New Urbanism and Industrial Policy – Toeing the Triple Line

In Democratic Governance, Economic Planning, Economics, Environment, Full Employment, History and Politics, Housing, Industrial Policy, Inequality, Liberalism, Living Wage, Mass Transit, Politics, Politics of Policy, Progressivism, Public Policy, Public Sector, Public Works, Regulation, Social Democracy, Urbanism on February 23, 2012 at 5:56 pm

Introduction:

In the past, I’ve written about the way in which new urbanism needs to do a better job attending to issues of class. However, I want to avoid the accusation that new urbanism is classist in the same way that others have made the argument about race. The reality is that the kind of transformations that new urbanism envisions are a lot easier to do with resources, and those are easier to find in a city that’s expanding, and given the history of post-war urban development that tends to be a particular kind of city.

If we want to revive cities, and not just help cities already on the upswing, if we want to bring New Urbanism to the Detroits, Baltimores, and New Havens and not just the Seattles, Portlands, and Denvers, New Urbanists need to bring industrial policy into their worldview.

Background

To begin with, we need to recognize that all cities practice industrial policy. They don’t do it well; to begin with, cities tend to conduct industrial policy almost entirely through tax breaks and free public services. This drains the city of desperately needed revenues and puts an additional burden on the revenues that remain. It forces cities to compete in a vicious game of beggar-thy-neighbor where corporations can put the screws to everyone but the lowest moral common denominator. Next, most industrial policies are shaped in the dark and often in a disjointed fashion as opposed to as a comprehensive picture. As a result, the citizens of our municipalities rarely have the open debates and clear, democratic choices about the economic choices they are making.

And make no mistake, these decisions have consequences. As Joshua Freeman writes in Working Class New York, New York City in 1945 was a thriving manufacturing hub with over a 2.6 million workers, and a million of them were union members. Together, they built a social democratic city on a foundation of rent control, that oft maligned policy which kept a world capital a working class city for a generation, the best public housing in the country, cheap and comprehensive public mass transit, public hospitals and health services, and some of the best public schools in the world. It was a New Urbanism for its time.

Yet over the next thirty years, this all came tumbling down –  in large part because when the pressures of global competition and automation came up against the city’s disadvantages when it came to land availability, high costs, and high wages, the city failed to do anything about it – at the same time that it was encouraging the development of finance, insurance, and real estate. By 1966, the majority of manufacturing in the region was located outside the city. Thus when the financial crisis hit New York in 1975, it created an opening for business and political elites to construct a new city where Wall Street rather than unions held power. Not only did this change the physical makeup of the city, as factories are knocked down to build high-end condos and corporate office buildings, but it changed the social structure. New York City went from being a city with a roughly diamond-shaped social structure with a broad, economically secure working class into one of the most highly unequal places in America, where the mega-wealthy sit on top of a pyramid of money.

This was a decision made through action and inaction. And these decisions are happening around us all the time. The question is: how do we make decisions that make cities on the decline better places, and all cities a better place for ordinary people?

Industrial Policy for Rusting Cities

Finance – the great difficulty of municipal reform is that many cities are constrained in both the forms and levels of revenue they can raise from taxes and the bond market. There are two potential ways for cities in decline to unshackle themselves. First, Metropolitan Reserve Banks. Just as with state governments, cities can establish reserve banks that can generate large amount of finance, especially for new industries. Naturally, the more limited basis of a city’s holdings and revenue will make these reserve banks smaller than their state counterparts, but given that the size of the projects they’d deal with are smaller too, it’s not a problem. Second, Build America Bonds. The Build America Bonds established by Obama were a godsend for the cities, allowing them to invest in infrastructure at lower costs. A permanent Build America Bond program, or even a program for cities to borrow directly from the Federal Reserve would allow the cities to take advantage of the Federal government’s functionally-unlimited financial capacity while giving the Federal government yet another tool to spread demand around in the future.

