Surviving the Great Recession: Nonprofit Housing Developers Through the Lens of Organizational Theory

This study identified factors that influenced California nonprofit housing development organizations’ (NHDO) survival and financial stability during the Great Recession. NHDO typically develop and manage affordable housing, while providing social services. During the recession, NHDO financial issues were exacerbated and compounded by the elimination of state redevelopment funds. This research tested organizational theories through bivariate and multivariate analyses from Internal Revenue Service 990 tax forms for nearly 800 NHDO. In many ways, the factors that influenced NHDO sustainability and performance were similar to those affecting for-profits and other nonprofits. For example, older and larger organizations with more staff and revenue fared better. Other factors were unique to this sector (e.g., the region and type of housing developed affected outcomes). An important finding was that reliance on government funding was negatively associated with survival and revenue. The lessons learned from NHDO inform other organizations about surviving and thriving during tough economic times.     

Measuring the Financial Position of Municipalities: Numbers Do Not Speak for Themselves

There are several challenges facing someone who wants to know if a city's revenue structure is fair and reasonable. There are few generally accepted standards to use as benchmarks of financial condition, and there is no generally accepted methodology to assess relative financial position. This article reviews literature on financial position and condition, and then develops a methodological approach that creates a cohort of similar cities for benchmarking financial position, and then forming a basis for assessing financial condition. Based on a study of the financial position of a medium-sized city, the article offers lessons for practitioners and scholars.     

Local Fiscal Distress: Measurement and Prediction

During and after the Great Recession, many local governments were compelled to declare fiscal emergencies, lay off workers, and cut services while others weathered the recession without needing to take such actions. In this paper, we construct an action‐based measure of fiscal distress using comprehensive annual financial reports, budgets, and media coverage and then use it as a dependent variable to model fiscal distress as a function of past financial performance and socio‐economic environment. The empirical models show the relative importance of fiscal reserves, debt, and revenue composition in predicting local fiscal distress.     

Life at the Bottom of the Fiscal Food Chain: Examining City and County Revenue Decisions

Any shifting of responsibilities from the state or federal governmentsto local governments would fall mostly on the shoulders of general-purposegovernments, namely, cities (municipalities) and counties. Thisstudy explores city and county revenue decisions associatedwith general funds—the governmental fund most likely tobe affected by state requirements for greater local financingresponsibility for new or devolved programs. The results suggestthat state control over local revenue authority affects decisionsregarding the imposition of financial burdens on residents,and that intergovernmental aid to cities and counties does notnecessarily mitigate those burdens. Despite evidence of healthyfinancial reserves, especially for cities, shifting responsibilitiesfrom the state to city or county governments could place citiesand counties in difficult fiscal positions. Given the importanceof own-source revenues to current budgets, and in view of thequestionable impact of intergovernmental aid on city and countyresidents' revenue burdens, questions persist about the abilityof city and county governments to maintain (and, if necessary,to expand) services during economic recession.     

Homeownership,the Great Recession,and Wealth: Evidence From the Survey of Consumer Finances

The owned home is central to both the American Dream and the financial lives of U.S. households. This article explores the typical financial trajectories of homeowners during the Great Recession, assessing the viability of positioning home equity at the core of a household's balance sheet. Using the 2007–2009 reinterview panel of the Survey of Consumer Finances, we describe the diverse balance sheets of groups of homeowning households. While some homeowners lost equity and wealth in the Great Recession, we find that an owned home introduced severe risk of loss, but homeowners were less likely than renters to lose very large proportions of their wealth. The experience of homeowners' balance sheets during the downturn was diverse, and the typical experiences of different groups are compared and contrasted.     

The legacy of the home owners’ loan corporation

Abstract

The appraisal practices of the Home Owners’ Loan Corporation (HOLC) and its Residential Security Maps are often cited as major contributors to later redlining and the perpetuation of segregation through unequal access to mortgage credit. This article focuses on whether there was a relationship between the HOLC's neighborhood assessments and mortgage outcomes.

