The City and Citizenship
THE URBAN POLITICAL ECONOMY:
PUBLIC REALM AND PRIVATE SECTOR
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The City and Citizenship
March 22, 2016
WHAT SHOULD MUNICIPAL
GOVERNMENTS DO?
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What are the key functions of municipal governments?
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Approaches
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Do “functions” = “services”?
Does scale make any difference (big city v. small municipality)?
Practical: look at what they actually do (what they spend on)
Theoretical: how does governance relate to the nature of cities?
Historical: how have municipal responsibilities evolved?
Relational: division of responsibilities between government,
society, economy
What is the “public realm?”
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What should the government’s role be?
How does this relate to the private sector and to civil society?
How is this role determined? How central are economic factors?
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The City and Citizenship
March 22, 2016
PETERSON AND “CITY LIMITS”
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Cities are limited
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What is the city’s interest?
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Not nations – e.g. cannot control immigration or (often) borders
Political expectations – cannot refuse services
Can consider political and cultural factors, but economic concerns primary
"cities, like private firms, compete with one another so as to maximize
their economic position. To achieve this objective, the city must use the
resources its land area provides by attracting as much capital and as high
a quality labor force as is possible.“
How do cities compete economically?
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Major focus is on land-use policy (e.g. planning, zoning, eminent domain,
building regulations, provision of public services)
Little control over labor – cities often try to attract white collar workers
(e.g. thru residential zoning, parks, etc.)
Little control over capital, but can minimize taxes on capital and profits,
offer low-cost public utilities, free public land, lax regulation, and
discourage unionization
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The City and Citizenship
March 22, 2016
“PRICING” GOVERNMENT POLICIES
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Thompson: Apply economic analysis to municipal policy
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Collectively-consumed goods
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“good” for everyone but priced at zero (city, i.e. taxpayers, bear cost)
E.g. education, museums
Redistribution of income
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Provided in one big lump (cannot exclude anyone, so all must pay)
E.g. air pollution control, justice
Merit goods
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Consider costs of goods and services (and incentives arising from their
provision and method of paying)
Does this substitute for considering political choices?
Perform a service for one group while making another group pay
E.g. welfare payments
Need to consider price of for each of these to rationally consider
incentives and priorities
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The City and Citizenship
March 22, 2016
DEVELOPMENT IN THE INNER CITY
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Porter: urban problems rooted in lack of “sustainable economic base”
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i.e. not enough employment opportunities, wealth creation, role models
Cf. Wilson on “jobless ghettos”
Solution not to provide more services or to redistribute wealth, but to
create wealth
Social model v. economic model of development
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Social model tries to meet needs of individuals, e.g. by income assistance,
housing subsidies
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Specific development efforts focused on business subsidies and preference programs
Solution not in “perpetually increasing social investment and hoping for economic
activity to follow” (LeGates, p. 276)
Economic model focuses on trying to create wealth by creating favorable
business climate
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Identify real advantages of inner cities and address real weaknesses
Consider proper role of city government and community organizations
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The City and Citizenship
March 22, 2016
ADVANTAGES AND DISADVANTAGES OF
THE INNER CITY
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Advantages
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Strategic location: near business centers, transportation and
communication nodes
Local market demand: low-wage, but high-density = high spending
power per acre
Integration with regional clusters (cf. Sassen)
Human resources: high unemployment, entrepreneurs
Disadvantages
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Land may not be usable
Building costs high (b/c of restrictive zoning, architectural codes, union
contracts, set asides, etc.)
Other costs (insurance, permits, regulation, neighborhood hiring, etc.)
Security costs high – deter businesses locating
Low employee and management skills
Limited access to debt and equity capital
Anti-business attitudes (on part of workers, community activists)
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The City and Citizenship
March 22, 2016
PORTER: ROLES OF PRIVATE SECTOR, GOVERNMENT,
AND COMMUNITY-BASED ORGANIZATIONS
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Private sector
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Urban governments
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Direct investments according to need, not political considerations (e.g. preferences based on need, not
race or gender; neighborhood hiring as criterion)
Reduce “artificial and outdated government-induced costs” (284)
prepare land for use (e.g. brownfield development); enhance infrastructure
Deliver economic development programs and services through business (“mainstream, private sector
institutions”) not CBOs
Community-based organizations
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Basic goal to “create and support economically viable businesses built on true competitive advantage”
(LeGates, 282)
Do business in city, e.g. franchises and other business relationships
Target corporate philanthropy to business-to-business efforts, e.g. job training
Useful in providing social services (e.g. low-income housing), not economic development - raises
conflicts between economic goals and community accountability
Work to change workforce attitudes
Work-readiness and job-referral programs
Overall, “businesspeople, entrepreneurs, and investors must assume a lead role”
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others (government officials, community activists) support them
key to a “rational economy strategy” that controls intolerable costs
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The City and Citizenship
March 22, 2016
COMPETING MUNICIPALITIES
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What is the role of municipal governments in a metropolitan
region?