Make Real Estate Work for the City – especially in the cases of cities like Baltimore and Detroit which have declined from larger populations, there is a huge untapped potential in the vacant housing and real estate for economic development. First, rehabilitation of vacant housing and real estate can be the foundation for a direct job creation program with extremely valuable production. Second, selling that housing cheaply (in the case of Baltimore for a dollar) or just giving it away to working people literally spreads the wealth while expanding the city’s tax base. As occupancy rates in these properties rise, so does the value of housing and land the city owns – building up the Metropolitan Reserve Banks in turn. Third, it can provide a real solution for homelessness by just giving people a key to an apartment and access to facilities.

High Road Economic Regulation – there also some ways that a city can promote a more egalitarian political economy that don’t involve spending money. Many of these policies – Buy Local provisions that direct purchases to local (and preferably) union vendors, Project Labor Agreements that involve unions in negotiating wages and benefits in city construction projects, and Living Wage Ordinances where cities require vendors, service providers, and businesses that receive public assistance to pay a higher than minimum wage – are already in place in many cities, but they aren’t universally and comprehensively in effect and they haven’t really been part of the New Urbanist toolbox.

They need to be. To begin with, policies that promote an egalitarian distribution of income are conducive to the kind of sustainable living we want – when working people and their families cannot afford to live close to where they work, they increasingly get pushed out into the suburbs. The demand for transportation resources and the resulting strain on our transportation network increases. As a result, the environment is degraded by ever-expanding sprawl and increased emissions from commuters, the high cost of gasoline and the hours lost to commuting exact a further burden on working people and their families, and the outward search for affordable housing continues to spiral outwards, until the fabric of our communities can no longer stretch. When workers can afford to live where they can walk or take public transit to work, not only do communities become more economically and racially diverse, but the forces that lead to sprawl begin to reverse gear, creating systemic incentives for sustainability. Moreover, advocates for social justice could use the kind of innovative, experimental approach that New Urbanists could bring to the human as well as the physical needs of the city.

Public Goodsas I’ve written before, the services that cities provide can make all the difference in livability of a city and its attractiveness to new industries and new migrants who can support a tax base. A municipal public option (building off of expanding Medicaid and SCHIP) and high-quality public hospitals and health clinics, municipal child care services and subsidies, municipal broadband wireless, high-quality social housing and housing subsidies, and yes, municipal job insurance, can transform a city into a commonwealth, where everyone is taken care of and takes care of everyone else.

If new industries and new residents with income are going to take a chance on cities that can’t offer what cities on the rise can, it will take something dramatic to attract them. However, this scale of public goods can’t be afforded by cities on their own – it needs support from state and Federal government. With loans, revenue-sharing to support new services, and Federalization of existing social services, Federal and state governments help shape the entire course of urban development.

Conclusion

It’s fashionable in “socially responsible investment circles to talk about the “triple bottom line” of social, environmental, and economic outcomes. New Urbanism has tended to focus largely on the last two, but it needs to include the first. Industrial policy will make New Urbanism better, and will bring allies that New Urbanism has not have before.

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  1. REALITY!! And A Fix for Unemployment, Homelessness and Hunger

    In addition to fixing healthcare the right way we need a NewDeal. We need a permanent and updated FDR WPA (Works Progress Administration). A Full employment act requiring the government to provide a job for everyone able to work that wants to work at a living wage or better. At safe, meaningful work where they live. Guaranteed by the US government. With free or very affordable excellent healthcare and free or very affordable education and training for advancement or just personal enrichment.

    ( http://my.firedoglake.com/iflizwerequeen/2011/05/16/how-about-a-little-truth-about-what-the-majority-want-for-health-care/ )

    ( Gov. Peter Shumlin: Real Healthcare reform — http://www.youtube.com/watch?v=8yFUbkVCsZ4 )

    ( Health Care Budget Deficit Calculator — http://www.cepr.net/calculators/hc/hc-calculator.html )

    ( Briefing: Dean Baker on Boosting the Economy by Saving Healthcare http://t.co/fmVz8nM )

    START NOW!

