Historian argues American public housing had successes

In a new book, a historian looks at the positive potential of American public housing:

“The story of American public housing is one of quiet successes drowned out by loud failures,” writes Ed Goetz, a professor at the University of Minnesota, in his book New Deal Ruins: Race, Economic Justice and Public Housing Policy

But as Maddie Garrett’s experience shows, and as Goetz details in his book, public housing had—and still has—a lot of potential. It’s just that seemingly no one—not politicians, not Congress, not home builders—wants it to succeed…

In some small cities, though, public housing has worked and continues to work. That includes Austin, the site of one of the first public-housing complexes in the nation, which still stands today. The Housing Authority of the City of Austin has been recognized as a “High Performer” by HUD for 15 years in a row, and, rather than depending on the federal government for help, it has embarked on a few entrepreneurial programs to raise money…

By and large, smaller agencies across the country have been more successful at providing good public housing for residents than giant city agencies have, Goetz says. The example of Austin and other cities such as Cambridge, Massachusetts; Portland, Oregon; and St. Paul, Minnesota; indicate that public housing didn’t have to fail. And perhaps with some tweaking—dividing big public-housing authorities into smaller, regional ones, or spending more money on housing for the poor in good neighborhoods—it doesn’t have to fail in the future, either.

Much of the article summarizes some of the history of American public housing which has had vociferous opponents throughout its existence. Given this opposition – involving charges of socialism, becoming intertwined with race, criticism of poor architectural choices, to corrupt management – maybe we should be surprised that there were any successes at all.

But, the finding that smaller agencies did better might provide insights into how to limit this opposition. The scale of public housing in these cities was likely smaller. The political stakes were probably lower. These smaller cities may not have had the same legacies of residential segregation. The local governments may have been able to maintain stronger control over the public housing instead of it being lost within the big city bureaucracy. Smaller cities have smaller media contingents that can’t quite bring the same negative attention to troubled public housing choices in the same way that big city media can.

Whether lessons from this can be productively used in the future remains to be seen. Public housing still doesn’t seem to have much of a chance in major cities.

Sociologist on “grassroots [support] for hire”

A sociologist discusses his new book about grassroots support that can be bought:

These are consultants that mobilize mass support on behalf of paying clients, and they can be distinguished from conventional insider lobbyists in that they rely less on direct contact with policymakers and more on the activation of third parties. A plurality of them are nonpartisan, and the rest are a roughly even split between those affiliated with the Democrats or Republicans. Their activity is generally unregulated by federal lobbying laws, and so it’s fair to see them, as Tom Edsall does, as “unlobbyists.” They use a wide range of strategies: some that political professionals are well known for using (targeted recruitment for sending letters/e-mails to policymakers, advocacy ads encouraging participation) and some that are less widely recognized (‘intercepts’ that stage seemingly unplanned interactions with legislators, creating third-party or ‘front’ organizations for clients’ causes, ghostwriting blogs, or even helping to stage protest demonstrations)…

Our everyday image of grassroots participation sees it as unprompted, spontaneous, and driven by the authentic moral concerns of local communities rather than by instrumental concerns about gaining resources or political power. Of course, the sociologists and political scientists who study advocacy know that this image has always been something of a myth. Effective organizing generally requires effective organizations, and those organizations need funding, staff, and some degree of structure.

When corporations and other interests hire public affairs consultants to organize on their behalf, what they are doing is often following the script of citizen advocacy: locating sources of public support, studying the opposition, searching out strategic alliances and points of political leverage, and trying to frame their arguments persuasively.  But there are certainly some key differences: the consultants usually have better data, significant funding, and the backing of a heavyweight client. A disadvantage, on the other hand, is that they need to operate with a light touch such that their efforts aren’t discounted as inauthentic “astroturf” (i.e. ersatz grassroots)…

Putting the issue of astroturf aside, an important finding in the book is that the targeting strategies of these consultants have significant consequences. In aggregate, these consultants are reaching out to and mobilizing many millions of Americans every year on behalf of their clients.  These consultants need to turn out numbers for their clients, and so the rational strategy is to target those most likely to acquiesce to their requests, namely, people with a history of political engagement and who are strong political partisans.  Of course, these are the groups that are already overrepresented in the political process, so selectively mobilizing these groups is amplifying inequalities in participation and representation.

