No city except maybe Detroit epitomizes American urban decay as much as Gary, according to a new study by the Federal Reserve Bank of Chicago.
But all is not lost. The study found reason for hope that includes new leadership, a growing attitude of regionalism, and significant assets that include Lake Michigan and major transportation infrastructure.
Gary also may have already hit its nadir. The study's authors say "there is almost no way not to make it better."
The Federal Reserve Bank profiled Gary and nine other Midwestern cities that also suffered major manufacturing job losses in recent decades as part of its Industrial Cities Initiative. The idea is to find why some cities outperform others, and whether their successful economic development strategies can work in underperforming communities.
Gary has lost more than 54 percent of its population since 1970, when half its jobs were in the manufacturing sector and 57 percent of its residents did not have high school diplomas. Today, one-fourth of Gary families live below the poverty line and the median income is only 55 percent of what it is nationally. Unemployment peaked at more than 17 percent in 2010.
The steel industry remains a major employer, but the Gary plants employ far fewer workers than they used to and also far fewer Gary residents. Little employment growth is expected through 2020 in the steel sector, which is more likely to grow through increased productivity.
Lake County's largest employer in 2011 was food services and drinking places, which the study's authors noted do not offer high-paying jobs.
High-skill jobs may be in short supply because Gary's workforce is less educated than the nation's. The Steel City is 12 percent behind the rest of the country, despite a 30 percent increase in its college-educated population in the last few decades, the study found
The city does, however, have nine career and education centers, colleges such as Indiana University Northwest, and Mayor Karen Freeman-Wilson's plan to develop a University Park neighborhood that would build on academic assets.
Gary's housing market is highly distressed, and more than 47 percent of residents rent. That's 10 percentage points higher than the national average. Single-family homeowners continue to leave, and their houses get converted into rental units.
Home mortgage lending in Gary dropped from a peak of 1,452 loans in 2006 to just 83 loans in 2011.
It has gotten so bad in Gary that leaders have come to define success as halting decline, the study's authors noted. But the city has crucial assets, including commuter rail to downtown Chicago, a lakefront and an international airport that could handle more commercial freight.
Freeman-Wilson's administration also offers reason for hope.
"By all accounts, Mayor Freeman-Wilson has the challenge of halting and beginning to reserve 40 years of decline and disappointment in the short time before the next election cycle begins," the study said. "Some resources have the potential to help: strong regional partners ready with investment, a new spirit of accountability at city hall with a team ready to execute, resources and programs ready to train a young workforce, and a large industrial presence that continues to make significant investments in the area."