Our results indicate that the agency was clearly instrumental in restructuring the home finance system and permitting far greater access to homeowner‐ship, but it is important to consider other factors in examining the HOLC's legacy in the reshaping of the mortgage market and the operation of the financial sector after the Great Depression. Specifically, the issue of increasing segregation in older cities in the late 20th century remains inextricably linked to both the shifting nature of real estate finance after the HOLC era and the demographic, economic, and residential changes affecting U.S. cities.     

Did Age Discrimination Protections Help Older Workers Weather the Great Recession?

We examine whether stronger age discrimination laws at the state level moderated the impact of the Great Recession on older workers. We use a difference‐in‐difference‐in‐differences strategy to compare older and younger workers, in states with stronger and weaker laws, before, during, and after the Great Recession. We find very little evidence that stronger age discrimination protections helped older workers weather the Great Recession, relative to younger workers. The evidence sometimes points in the opposite direction, with stronger state age discrimination protections associated with more adverse effects of the Great Recession on older workers. We suggest that during an experience such as the Great Recession, severe labor market disruptions make it difficult to discern discrimination, weakening the effects of stronger state age discrimination protections. Alternatively, higher termination costs associated with stronger age discrimination protections may do more to deter hiring when future product and labor demand is highly uncertain.     

Decentralization, Local Priorities, and the Community Development Block Grant Program in Milwaukee

This article analyzes the geographic distribution of CDBG fundsacross twenty-three neighborhoods in Milwaukee, Wisconsin, bycomparing federal, city, and neighborhood responses to localneed and by testing the impact of these responses on the finalfunding allocations. In Milwaukee, decentralizing decisionmakingto the city improved the program's responsiveness to local need.However, the funding decisions made by local officials did notalways direct funding exclusively to the most extreme need;nor did they distribute funding proportionately with respectto need, even though the city's targeting mechanisms were closelyrelated to the measure of need used in this analysis. We concludethat Milwaukee's program results were obtained through a mixtureof targeting rules and political competition over program decisions.     

Estimating property tax base elasticity over time: Evidence on the revenue maximizing politician

The Laffer curve analysis suggests a possible policy conflict between short-run revenue maximization and long-run fiscal health. This paper estimates short-run and long-run property tax base elasticity in order to test whether such a conflict exists for the property tax in central cities. A stock adjustment model is used and separate time-series estimates for four New York State central cities lend empirical support to such a conflict. The results show that while disincentive effects associated with property tax rate increases are not strong enough to reduce proeprty tax revenue in the short-run, they are substantial enough to reduce long-run revenue in all but one city. The paper also tests for asymmetric response to property tax rate changes and finds significant results for only one city.     

Neighborhood Conservation: Political Choices Under the Community Development Block Grant Program

Neighborhood conservation is an objective widely espoused byAmerican cities. But movement from advocacy of conservationto allocation of funds for specific neighborhoods involves difficultpolitical choices for local officials who must respond to neighborhoodscompeting for scarce resources. The experience of Rochester,New York, the state's third largest city, closely parallelsthe national experience—shifts away from renewal and clearanceactivities to conservation and rehabilitation of marginal urbanneighborhoods. Over the first six years of the CDBG program,Rochester officials changed from a general, inclusive approachto neighborhood conservation to a more targeted approach. Thesechoices were shaped in response to local economic, demographicand political factors, including a well-organized network ofneighborhood organizations. The article concludes that the Rochesterexperience led to strengthened relationships between neighborhoodassociations and city hall, but evidence of stabilization andrevitalization in assisted city neighborhoods is inconclusive. ^*The author gratefully acknowledges the comments by Paul R.Dommel, Christopher Lindley and Richard P. Nathan on an earlierdraft of this article.     