This sounds like it raises lots of interesting questions about social movements and what gets counted as “authentic” or not. Large-scale social movements that get many members to physically act are quite rare so it is not surprising that different firms and organizations would want to generate more grassroots activity. Yet, as the author suggests, there is a line where we question the motivations of those organizing or participating in social movements. Are they acting for the right reasons? Are they protesting because there is a legitimate grievance or are they doing it because they are self-interested or getting some kind of renumeration? Should social movements only originate with the public and non-profits (which is practically its own industry these days) or is it okay if corporations and governments also try to get people involved on their behalf? It would then be interesting to look at where Americans draw this symbolic boundary between authentic and inauthentic social action. Perhaps the line would tend to get drawn more harshly for causes you don’t personally agree with as much…

There are some interesting parallels here with action online regarding social movements. If you sign an online petition or like a group or cause, have you become part of the movement? A recent study suggests more private forms of slactivism can lead to deeper engagement with social movements while more public displays don’t do as much. And then what about all of those fake Twitter followers that can be purchased for different causes, whether furthering fame, status, or political interests? While many people may not be aware of the number of less-than-active Twitter accounts, I suspect the public would see these kinds of support as more inauthentic.

When big corporations keep approaching Illinois about tax breaks

ADM and other large companies in Illinois keep pushing the state to offer more tax breaks:

The company has called Decatur home for more than four decades but said it needs to relocate to make international travel and employee recruitment easier. ADM hasn’t said where its new headquarters will be, but Chicago is the preferred location for an operation that would employ about 100 people, according to knowledgeable sources. The company has said it would also create a technology center at its headquarters site that would employ an additional 100…

The ADM tax package is one of several bills introduced Friday that would give breaks to specific companies or industries. The bills seem likely to reignite the debate over targeted breaks that swirled in 2011 when the General Assembly gave tax relief to CME Group Inc. and Sears Holdings Corp. Both companies had threatened to exit the state…

The proposal also would let the company retain state income tax withholdings that employees would have paid the state. Motorola Mobility, Navistar International Corp. and Ford Motor Co. have received the same tax break to retain jobs…

Separately, two other companies are in line to receive tax incentives. Swiss insurance company Zurich plans to build its new North American headquarters in Schaumburg, where it employs about 2,500 people who would shift to the new facility.

More on the story from yesterday’s paper:

ADM, which said last week it is searching for a new corporate headquarters, wants $1.2 million a year for the next 15 to 20 years, company representatives told a State House Revenue and Finance Committee at a hearing in Chicago on Tuesday…

If lawmakers approve the bill, ADM would join a select number of companies that can retain their employees’ income tax withholdings. That group includes Motorola Mobility, Sears Holdings Corp., Navistar International Corp. and Ford Motor Co.

To get there, companies have lobbied lawmakers to amended the language of the state’s Economic Development for a Growing Economy tax credit program, or EDGE.

The print version also noted that about two-thirds of Illinois companies don’t pay corporate income taxes.

Such requests put politicians in a difficult position – which I suspect is one reason businesses make such requests. The politicians quoted in the stories sound fairly negative about the tax breaks; they think the companies are simply asking to avoid taxes they could afford to pay. At the same time, politicians don’t want to be the ones who are viewed as anti-business (which is related to being anti-growth or anti-jobs) and the ones who let big name companies get away. If other states or localities are offering better tax breaks, they have to compete with tax breaks or highlight other advantages (an educated workforce, access to a global city – Chicago, clusters of other nearby corporations and services, etc.). It can then become a race to the bottom as governments undercut each other to attract corporations which are then less valuable.

Building more resilient cities

Constructing cities and social and political institutions that are resilient in response to disasters, like Hurricane Sandy, is not an easy task:

An article from The New York Times this past September explored New York City’s vulnerability from flooding, casting an eerie hindsight over this week’s storm. Dr. Klaus H. Jacob, a research scientist at Columbia University’s Earth Institute and an adviser to the city on climate change (also author of this predictive study), told the Times that subway tunnels would have flooded during Hurricane Irene had the storm surge been one foot higher. “We’ve been extremely lucky,” he told the paper. “I’m disappointed that the political process hasn’t recognized that we’re playing Russian roulette.” Today, repairs and service restoration are only just beginning in New York’s flooded subway system.

The opportunity is to rethink infrastructure in terms of resilience, and not just rebuild it as it was (as this post in Scientific American points out). As University of Toronto professor Christopher Kennedy points out in his important book on The Evolution of Great World Cities, the definition of infrastructure goes far beyond roads, airports, tunnels, rail systems, subways and bridges and includes the rules, code and norms which govern how cities are built. His research points out that London’s rise to global commercial dominance in the 17th century was fueled by its response to the catastrophic fires of 1666. These led to sweeping changes in the city’s building codes and widening of its streets, which in turn led to increased densities, the adoption of new building technologies, and ultimately remade the city in ways that put it on a new growth trajectory.
The roadblock to building resilient cities, quite simply, has less to do with science and more to do with institutions and politics, as Steve Nash pointed out a couple of years ago in The New Republic.

