or bad?Do we see cities as a force of good or bad?