The New Homestead Act
It's been 140 years since the Homestead Act sent waves of settlers across the Great Plains, staking claim to parcels of land 160 acres in size. About 2 million people claimed more than 270 million acres. Many of the communities they created thrived for a while. But some peaked in growth decades ago. In fact, 700 rural counties have lost at least 10 percent of their populations since 1980. The greatest outflow of people is on the Plains, from Texas through North Dakota.
Now, Congress is considering a New Homestead Act that would attempt to repopulate dying towns. The legislation focuses on small businesses, entrepreneurs and young people abandoning hometowns. The bill proposes all kinds of incentives: the forgiveness of college loans; home-buying assistance; venture capital; tax credits; and tax-free savings plans.
NPR's Howard Berkes recently visited Ord, Neb., a town where many of the kinds of incentives proposed by Congress have already been put into effect. The 2,200-person town has implemented an enterprising economic development policy that has helped retain or lure several novel businesses to the community: a specialized pharmaceutical lab that customizes drug combinations and dosages for patients across the state; a seafood distribution business; a call center for a cable TV company that services people all over the United States.
Many credit Ord's efforts to local leaders who have aggressively pursued new jobs and businesses. They convinced the regional telephone company to provide high-speed Internet access, a necessity for many of these new businesses. They wrangled $750,000 in city, state and private incentives for the call center. They created a sales tax to support economic development. They match retiring business owners with young prospective buyers. And they've appealed to current and former Ord residents to invest in the town's future.
"What's exciting about Ord is that one can see the local leadership emerging to go out and challenge people in the community to take control of the future, to invest in entrepreneurship, small business," says Chuck Hassebrook of the Center for Rural Affairs in Walthill, Neb. "Successful community revitalization can't happen without effective local leadership. That really is a key."
Ord is still suffering a net population loss. The town's economic development goal is a net gain in the next census. Ord might make it, because despite its relative isolation and small size, it's a regional center for government, banking, shopping, entertainment and health care. Many towns don't have that to build on. Still, some see hope for the rest of rural America.
"When I look out over rural Nebraska and the Great Plains, I see it happen all the time," says John Allen, a rural sociologist at the University of Nebraska. "So it isn't that it can't happen. The question is, 'How do we stimulate that at a level that it happens in more than just those anecdotal places across the Great Plains?'"
Others worry that the New Homestead Act will ultimately be no more successful than the original, which had a failure rate of 60 percent. Creighton University economist Ernie Goss says today's businesses follow the incentives; when the subsidies run out, new employers may not stick around.
"You're bringing individuals there who may or may not be committed to that area," Goss says. "And so I'm not certain that that sort of approach will work."
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