For one thing, the politics of sea-level rise are still hazy—no one seems to agree on whether it’s a local, state, or federal responsibility. And Congress is not doing much to resolve these issues. The climate bill that passed the House last year merely calls for more research, even though more blue-ribbon panels seem superfluous at this point. “Do you need cost-benefit analysis to know that you’re going to protect Manhattan?” asks [Jim Titus of the U.S. Environmental Protection Agency]. “That you’re not going to allow the Jefferson Memorial to go underwater? That Miami is going to continue to exist?” Those aren’t trick questions. But, for now, they’re going unanswered.

In other words, it isn’t just about rebuilding the same thing over and over again. Cities, and countries, need to develop plans by which the new construction is better suited to possible future disasters. The response to massive fires is cited above (and it reminds me of the changes in building after the Chicago Fire in 1871) but this has also occurred in response to earthquakes by setting codes so that buildings are better suited to face future threats. And being able to develop forward-thinking plans requires more flexible institutions that can respond to whatever changes come along. What worked in the past won’t necessarily work in the future so only changing after a major event or disaster is not a good thing. At the same time, such major events also may allow for a more sweeping reaction and change to take place in cities.

“More U.S. cities set to enter default danger zone”

A Reuters story suggests more municipalities are having trouble keeping up with their debt:

Bond defaults were $25.355 billion in 2011, or nearly five times the value of defaults in 2010, according to Lehmann. In 2012’s first quarter, defaults totaled $1.245 billion, or more than double the $522 million of last year’s first quarter.

Municipal bankruptcies, such as last November’s landmark, $4.23 billion Chapter 9 filing by Alabama’s Jefferson County mainly because of its excessively expensive sewer system mocked as a Taj Mahal project, have picked up, too.

Chapter 9 municipal bankruptcy filings doubled to 13 in 2011 from six in 2010, but still remain rare among the more than 60,000 issuers, with only 49 of the 264 cases since 1980 being towns, cities, villages or counties, according to James Spiotto of Chapman and Cutler LLP. States are ineligible for Chapter 9.

Outsized pension-deficit payments and other liabilities, as well as depressed local economies or failing government projects such as Harrisburg’s trash incinerator, often herald crises, according to Ciccarone.

While much of the focus has been on the national debt and national figures (such as unemployment, jobs created, where to set the tax brackets, etc.), all of this is trickling down to the local level. Since many municipalities and local taxing bodies are heavily dependent on property taxes, a decrease in housing values and a continued sluggish housing market suggests many communities will struggle to find revenue. In other circumstances, local bodies might be able to look to states and the federal government for monetary help but they have their own issues during this economic crisis.

I would love to see experts speculate on where this all will end up in five or ten years. Are we legitimately in danger of a lot of municipal governments defaulting? If so, how will this affect local services? How will residents respond to what will be more fees and taxes even as their services might decrease? Could the wealthier people respond with their feet and move to more financially solvent communities?

Naperville government leads Illinois’ top 20 cities in social media use

Naperville is used to accolades – see this well trumpeted #2 ranking in Money‘s Best Places to Live in 2006. Here is a new measure of excellence: Naperville is #1 in a suburban government’s use of social media.

A University of Illinois at Chicago study ranks the western suburb No. 1 among local government websites in a study of social media use by Illinois’ 20 largest cities.

Researchers from the university’s College of Urban Planning and Public Affairs analyzed the websites using at least 90 criteria to determine how well each provided residents with information and the opportunity to interact with officials. Chicago and Elgin round out the top three…

In addition to its main website, Naperville uses Facebook, Twitter, YouTube, RSS feeds and about two dozen e-newsletters to communicate with residents. It also is looking into starting a mass notification system that Community Relations Manager Nadja Lalvani likened to a “reverse 311.”

“It’s very important for us to be able to communicate effectively and efficiently with residents and other constituents,” Lalvani said. “Social media is very prevalent and another tool to make sure the message is penetrating our audience.”

The UIC study also found increasing use of social media by cities around the country. In 2011, 87 percent of the 75 largest U.S. cities used Twitter, compared with 25 percent in 2009. Likewise, 87 percent used Facebook, compared with 13 percent two years prior.

