The New Art of Governing

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The New Art of Governing
The Brookings Institution
Center on Urban and Metropolitan PolicyBruce
Katz, Director
Presentation at the Fannie Mae Foundation Annual
Housing Conference October 17th, 2003
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The New Art of GoverningChanging the way cities
do business

• American Cities are undergoing profound, but
  uneven, demographic and market change.
• More than ever it is imperative that cities plan
  and act with a clear understanding of their
  assets and liabilities.
• More than ever it is imperative that cities
  develop competitive agendas that are tailored to
  their realities, embrace systemic change and can
  be sustained over time.

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The New Art of GoverningChanging the way cities
do business
Proposition Cities need to adopt and adapt tools
of the corporate trade to maximize their
competitiveness.
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The New Art of GoverningChanging the way cities
do business
I
Know the Context - The Diagnosis
Use Diagnosis to Set Agenda
II
Implement Agenda with Focus and Market Discipline
III
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Know the Context - The Diagnosis
I
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Like a business, a city needs to start with a
clear understanding of its position in the
marketplace. It needs to understand,
fundamentally, how it is similar to but different
from other cities.
What works in Philadelphia, might not work in
Phoenix.
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What are the dynamics of your urban demographics?
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Who lives in the city?
Demographics
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In the nations 100 largest cities, the bulk of
the population is between 20 and 40
Demographics
Population by Age and Sex, 2000
Indianapolis
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In some cities this is true, if not more so -
Minneapolis
Demographics
Population by Age and Sex, 2000
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In other cities, as in Scottsdale, AZ, its not
true at all
Demographics
Population by Age and Sex, 2000
Indianapolis
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Who is moving in?
Demographics
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Some things are ubiquitous
Demographics
The share of Hispanics in 98 of the 100 largest
cities increased.
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In aggregate, the racial makeup of the 100
largest cities has shifted.
Demographics
Share of population by race and ethnicity, 1990
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to majority minority status
Demographics
Share of population by race and ethnicity, 2000
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In some cities, this has been.
Demographics
Share of population by race and ethnicity, 1990
Anaheim
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.magnified
Demographics
Share of population by race and ethnicity, 2000
Anaheim
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And in other cities
Demographics
Share of population by race and ethnicity, 1990
Cincinnati
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change is not as pronounced
Demographics
Share of population by race and ethnicity, 2000
Cincinnati
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Who is moving out?
Demographics
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In aggregate, there are less childless married
couples in cities than there where in 1990
Demographics
Change in share of households by type in central
cities, 1990 - 2000
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Some trends are dominant
Demographics
74 of the central cities in the 102 largest
metros lost married couples without children in
the 1990s
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But Chicago saw decreases in other families
without children as well
Demographics
Change in share of households by type in central
cities, 1990 - 2000
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Tucson, an exception, saw increases in every
household type
Demographics
Change in share of households by type in central
cities, 1990 - 2000
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What are the education levels of your residents?
Demographics
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Demographics
Income growth tracks educational attainment - and
some places are pulling away from the pack
Share of adults w/ bachelors degree, 1990-2000
Source Brookings calculations of U.S. Census
Bureau data
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What are their incomes?
Demographics
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Some are low and growing
Demographics
Median Income (1999), 1989 - 1999
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Some are low and falling
Demographics
Median Income (1999), 1989 - 1999
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Some are high and growing
Demographics
Median Income (1999), 1989 - 1999
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Some are high and falling
Demographics
Median Income (1999), 1989 - 1999
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What are their assets?
Demographics
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Homeownership in cities is significantly below
the national rate
Demographics
Share of owner occupied units, 2000
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A handful of cities are as high as the national
average
Demographics
Share of owner occupied units, 2000
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but most are much lower
Demographics
Share of owner occupied units, 2000
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Why do demographics matter?
Demographics
Baltimore
Boston
Places differ, and differences in place should
drive different policy
Population DeclineLow ImmigrationLow
EducationLow Wage Work Force
Stable PopulationStrong ImmigrationTalent
MagnetHigh Housing Costs
Income Problem
Housing Supply Problem
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What are the dynamics of your economy?
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What is your function in the economy?

