Modest proposals for fixing local government in America

Originally Published by ArchitectureBoston

Local government in America is in trouble, and I have some modest proposals to fix it. I also have a few scars and bruises to show for a 20-year career in municipal government as an architect and urban planner with the Boston Redevelopment Authority (BRA) and later as executive director of the Somerville (Massachusetts) Office of Strategic Planning and Community Development. When government works efficiently to meet the aspirations of the citizens, it’s an inspiring enterprise. But the coming fiscal crisis will break local government.

Writing in Forbes, Joel Kotkin says, “In the next two years, America’s large cities will face the greatest existential crisis in a generation.” Wall Street investors are in a panic. What happens when nervous investors in the $3 trillion municipal-bond market decide that lending to cash-strapped local government is a risky bet? Smaller cities in Massachusetts are in triage mode as they struggle mightily to provide services in the face of budget cuts, staff reductions, and cuts in state aid — reducing the core functions of municipal government to police, fire, schools, and streets. More daunting are the unfunded pension obligations of municipal workers, exploding health-insurance costs, and the diminishing property-tax revenue due to a battered real-estate market.

Local government faces another critical crisis: most Americans don’t trust government. “Politics have poisoned the well in terms of trust in government,” according to Andrew Kohut, director of the nonpartisan Pew Research Center. Americans trust politicians about as much as they esteem Goldman Sachs bankers. The pathetically low voter turnout in local elections reflects the sentiments of cynical, disillusioned citizens.

To improve local government, we must see it for what it really is and how it actually functions. I started my career in local government at the BRA not long after returning from Morocco, where I had served as a Peace Corps architect building rudimentary health clinics and community buildings. In the Peace Corps, I was a pragmatic idealist; after 20 years in municipal government, I turned into a somewhat idealistic pragmatist. Machiavelli, in The Prince, justified duplicity as a means to power; nevertheless, he told truth to power as he saw it, emphasizing realism — or realpolitik — over idealism. A realist sees local government as a collection of competing interests. Government, like other organizations, is made up of individuals striving to pursue their own conflicting self-interests.

Solving local government’s most critical fiscal problems is beyond my pay grade. What follows, however, are some modest “fixes” to local government.

Don’t trust government.

In my experience, local government runs better and is more efficient in delivering services when it’s not trusted — provided that politicians and their operatives understand and appreciate that they are not trusted. So don’t trust government, and let politicians and publicsector managers know this. Keep them on their toes. You will actually be empowering the best-intentioned people in government to do the right thing and putting less-than-well-intentioned people on notice that they are being scrutinized. I confess that, even when I was in government, I often didn’t trust government — or have full confidence that elected officials and political operatives would use the apparatus of government to serve the interests of average citizens rather than those of politically connected interests. I felt like an embedded insurgent waging guerrilla war to advance the public interest. I learned early in my career that you can’t serve the public interest unless you’re willing and prepared to be fired from your government job. A skeptical citizenry can give aid and comfort to the insurgents.

Reconfigure local government around a strategic mission.

Political geographer and urban planner Edward Soja argues that: “Of all the sectors of contemporary life, government and forms of governance have probably changed least. This has made it increasingly difficult to respond democratically and effectively to the many problems arising from the enormous concentration of population, wealth, and power in a small number of megacity regions.” Local government needs to be reconceptualized from time to time. The organizational chart of departments within municipal government should reflect a strategic mission. From my insider’s point of view, municipal government can become calcified with departments and staff organized to solve yesterday’s problems. A critical fix is to engender a bias for rethinking and rearranging the organizational structure of government around clear missions.

When I was the executive director of Somerville’s Office of Strategic Planning and Community Development, I believed our mission required a different kind of org chart. Somerville typifies, in microcosm, the problems and challenges of big cities: new gentrification resulting in displacement of low-income families, a large low-income population, a community of immigrants that constitutes almost half the city’s population, large swaths of environmentally degraded former industrial properties, and decades of economic disinvestment. With the support and encouragement of Somerville mayor Joe Curtatone, I organized a 65-person, multioperational development agency by merging several unlikely city departments — zoning, the building department, historic preservation, parks, economic development, and housing — into an integrated development agency and gave it a new name, the Office of Strategic Planning and Community Development (with an emphasis on “strategic”). We structured the agency around the execution of a clear mission: to attract investment into the city and plan for the redevelopment of a large area of vacant and underused industrial land. Consolidating city functions into one department — not unlike the 1960s Boston Redevelopment Authority — has proven to be a good platform from which to revitalize Somerville’s economy.

