The Heartland’s Doughnuts of Despair
EUCLID, Ohio—Before so many bedroom communities were created after World War II, this Cleveland suburb was once a summertime vacation spot. With four miles of Lake Erie shoreline, it neighbored an amusement park and well-to-do holiday cottages. And if you were driving from Cleveland out to Geneva-on-the-Lake for putt-putt golf, skee-ball arcades, and big band music halls, you might have stopped in Euclid to pick up burgers and beer at Stevenson’s.
In these earlier years, Euclid was more of a sleepy travel crossroads than a bustling factory town. In 1920, the population was only 3,300, but by 1970 it had grown to an astounding 70,000. Since then, Euclid has contracted and now counts around 47,000.
Euclid was also very different racially in the old days. As late as the 1970s, African Americans represented only one half of one percent of Euclid’s population. It now numbers about 60 percent African American.
Today, Euclid is a classic inner-ring suburb, and is stuck in a tough place. Much of the original housing stock was poor quality construction then—and is only decaying. The economy in the Midwest has stalled, and Euclid’s current residents are more likely to be poorer and renters. Politically, the suburb is caught in a no man’s land: it’s not urban enough to be hip and cool and Democratic, not exurban enough to be rich and powerful and Republican.
Euclid is not dominated by crime and poverty. But neither is it any longer a bedroom community of comfortable, middle-class homes. That picture started to unravel with the foreclosure crisis, which began to appear in the early 2000s. Jobs left and the houses aged—and the people became older, too.
“In some ways our housing is outdated by today’s standards, and it is something we work on continually,” says Euclid Mayor Kirsten Holzheimer Gail. “We are sort of stuck in the middle. We work hard to maintain what we have, but the sprawl mentality of housing development makes it harder for us, and it will be a huge issue down the road if the country doesn’t figure out what us and other suburbs are dealing with these days.”
The plight of these inner-ring suburbs has been misinterpreted by politicians and some urban planners for decades. Some blame white flight and the lower income levels of those new residents; others point to the lack of fiscal responsibility by local governments. Still others think the market will take care of the decay if you just leave things alone.
Unlike central cities, inner-ring suburbs are neither poor enough to qualify for many federal and state reinvestment programs nor large enough to receive direct federal or state grants. To add to those problems, the housing industry in most urban areas is constantly looking to build at the far edges of exurbs, even as some inner suburbs hurt existing home values. The lack of economic growth in the region compounds the issue, including in the Cleveland area.
“Politically, these inner-ring suburbs are in no-man’s land, not big enough to get attention and not small enough to handle their problems themselves,” says Tom Bier, an urban planning professor at Cleveland State University. “And no one in state or federal government really asks the question, ‘Well, what is supposed to happen to a community once it starts to get old?’ Instead, they seem to be intent on figuring out how to build new homes further out.”
Last December, Bier testified before the Ohio General Assembly on the problems facing these older suburbs: “The state has a constitutional responsibility to ensure ‘equal protection and benefit’ of its citizens. It readily promotes the development of new communities, which is fine. But that promotion fuels movement from, and weakening of, established communities. The state then holds the weakened places solely responsible, or nearly so, for their condition by providing scant support for renewal and redevelopment.”
Bier explains how Euclid and other municipalities are left alone. The mentality is: “‘You have home rule; it’s your problem, you fix it,’ even though the state greatly exacerbates the problem.”
Federal and state governments can’t merely claim they are bystanders that have nothing to do with this decline, as Bier and others emphasize. These inner-ring suburbs, and all the attendant issues, were originally created by the state and federal governments themselves, a reaction to the post-World War II baby boom and the need for new housing.
From 1929 until 1946, the United States built very little housing. Of course, the Great Depression and the war left little money for new homes, and in the 1940s there was no material left to do it. For almost 20 years, the U.S. economy—especially the housing industry—was put on hold.
The data shows this very clearly. In the 1920s, the U.S. built about 800,000 new homes every year before the bottom dropped out in 1929. In 1933, there were only 93,000 new homes built, and in 1944, just 142,000. When the war ended, the soldiers came back home and found their new families stacked on top of each other in old, central cities. Immediately after the war, Cleveland’s housing occupancy rate was 95 percent.
So the federal and state government knew that they had to bust open the long-neglected homebuilding sector of the economy. They found smaller towns like Euclid, built interstate freeways to connect them, and gave the soldiers home-loan guarantees. Then they got out of the way.
New housing construction jumped through the roof in the postwar years. Between 1946 and 1970, new homes averaged about 1.5 million a year nationally—10 times higher than in 1944. Homes were being built largely in these inner-ring suburbs, creating a vast new suburban market. At the same time, urban policymakers promoted large swaths of teardowns of inner-city housing, the “urban renewal” projects of the 1960s and 1970s.
Yes, white flight was part of suburban growth. But a big part of the demand came from families that now had cars and wanted a backyard. New houses in new suburbs fulfilled those postwar yearnings.
In Euclid, 11,747 new homes were built from 1946 to 1969. In 1949, Cleveland’s region surrounding Cuyahoga County saw $130 million in new building construction, $100 million of which was in the suburbs. Seventy-three percent of Euclid’s homes were built in that critical period of 1946 to 1969. The big suburban buildout all over the Midwest happened when local governments were trying to make up for the lack of building in the 1930s and 1940s. And it’s not hard to find them in the Midwest similar to Euclid: Calumet City, Illinois; Norwood, Ohio; Hamtramck, Michigan; McKees Rock, Pennsylvania; Ferguson, Missouri; to name a few.
