The pandemic era brought many city administrations to their knees, and the ripple effects may not be fully understood for years to come. But as local leaders try to pave a path forward, they would do well to heed the findings of Richard Schragger’s 2016 book, City Power: Urban Governance in a Global Age.
The University of Virginia law professor argues that many of the economic development strategies urban leaders pursued in the 20th century did not work out very well. Instead of trying to court big corporations with generous tax breaks, he argues that cities should build on tier strengths and focus on providing services for the businesses and residents that they have already.
(University of Virginia)
Governing: In your book, you argue not only that popular economic development policies are often unsuccessful — big tax giveaways, stadium projects — but that we really don’t know what policies have been successful at the local level. So what should local policymakers be trying to do?
Richard Schragger: The purpose of the bookCity Power is to make an argument that our current views of what cities are capable of doing, and what we want them to do, are mistaken. The main targets of the book are claims that local governments, and cities in particular, have to be both business friendly and somewhat deregulatory to attract mobile capital. My claim is that it’s increasingly mistaken in a world of agglomeration economies, where cities have a lot of locational benefits.
In any case, none of those strategies have proven to work in terms of resisting urban decline. Maybe we should stop doing those kinds of strategies and start providing basic municipal services as best as possible. For a declining city that will require help from higher level governments, but in a lot of cases cities can engage in redistributive policies successfully. The book tries to make a case for why that’s possible and why we should stop having cities pursue mobile capital to the exclusion of lots of other interests that they can pursue.
Governing: Throughout your book, you say cities should have more power over their fates, and less should be pre-empted by the state. When we last talked you were working with the National League of Cities on a means to fight pre-emption. Where does that stand?
Schragger: The National League of Cities has worked with a number of law professors from around the country to produce a document called Principles of Home Rule for the 21st Century. What it’s attempting to do is rearticulate the appropriate constitutional relationship between the states and their cities. It is a model home rule provision that we would hope states would consider adopting. The National League of Cities and the institutions that preceded it have [historically] produced model city charters and home rule provisions and, in some cases, those have been adopted in the states.
This one is intended to update those previous model constitutional provisions. It includes a statement of principle about the importance of local self-government and home rule authority. It embraces a number of structural protections for that authority, including a power of initiative in which the cities could adopt regulations without having to get permission from state legislatures. And then a presumption against state pre-emption, which doesn’t require that states never pre-empt local laws but would require that the state have a good reason to do so and provides a standard for how one would assess those reasons.
Again, just as a reminder, pre-emption is when the state legislature comes in and tells local government that they can’t adopt particular laws or replaces a state law for a local law. We’ve seen lots of that happening across the country over the last decade or so. The National League of Cities principles readjust that relationship so that states have to give better reasons for why they would pre-empt local laws.
Governing: Considering the rural-urban polarization of our politics, and the Republican Party weakness among urban voters, what incentive would there be for conservative state legislatures to pursue something like that?
Schragger: That is a political reality. It’s hard to get state legislatures to give up power. On the other hand, there have been state constitutional-level reforms that have been adopted in the face of legislatures being jealous of their power. Those have been pursued during periods in which it was clear that the state legislature was overstepping its bounds.
In the Progressive Era, then later in the 20th century, we also see home rule reforms when it’s clear that local governments, especially urbanizing cities and suburbs, need more authority to address the problems that they face. It is inefficient and undemocratic to have the legislature address all the issues facing local governments. While it looks a little bit impossible now, with the kind of polarized politics we’re seeing, there is some room for maneuver especially in those states in which it’s possible that there can be changes in political dominance.
Governing: You’ve expressed skepticism in the past about regionalism as a path forward. You argue that it’s been talked about and pursued for decades and there’s very little to show for it. But why would this possibility of winning more control for cities be more politically realistic than the regionalism approach?
Schragger: I’ve been skeptical of regionalism as a strategy for getting more resources to cities or equalizing resources between cities and suburbs. It’s long been a goal of urban policymakers to create regional entities that do these things. But the successes have been few and far between. In fact, we’ve seen fortunes switch in some cases, with cities doing better and some inner ring suburbs doing worse. It’s not clear that a regional body could assist in helping cities in the context of that kind of demographic inversion.
