Politics & Policy

Whether Thriving or Failing, Cities Need Investment

(Dreamstime image: Dmitry Rogatnev)
Recipe for reform: less red tape, more-flexible zoning rules, and small-scale projects

Seven years into the recovery from the Great Recession, unemployment is down, gross domestic product is up, and the Dow Jones Industrial Average closed recently at an all-time high.

Yet for millions of Americans, these positive national economic indicators belie the collapse of their local communities. In post-industrial cities and in long stretches of Appalachia, the dissolution of economic anchor institutions — whether mills, factories, farms, or mines — precipitated a slow social death. In city centers, rising rents pushed longtime city residents into suburbs or fringes, cutting them off from their social-anchor institutions and resettling them in areas that are economically unsustainable.

Adrift, alienated, and angry, the American electorate chose the change candidate, a real-estate magnate riding a populist wave. He promised an American restoration of greatness, and his first policy promises center on an outpouring of infrastructure investment. Such a spending program has already found bipartisan appeal across Washington, as House Minority Leader Nancy Pelosi welcomed the opportunity for cooperation. Only time will tell how this populism will progress and how far it will be able to overturn the political-economic arrangement that has worked so well for some and so brutally poorly for others.

When the announced appointees Elaine Chao and Ben Carson take up their cabinet-level portfolios as, respectively transportation secretary and secretary of the Department of Housing and Urban Development and Transportation, they will assume responsibility to execute this popular mandate through the federal government’s interests in the American-built environment. Decades of bad policy carved up cities with urban interstates and resettled the displaced residents into inhumane housing projects. It provided incentives for suburban exodus while trapping others in place. There is much in the post-war federal story to justifiably resent. However, a status quo’s “awfulness should not obscure the truth that a healthy populism requires anchorage,” noted committed populist Bill Kauffman, in “Populism Needs Place-ism,” published recently at The American Conservative. “It must be grounded in a love of the particular . . . or else it is just a grab bag of resentments, however valid they may be.”

As the consensuses of past politics run aground, the change-oriented citizen should not be satisfied with closing the barn doors behind the free-trade horse. Nor should he be content with mere social signaling from a new White House. As political leaders mold new coalitions and messages, they should recognize that a productive populism must grow from the bottom upward; it will not emanate outward from Washington or New York. It will indeed require investment, but not in the sort of massive, centrally planned projects that have been sitting on Transportation Department shelves for decades and go by the misnomer of “shovel-ready.” Nor will meaningful investment come from token factory commitments made by brand-name companies to give an incoming administration an early win.

Instead, the same citizens who grabbed the electoral megaphone to voice their displeasure must now begin to rebuild their own places. Those of us working in politics must help them and remove the obstacles we have long placed in their way. Thriving cities need to lift barriers to keep housing affordable; struggling cities need to remove obstacles that make it hard for people to create value. And any federal infrastructure money would be better spent on maintenance and on undoing the mistakes of past urban-renewal boondoggles, not on building new vanity projects in front of which politicians can cut ribbons and receive plaudits.

If we have learned anything over the past several weeks, it should be that one policy will not suffice for a country containing both Silicon Valley and Youngstown, Ohio. There are in fact two types of cities in America now, each loved by its own, each with its own challenges, each demanding its own response.

If we have learned anything over the past several weeks, it should be that one policy will not suffice for a country containing both Silicon Valley and Youngstown, Ohio.

There is the thriving metropolis, where the 21st-century economy has concentrated college graduates into “knowledge trades,” and where the surge of talent into neighborhoods frozen in place by longstanding land-use regulations has produced a housing crisis. The thriving metropolis contains plenty of demand but needs to cut through its accumulated codes in order to allow supply to catch up. Cities should trim or entirely eliminate requirements for new development to build off-street parking, the lack which can inflate the cost of an apartment by up to 50 percent. They should also relax single-family residence zoning so that it can include multifamily buildings and mixed-use development. If municipalities fail to undertake such reforms, cities will be increasingly unaffordable, no matter how much housing is set aside for low-income residents.

Furthermore, we should not be content with the demand generated by people who already live there, but should lift unintended burdens that trap the disadvantaged in place. As my colleagues Lori Sanders and Eli Lehrer have written in “Moving to Work,” at National Affairs, American regional mobility is at an all-time low, a worrying trend given that the ability to pick up stakes and move to opportunity has traditionally been a defining attribute of America’s economic dynamism. Federal assistance programs are often so concentrated on a targeted place that their benefits fail to accompany any enterprising recipient who does move to find work.

Then there is the struggling city, often deindustrialized or otherwise declining. Policymakers might wish to write off these places, to declare defeat and assist only those people who will move out of them. But while such cities may be in trouble, they’re not dead yet, and they are quite unlikely ever to be.

These struggling cities need demand; they need to give people a reason to want to live in them, to move to them, to invest in them. Many such towns are doing just that. Akron, Ohio, is investing in its downtown’s South Main Street, pooling funds from numerous sources to create an activated streetscape that will encourage further development. Southbridge, Mass., has a 22-year-old real-estate prodigy named Hunter Foote who is turning around his hometown’s downtown core, one building at a time. Greenville, S.C., turned from old mill town to new-economy hub as it invested in its downtown, drawing restaurants and shops, hotels and businesses, and it uncovered an original waterfall in the city center that had been buried beneath a concrete bridge for decades. Even Detroit, the icon of American urban collapse, has seen the first, early but unmistakable signs of a recovery sprout up as billionaires and neighbors alike invest in its downtown and its neighborhoods.

Struggling cities need demand; they need to give people a reason to want to live in them, to move to them, to invest in them. Many such towns are doing just that.

Too many of these projects — especially the small-scale, incremental projects — die in a tangle of accumulated city codes and red tape. The peripatetic urbanist John Sanphillippo wrote a recent blog post, “Lessons Learned,” about his own attempt to add incremental, affordable units on properties in places as disparate as Cincinnati and Sonoma, Calif. He recently gave up in both cities, succumbing to bureaucratic obstacles that designated the area’s original neighborhoods as being in violation of post-war zoning codes. This effectively meant that any substantial investment would void the old neighborhoods’ grandfathered status and turn a neat urban house into a money pit, as any developer would need to jump through expensive hoops to bring the new units up to code. Of his project in Cincinnati, Sanphillippo lamented: “The cost of bringing this sad little one-bedroom one-bath shotgun up to code — forget about making it the kind of place good-quality tenants would want to live in — far exceeded the likely low rental income.”

The business-as-usual cronies can navigate the bureaucratic hurdles, and big corporations with dedicated legal teams can cut through them as well. Sanphillippo noticed a big apartment complex going up down the street from his rejected house in Cincinnati, complete with politicians posing for the ribbon-cutting. But for the aspiring retailer trying to turn his side hustle into a full-time, tax-paying small business, or for the small developer trying to turn the value-killing and crime-boosting vacant house on his block into a productive asset occupied by a neighbor, the city permitting office is a hostile obstacle to new entry, and federal assistance is often blind or even opposed to the needs of the low-rise and small-scale.

Now is certainly a time for investment, but not for profligacy. Too much money, for too long, has been thrown after quick-fix schemes and politically short-sighted projects. If the people are fed up with the results of Washington, they should take up the shovel and the hammer to rebuild, out of love for their home. Any nationalism, any populism, must ultimately proceed from that love that keeps us committed and working even when times are tough.

And if politicians come wielding scissors, they should be for cutting red tape, not ribbons.

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