The Economy
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Understand your employment base

The Economy
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City economies have undergone profound change.
For example, manufacturings in Baltimore has
declined more sharply than in the nation.

The Economy
Manufacturings share of total employment, 1969 -
2001
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But, the service sector share has increased faster

The Economy
Share of total employment, 1969 to 2001
Services share of total employment, 1969 - 2001
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So, the sectoral strengths are radically altered

The Economy
Share of total employment, 1969 to 2001
Percent exceeding national share of employment,
2001
Source Bureau of Economic Analysis, Regional
Accounts Data
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Who are your competitors across cities and metros?

The Economy
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Example Competing Biotech Centers

The Economy
Based on several indicators, a 2002 Brookings
study established the location of 9 biotech
centers
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Who are your competitors within the metropolis?

The Economy
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The difference between employment
decentralization in different cities is profound

The Economy
Share of metropolitan office space (SqFt), 1999
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Who are your investors?

The Economy
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Public investment can come in the form of a tax
credit

The Economy
Share of tax filers receiving the EITC, 2001
Indianapolis
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The Home Mortgage Disclosure Act allows cities to
know the location of private mortgage investment

The Economy
Income Stability in Chicago Area Home Buying,
1993-1994 to 1999-2000
Chicago
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So what are your assets and liabilities?
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Assets and Liabilities
A L
Example Baltimores Assets and
Liabilities

• Current AssetsLearning LocationLivability

• Liabilities
• Low educational attainment
• Low labor force participation
• Persistent racial separation
• High crime rates

• Developable AssetsLandLabor

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Use Diagnosis to Set Agenda
II
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The challenge is for corporate, civic, community,
and political leaders to develop an empirically
based agenda that builds on assets and cures
liabilities
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Barriers to the new art of governing
My idea of long-term planning is lunch Frank
Ogden
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Barriers to the new art of governing

• Lack of information
• Lack of capacity to use information
• Susceptibility to idea viruses
• Lack of long term focus
• Diminished leadership network
• Allergy to systemic change
• Constituency gridlock

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Step 1 Establish process for getting to a
shared vision
Set Agenda
Set a large table Be inclusive Bridge
constituencies Go beyond usual suspects
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Step 2 Re-imagine the city
Set Agenda
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Step 3 Develop an integrated/ holistic agenda
Set Agenda
2
3
Build on Assets
Create Quality Neighborhoods
1
FIX THE BASICS
4
5
Build Family Wealth
Influence Metropolitan Growth
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Step 4 Tailor agenda to your city
Set Agenda

• Good schools
• Safe streets
• Competitive taxes and services
• 21st century infrastructure

• Developable land

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Step 5 Assess the policy levers necessary to
affect change
Set Agenda
Example Developable Land
FEDERAL Need investment in brownfield
remediation STATE Action on property
disposition and eminent domain laws LOCAL
Local action on bureaucratic efficiency
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Step 6 Make long term plans, and provide short
term deliverables
Set Agenda
Accelerate sale of foreclosed properties
Build constituencies to expand federal spending
on land reclamation
Access existing brownfield grants
Local information transparency
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Implement Agenda with Focus and Market Discipline
III
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Market/Brand your agenda
Implement with focus
Consolidated Louisville
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Impose market discipline on government agencies
Implement with focus
Philadelphia Neighborhood Transformation
Initiative

• A 1.6 billion dollar 5 year program to remove
  blight from Philadelphia neighborhoods.
• Reform of the city's delivery systems.
• Build 16,000 new houses and demolish 14,000
  buildings.
• Rehabilitate 2,500 properties.
• Creation of a Philadelphia Land Bank.
• Clearing of 31,000 vacant lots in the first year.
• Facilitation of neighborhood planning in a
  citywide context

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Use technology and information to move markets
Implement with focus
Example Milwaukee web site
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Create metrics to hold yourself accountable
Implement with focus
Example Ft. Wayne
Identify goals Measure Progress Reward Success
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Find your allies
Implement with focus
Central City
Older Suburb
Retail
Housing
Schools
Rural Area
Newer Suburb
Farm Preservation
Quality of Life
Conservation
Congestion
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Youve got to out on a limb sometimes, because
thats where the fruit is Will Rogers
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www.brookings.edu/urban