Let people in local government be more entrepreneurial.

Create a culture in government that will attract creative, committed, and idealistic people. Value and encourage a bias for entrepreneurship and experimentation in government workers to counter the political pressures, entrenched parochial interests, and other disincentives.

Leadership sets the tone. My former boss, Mayor Curtatone, urged us to “be abnormal,” signaling that he valued people with provocative ideas that challenged convention. In 2005, Somerville was our laboratory for innovation and experimentation in urban policy.

I took a page from the cutting edge of the private sector and ran the Office of Strategic Planning and Community Development like a design firm or an Internet start-up — a radical departure in ossified municipal government. I recruited talented, young professionals to join me in planning and launching a bold strategy to transform and “reinvent” the city. I gave them room to be creative and take initiative and the flexibility to make their own schedules — another departure from the 9-to-5 (and not a minute more) punch-the-clock culture in local government. We got results. In less than three years, my staff launched a major economic-development strategy, attracted more than $900 million in anticipated public and private investment, and secured the state’s commitment to build the Green Line transit extension and transit-oriented development (TOD) corridor through Somerville. In the process, we positioned Somerville in metropolitan Boston’s globalizing economy as a place for innovation and creative industries by advancing provocative architecture and urban design. My staff re-envisioned Somerville and advanced the idea that architecture and urban design could be leveraged as a means of attracting new investment and dynamic development.

Architects should be mayors.

This is not ego-stroking for design professionals. It is a clarion call. Architects (as well as landscape architects, urban designers, and planners) should be mayors of cities, elected members of city councils and boards of aldermen, and chairs of elected planning boards. In light of the coming crisis, local government will require the precise competencies that architects offer. The electorate, worn down by the current nasty, divisive political gamesmanship, is yearning for positive inspiration and will demand it in the future. Architects know how to inspire people. There are precedents for architects serving as successful and transformative mayors. Jaime Lerner, an architect and former mayor of Curitiba, Brazil, launched a revolution in city building. Today, Curitiba is a model of sustainable 21st-century urban planning recognized by UN-HABITAT and UNESCO.

Imagine if members of the Boston Society of Architects (BSA) were mayors of cities in Massachusetts. With the resources and the political power afforded by government, BSA architects could advance the impressive civic-minded BSA initiatives over the years, such as The Civic Initiative for Smart Growth. My recommendation to architects and associated professionals: fundraise, form PACs, press the flesh on a campaign trail, and run for local office.

Cancel public meetings.

In the recent Architect magazine article, “You Dream of a Dictator,” architect and urban planner Andrés Duany FAIA laments that “we can’t get anything done” in the United States. He goes on to criticize community participation in planning as “an absolute orgy of public process” that privileges the interests of obstructionist neighbors over wider community interests.

Duany is right. We’re mired in endless, contentious public participation processes. In my long experience, the “orgy of public process” doesn’t always lead to satisfying or durable results. For all the effort, often we get mediocre urban design. Let’s be honest: Long and frequent community meetings where project opponents or proponents drone on in front of the microphone are not especially efficient in producing creative thinking and collective problem solving. The public meeting becomes a stage to vent frustrations and a crusade for causes that often have no bearing on the project or proposal under consideration. People who don’t enjoy unpleasant, rancorous meetings choose to spend their evenings elsewhere. Who can blame them? Does the audience at public meetings accurately represent the sentiments of the broader community? It’s unlikely. Public meetings are faux democracy.

