New Directions for Urban Policy

Contrary to the conventional diagnosis of urban problems, this article argues that these problems do not arise from the long-term trends in the decentralization of employment and population in metropolitan areas. Instead, the most important fiscal problems confronted by central-city governments and the most significant social and economic problems of central-city residents arise from increased concentrations of poverty populations and from racial discrimination in the operation of housing markets. Recognition of these causes leads to urban policy prescriptions that emphasize integration of income transfer mechanisms and vigorous enforcement of fair housing laws and that deemphasize job creation and other employment programs targeted to predetermined central locations. Housing policies emphasizing demand-side subsidy rather than place-oriented supply programs are more consistent with the long-term market forces determining the spatial pattern of economic activity in urban areas.