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[This is the second in a series of articles examining the challenges facing rural Iowa communities. The series is a product of research conducted by the Iowa Center for Public Affairs Journalism, an independent, nonprofit and nonpartisan news service located in Iowa City.]
By Randy Pauson and Zoe Seiler
The rural-urban divide in state economic assistance and the related population growth comes as no surprise to Dave Swenson, an associate scientist at Iowa State University’s department of economics and a lecturer in the School of Urban and Regional Planning at the University of Iowa.
“So, for the most part, we have two economies in Iowa,” he said. “We have a metropolitan economy, the counties with a city that’s 50,000 or more. In general, they are all growing.”
The state’s secondary economy — the rural economy — has not seen growth, Swenson said. He said rural communities in Iowa have shrunk since 2008, with a smaller labor force and a declining economy.
Swenson has studied rural economics and affairs in Iowa since the farm crisis that swept through the state in the 1980s. In the more than 35 years since, he has kept a close eye on how population and industrial trends in Iowa have fluctuated, in metropolitan and rural areas.
Iowa has roughly 40 “medium-sized trade centers” spread throughout non-metropolitan areas around Iowa, Swenson said.
“That’s where people from the surrounding region go to work, that’s where they go shopping, that’s where they get healthcare, that’s where they go to community college,” he said.
Ottumwa is one of those micropolitan trade centers, with a population of about 25,000 people. But even though it’s by far the largest city in Wapello County, people in Ottumwa still find themselves caught between two worlds: that of a small, rural town and that of a micropolitan hub.
The city can be categorized either way, Sharon Stroh, the executive director of the Ottumwa Economic Development Corp., said.
“That works to our benefit sometimes and to our detriment other times,” Stroh said.
Although the city’s relatively large size has allowed it to become a retail and commercial hub in southeast Iowa, she said Ottumwa’s population also can make it ineligible for state grants intended for communities with fewer than 25,000 people.
For example, Stroh said Ottumwa has been ineligible for U.S. Department of Agriculture Rural Development programs as well as some Iowa Arts Council program funding.
However, Ottumwa received $800,000 from the federally funded Community Development Block Grant program in 2018. The federal money, which the Iowa Economic Development Authority administered, is awarded for community facilities, downtown revitalization and rehabilitation of single-family, owner-occupied housing.
That same year, Iowa cities with populations between 10,000 and 50,000, such as Ottumwa, received close to $28.1 million in direct financial assistance from the state and federal government. Combined with the amount of money in financial assistance rural areas received, however, urban areas still received close to $8.3 million more in direct assistance in 2018, the IowaWatch Simpson College Journalism Project found.
Swenson said he and his colleagues believe that while the state cannot practically support all rural communities throughout Iowa, it can support the state’s 40 micropolitan trade centers and help slow their rates of economic decline. Doing so would in turn help stabilize outlying rural communities, he said.
“But that’s a hard sell because it sounds like you’re picking winners as opposed to giving just a little bit of money to everybody that doesn’t do anything,” he added.
Iowa’s population trends
The largest town in 38 of Iowa’s 99 counties has fewer than 5,000 people, while in an additional 24 counties, the largest town has fewer than 10,000, according to a report on the Iowa Legislature website. These 38 counties are consequently considered rural.
According to data from the U.S. Census Bureau, 69 of Iowa’s 99 counties had population declines from April 2010 to July 2018.
The areas that saw population gains were limited mostly to metropolitan cities such as Des Moines, Cedar Rapids, Ames, Iowa City and Dubuque. Other urban cities with more limited growth are Sioux City, Council Bluffs and Waterloo.
In the 10 years since the Great Recession, Iowa’s overall population has grown to an estimated 3,156,145 people. In 2010, Iowa’s total population was approximately 3,050,000, according to U.S. Census Bureau data.
By 2020, the population is projected to grow by 100,000 people, according to data from Woods and Poole Economics Inc. in Washington D.C.