The electoral consequences of the financial and economic crisis in Europe

The electoral consequences of the Great Recession are analysed in this article by combining insights from economic voting theories and the literature on party system change. Taking cues from these two theoretical perspectives, the impact of the Great Recession on the stability and change of Western, Central and Eastern European party systems is assessed. The article starts from the premise that, in order to fully assess the impact of the contemporary crisis, classic economic voting hypotheses focused on incumbent parties need to be combined with accounts of long‐term party system change provided by realignment and dealignment theories. The empirical analysis draws on an original dataset of election results and economic and political indicators in 30 European democracies. The results indicate that during the Great Recession economic strain was associated with sizable losses for incumbent parties and an increasing destabilisation of Western European party systems, while its impact was significantly weaker in Central and Eastern European countries, where political rather than economic failures appeared to be more relevant. In line with the realignment perspective, the results also reveal that in Western Europe populist radical right, radical left and non‐mainstream parties benefited the most from the economic hardship, while support for mainstream parties decreased further.     

Income inequality and election outcomes in OECD countries: New evidence following the Great Recession of 2008–2009

Using data on national parliamentary election outcomes in 32 OECD countries from 1975 to 2013, we investigate the importance of economic voting. We focus on the relevance of income inequality which has resurfaced to the forefront of public debate since the last global economic downturn. Additionally, we examine whether the degree of economic voting varies with the political orientation of the incumbent government. Finally, we check whether the Great Recession of 2008–2009 alters the degree to which voters hold the incumbent government, specifically left parties, responsible for poor economic performance and rising inequality. We find that economic growth is the most robust variable for economic voting, before and after the Great Recession. The vote share for left-leaning parties declines when income inequality rises during normal economic times. However, voters are more likely to vote for left-wing incumbents if domestic income inequality and unemployment rate rose during the Great Recession.     

Party choice in hard times: Group-specific responses to economic downturns in Sweden

This article asks if, when, and why different groups of voters behave differently in the wake of economic downturns. We examine two Swedish elections (1994 and 2010) that were held just after two deep recessions (the financial crisis of 1991–1993 and the 2008–2009 Great Recession). We find that group differences were much larger in 2010 than they were in 1994. After the 1991–1993 recession, the government's electoral support declined across the board. In 2010, there were large differences between voters with low economic status (who were unlikely to support the government) and voters with high economic status (who were likely to do so). Our findings suggest that group differences in electoral behavior after an economic downturn depend on contextual differences across elections. We argue that future research should pay close attention to the magnitude of economic shocks, the development of asset prices (especially real estate), and changes in social policy.     

Unified Service Planning and Budgeting: The Next Generation of Service Management

Like many large cities, Minneapolis faces the challenges of declining intergovernmental revenue, federal and state restriction on actions, and increased service demands. However, unlike most other places, Minneapolis does not suffer from severe fiscal stress. It has managed this feat by making changes in the organizational structure, planning, and budgeting process. This allowed the development of a comprehensive and coordinated approach to service delivery in the city.     

Revenue Diversification in Arkansas Cities: The Budgetary and Tax Effort Impacts

The consequences of revenue shortfalls for cities are particularly dramatic due to the balanced‐budget requirement. Revenue diversification is one method of stabilizing revenue streams because diversified revenue structures can mitigate the revenue fluctuations often associated with single source revenue. Using audited financial reports, this study examines the impact of revenue diversification in Arkansas cities over 10 years. To address the issue of revenue adequacy, this study examines diversification's impact on current year budget changes in revenue and expenditures as well as its impact on tax effort.     

Red Europe versus no Europe? The impact of attitudes towards the EU and the economic crisis on radical-left voting

The 2014 European Parliament election saw a relatively large increase in the size of radical-left parties (RLPs), particularly in Western Europe. This article aims to provide new ways of thinking about the dynamics of radical-left voting by analysing the changing role of attitudes towards the European Union in explaining support for RLPs at European Parliament elections during the Great Recession. It is argued that the Europeanisation of economic issues during the financial crisis, together with the particular kind of Euroscepticism advocated by these parties, have enabled them to successfully attract a heterogeneous pool of voters. Using the 2009 and 2014 European Election Studies, it is shown that the effect of negative opinions about the EU on support for RLPs increased significantly during the crisis. In addition, support for RLPs also increased among voters with positive views of the EU who were nevertheless highly dissatisfied with the economic situation.     