Duany argues for much less community participation (unless it’s a Congress for New Urbanism–sponsored charrette). I would argue for more public engagement—but engagement that better represents the sentiments of the entire community. My recommendation: Use new technologies including collaboration software and digital visualization tools to engage the public more constructively and efficiently. Promote community-scale decision making using new tools that allow citizens to “vote” online and enable municipalities to track the distribution and rate of responses.

For example, Michael Kwartler, founding executive director and president of the Environmental Simulation Center, recently launched CommunityViz, the first geographic information system–based planning and design decision support software to fully integrate virtual reality with scenario design, impact analysis, and policy simulation. INgage Networks, formerly called Neighborhood America, uses innovative web applications to support collaboration to gain the real-time answers. Smartocracy is a social software system for collective decision making. Locally, there’s Northeastern University School of Architecture’s Urban Gauge, a web-based visualization tool that evaluates alternative scenarios in real time during public meetings.

The goal is to capture more accurate, broadly inclusive public opinion. In many cases, financing for major real estate projects in Massachusetts collapses before communities reach a consensus and an acceptable design. The long time frame for public processes isn’t always in sync with the up-and-down cycles in the real estate market. Local government needs a more efficient and expertly managed process of public deliberation that generates high-quality public review and input in a shorter amount of time.

Think like a real estate developer.

Cities and towns own real estate—town halls, school buildings, police stations, tax-foreclosed properties, and vacant land parcels. My recommendation: Leverage real estate owned by local government in creative ways to generate revenue. The fiscal crisis demands an entrepreneurial mindset in government.

In Somerville, after decades of disinvestment, we considered a real estate strategy to transform Somerville’s Union Square into a vibrant center for the city’s emerging creative economy. Our plan combined and rezoned city-owned vacant properties. In our strategy, we considered consolidating various municipal departments dispersed around the city into a new “City Hall Annex” in Union Square, including a new public-library branch. The consolidated municipal offices and the library would bring a new population of consumers to support the stores and restaurants in Union Square. Our development concept involved an unusual public-private plan to finance a new arts center and the public library with a below-grade municipal parking garage. We also explored an innovative public-private financing strategy to pay for the relocation of an obsolete police station, freeing up four acres of city-owned land for new development. Though this plan has not yet been implemented, in 2009, the City of Somerville re-zoned Union Square to set the stage for new development clustered around the visual and performing arts. The city is currently exploring the best real estate strategies to make these ideas a reality as the economy rebounds.

In my experience, you spark redevelopment in marginal areas with a synergistic package of incentives to attract investment by minimizing risk to prospective developers. A city can leverage its “buying power” as a consumer of rentable space; the City of Somerville explored the idea of leasing space in the new development for the City Hall Annex and library. We based our strategy on the creative use of “sales-leaseback financing” to take advantage of the equity that the city had in its real estate holdings—essentially a sale or leaseback of new privately developed buildings on city-owned land parcels.

Thinking like a developer also means marketing like a developer. Our “gem in the rough” was the Inner Belt, an industrial area of more than 200 acres strategically situated in the Cambridge Metro area, which we envisioned as a future cluster of biotech companies and related emerging growth industries. Faced with stiff competition from the suburbs, we aimed to lure biotech companies to the Inner Belt as they expanded beyond Cambridge’s Kendall Square by planning the right infrastructure investments, such as new roads and the Green Line extension.

Cities, like developers, must know their target markets to create a competitive advantage. We talked (sometimes off the record) with biotech and life-sciences companies and asked them to list their top 10 criteria for site selection. At the top of the list? Not highway access, public transit, proximity to talent, or commercial property tax rates. Their answer: on-site steam and the “power quality” of electricity—absolutely critical for the mega-precision required in the production of biotech’s genetic products. Two people on our staff, experienced with the political perils of locating power plants within communities, developed an idea for an experimental “green tech” cogeneration plant that would generate electricity and produce steam as a byproduct for future companies in the Inner Belt. Senator Ted Kennedy and his staff lobbied Congress to grant us $ 1 million for an Inner Belt strategic plan that included market-driven ideas like the cogeneration plant. The City of Somerville will be launching the Inner Belt planning study this year.

Compete by collaborating.