    As you all know. Had congress passed a single-payer or government-run robust Public Option CHOICE! available to everyone on day one, our economy and jobs would have taken off like a rocket. And still will. Single-payer would be best. But a government-run robust Public Option CHOICE! that can lead to a single-payer system is the least you can accept. It’s not about competing with for-profit healthcare and for-profit health insurance. It’s about replacing it with Universal Healthcare Assurance. Everyone knows this now.

    The message from the midterm elections was clear. The American people want real healthcare reform. They want that individual mandate requiring them to buy private health insurance abolished. And they want a government-run robust public option CHOICE! available to everyone on day one. And they want it now.

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    THE AMERICAN PEOPLE WILL NOT, AND MUST NOT, ALLOW AN INDIVIDUAL MANDATE TO STAND WITHOUT A STRONG GOVERNMENT-RUN PUBLIC OPTION CHOICE! AVAILABLE TO EVERYONE.

    For-profit health insurance is extremely unethical, and morally repugnant. It’s as morally repugnant as slavery was. And few if any decent Americans are going to allow them-self to be compelled to support such an unethical and immoral crime against humanity.

    This is a matter of National and Global security. There can be NO MORE EXCUSES.

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    Also, unemployment healthcare benefits are critically needed. But they should be provided through the Medicare program at cost, less the 65% government premium subsidy provided now to private for profit health insurance.

    Congress should stop wasting hundreds of millions of dollars of taxpayer money on private for profit health insurance subsidies. Subsidies that cost the taxpayer 10x as much or more than Medicare does. Private for profit health insurance plans cost more. But provide dangerous and poorer quality patient care.

    Republicans: GET RID OF THE INDIVIDUAL MANDATE.

    Democrats: ADD A ROBUST GOVERNMENT-RUN PUBLIC OPTION TO HEALTHCARE REFORM.

    This is what the American people are shouting at you. Both parties have just enough power now to do what the American people want. GET! IT! DONE! NOW!

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    We need two or three very strong progressive volunteer candidates for every member of congress that will be up for reelection in 2012. You should be fully prepared to politically EVISCERATE EVERY INCUMBENT that fails or obstructs “THE PUBLIC OPTION”. And you should be willing to step aside and support the strongest pro “PUBLIC OPTION” candidate if the need arises.

    ASSUME CONGRESS WILL FAIL and SELLOUT again. So start preparing now to CUT THEIR POLITICAL THROATS. You can always step aside if they succeed. But only if they succeed. We didn’t have much time to prepare before these past midterm elections. So the American people had to use a political shotgun approach. But by 2012 you will have a scalpel.

    Congress could have passed a robust government-run public option during it’s lame duck session. They knew what the American people wanted. They already had several bills on record. And the house had already passed a public option. Departing members could have left with a truly great accomplishment. And the rest of you could have solidified your job before the 2012 elections.

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    Knock heads. Threaten people. Or do whatever you have to. We will support you. But get us that robust public option CHOICE! available to everyone on day one before the end of 2011. Or We The People Of The United States will make the past midterm election look like a cake walk in 2012. And it will include you.

    We still have a healthcare crisis in America. With hundreds of thousands dieing needlessly every year in America. And a for profit medical industrial complex that threatens the security and health of the entire world. They have already attacked the world with H1N1 killing thousands, and injuring millions. And more attacks are planned for profit, and to feed their greed.

    Spread the word people.

    Progressives, prepare the American peoples scalpels. It’s time to remove some politically diseased tissues.

    God Bless You my fellow human beings. I’m proud to be one of you. You did good.

    See you on the battle field.

    Sincerely

    jacksmith – WorkingClass 🙂

  2. […] is, the less sustainable it tends to be, and vice versa. When working people and their families cannot afford to live close to where they work, they increasingly get pushed out into the suburbs – which increases our consumption of open […]

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