Cincinnati leaders are worried they're stuck in a Catch-22. The city's declining population seems certain to take away millions in federal and state funding — but this is money the city uses to solve some of the problems that spur people to leave in the first place.

        The U.S. Census last week gave the City of Cincinnati a glimpse of how large the population loss is. More than 33,000 people have left since 1990; only six U.S. cities lost population at a faster rate.

        And a city economist estimates Cincinnati citizens will lose more than $12 million a year in federal and state funding if Census 2000 shows a similar result.

        That's funding allocated to the city, other government agencies and nonprofits to help pay for community de velopment, highways, public safety, drug treatment, job training and other programs for Cincinnati residents.

        City employees haven't calculated which programs stand to lose the most dollars when Census 2000 figures are released in March. But those numbers will be used to help calculate funding levels for the next 10 years, and city leaders are expecting it will cause a substantial drop.

        “It's a jolt,” said Planning Director Elizabeth Blume. “But it's not a surprise."

        Councilman Paul Booth tried to ease his colleagues' fears at a City Council meeting last Wednesday by reminding them that the Census figures released a week ago are merely an estimate based on death and birth records, building permits and other public records.

        The Census 2000 figures that will determine state and federal funding were gathered differently, through mailed surveys and door-to-door interviews.

        “I'm not questioning the fact that population has declined,” said Mr. Booth, a Democrat who has supervised the city's Census efforts. “I'm saying let's not focus on those numbers yet. Let's wait for the actual (count).”

        Mayor Charlie Luken said the Census estimates should motivate the city toward new policies.

        “Our first battle is our budget, to engage in a growth strategy,” Mr. Luken said. “That is where we make a pretty important statement in reversing this trend.”

        Rather than worry about federal and state funding declines due to the Census 2000 figures, Mr. Luken said it's important to tackle the problem of why people are leaving the city.

        The estimates show Cincinnati is losing people at a faster rate than are Columbus, Cleveland, Toledo, Akron and Dayton. Even the older suburbs ringing Cincinnati — Newport, Norwood, North College Hill, Fort Thomas, Covington, Springdale and others — are losing population.

        The Greater Cincinnati region, which includes 13 counties in Ohio, Northern Kentucky and southeastern Indiana, gained 7.9 percent in population since 1990, indicating that while the core city shrinks, the suburbs continue to grow.

        “The march to the suburbs is well-documented,” Ms. Blume said. “But I'm not convinced that 33,000 people moved out because they want to be 20 miles away from the city and live next to a McDonald's.”

        One problem is that the city and its older suburbs have little available land to develop, so it's difficult to build housing that many families desire.

        City housing must be developed by converting older structures, or demolishing structures and building anew.

        That takes money to entice builders to redevelop buildings that are often decaying. But if the city's federal funding shrinks after the Census, that could establish more intense battles for the same dwindling pool of housing dollars.

        The city has earmarked an extra $4 million for its 2001 budget to spend on market-rate housing — that is housing for people who are willing to pay the going rate.

        Mr. Luken said there is a demand for market-rate housing downtown and in Over-the-Rhine, but developers are unwilling to build without city funding because they can't charge enough in rent to recover costs of redeveloping older buildings.

        Young professionals and older adults with grown children are the most likely people to rent or buy downtown homes, Mr. Luken said, adding that 2,000 people paid to attend a recent downtown housing tour.

        The extra $4 million will provide a funding pool that developers can tap into to build lofts and downtown apartments for urban dwellers.

        Zane Miller, co-director of the Center for Neighborhood and Community Studies at the University of Cincinnati, agreed that urban housing demand is on the upswing.

        He noted that several other factors color people's decision on where to live, such as schools, safety, social services and racial composition of neighborhoods.

        The city must take the lead in addressing these issues to entice people to return, Mr. Miller said.

        “It will happen here only if the city develops policies to encourage it,” he said.

        Vice Mayor Minette Cooper warned that the city must subsidize housing for all income levels.

        Ms. Cooper is upset that the council this year failed to approve funding for Restoc, a nonprofit group that builds housing for the poor in Over-the-Rhine.

        “Mixed-income housing is desirable. That's what my concern is,” Ms. Cooper said.

        And Ms. Cooper said she wants to ensure that the city shores up neighborhoods. That means committing funding to neighborhood business groups and economic development groups.

        For example, Ms. Cooper said, the Clifton Heights Business Association used funding from the city and the University of Cincinnati to de velop a plan to revitalize the neighborhood.

        The Clifton Heights group was awarded $50,000 through the Cincinnati Neighborhood Business Districts United, a city program that aims to improve neighborhood retail and business districts.

        The Clifton Heights group came up with a plan that calls for a reshuffling of businesses along Calhoun Street to encourage a mix of national chains and unique, small shops.

        It's had some success. Already, the group lured Philadelphia-based retailer Urban Outfitters to remodel a 19th Century church into a new store. UC agreed to lend $3 million to Urban Outfitters to pay for construction.

        “We're trying to bring people back to the community, create a destination point,” said Tony Hamburg, president of the Clifton Heights Business Association. “We feel by doing this, people will want to live around here. If we didn't have (city) funding, that would make this difficult.”

        City Manager John Shirey realizes that different groups and political interests will grapple for funding..

        To ensure the city's population was properly counted by Census workers, Mr. Shirey assigned employees to work with Census workers. The city workers and Census employees identified 160,000 households within the city.

        “We worked our tails off to get a complete count,” Mr. Shirey said. “There is absolutely nothing else we can do until those numbers come out next spring.”

        Even if there's an accurate count, Mr. Shirey acknowledged the numbers will show Cincinnati's population has declined.

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