In Massachusetts, local government is stuck in a zero-sum game. Historic political parochialism privileges the autonomy of local governments while requiring them to compete for investment and new tax revenues. Suburban towns find themselves in no-win situations when one town attracts a major real estate development to a site adjacent to a neighboring town. The neighboring town feels the impact of traffic congestion from the project on its border without enjoying any of the property-tax benefits—and often blocks the project by filing lawsuits against its neighbor. A collaborative approach might open the door to an arrangement in which the towns share the tax revenues the project generates. Towns and cities can compete more effectively for investment in a global economy if they compete as a region, rather than as individual municipalities.

Though challenging, cities and towns can profitably join together to advance projects that extend across city borders. The cities of Everett, Malden, and Medford had historically been locked in fierce competition for new investment. In 1995, the mayors of the three cities tried a different approach: They joined to redevelop 200 acres of blighted industrial land as a large-scale office and research campus for the telecommunications field, along with open space and public river access. It is doubtful whether these cities, acting independently, would have had the capacity to leverage the resources and state political support to make this project a success. This is “ad hoc regionalism,” an informal system of negotiated arrangements and joint decision making between municipalities in the absence of serious comprehensive regional planning.

Identify internal turf battles.

Far from being an efficient unified machine, local government is made up of independent departments battling over resources and staking claim to “turf.” Turf fighting will get worse as budget cuts threaten jobs. For example, firefighters have paradoxically been victims of their own success. Across the nation, the incidence of fires has actually declined. With fewer fires to fight, fire departments are assuming new responsibilities. Fire department code inspectors now go head to head with building departments and building inspectors in the review and approval of building-permit applications. These “turf battles” have the potential to slow the issuance of building permits to the frustration of building contractors and subcontractors. What’s the fix? My recommendation is to put the fire department inspectors and the building department inspectors in the same room. By sharing the same office, the inspectors have at least some incentive to work together. Familiarity and proximity can lead to common purpose.

Institute the “no asshole rule.”

Stanford University professor Robert Sutton wrote The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t, a bestseller in corporate America based on his provocative 2004 Harvard Business Review essay “More Trouble Than They’re Worth.” Sutton argues that bullying behavior and other dysfunctional behavior such as malicious gossiping takes a toll on an organization’s morale, productivity, and profitability. Local government is fertile ground for dysfunctional behavior. In a vacuum, where good, enlightened leadership is missing, politically motivated, Machiavellian people thrive. Toxic behavior drives out the very people you want in government. This is where the “no asshole rule” comes in. Moreover, we should train good public servants how to survive the bad behavior of schemers, backstabbers, and nasty gossips. Think of urban planning as conflict resolution.

In their seminal book, Getting to Yes, Roger Fisher and William Ury proposed a “mutual gains approach to negotiation” using tools of alternative dispute resolution to address complex, controversial public issues. Alternative dispute resolution practitioners have perfected techniques to resolve conflict to avert strikes, craft peace agreements, and settle environmental policy disputes.

My recommendation: Use the “mediation model” as a tool of urban planning and public project review. Train local government planners to be consensus builders who must reconcile conflicting visions about how the city should be designed and developed. In Somerville, I hired Jack Wofford and Pat Field, national pioneers in the mediation field, to resolve contentious neighborhood disputes about development. Doug Foy, former secretary of the Massachusetts Office for Commonwealth Development, and Anne Tate, an architect and Rhode Island School of Design professor, mediated the conflict between community activists and a national real estate developer over the mixed-use, transit-oriented Assembly Square development project, which had been stalled for several years by lawsuits. Incorporating the “mediation model” into urban planning and public project review proved to be particularly effective in combination with workshops that trained citizens how to analyze proposed projects in a way that dispassionately balanced the costs and benefits.

Consider Wikipedia and Facebook as metaphors for 21st-century local government.

Thinking of government as a social network can be a surprisingly useful way to think about some administrative and procedural fixes to local government that serve to regain the trust of a new (but cynical) generation of citizens.