One of the political features that gives me some hope, in terms of city power, is that cities have increasing economic, political and social influence especially in light of the urban resurgence of the last 20-25 years or so. That means at least some cities — and again, not all, not in every state — but some cities can exercise that power and exercise influence in state legislatures because they are now in a better economic and social situation than they had been.
We have a misalignment right now between the economic and social power of cities in many parts of the country and their political power. That suggests to me that that misalignment will engender a political response at some point.
Governing: Speaking of the struggle for power between states and cities, in a recent paper you expressed skepticism of the YIMBY movement’s efforts in states like California to overturn local zoning rules to enable more construction. Can you spell out that criticism?
Schragger: There’s a strong movement afoot, especially in California, for state-level land use authority that would override local land use decision-making. It’s a form of pre-emption. It’s often pursued by groups who are pursuing a Yes In My Backyard (YIMBY) agenda. It’s a view that there’s an affordable housing crisis in the United States and one way to solve it is to eliminate local exclusionary zoning rules that limit the ability to construct multifamily housing.
I’ve been a critic of suburban exclusionary zoning where localities control their populations by controlling the housing supply and in doing so seek to create a fiscal floor for their municipal budgets. The idea of state-level zoning overrides has been a popular one for some time, but my concern about these moves is, first, that state-level land use has not been shown to work well. This goes back to the regionalism point, which is that simply expanding the sphere of politics to encompass a larger entity doesn’t have the effects that a lot of people want it to have.
What we’ve seen historically is that interventions by states or the federal government in local land use have often been quite disastrous, especially for minority communities and poor communities. Urban renewal is an example of national monies coming through states into localities. We’ve also seen, particularly in New Jersey,state-level land use regimes that have been good intentioned but haven’t succeeded in the ways that housing advocates have hoped.
(Wynn Dhyana/Shutterstock)
This could result in the gentrification of city neighborhoods, not their revitalization. At the same time, state-level land use is often pitched as a way to open up exclusionary suburbs. But it’s unclear that that would actually occur or that it’s actually beneficial to lower income communities to have that happen. While exclusionary zoning in the suburbs is quite problematic, it’s not clear that the solution to that is state-level land use.
My third point is that local governments, and cities in particular, can have a politics that’s pro-low-income and moderate-income housing. There are coalitions that promote an affordable housing agenda. That’s where these kinds of reforms should occur, and they should occur, in part, because cities are in a better position to take into account all these various interests. They’ve done it before and they can do it again. So, I think the skepticism of city power in the land use context is misplaced, because the model that folks are using for that skepticism is the exclusionary suburb and I don’t think that’s the important place to look to expand affordable housing.
Governing: But what are advocates supposed to do when cities are just bad actors, as in the case of these exclusionary suburban jurisdictions? When you have a collective action problem in highly fragmented metro areas? In a state like California, which is quite progressive, and where tenant organizations and labor unions are strong state-level actors, it seems like coalitions could be put together on a larger-than-city scale. One could argue that the state legislature is probably going to be much more progressive than the city council of Woodside or a place like that.
Schragger: This has become the conventional view, that the state legislature can make political moves that certain parochial and exclusionary localities will not make. Collective action problems, exclusionary or even racist motivations: Those problems do exist! But the claim that the state legislature is going to do a better job is an empirical claim and what we have seen in the past, at least, is that state legislators don’t do a very good job in this arena.
Even when they do it with the best intentions, the results are often disappointing. That doesn’t mean you don’t give it a shot, I guess. But I’m quite skeptical of going back to the state legislatures in all these cases. The main detrimental effect that I’m concerned about is, essentially, reverse suburbanization. We’re going to be pro-growth across the state of California, let’s say pro-housing (market rate housing in many of these cases), and override local zoning laws. That just results in the displacement of lower income and moderate-income communities in places that are now suddenly more popular than they had been in the past. You can see that already happening in lots of places. Downtowns are now very popular and neighborhood resistance to downtown development is the main target these days of the YIMBY project.