Can Managerial Turnover Be a Good Thing? The Impact of City Manager Change on Local Fiscal Outcomes

A long line of private sector research outlines the positive and negative impacts of employee and managerial turnover on organizations. However, public administration scholars often treat turnover as a phenomenon to be avoided and focus more on the antecedents of managerial turnover than on its consequences for public organizations. Within the context of local government, the impact of city manager turnover on organizational outcomes is unclear. This article identifies how city manager turnover influenced local fiscal outcomes during the Great Recession. Analysis of 165 council‐manager municipalities in California, more than one‐third of which experienced turnover during the height of the recession, allows for empirical examination of the impact of turnover during the test period of 2008–11 on local fiscal outcomes in 2011 and 2012, specifically the degree and incidence of budget deficit spending. The results demonstrate that managerial turnover may lead to better fiscal outcomes, conditional on how long the new manager has held the position. This suggests that while cities that hired new managers during the recession did better than those that did not, the earlier in the recession a manager was hired, the better.     

Economic crisis and the variety of populist response: evidence from Greece,Portugal and Spain

Abstract

Greece, Portugal and Spain are among the countries worst hit by the 2008 Great Recession, followed by significant electoral and political turmoil. However, one of the dimensions in which they differ is the presence and varieties of populism in parties’ political proposals. Drawing on holistic coding of party manifestos, we assess the varying presence of populist rhetoric in mainstream and challenger parties before and after the 2008 economic downturn. Our empirical findings show that populism is much higher in Greece compared to Spain and Portugal. We do not find a significant impact of the crisis as the degree of populism remains rather stable in Greece and Portugal, while it increases in Spain, mainly due to the rise of new populist forces. The study confirms that populist rhetoric is a strategy adopted mainly by challenger and ideologically radical parties. In addition, inclusionary populism is the predominant flavour of populist parties in new Southern Europe, although exclusionary populism is present to a lesser extent in the Greek case. We contend that the interaction between the national context – namely the ideological legacy of parties and the main dimensions of competition – and the strategic options of party leadership is crucial for explaining cross-country variation in the intensity of populism and the specific issues that characterise populist discourse.     

Measuring the impact of community development block grant spending on urban neighborhoods

Abstract

Regression analysis of Community Development Block Grant (CDBG) spending in 17 large cities reveals strong statistical associations between spending from 1994 to 1996 and changes in three indicators of neighborhood conditions: the home purchase mortgage approval rate, the median amount of the home purchase loans originated, and the number of businesses. However, there is no consistent association between spending and indicators of subsequent neighborhood change unless CDBG spending is sufficiently spatially targeted that it exceeds a threshold of the sample mean expenditure and is measured relative to the number of poor residents. In addition, associations vary according to neighborhood trajectories before investment and changes in the local economy.

Nevertheless, even in the least hospitable contexts—highly concentrated neighborhood poverty, preexisting declines in home values, weak city job growth—our estimates are consistent with the hypothesis that above‐threshold CDBG spending produces significant neighborhood improvements. We discuss the implications for such spatially targeted spending and connections between our work and the emerging literature on the dynamics of poor neighborhoods.     

City Managers,Career Incentives,and Municipal Service Decisions: The Effects of Managerial Progressive Ambition on Interlocal Service Delivery

City managers play an influential role in brokering intergovernmental service arrangements on behalf of their jurisdiction, yet their motivations for doing so are not well understood. One argument, drawn from theories of bureaucratic entrepreneurship and ambition theory, suggests that cities with managers who are motivated to advance their careers will parlay more interlocal service delivery as means of capturing economic efficiencies. Such strategies serve to build their personal resumes of career achievements. An alternative argument suggests more altruistic motives, including a desire for increased social equity and valuing the common good of the region, compel city managers to pursue interlocal service arrangements. These competing theories are tested on 134 large municipalities, using survey data from the city managers of these jurisdictions, coupled with interlocal revenue and expenditure data for these cities. Results yield greater support for the first theory. However, progressive ambition possesses complex consequences for interlocal service delivery choices. Jurisdictions managed by city managers with career‐enhancement ambitions are more likely to sell services to other local governments. Yet, they are significantly less inclined to buy services from other jurisdictions, thereby underscoring entrepreneurship in shaping managers’ professional trajectories.