Government, as defined by network theory (and in actual practice), is decision making as a group activity, within a self-organizing network comprising individuals (or organizations) called “nodes.” Social-network theorists argue that modern government is “not the cockpit from which society is governed” but a dynamic interplay among various actors that form a social network. The more robust the network, the more “nodes of opportunity” that allow direct citizen engagement and the more accurately government represents public consensus about decisions and priorities. So how do you translate this into the everyday functions of city hall? Here are two suggestions:

1. Re-institute planning boards elected by citizens rather than planning boards appointed by elected officials—a very traditional idea in New England town government. In Boston, for example, the mayor appoints members to the planning board (called the Zoning Commission). Instead, imagine giving the voting public the power to elect people who represent their respective hopes and aspirations regarding planning and development.
2. Create design review committees elected by the voters, with seats reserved for licensed design professionals. The Boston Civic Design Commission (BCDC) has served Boston citizens well and provided valuable guidance over the years. But imagine an elected BCDC: Architects would campaign for votes across the city.

Fundamentally, people are more vested in and consequently more trusting of any endeavor that gives them the power to make decisions collectively.

Limit the scope of local government.

Be realistic about what local government can do with available resources. Concentrate on such basics as improving schools, promoting entrepreneurial growth, and nurturing sustainable middle-class neighborhoods.

Of course, communities have critical needs beyond these core services, particularly in times of crisis, which a better-resourced government could have addressed in the past. In this new reality, local government might prove its effectiveness by facilitating and “brokering” the work of groups outside government to meet these needs. This is different from outsourcing. Here, the idea of local government as a facilitator is based on the premise that government no longer has the resources to meet all of a community’s needs but still has a responsibility for creating the right conditions so that those needs are addressed by other institutions or individuals.

Local government, as an enterprise, gets caught in a vicious cycle. An inadequately resourced government doesn’t have the capacity to reasonably perform to the public’s expectations; an angry and disillusioned public demands further cutbacks, thereby exacerbating government’s failure to perform and feeding the public’s lack of confidence. Planning and code administration offer a good example—core functions of local government. In economic crisis, the difficulties in meeting critical short-term needs with less staff and constrained budgets leave municipalities with limited capacity. And with public distrust and cynicism unabated, local government may no longer have the credibility or legitimacy to do objective, unbiased planning. Citizens sometimes perceive planning by local government as more of a rationalization of political decisions already made.

This failure of public confidence demands new radical approaches. For example, municipal governments might outsource planning and related regulatory responsibilities to the nonprofit “third sector,” the nongovernmental, nonpolitical organizations that have effectively done work for communities that government had historically assumed (the public and private-for-profit sectors being the “first” and “second” sectors, respectively). For example, the Metropolitan Area Planning Council (MAPC)—a nonpolitical organization staffed by highly competent professionals—enjoys legitimacy in the public mind because it offers a more rational regional perspective. Other nonprofit organizations such as A Better City, MassINC, the Boston Foundation, or the Pioneer Institute have the expert professional capacity to do varying aspects of city and regional planning. Their agendas are clear and transparent and, as a result, they have credibility. The third sector can fill in where local government no longer has the resources and capacity. A more viable role for local government might be as an orchestrator of many parallel planning initiatives by nongovernmental organizations. In this role as network manager, local government earns a different kind of legitimacy by ensuring that everybody’s interests are represented in an open, transparent, and balanced manner. Imagine if nongovernmental organizations such as MAPC, with a regional perspective that transcends municipal boundaries, assumed responsibilities for the planning for each town and city.

Trust local government—but only if you can verify its performance.

Reconsider my first recommendation, “Don’t Trust Government.” Ronald Reagan quoted the Russian proverb, “trust but verify.” How do you “trust but verify” local government? Taking a page from private business, hold the staff accountable, and establish performance benchmarks that reflect the degree to which the public purpose has been met. If you can’t measure it, you can’t manage it.

Here are a couple of ideas: Peg the salary of the planning or economic development director upward or downward to the annual increase or decrease in the city’s commercial tax base—a measure of a city’s or town’s success in attracting investment and, ultimately, revenues. The growth of the commercial property tax base in a city is a good indicator of a city’s capacity to generate tax revenue needed to pay for schools, safety, repair of potholes, crime prevention, and social services. Use the amount of weeks it takes a building department to process building-permit applications as an indicator of efficiency.

