Sunday, April 25th, 2010
America is a metropolitan nation, as has been tirelessly documented by the Brookings Institution and many others. Two-thirds of Americans live in the top 100 metro areas, which generate 68% of employment and 75% of GDP. You’ve heard the stats before I’m sure.
Yet the federal government has often given cities short shrift, preferring to think instead of the federal-state partnership through our system of federalism. The Obama administration has brought a new focus on cities, creating the first ever White House Office of Urban Affairs, but we are still a long way from having a real 21st century federal policy for America’s cities.
I’ll share some thoughts on a federal urban policy today, though clearly am not laying out any sort of a complete program myself. I just want to highlight some key considerations and ideas to stimulate thinking and conversation.
The Importance of Flexibility
The first thing to consider is the danger of a stronger federal urban policy. The biggest risk is that of the federal government imposing a one-size-fits-all model on cities. It is the nature of governments to promote uniform rules. Also, urban policy is incredibly faddish. As a result, we tend to do pretty much the same thing in almost every city around the country, whether that be freeways yesterday or bike lanes today.
But our country is incredibly diverse and only getting more so. Our cities are likewise are diverse to match. Indeed, they often have radically different demographics, histories, economies, etc. The needs of one place are vastly different from those of others. Policies that are right for Chicago may be wrong for Detroit. Those that are right for Detroit would probably be wrong for Columbus, Ohio.
Economist Joe Cortright, who did much of the research behind the CEOs for Cities initiatives, has said that the four issues cities must pay attention to are talent, innovation, connection, and distinctiveness. Per Cortright:
The point about distinctiveness is the most important issue for cities. There is no single model for the city of the future. One failing of public policy work is that it often assumes there is only one model for cities to follow. While there are common elements like talent, innovation and connections, they all mean different things in different places.
The challenge is for each city to figure out its special niche so that it can define its strategic opportunities. What can they do differently or better than others? What about their populations, DNA, culture, traditions, history and specialized knowledge make them unique?
And Harvard business professor Michael Porter, the godfather of strategy, has said that “competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique matrix of value.”
Being distinctive, being different, are important to urban success. You have to find your niche as a city. That means you actually have to do something different. A federal policy where everyone was more or less forced to do the same basic things would be antithetical to the development of the rich tapestry of diverse and specialized cities that we need to create in order to promote urban success and prosperity across this country.
In that light, one key element that should underpin federal urban policy is flexibility. That is, the federal government needs to be willing to give broad discretion to cities and regions to pursue different approaches, even if those sometimes don’t agree with what some federal officials might prefer. This might seem like the opposite of a federal policy, but it is not, as we’ll see.
The first area we need reform in is transportation. Today most transportation funding is allocated to highways and flows down through state DOT’s. This lets the states siphon off the money for boondoggles. It seems unlikely the states will ever stop doing this voluntarily, so the federal government ought to look at changing the way it distributes money.
The first way to do this is to directly allocate the bulk of transportation funds to MPO’s whose size exceeds a certain threshold, such as urbanized areas of greater than one million people. The MPO would be the conduit for the money directly from the federal government. Some type of analysis could be done to calculate the cost to maintain rural interstates and federal aid highways, plus some reasonable expansion funds. That money could continue to flow to the state DOT’s. Perhaps they could also administer funds for smaller urban areas that lack the technical expertise to do it themselves. But the majority of the money should go directly to metro areas. Remember, these metro areas account for a the bulk of the population, jobs, and economic output, so this is where the money probably should be going. Let’s cut out the middle man, which will probably be more efficient to boot.
Secondly, this money ought to be in the form of bulk flexible funding, not all these byzantine special funding programs that restrict money to certain highly specific uses. This is the way we bring flexibility.
A city like New York needs big dollars for new heavy rail investments. They could perhaps allocate their money to that. Maybe Chicago feels it needs more transit operating funds. It should be allowed to use some of its annual federal funding for operating needs if it wants. Portland might want to stress bike infrastructure. Some cities might even choose to build highways. Believe it or not, rapidly growing cities do need more road infrastructure. The key is to let cities choose for themselves.
I’m not sure what the federal role is here, but we also need some type of MPO reform to make sure that MPO’s don’t start acting like state DOT’s. In particular, way too many MPO’s have a “one municpality, one vote” system where a tiny suburb gets as much say as the central city. Perhaps this is best addressed through broader regionalism initiatives, as I don’t see how successful regionalism could be imposed from outside.
