Creative Construction: The New Phase of American Municipal Finance

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Part 1 of Creative Construction - a three-part series by Theodore Brown

Seventy-five years ago, Walker Evans and James Agee published their book Let Us Now Praise Famous Men, giving the Depression a composite face: rugged and, while not defeated, profoundly resigned. A portrait of the The Fields, one of the three families that Evans photographed, shows Bud, the father, shirtless and malnourished, staring patiently ahead while his wife Lily Rogers, exhausted bordering on conquered, nurses their son on a iron wrought bed. Ironically perhaps, these photographs of individual hardship were funded by the federal government. Today, if Walker Evans were working, his subjects might be the government itself.

At a local level, municipal governments have been pushed to brink — and in places such as Harrisburg, Philadelphia. or Central Falls, Rhode Island, they’ve gone past it and into bankruptcy. Due to the Great Recession and the collapse of the housing industry, cities across the country face lower tax revenue per capita than before and limited political ability to raise taxes in tough times. As a result, cities like Colorado Springs are reducing the services they pay for. At the same time, most cities are stuck with growing public employee entitlements that were negotiated during better times. Detroit, for example, spends 50 percent of the city’s annual budget on pensions and other entitlements. While Federal funding, particularly ARRA and TARP dollars, has helped many suffering cities with infrastructure projects, those grants are now long gone. Certainly it’s not going towards any photography series.

But if necessity is the mother of invention, cities have had to innovate to survive. And many have shown their resourcefulness by finding ways of increasing their revenue and reducing their costs. Atlanta cut through significant pension issues in 2011 through hard fought compromise, and officials and workers are still recovering from the bruising process. Chicago’s decision to lease the Chicago Skyway a private company produced a windfall for city coffers but opinions on the move are mixed. Other cities have avoided paying for city employees by “outsourcing” public services to private providers such as community development corporations, business or neighborhood improvement districts (BIDs or NIDs) and others. In places like Cleveland and Detroit, well-run programs such as University Circle, Inc. and Midtown Detroit, Inc. aren’t just working with the city or picking up the slack — they might be radically changing the direction of the city. In Cleveland, the city’s center has shifted to the University area, which begs the question of what happens to those who aren’t affiliated with a university or aren’t living there? Midtown Detroit’s Sue Mosey may have been called the “Mayor of Midtown,” but may actually have more access to capital and more capacity to get things done than Detroit’s Mayor Bing.

The shift isn’t uniformly positive. While community development corporations (CDCs) in their various incarnations are providing services at the grassroots level, their impacts are limited to the communities they operate in. City Governments purview ends not at blocks but at city limits—they can cast a broader net through simple administrative breadth. But ebbing capital leads to waning influence over everyday events that CDCs cannot, for legal, administrative, or economic reasons, pick up the slack on. The best CDCs are the ones that find the middle ground, that find that the best way to help their city is to pick up where official efforts have left off.

Change is in itself suspicious, but the life of any city depends on its malleability. Bruce Katz of the Brookings Institution spoke to that point this summer to an audience of policymakers and urbanists at the Ford Foundation auditorium, “Cities need to influence the national debate about our economy post-recession.” The most effective urban policy decisions since the beginning of the recession in 2007 have not sprouted from the green puritanical dogma of the Occupy movement, but from the lucidly passionate appeals of working people from St. Louis and Cleveland and Pittsburgh and Buffalo and Atlanta.  The progress of people and cities hinges itself on the understanding that the world is not bound for perfection—and that the minor miracles of expelled division and burgeoning equality are borne out not from glossy idealism, but stubborn morality.

Creative Construction continues on Wednesday and Friday with case studies from Cleveland and Detroit.

Image courtesy of Thomas Hawk on flickr