Benchmarking should not be punitive; rather, it should be the basis of a system of incentives. For example, I wish that I could have given raises to my staff at Somerville’s Office of Strategic Planning and Community Development based on how much grant funding they secured. Staff landscape architects received $4 million from the state through a competitive process to design and build new parks and playgrounds—a significant investment. Other staff secured more than $50 million in commitments from Massachusetts Department of Transportation through the competitive State Transportation Improvement Program to plan and build new transit, roads, and other infrastructure. Our senior planner was aggressive in getting the Environmental Protection Agency to fund a brownfield project in Somerville at a funding level far greater than that in other similar cities. A project manager won several million dollars from the U.S. Department of Housing and Urban Development to remove lead paint from affordable-housing units through a pilot program. In the private sector, this would have been rewarded. Why not government? The inside political culture of local government often conspires against true incentive-based compensation. In the worst cases, raises and promotions are based on patronage and how well staff serves narrow political interests.

Local government will only be as good as the people who work in it. Incentives to encourage good performance are cornerstones of any effort to make government more efficient. Committed and motivated workers will make government run in times of crisis.

In Conclusion

Even in crisis, local government is where democracy is most direct and tangible in the average person’s everyday life: educating kids, making the streets safe and clean, approving new zoning, issuing building permits. Doing these things well gives local government the greatest potential to win back the public’s trust. Crisis brings out creativity and builds resilience—provided creative government workers are not stymied by narrow political interests. Therein lies the problem—but also the opportunity—in local government.

In early October, I gave the keynote speech at a Forum hosted by the Instituto Tecnológico y de Estudios Superiores de Monterrey, commonly referred to as the “TEC”. The Forum was a fascinating discussion on how to turn around a city that’s plagued with violence and crime fomented by the drug cartels (read more here). For me, though, the most inspiring part of the trip was a tour of a new house the TEC and its students had helped build in a nearby barrio for the school’s cleaning woman whom the union had voted to be in the most need of a new home. The social, environmental, and economic potential of such projects have the ability to transform Monterrey’s urban development as much as any government or private initiative.

The TEC is committed to engaging marginalized communities and operates a national network of centers, called Social Incubators, that cater to communities near the TEC’s 33 campuses across Mexico and allow students to serve as local consultants under their professors’ guidance. The School of Architecture, Art and Design Technology (EAAD) students to conduct community service as part of earning their degree in architecture. By raising students’ awareness about Monterrey’s urban problems, EAAD challenges them to consider the power of education and design to offer alternative solutions to the ‘wicked’ social problems confronting Monterrey and other cities.

The School’s Impulso Urbano (Urban Impulse) project is an innovative example of the TEC’s social incubators. It involves graduate and under graduate students from different disciplines in promoting social development and improvements that benefit low-income residents in poor neighborhoods – typically informal communities.

The 10×10 Casa Rosenda project is an inspiring outcome of this project. EAAD architecture and industrial design students under the guidance of Prof. Pedro Pacheco helped the family of Rosenda Flores to design and build an innovative house in one of the poor informal high crime neighborhoods in the Guadalupe municipality. Rosenda and her family previously lived in a 250 square foot (sf.) shack built from thin metal scrap without running water – characteristic of informal houses in her neighborhood.

Creatively using discarded materials from landfills and abandoned construction sites, the students built a 640 sf., two-level, environmentally sustainable house with a full kitchen, one bathroom and a 10,000-liter rainwater collection tank.