Lastly, there’s high speed rail. I can certainly respect that many people might think it’s a boondoggle. The cost is very high and the benefits speculative outside of the Northeast corridor. But if we do move forward with it, we should at least make sure it has a shot of succeeding. That means making sure: a) we have real high speed rail, not a 110-MPH Amtrak on steroids system, b) that we charter a real high speed rail operating authority or hire a competent overseas operator and don’t rely on Amtrak to run it, c) we make sure it stays as a major metropolitan service, without being forced to serve and stop at every small town along the way. (I don’t object to occasional “stoptrein” service, as long as the bulk of service is limited stop).
I previously wrote a long take on high speed rail in the Midwest addressing these points in more detail.
This is a broad topic I’ll only touch on. A lot of federal housing programs seem to be restricted to areas with very low income levels and towards projects that have a certain percentage of low income residents. Again, I think we need more flexibility here.
For example, for a city like Chicago, the main issue might be affordable housing. That’s less of an issue in smaller cities where housing is virtually free given the levels of abandonment. A city like Cleveland might want to emphasize spending money on demolition of vacant structures. Other cities might want to look at middle class neighborhoods that are declining and try to stabilize them through public investment before they become the next basket case. (This seems to be a huge gap in the federal program right now).
Environmental policy with regards to cities needs to start from the premise that the most environmentally friendly thing we can do is to have more people living in cities. Thus the aim of federal environmental policy should be to increase the attractiveness of cities vs. greenfield developments on the fringe.
Unfortunately, much policy has exactly the opposite effect. Particularly the Clean Water Act might be one of the most important forthcoming drivers of sprawl. Pretty much every older city is facing a multi-billion dollar bill to eliminate combined sewer overflows to comply with the act. A noble goal. But the costs of compliance are staggering and will only encourage people to flee to the fringes. (In general, even places with regional sewer utilities have plenty of suburban areas that are outside its boundaries and thus are not burdened with these costs). CSO remediation is the biggest local capital project in pretty much every city I track.
Also, the preferred approach today to compliance is a so-called “deep tunnel”, where excess sewage is stored in huge underground tunnels bored into bedrock. This is a pretty horrible waste of money. Today there are much better ways to do this using modern green infrastructure such as green roofs, rain gardens/swales, permeable pavements, etc. But the EPA hasn’t been with the program on this. Cincinnati wanted to do this and got shot down. Philadelphia is trying now and we’ll see where they get. This should be encouraged. We need to stop pursuing 1970’s solutions.
There are two big things the federal government could do here. First, the President could tell the EPA to get serious about green stormwater management and do everything possible to put a halt to any more deep tunnels. Second, the federal government ought to pick up tab for Clean Water Act Compliance.
Now some people say that the federal government is spending too much money. I agree. So let’s stop the endless stream of bailouts for what Reihan Salam called the “McMansion-and-Hummer economy” and start focusing what we do spend on investment in the upgrades of basic urban infrastructure that will actually power our future economy. And in this case the money is being spent one way or the other. The question is whether or not we’ll do it in a way that promotes sprawl or not.
I outlined a more complete case for both of these actions in two previous posts called “A Better Road to Clean Water Act Compliance” and “Clean Water Act Compliance Costs are Hurting Our Cities and Promoting Sprawl.”
Similarly, rather than using federal funds to guarantee AIG credit default swaps at par and the like, how about putting some of that money into more brownfield cleanup initiatives, lead paint abatement, and otherwise removing some of the environmental barriers to urban living and redevelopment?
However you feel about this matter, I think most can agree that the current approach where we have neither enforcement, nor regularization has created an untenable situation. We need to get this situation resolved.
I’m generally a state and local policy guy who generally focuses on what cities can do for themselves to be more successful. But the federal government clearly has a major role to play in urban success or failure as well. The key again is to ramp up federal involvement without putting our cities into a straitjacket of red tape or imposing a one-size-fits-all model. Think about these cities: Detroit, San Francisco, Charleston, Miami, and Oklahoma City. I just picked those off the top of my head, but it is easy to see how remarkably diverse they are and the very different needs, challenges, and opportunities they have. We need a federal policy that recognizes that. Obviously this is but a sampling of the issues, but hopefully provides some food for thought.