* Knoxville, Dallas, Pittsburgh see improvements in 2012
* 75 US cities expected to return to peak employment by 2014
By Lisa Lambert
WASHINGTON, Nov 30 Retailers moving into old
downtown buildings, an abundance of freshly planted greenspaces,
and a stream of new jobs in Knoxville, Tennessee, are all signs
to Mayor Madeline Rogero that for the last year prosperity has
been blooming in her city.
"We feel very good about how we're coming out of this
recession," Rogero said. "We see new interest. We see new
development that's occurring. We're optimistic that this
recovery is going to continue."
Knoxville is a member of a very small club. Three and a half
years since the 2007-09 economic recession ended, only three
major U.S. metropolitan areas are experiencing an economic
recovery, according to the Brookings Institution.
The Washington-based research group has also deemed Dallas
and Pittsburgh in recovery after analyzing their employment
levels and gross domestic product per capita.
The United States has the most major metropolitan economies
of all countries - 76 - according to an annual report on the 300
largest metropolitan economies worldwide that Brookings released
"It was still better than last year when the U.S. had no
metro recoveries," Brookings Associate Fellow Emilia Istrate
Istrate said the three cities had two features in common:
strong local services such as healthcare, and business and
financial services that cater to specific industries.
The recession came late to many city budgets. Their primary
revenue source - property taxes - took time to fall because of
lags in real estate valuations. By the time they dropped, cities
were also contending with falling sales and income taxes
resulting from job losses.
Many of the splinters the downturn drove into their budgets
remain deeply lodged, and cities of all sizes worry about
federal spending cuts that are part of the "fiscal cliff."
"Cities are emerging slowly from the Great Recession," said
Robert Zahradnik at Pew's American Cities Project, which tracks
fiscal conditions and budgets. "In many cities revenues are
gradually recovering but there are still some risks out there."
SEEKING TO REPLICATE A RECIPE FOR SUCCESS
Rogero has only been in office for a year. But she
remembers, as a resident and as director of the city's community
development office, when the recession hit. Sales tax revenues
fell. The building inspections department that had always funded
itself from fees had to tap the city budget.
"People were losing their jobs. People were losing their
homes," she said.
Nonetheless, the city continued investing in infrastructure
and fostering private investment, often using funds from the
2009 federal stimulus plan. The goals were to attract businesses
and to keep people working on construction jobs such as a
housing project for the elderly.
The Pittsburgh skyline partly tells the city's economic
story, said Mayor Luke Ravenstahl. A major bank just finished
building one skyscraper and started construction on another.
"In my mind, it's already recovered. We employ more people
in Pittsburgh than we ever have," he said.
Pittsburgh built up industries before the recession, mostly
in what Ravenstahl calls "eds and meds" - universities and
healthcare. Then the shale gas boom put its business services in
"The opportunity that exists with shale is really something
that most cities don't have. It really is going to be the
economic engine in the future," he said.
All three cities created long-term stability with local
services and the public sector, and growth with business and
financial services, said Istrate.
"People always want to know what metros are recovering, what
they are doing, so they can replicate it. There is no single
industry that can help, but there is an industrial structure
that can help you grow year to year," she said. "More and more
metropolitan areas are looking at the export sector, at foreign
investors, at infrastructure."
She noted that many U.S. metropolitan economies are doing
better than some major cities in other countries.
In terms of Dallas, she said, the city's business services
easily cater to the commodities sector.
Analysts at the firm IHS track employment in U.S.
metropolitan areas and found almost all cities in Texas have
returned to their pre-recesssion employment peaks, with Dallas
reaching those levels in the last quarter of 2012.
The state was not hit hard by the housing bubble, said IHS
Economist Steven Frable. Its industry diversity, which includes
energy, business services, and trade and transportation, has
attracted workers to the state.
Looking to 2013 and 2014, IHS expects more than 75
metropolitan areas to regain their peak employment, mostly large
cities such as New York and Seattle.
"It's been almost four years since the recession happened
and only a few metro areas...have been able to recover in terms
of employment," Frable said. "Recessions these days seem to be
deep, long and drawn out.
Any improvements could take a while to impact budgets, said
Christy McFarland, who researches fiscal issues for the National
League of Cities.
"We're going from worse to a little bit better, but it's
still bad," she said.