But even by 1954, Euclid could tell it was adding too many homes, too fast. “Homes are very desirable, but they cause additional demands for service by the city and for additional schools,” the Euclid Sun Journal wrote. “No home pays enough in taxes to cover the services required. At the rate homes are being added, the balance is slipping.”
By today’s standards, these houses are small, averaging about 1,300 square feet, and on small lots, too. Real estate experts have long said that most homes need a big tune-up after about 70 years—that means new plumbing, heating and air conditioning, kitchen, and bathrooms. Most of the housing in Euclid—and by extension, in most inner-ring suburbs around the country—is either in need of serious rehabilitation, or close to being there.
“What has happened in these inner-ring suburbs is a challenge,” says Aaron M. Renn, a senior fellow at the Manhattan Institute and contributing editor at City Journal. “I don’t believe these suburbs are intrinsically doomed to decline, but it all depends on the housing market they’re in. Cleveland is now a low-demand market. But at the same time it has low demand for housing, it is still building new housing in the outlying suburbs. That’s the real issue.”
Metro areas across the country face unique problems—and “inner-ring” is defined differently across the country. For example, the metropolitan Los Angeles suburb, Lakewood, has been designated an inner suburb with all the problems that entails. But Lakewood’s city’s home values average $445,000, along with a median household income of $82,000. In contrast, Euclid’s average home value is $81,000 and median household income is $37,000.
With profound disparities between the Midwest and the big coastal cities, inner-ring suburban decline is even more pronounced in parts of the Rust Belt such as Cleveland.
Every inner-ring suburban mayor TAC interviewed for this story talked about the same problem. What incentives do potential homebuyers have to fix up these houses?
For example, if the value of the house has declined to $30,000, then it will likely need about $50,000 of upgrades to make it livable for a family buying a home. A lot of low-value homes are on the market in inner-ring suburbs. But banks aren’t offering this type of loan, since the renovated home won’t be worth $80,000 afterwards.
The experts call this a “credit gap.” Some have suggested that inner-ring suburbs should be designated as “special districts,” where homeowners might qualify for an income tax break or the suburb can dispense state or federal grants. Or perhaps regional or state funding might need to support declining municipal services.
“Redlining in some communities still exists, and we are finding very few mortgage loans are written for homes under $70,000,” says Georgine Welo, mayor of South Euclid, an adjacent city of 21,000. “That is always a financial issue with us. It can be solved by having some state or federal government programs or regional planning groups to monitor the banks and see how many loans they issue in certain areas. But we’re seeing that there is little political will to do that right now.”
About 88 percent of the homes in South Euclid were built in the critical 1946-1969 period, and their average value in 2017 ($85,000) was only 66 percent of what it was in 2005 ($128,500).
Continued racial issues cannot be avoided, either. As William H. Frey, a demographer who specializes in urban planning wrote, “The classic image of an American metropolis was that of a polyglot city surrounded by mostly white suburbs—the ‘chocolate city/vanilla suburbs’ of the 1950s and 1960s, when white-dominated suburbanization left largely black minority populations stranded in many of the nation’s largest cities. That paradigm has almost entirely broken down.”
Maple Heights, another inner-ring suburb near a major interchange just south of Euclid, faces the same problem—a lack of funding for fixing up old housing. The city is near some healthcare institutions and nursing homes, and many healthcare workers have salaries in the range of $25,000 to $35,000. About 40 percent of them are single mothers, says Mayor Annette Blackwell.
“These are people that need affordable housing, and we have that type for them, but they are very leveraged in their finances, and often they can’t get banks to back them so they go into renting in other cities,” Blackwell says.
“This housing was needed after World War II, and we found ways publicly to pay for the loans and the construction…. But they still need that same type of help as when they were created, and I find it very frustrating the country is avoiding the issue.”
Some have suggested merging these older suburbs with central cities (such as Cleveland), or regional property taxes that share programs between the “haves” and the “have-nots.” “Governments have tried to do this, and when they have done it—like in Minneapolis/St. Paul—it does work, but getting regional cooperation between the big cities and the troubled suburbs has always been tough to do,” says Cleveland State’s Bier.
And then there is the national perception issue. “The problems that the inner-ring suburbs have in these old industrial parts of the country are very different from housing issues in New York and Boston and even Chicago,” says Bier. “The economies in places like Cleveland and Detroit are limping along, and we aren’t paying attention because what happens in Brooklyn, New York gets attention, but what happens in Euclid, Ohio doesn’t.”
It comes down to money, explains Bier. In Cuyahoga County, the home of Cleveland and the smaller communities mentioned in this story, the 18 inner-ring suburbs that shared a border with Cleveland lost a combined $4.8 billion worth of property taxes between 1994 and 2017. The remaining suburbs that don’t border Cleveland gained $2.9 billion in property taxes.
And if that’s not enough of a disparity, the six adjacent counties to Cuyahoga County—the outer suburbs—added $16.6 billion in revenue from new housing built in that time period.
“At the end of the day,” Bier says, “the local government officials don’t understand this is a serious financial issue if left alone. The inner-ring suburbs aren’t going away, but they will cost their neighbor cities a lot of money if we don’t come up with solutions to what has happened to them. Building expensive housing further out doesn’t solve it.”
“We are good at dealing with big cities that get old,” says Bier. “But we need to learn how to come up with plans that alleviate suburbs getting old. Lots of options to consider, but to avoid it is going to make it a lot worse.”
Daniel McGraw is a freelance journalist and author living in Lakewood, Ohio.