It doesn’t surprise me that Naperville would lead the way: they seem to have the resources to make this happen as well as the interest in being efficient, taking advantage of new technology (see the ongoing debate over wireless electricity meters – the city’s view and an opposition group), and communicating with people.

I wonder if the study included talking to residents to see if these efforts are reaching them. This is an on-going issue for many communities: the city/village/town claims that they are putting out information while residents suggest they are blindsided at the last minute or aren’t informed at all. I think both sides are often right: many communities have newsletters and websites where information can be found. However, searching out and reading this information does require some effort on the part of residents. Add in the issue that many communities are without local newspapers and it is more difficult to transmit this information broadly. If this plan of attack in Naperville is successful, I imagine more communities will follow their lead.

A second issue could still limit the effectiveness of the social media outreach. I was reminded of this by a talk I heard last week: governments may make information publicly available but they don’t necessarily make the information easily understandable. For example, a community may release some data or an important report but the language and data requires interpretation that the average citizen may be incapable of doing. There is a translation issue here from technical or government speak to what people can understand and then react to. Or a large dataset may be public but it requires knowledge of statistics and specialized software to make some sense of it. Granted, it can be hard to boil down complex issues into newsletter items but it also shouldn’t be the case that newsletters and tweets only cover basic stuff like brush pick-up and meeting times.


Quick Review: Boomerang

Michael Lewis’s latest book, Boomerang, gives the current economic crisis some international context. In an entertaining and somewhat breezy manner, Lewis investigates why countries as disparate as Iceland, Greece, Germany, and the United States all fell into the economic mess. Here are a few thoughts about his take:

1. My overwhelming thought about Lewis’s explanations is that he wants to delve into different cultural approaches to the world of finance. Lewis’s argument goes like this: even though these countries have very different histories and cultural mindsets, somehow they all got involved with bad debt in the 2000s. This same topic could spark a fascinating economic sociology or cultural sociology manuscript.

2. Unfortunately, Lewis either doesn’t have much time to spend with each country (he admits the book began as he was working on understanding the US system, which became The Big Short or he doesn’t want to delve deeply into his thin arguments. For example, in Germany he tries to tie their fondness for following rules (which means Germans were the last people to be being disastrous American CDOs) to their fondness for scatalogical humor (which Lewis bases on one anthropological study). While there is a lot of potential here for showing how different cultures can be tied together by a global finance market, Lewis needs a lot more evidence to construct a convincing argument.

3. I found the last chapter to be both exhilarating and depressing. Lewis comes back to the United States in the final chapter and describes how this could all play out. Here is what Lewis suggests: while the centralized governments of Europe struggle, the problem in the US is pushed down the road because the federal government can push off more and more obligations on state and local governments. If this plays out as Lewis suggests (though there is debate over whether it will be as bad as Meredith Whitney suggested), local governments will continue to feel the pain of the economic crisis for years to come and the results may not be pretty.

Summary: I think Lewis is on to something here but I would like to see the topic covered with more depth and include more research.

Shifting resources away from the “fringe suburb[s]”

In an op-ed in the New York Times, an academic argues that “fringe suburb[s]” are dying and we should shift resources to communities that need reinvestment:

Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.

The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population…

Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut. Nothing the federal government can do will reverse this…

For too long, we over-invested in the wrong places. Those retail centers and subdivisions will never be worth what they cost to build. We have to stop throwing good money after bad. It is time to instead build what the market wants: mixed-income, walkable cities and suburbs that will support the knowledge economy, promote environmental sustainability and create jobs.

This is not an unusual argument. Based on survey data, a number of commentators have suggested that the demand for the sprawling suburbs will shrink and builders and governments should get ahead of this shift. The suburban critiques delivered by academics and others since the post-World War II suburban boom may have finally gained some traction as the young and old seek out community over a big, cheap house. How much of this shift will be “durable and lasting” remains to be seen but it would certainly be helped if “the market” goes in this direction.

Two claims in the final sentence of this op-ed are intriguing. The argument that density = greener neighborhoods is common but the arguments about benefits for the knowledge economy and creating jobs is less common. A little more about each of these:

1. I assume the knowledge economy bit is tied to ideas like “the creative class” from Richard Florida. Younger adults, in particular, want to live in places with some culture and neighborhood life, not on the metropolitan fringe in bland neighborhoods. These places become centers of innovation and culture, attracting more residents and businesses.

2. The jobs claim is a bit less clear to me. If money was spent redeveloping older neighborhoods, this could create jobs – but so could building new balloon-frame homes in new subdivisions. Perhaps the creative cities will create so much innovation that this leads to job growth? Does Richard Florida have data that shows a link between the creative class and job expansion overall?