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Typical municipal budget priorities
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“market-like set of local governments competing for residents”
(Orfield in LeGates, 289)
Cf. Downs’ fourth pillar, Peterson’s “city interest”
consider services as “costs” and taxes as “revenues”
“core services” e.g. public safety, sanitation services
Income maintenance, health services, courts
Parks, recreation, housing, community development, libraries
Interest on debt
Two key tools of municipal government
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Tax policy (mix of property, income, sales, fees)
Land-use regulations (zoning, subsidies, etc.)
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The City and Citizenship
March 22, 2016
POLITICAL CHALLENGES IN SUBURBIA
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Downs and the Metropolitan Ideal
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Based on four pillars – widely-held aspirations rooted in
“unconstrained individualism” (LeGates, 247)
1: “ownership of detached, single-family homes on spacious lots”
2: “ownership and use of a personal, private automotive vehicle”
3: suburban workplaces should be low-rise, park settings, with lots
of close-by parking
4: “small communities with strong local self-governments”
The 4 pillars generate significant flaws
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The problems (and struggles) resulting from these are much of the
“content” of suburban/metropolitan politics
Redistribution of power to have-nots not the most appropriate
framework for discussing suburban politics
Are Arnstein’s criteria for distinguishing levels of participation
useful in looking at citizen involvement in suburban politics?
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The City and Citizenship
March 22, 2016
THE FLAWS OF THE DOMINANT
METROPOLITAN IDEAL
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Flaw 1: Excessive Travel
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Flaw 2: Little housing for low-wage workers
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Single-family detached too expensive for service workers
Multi-family affordable housing often resisted
Difficult for workers to get to these low-wage jobs spread out across suburbs (look at all
the “now hiring” signs)
Flaw 3: Difficult to finance new/expanded infrastructure
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i.e. sprawl “makes cars happy”
Traffic congestion typically blamed on newest arrivals and on real estate developers
Typical political response is to resist new housing developments (cf. chap. 1 in Duany)
E.g. roads, water systems, utilities, parks
In cities, issue typically maintaining and updating infrastructure
Pits established against new residents
Flaw 4: Difficult to accommodate LULUs
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i.e. locally undesirable land uses such as landfills, runway extensions
Fragmentation of metropolitan governments means few looking at, and fewer willing to
incur political costs of fixing broad problems
Typical political response is NIMBY
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The City and Citizenship
March 22, 2016
POLICY RESPONSES TO METROPOLITAN
PROBLEMS
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What are the basic causes of metropolitan problems?
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Orfield: political economy as shaped by municipal powers
and constraints
Downs: dominant ideal and its implications
Jackson: utopian ideal (“crabgrass frontier”)
Possible solutions
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Orfield: weaken link between tax policy and land-use
regulations
Downs: several options, geared toward affecting incentives
of metropolitan residents
Both economistic in trying to adjust to “consumer” choices,
market externalities, etc
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The City and Citizenship
March 22, 2016
“FISCAL ZONING”
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Competing municipalities try to reap fiscal dividend
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Fiscal zoning: “deliberate attempt by a local
government to reap the best fiscal dividend by limiting
the types of land uses within its jurisdiction (LeGates,
290)
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Focus on net effect of specific land uses on revenues and
expenditures
Accomplished by regulating (limiting) land uses
Positive dividend: office parks, industrial development,
high-value single-family homes
Negative dividend: larger townhouses, inexpensive singlefamily homes, larger apartments, mobile homes
These political decisions affect housing, employment,
municipal services
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The City and Citizenship
March 22, 2016
FISCAL INEQUITIES
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Competition for tax base among municipalities
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Stratification of metropolitan areas
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Wasteful: zero-sum game
Biased: those with early advantages can more easily attract “positive
dividend” uses
“core” communities may not be able to expand or attract higher-value
uses (e.g. expensive homes) and may have higher social expenditures
Edge communities may suffer from massive short-term extension of
infrastructures (cf. Downs’ third flaw)
Very few are clear winners
Consider this in looking at specific suburbs in Northwest (e.g. Des Plaines,
South Barrington) and also challenges faced by central city
Contributes to sprawl
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Municipalities have incentive to promote growth to pay for current
expenses and debt
Heightens competition for new housing, commercial (and leapfrogging)
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The City and Citizenship
March 22, 2016
DOWNS’ APPROACH
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Downs
European-style comprehensive metropolitan planning unlikely, so what
then…?
Cannot abandon the four pillars – need “individualism sensitive to
collective behavior problems, not unconstrained individualism” (252)
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Specific suggestions:
sizable areas of high-density development
“Balanced blend” of different types and prices of housing
State governments impose constraints on local governments to “act
responsibly to meet area-wide needs”
More realistic accounting of collective costs of individual(istic) behavior
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E.g. congestion pricing
Fees on “exclusive zoning” to subsidize affordable housing elsewhere
Flexible (not fixed) mass transit
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