Really, what’s going on here is the high cost of urban housing in places like San Francisco and Los Angeles, and so the goal has been to increase the level of market rate housing in those highly popular urban areas. That is not what regionalist and pro-low-income housing folks were seeking when they were trying to open up the suburbs. The target has now shifted. Now those lower income minority communities, which had been abandoned through things like white flight and the development of the suburbs, now they are suddenly popular. What we’ve seen is that a pro-growth market rate housing strategy is one that will predictably displace those folks. That tends to be what occurs when low value land suddenly becomes high value land.
Governing: I could see that argument in a state like Pennsylvania or Ohio, where the legislature is controlled by conservative Republicans and tenant groups or other economic justice actors have little state-level influence. But in California, it does seem like there is a different dynamic. These state-level bills have been changed to include tenant protections and take displacement concerns into account.
Schragger: If you’re just thinking about how do we get more affordable housing, then the particular politics of those places is going to matter as to the balance between market rate housing, deregulation, and low-income housing support. Again, states often have more resources than local governments do on some of this stuff. But there are pretty deep risks in centralizing those kinds of land use decisions.
I agree that there’s been some moderating of the pro-growth agenda in the California state Legislature. But that took a lot of work by low-income and moderate-income housing advocates. We’re still seeing some of those folks be very concerned about the state-level overrides. It seems to pit low-income, minority neighborhoods against higher income, say, tech employees.
Again, a big question for me is can you put together a coalition locally to do this? I think you can. What is the historical outcome of some of these state law pre-emptions? Most of them are disappointing. Then, finally, what’s the actual product that you’re going to get from legislative bargaining at the state level? It’s not clear to me that that’s anything but a deregulatory approach with a little bit of handwringing about displacement, which continues to happen at a rapid pace in a lot of these places.
Governing: But the displacement is happening anyway. Wouldn’t it be worse without liberalizing some of these land use regulations? InMinneapolis and St. Paul, local policymakers have sought to combine rent regulations with getting rid of mandatory parking minimums. They want to encourage construction while also preventing displacement.
Schragger: That is a nice example of local action. Cities can do this! Charlottesville, Va., has done a bunch of this stuff. Minneapolis is obviously a good example.
But, a couple of points about that. The first is that when we’re talking about these housing affordability crises, we’re talking about places like San Francisco and New York City. New York has had high housing costs for a long time and has a lot of housing. It’s quite dense! And yet, there is the idea that if you can just build more you can meet the demand. That’s not actually clear. That may also be the case in a place like San Francisco, where you might build a ton of housing and still not lower prices significantly.
The other point I would make about the Minneapolis example is you’ve got two contrary commitments there that are hard to reconcile, at least from an economic theory standpoint: rent control and lifting building restrictions. The classical view is that rent control inhibits construction and so the market-based YIMBYism would oppose most efforts at preventing displacement. Putting those things together would raise the critique that they were pushing against each other.
(Shutterstock)
Governing: Lastly, are you still feeling bullish on the future of big urban areas in the era of remote work? The future of public transit, for example, looks very tenuous right now.
Schragger: This is a very strange time. But I think we’ve seen an urban resurgence of quite significant proportions that I don’t think folks who were living in some of these cities in the mid-’70s could have imagined. Now we’re seeing an increase in remote work and, in some cases, the decline of the downtown office building. Public transit has taken a hit in many of these places.
Cities take a lot of hits from technological or demographic changes and they’ve done so for thousands of years. One of the lessons of City Power is to be modest about making predictions about what might happen. We’re too fast to conclude that the city is either on its way up or on its way down. I’m not so certain that we can extrapolate from any of these short-term events. I wouldn’t venture a guess as to the long- or even medium-term fates of cities.
What we have seen globally is the increasing urbanization of almost every place. That suggests to me that the city is going to continue to be an enormous focus of productivity, civic engagement, political action, and social interaction. That’s not going to stop because of certain kinds of technological advances. Essentially, we’re pretty quick to predict the downfall of these places. And yet, globally, we’re seeing urbanization on a massive scale. That’s not going to stop anytime soon.
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