At the October 2011 Design Like You Give a Damn: LIVE! Conference in New York, Architecture for Humanity recognized Impulso Urbano’s Casa Rosenda project for its innovation and creativity, and has included the project in the second edition of Design Like You Give a Damn, a compendium of innovative projects from around the world that “demonstrate the power of design to improve lives” (to be released in Spring, 2012.) Architecture for Humanity is a nonprofit design services organization devoted to “building a more sustainable future through the power of professional design,” and a leading voice of the humanitarian architecture movement. The next edition of Design Like You Give a Damn, edited by Architecture for Humanity, will showcase innovative projects, like Casa Rosenda, that provide basic shelter, health care, education, and access to clean water, energy, and sanitation and solutions to other urgent needs. As the book’s editors note, many of the featured projects were often built and designed “against great odds” in cities and rural areas challenged by pervasive poverty — similar to Rosenda’s neighborhood in the Guadalupe.

Mr. James Mayeux, AIA, Dean, School of Architecture, Art and Design Technology and Prof. Pedro Pacheco are continuing discussions with I2UD about a partnership in support of Urban Impulso as a ‘social incubator’.

Photos by James Kostaras

An acute crisis of confidence pervaded discussions at Revive Monterrey Forum 2011. Monterrey, Mexico’s third largest city with a metropolitan population of more than 4 million, is confronted by brutal violence from drug cartels. Monterrey is the nation’s most affluent city and home to some of Mexico’s major international corporations that compete successfully in the global economy, including CEMEX, the largest cement producer in the Americas. However, as Tim Padgett recently reported in TIME Magazine (“Mourning Monterrey: Drug Mafias Darken Mexico’s ‘Lighthouse’“, August 26, 2011), “In 2005, the global consulting firm Mercer ranked Monterrey as Latin America’s safest city. But in 2006 it began falling to los narcos – the drug-cartel mafiosi responsible for 40,000 murders in Mexico since their violence began spiraling out of control that year.” Urban poverty and a dysfunctional and fragmented metropolitan governance structure resist and complicate an effective response to this crisis.

Monterrey’s business leaders are increasingly concerned that the costs of doing business in a city plagued with escalating criminal violence and intractable poverty will drive away foreign investment and undercut Monterrey’s robust economic competitiveness nationally and in the global economy. As part of the dialogue on what to do in such a situation, the TEC invited me to share insights into the challenges of urbanization and metropolitan governance from I2UD’s global perspective, and recommend new urban strategies for decision-makers in Monterrey, particularly in the context of crisis.

As a consequence of a turbulent economy, dysfunctional politics and drastic federal budgets cuts, a looming fiscal crisis will break municipal government in the United States, particularly in cities that have lost jobs and their industrial base. Building upon its international experience, I2UD is exploring ways to assist smaller economically distressed cities in America.

Joel Kotkin, a former Senior Research Fellow at the New America Foundation, writing in Forbes says, “In the next two years, America’s [large] cities will face the greatest existential crisis in a generation.” Smaller former industrial cities, as we noted previously in this blog, are in “triage” mode as they struggle mightily to provide services in the face of budget cuts, staff reductions and cuts in state aid, reducing the core functions of municipal government to police, fire, schools and streets. More daunting are the unfunded pension obligations of municipal workers, exploding health insurance costs and the diminishing property tax revenue due to a battered real estate market. The political risks for local government pose a dilemma: municipal governments stressed by budget cuts without adequate resources perform badly, leading to further demands for severe budget cuts from a disillusioned public, exacerbating performance problems and creating a vicious cycle.

I2UD Research
In response, I2UD is completing an analysis of selected Massachusetts cities and towns, faced in recent years with fiscal crisis, economic stress and diminishing State and Federal funding. The objective is to assess the capacity of these cities to formulate creative strategies to ensure their long-term economic competitiveness, deliver essential services and address problems of urban poverty. Since June 2011, Kendra Leith, Research Associate, and Lu Gao, Research Intern, have collected data from the Massachusetts Department of Revenue and 2010 U.S. Census for 36 cities in the Commonwealth of Massachusetts, primarily post-industrial cities with populations of 100,000 or less. Our analysis and findings predictably confirm a range of assumptions, some of which include the following:

