Research Quick Take: Spatializing the Municipal Bond Market: Urban Resilience under Racial Capitalism

The number of majority-Black cities and towns in the United States has more than doubled in the past 50 years, including 21 cities of more than 100,000 people. An ongoing and dynamic process of “white flight” is mainly responsible for this trend. While many US cities are global cities, hubs of wealth, power, information, and infrastructure in the world economy, critical geographer Dr. Ponder observes that the nation’s majority-Black cities tend to be sites for the extraction of wealth, rather than its concentration. Majority-Black cities provide opportunities for Black political leadership, but they also face financial disadvantages. The racialized economic geography of US cities resonates with academic conversations about both the concentration of wealth due to globalization, and the spatial organization of plantations in the historical slave economy.

Ponder illustrates the extractive relationship between the global economy and US Black-majority cities through their struggles with indebtedness on the municipal bond market. Data on municipal bond interest rates show that the nation’s large Black cities are all charged more than average for infrastructure projects. This financial disparity has increased since deregulation of the bond market in 2000. Ponder’s Figure 3, included here, summarizes the rates.

One representative case of out-of-control municipal bond indebtedness in Jackson, Mississippi, which is 78% Black. Many older US cities require extensive improvements to aging drinking water and sewer systems. Federal environmental regulations enforced by the EPA often mandate such infrastructure problems, but usually without providing federal funds. As a result, some cities have taken on billions in debt for their water systems. In 2010, Jackson’s sewer system faced EPA enforcement actions, and water main breaks during freezing temperatures created an urgent need. To help cut costs in the face of costly water and sewer improvements, the city engaged the multi-national engineering firm Siemens to improve the energy efficiency of their water systems. Although Siemens representatives promised immediate cost savings, in reality the deal included an unusually high interest bond that will cost the city over $200 million. This expense, Ponder shows, will impact the impoverished city for generations, as it struggles with its infrastructure.

Infrastructural energy efficiency improvements are often praised for their climate change resiliency benefits. Urban climate resiliency efforts may help a city like Jackson, but they are tied up in an extractive financial system. As a result, impoverishing majority-Black cities may be their main legacy. As this trend seems to accelerate, Ponder calls for us to pay urgent attention to the racialization of urban finance.

Dr. Sage Ponder is an Assistant Professor of Geography at Florida State University.

This post is a summary of Ponder’s recent piece, summarized by COSSPP blog researcher, Jesse Fried.

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