Reasserting the importance of cities

November 16, 2016 David Dagan
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In his essay “City Power,” Richard Schragger indicts decades of urban policy that has focused on moving people around geographically. Instead, he proposes that we give cities the tools to move people up economically, “turning working-class people into middle-class people.”

To let cities effectively pursue that goal, Schragger proposes a “city power” agenda that would stabilize urban budgets with federal aid, rein in the destructive subsidy race, and give mayors more power to experiment with labor and even financial regulations.

That would be a good start on resolving the pathologies of urban political economy. However, it will take even more than Schragger’s plan to resolve others, such as the economic dominance of a handful of major cities, the extreme fracturing of local government, and the apathy of local voters.

To understand Schragger’s critique of urban policy until now, consider a recent example from Baltimore. In September 2016, the city agreed to borrow $660 million to spur the development of more than 200 waterfront acres into a complex that would include high-end housing units and the headquarters of athletic-wear giant Under Armour.

Taxpayers will largely be financing basic infrastructure for the site, known as Port Covington, but also paying for features including a trolley line. The developers, who include Under Armour’s founder and CEO, are promising that Baltimore will get its money back in taxes once the project is complete. Consultants also see the project generating 35,000 permanent jobs. But critics are not so sure the city’s investment is safe, and argue that benefits the developers have promised to current Baltimore residents are riddled with loopholes.

The Port Covington story underscores two of the central weaknesses of American urban-development strategy. The first is the scorched-earth competition among jurisdictions for job-creating investments, where tax credits and subsidies are used to woo businesses from one place to another. There was no explicit threat from Under Armour to leave Baltimore if the Port Covington project fell through, but policy makers got the message anyway that refusing to pony up could have dire consequences.

The second weakness runs even deeper. It is the persistent notion in economic-development circles that the key to a city’s health lies in moving people. The ugliest manifestation of this idea came in the form of a push: urban-renewal policies that destroyed poor neighborhoods and displaced their residents.

In recent years, planners have instead tried to pull, building the amenities they believe will draw high-income residents. Such a “creative class,” the thinking goes, will not only pay taxes but also provide the entrepreneurial spark that gives rise to new industries. But the danger is that pursuit of these new residents can become an end rather than a means. As Schragger argues, “Giving working-class residents the tools to become middle class in place should be the goal … not moving residents hither and thither in an attempt to cobble together a sustainable tax base.”

To refocus local government on that goal, Schragger calls for rules to limit the relentless subsidy race, federal aid that would free up resources for cities to offer more programs to their residents, and new freedoms for cities to engage in local economic regulation. This will mostly be anathema to the conservative wing of the Republican Party represented by Paul Ryan. But some of these ideas, and others I propose below, might resonate with the Rust Belt voters who pushed Donald Trump to his surprising victory. In fact, one way to give the “city power” cause wider appeal might be to rebrand it as a “prosper in place” strategy, implying a localism that can extend to smaller towns, too.

For a new president who is thinking big, the package might be enlarged to tackle another structural issue, one that exacerbates the flaws illustrated by the Port Covington deal. That problem is the intense fragmentation of local government. As Schragger notes, this fracturing creates immense collective-action problems in which jurisdictions try to limit affordable housing (and what they assume will be the low-tax-paying, high-services-consuming residents who occupy it).

Russell Murphy points out that students of urban politics have long bemoaned this fragmentation and the way it tends to concentrate poverty, but the “metropolitan government movement” has nonetheless struggled to gain traction. Federal incentives that nudge redundant local jurisdictions into merging might be one way to pump life into it once again.

Consolidated metropolitan regions would do a better job of lining up the scales of political and economic life, but they would still be at the mercy of larger market forces. That means devolution is not enough; it will require concerted federal action to ensure that left-behind cities have a chance to get back into the economic race. As Philip Longman argued last year in the Washington Monthly: “Throughout most of the country’s history, American government at all levels has pursued policies designed to preserve local control of businesses and to check the tendency of a few dominant cities to monopolize power over the rest of the country.” But the federal government pulled back from this commitment in the 1980s, letting some regions prosper at the expense of others.

Reasserting the importance of the city in American prosperity will require reckoning with a final problem. Notwithstanding the mythology of local self-government, turnout in municipal elections is generally abysmal, often less than a quarter of eligible voters. People who do not show up at the polls will struggle to get their economic concerns heard, by federal or local politicians. In Baltimore, the charged 2016 presidential race drove a record turnout of 44 percent in April’s primary election, which largely determines local races in the heavily Democratic city. If residents want to have a serious voice in the Port Covington saga, and the many other issues facing Baltimore, they will have to keep coming back to the polls.

David Dagan is a Ph.D. candidate in Political Science at Johns Hopkins University. His dissertation is titled, “Building the Big House: American Institutions and the Rise of Mass Incarceration, 1980-1995.” He is also co-author of the new book, Prison Break: Why Conservatives Turned Against Mass Incarceration. Dagan’s research focuses on American political development and the comparative politics of criminal justice. Dagan is a 2016-2017 Miller Center National Fellow.