Why many cities are struggling.

• Position: Effect of state policies on cities

An analysis by a team of University of Virginia urban planners shows that, although nearly 90% of central cities in the U.S. have been declining compared to their suburbs since the 1960s, cities are doing nearly as well as or even better than their suburbs in many states. In 25 states, the condition of central cities could be described as at least "fairly well off," while the other 25 are dominated by cities that either are "struggling" or "deteriorated," according to researchers William Lucy, David Phillips, and Paul Muhlberger. The main reason for the differences is wide variations in state policies--not problems with Federal policies--regarding cities, they indicate.

Most states with cities in trouble and the highest city/suburban income disparities are in the Mideast and North, while southern and western states generally contain more cities that are doing better. New Jersey has the worst income disparities between central cities and suburbs. Of 150 metropolitan areas, 134 had declined in income relative to their suburbs between 1960 and 1990. By 1990, only 23 had higher median family incomes than their suburbs.

The most important state policy variation that affects how well cities are doing is rules governing expansion of metropolitan boundaries. States that allow cities flexibility to expand in order to retain substantial portions of middle- and upper-income residents do better. Among the 10 states with cities doing as well or better...