The town of Humeston, Iowa, straddles Highway 65 in the northwestern corner of Wayne County, less than a 30-minute drive from the Missouri border. Its population peaked in the 1920s at 1,214 people.
Today, the southern Iowa town has only 494 people.
“A lot of kids, when they graduate, they want to get out and see the world,” David Dotts, of the Wayne County Board of Supervisors, said. It’s one of the many explanations for the population loss.
Like nearly all of the other incorporated towns in Wayne County — except for Corydon, the county seat — Humeston has seen a consistent decline in its population since the early 1900s.
Humeston is not alone: Small towns around Iowa have been fighting to support themselves as rural populations continue to decline, while state government has been investing more in larger cities where the population is growing.
In 2018, Iowa’s metro regions received the most financial support from state government via the Iowa Economic Development Authority (IEDA) and the Iowa Finance Authority (IFA).
Reporting this spring by an IowaWatch Simpson College Journalism Project showed cities with populations more than 50,000 people received $61.3 million in direct financial assistance through state and federal grants and loans. Several of these communities also received assistance in the form of tax benefits.
Meanwhile, rural businesses and communities with fewer than 5,000 people received a little less than $24.9 million in direct financial assistance from the state and federal government, the reporting project revealed.
Assistance was awarded to businesses and communities for economic development purposes that include job growth and expansion as well as capital rehabilitation and renovation.
For example, startup companies such as Accelerated Ag Technologies LLC in Ankeny received $300,000 in March 2018 from the Iowa Innovation Acceleration Fund. This fund “promotes formation and growth of businesses that engage in the transfer of technology to competitive, profitable companies that create high-paying jobs,” the economic development authority website states.
That same month, a Des Moines-based startup called InfraLytiks received $100,000 in direct assistance from the Demonstration Fund, which provides “assistance to companies with market-ready innovative technologies or products that have a clear potential for commercial viability,” the economic development authority website states.
Several buildings in urban cities also received millions from the State Historic Preservation Tax Credit.
In Dubuque, for instance, SS Event Center LLC was awarded over $2 million from the tax credit in June to renovate the former St. Mary’s Catholic Church. SLE Investments LC in Cedar Rapids received almost $3.6 million that same month from the tax credit to rehabilitate the Harper and McIntire Company Warehouse.
MAKING SENSE OF THE DIVIDE
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, Davenport 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.
SEARCHING FOR PRACTICAL SOLUTIONS
Aside from awarding money to businesses and communities who apply for it, what has the state been doing to address economic decline in over two-thirds of its counties and encourage overall growth?
“Virtually nothing,” Swenson said. “The state’s rural economy has consistently declined for the last 25 years. And notwithstanding lots of language and some money and the name of rural development, very little of it has produced net growth in selected rural areas.”
This story was produced by the Iowa Center for Public Affairs Journalism-IowaWatch, a non-profit, online news website, and the Simpson College Journalism Seminar. Reporters for the project were: Randy Paulson, Zoe Seiler, Emily Carey, Austin Hronich, Taylor Bates and Dustin Teays. Read more at www.IowaWatch.org.