Overall, this is another voice calling for a new urban strategy where the government and businesses stop subsidizing sprawl and start providing money to promote denser, more New Urbanist type developments that some Americans desire.

American cities continue to face falling revenues

A new report shows that American cities continue to face falling revenues, leading to changes in city budgets and governments:

Belt-tightening continued in cities across the United States in 2011, as fiscal crunches forced local governments to cut back. City revenue is projected to decline 2.3 percent by the end of 2011, according to a new report from the National League of Cities released Tuesday, marking the fifth straight year of declines.

One of the main factors contributing to the decline in revenue is a drop in property tax collections, which are projected to fall by 3.7 percent in 2011, the second straight year of declines. Last year’s drop of 2.0 percent was the first year-over-year decline in city property tax revenue in 15 years. To make up for the shortfalls, cities cut jobs, canceled infrastructure projects, cuts services such as libraries and parks and recreation programs and modified health care benefits for employees.

Hiring freezes were the most common personnel-related cuts made in 2011. Half of cities reported salary reductions or freezes and nearly one in three reported laying off employees or reducing health care benefits. Other actions included early retirements and furloughs.

Even in good times, cities are often concerned with boosting property and sales tax revenues. Commercial and residential development proposals are often scrutinized to see how much they might bring into local coffers versus how they might require in new services. But in times of economic crisis, municipalities and residents, worried about possible rises in property taxes, look even more closely at this issue. Additionally, it is more difficult to obtain federal or state monies when those governments have their own budget concerns.

The belt-tightening will continue unless the economy posts a remarkable reversal. In the meantime, cities big and small, from the size of Chicago and a looming $600 million budget shortfall to smaller suburbs, will continue to look for ways to maximize revenues. In many places, this will lead to some interesting conversations about whether the local government should dig itself out of the mess or whether the residents should help makeup some of the loss of revenues.

Whether corporate tax breaks help the average citizen

Phil Rosenthal tackles an interesting question that pertains to Illinois and Chicago after recent news about certain companies threatening to leave unless they get more tax breaks: do such deals help the average citizen? While the conclusion is unclear, here is a bit about the effect of TIF (Tax Increment Financing) Districts which typically generate funds for localized development and infrastructure:

The TIF has become a fashionable way for a municipality to encourage a business to set up shop in a particular locale it might not have chosen otherwise.  Some, however, see TIFs as too often just a handout for businesses that want to go somewhere.

“They’re a very popular tool for economic development,” Rebecca Hendrick, an associate professor in political science at the University of Illinois at Chicago, whose book, “Managing the Fiscal Metropolis,” is due out in November. “There are a lot of discrepancies in the empirical research as to whether they’ve had the intended effect. Would the steel company have come in but for the TIF, or would it have come in anyway?”…

“But it turns out that tax rates go up in the entire jurisdiction in the city of Chicago as a result of a TIF being created in the city of Chicago because the way the property tax works is kind of a zero-sum game. If someone gets money, someone else has to pay for it. … Plus, it’s also off-budget.”

Chicago has a lot of TIF districts so this is not a small issue. Of course, there are different ways to measure the benefits of such development for the average citizen: should it lead to a smaller property tax bill? Should it lead to more city and state services since they should have more tax dollars? Should it lead to a better quality of life in rebounding neighborhoods? Should it lead to more jobs? The common focus seems to be on jobs, as the recent offer from Amazon.com to the State of California illustrates. But these tax breaks often lead to a very limited number of jobs.

The article also hints that certain kinds of economic change receive press coverage while others do not:

A steel company moving to Chicago gets our attention. One person losing his or her home generally doesn’t. Even 100 people losing their homes might not make the papers.

“One hundred people losing their mortgages may involve the same amount of money as a steel company moving to Chicago,” Bowman said. “One of the reasons that TIF money is provided to these businesses is it does get more attention, and people feel like, ‘Maybe things are starting to turn around if Chicago’s more attractive than Cleveland.'”

So is this more of a journalism problem? If newspapers and other media sources are more interested in the “movers and shakers,” typically politicians, business leaders, and entertainment/celebrity figures, does this help the average citizen? I assume the media would suggest that they are the public “watchdog,” helping inform people about abuses of power. But, the media, often in big corporations themselves, can also easily be cozy with these bigger interests and also want to be boosters and help improve the image of their community.

In these poor economic times, I imagine we will be hearing more about corporate tax breaks and whether local, state, and national governments should be in the business of handing them out.