• Poverty. Former industrial cities tend to have higher poverty rates, although there is no consistent pattern across the spectrum of the selected cities in terms of the increase or decrease of poverty rates from 2000-2010.
• Immigration. Immigrants have been a significant and increasing percentage of the population in the former industrial cities. A critical research objective, in the future, might be to determine the extent to which immigrants’ investment and participation in the local economy have revitalized or ‘propped up’ distressed cities during the national economic crisis — or alternatively been a burden to these communities in terms of social services.
• Diminishing Property Tax Base. Selected cities differ significantly in their capacity to generate local revenue through property taxes during the 2000-2010 period. Some cities have a strong sustaining tax base with over 70% of revenue coming from local property tax; others rely heavily on the financial aid from the State and can only collect 30% of local revenue from their own property tax base. This reflects a broader dilemma for municipal government in the U.S. As the National League of Cities recently reports, “One of the main culprits is the property tax, which many cities and local governments rely on heavily. Property tax collections, which are usually quite resilient, are projected to fall by 3.7 percent this year — their second year in a row of declines — as tax assessments belatedly catch up with the lower property values left behind by the battered real estate market…. For cities, the collective impact of property values continuing at levels far below their 2007 peaks, consumer spending slowing, consumer confidence eroding and markets possibly entering a double-dip recession is the worst since the Great Depression.”

Interviews with Municipal Officials in Massachusetts
Informed by this data analysis, I2UD has also interviewed elected officials, city planning and economic development directors, and representatives from community development agencies in several selected cities since July 2011 to explore a prospective role for I2UD in helping to build the capacity of these communities to develop innovative interventions strategies, reverse their economic decline and continue to provide essential services to their communities.

Does I2UD have a viable role in helping to build the capacity of local governments in U.S. cities?
Undertaking this ‘pilot’ research project over the past three months has given us an opportunity to consider several questions pertaining to the value of and prospects for I2UD U.S.-based work in cities in crisis.

Do municipal governments have a real need for and interest in I2UD’s services and expertise, notwithstanding the scope and impact of the current crisis?
Interviewed municipal stakeholders identified difficulties in meeting critical short-term needs with less staff and constrained budgets leave them with a limited capacity to plan strategically for mid- and long-term economic development. In fact, several cities were very enthusiastic about involving I2UD in several specific tasks or services that they have limited capacity to undertake including:

• Grant writing for competitive federal and state government funding
• Developing master plans and urban design guidelines
• Preparing economic development plans
• Generating comprehensive community development strategies
• Provide training for planning and economic development staff within city government
• Developing programs to provide technical assistance for small businesses
• Offering training programs in community participation, consensus building, and negotiation to municipal staff
• Documenting and disseminating best practices

What would be the funding strategy to support either research or pro bono consulting work by I2UD to assist distressed U.S. cities?

As an initial inquiry, we identified foundations and corporate-giving entities within private sector organizations that might offer potential funding on a competitive basis for an I2UD pilot project to provide the cities with technical assistance on a no-cost basis to prepare a development strategy and other requested services.

Assuming the availability of funding, is U.S.-based work in this area resonant with I2UD’s long-term international strategy, in terms of the organization’s capacity and allocation of staff time?
This question will require a broader, more strategic discussion within I2UD once this analysis and assessment are complete.

An I2UD ‘Learning Network’ of Smaller U.S. Cities
The discovery of innovative strategies and approaches to urban development by entrepreneurial planners and other officials in local government in several of these cities, even in the face of economic headwinds and diminishing federal and state aid, was an unanticipated outcome of the interviews. Some of these innovations include a municipal solar power facility, creative development of tax-foreclosed properties in collaboration with community-base organizations and a city-owned farm and apple orchard that generate a profit supplementing the otherwise constrained municipal budget. On a parallel track with the capacity-building project, I2UD might assume a role in documenting and disseminating these ‘innovative practices’, many of which might contribute to the future fiscal sustainability of communities in crisis, through a ‘learning network of cities’.

Mr. Kostaras’ article, “What I Learned: An Insider’s Guide to Improving Local Government, Modest proposals for fixing local government in America” appeared in ArchitectureBoston’s Summer 2011 issue.

Top photo: Renovated mill in Holyoke, MA; Second photo: Run-down mill in Leominster, MA; credits: I2UD