Subprime Crisis Illustrates Key Role of Anchor Institutions
Five years ago, Thad Williamson, David Imbroscio, and C-W.org’s own Gar Alperovitz wrote in Making a Place for Community that, “It is intuitively obvious to most citizens that moderately-sized university towns, state capitals, and even towns near long-established active military bases and prisons have greater stability than areas primarily dependent on private investment.” Now, in the wake of the national mortgage foreclosure crisis, an article in the November 4th issue of the New York Times finds much the same result. The article’s title is illustrative: “College Towns Escape The Pain.”
Indeed, as the article states, “The list of metropolitan areas with the smallest percentage of high-cost home loans is dominated by small cities with big colleges, including Ithaca, N.Y.; Iowa City; Madison, Wis.; Morgantown, W.V.; and State College, Pa.” In fact, this would pretty much describe nine of the top ten cities (all but San Francisco). The list also includes, in addition to those already mentioned: Boulder, Colorado (University of Colorado), Ames, Iowa (Iowa State), San Luis Obispo, California (Cal Poly-San Luis Obispo), and Lawrence, Kansas (University of Kansas).
“Is it because their educated residents were so much smarter than the rest of us, and foresaw the folly?” Times reporter Fred Fessenden rhetorically asks. Fessenden answers his own question as follows: “[U]ltimately, what the cities on the list have in larger measure than much of the rest of the country is stability, in both their housing and job markets.”
Bruce Katz, Director of the Metropolitan Policy Program at the Brookings Institution, notes that in college towns, “wages and housing prices are more in sync than in the rest of the country.”
A real estate agent in Morgantown, West Virginia (home of West Virginia University) who was interviewed for the article underscores this theme: “We’re like what middle-class America used to be ... I can’t remember the last time we had a recession in Morgantown.”
Posted by Steve Dubb on 11/08/2007 at 10:34 AM
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