I have serious doubts about the capacity of Americans to experience Suburban Retrofit as anything more than a niche undertaking in the most affluent places. The cost of these projects is enormous, far beyond what makes sense for most places. The number of people and businesses it would take to make a big-box store on the edge of town viable is more than most communities have to spare.
And, if Suburban Retrofit of a site is successful, then there is an oasis of prosperity amid a disconnected suburban landscape, something that seems to merely repeat the mistakes of the modern development approach.
Many technical professionals who advise cities, along with many developers well versed in both subsidies and municipal desperation, are smitten by the concept of Suburban Retrofit. It allows them to pretend that their bold visions can lead the way out of the decline we’re trapped in.
Our cities have had their fill of bold visions. It’s now time for an extended period of humility.
Notes
1 “Paul Stewart on Neighborhood Revitalization”, Strong Towns Podcast, September 8, 2016.
2 Mike Lydon and Anthony Garcia, Tactical Urbanism, Short-Term Action for Long-Term Change (Washington, DC: Island Press, 2015).
9
Place-Oriented Government
There was skepticism in the room when I finished a presentation to a group of city managers in Mississippi. These are the unelected professionals appointed to manage the day-to-day affairs of cities. They were not impressed with the engineer from Minnesota.
I told them that their cities were insolvent, that they were making bad capital investments, and that they needed to change their approach to growth and development if they wanted to get out of the financial hole they were in. I had shown them the math – all the data and charts – but they weren’t buying it.
One of these city leaders took issue with the entire narrative. In a deep Southern drawl, he argued that he and his colleagues were good stewards of the taxpayers’ money. He suggested that the capital projects they had done all followed accepted practice and had a positive return on investment. He was quite assertive, and very insistent.
I tried a different approach. I offered that, if these were such great investments, if they all paid solid returns, instead of borrowing the money or raising taxes, they could redirect their pension funds as a source of capital. Then their pension funds could capture the great returns from their wise management. It was a way for them to have skin in the game, to align their own future with that of the communities they serve.
The room went quiet for a moment, then exploded with laughter. The city managers slapped each other on the back and nodded enthusiastically. You mean that kind of return. There wasn’t one of them willing to use their pension funds in that way, and everyone in the room knew it. I had made my point and we now understood each other.
The Local Government Response to Hardship
I’ve been in the private sector my entire professional career and I’ve heard all the jokes – some of them quite hilarious – about government employees. Like all good humor, there is some factual basis for critique, but I’ve not found the stereotype of the incompetent government bureaucrat – biding their time, filling out forms, going to meetings – to be based on reality.
This is especially true for city government, specifically among the professional leadership. Running a municipal corporation is demanding, as difficult if not more so than most private-sector undertakings. The culture is different, of course, and the values emphasized diverge, but my experience working with organizations big and small has shown that the distribution of competence (and incompetence) throughout an organization is fairly consistent, regardless of whether it is a public- or private-sector undertaking.
Where private and public sectors differ the most is in their response to feedback, particularly hardship. When private-sector enterprises are stressed financially, they tend to cut staff and retain programs. The reality of the private sector is that, without people willing to pay for goods or services, employees are a liability. If the organization can’t bring in sufficient revenue, it will cease to exist. Tightening organizational slack will limit the kind of innovation that comes from excess resources, but cutting staff has its own way of revealing inefficiencies and driving adaptation. The company that waits too long to cut staff in a downturn might not make it through.
For the public sector, the response is very different. Local governments experiencing shortfalls might freeze hiring, but they generally find it more expedient to cut programs instead of people. The government can’t fail in the same sense as a private-sector business; it can fail in its duties, but it won’t go away or cease to exist. Revenues will continue to come in and so, whatever shortfalls occur, local governments have an internal incentive to prioritize their own staff. The cuts that happen instead result in more deferred maintenance, slower response times, and, worse service.
Over multiple business cycles, these diverging responses to hardship result in local governments full of legacy programs – things they’ve always done and just never stopped doing – and, subsequently, short on both resources and the capacity to innovate. Again, this is not because the people lack competence or motivation – I have found some of the most competent and heroic people working for local government – but because of the nature of the feedback local governments receive.
In the private sector, the price paid for keeping excess employees during a downturn is potentially enormous. For local governments, the price paid can also be enormous, but it’s experienced disproportionately by the residents of the community, not the senior leadership of the local government.
This is an important distinction to understand because cities need to intentionally reorient themselves to experience more direct feedback, particularly hardship. They need to focus away from the hierarchy of governments and toward a shared experience with their own residents. Harmonizing competing interests in an infinite game of building human habitat requires local government leadership to become acutely aware of, and responsive to, the hardships experienced by people within the community.
Designed for Efficiency
Today’s local governments are organized based on the efficiency model popular in business schools of the 1950s and 1960s. Borrowing much from the military, this model organizes personnel into silos based on tasks. Within each silo, a hierarchy is established with a clear chain-of-command. All of this is overseen by elected leadership, which – theoretically – directs this machine of efficiency to address community priorities.
Some may bristle at my characterization of local government as efficient, yet that is what this approach is designed to be. The primary purpose of this structure is to replicate a set of directions over and over. For the Army, it’s used to direct troops across terrain to gain and occupy territory. For local government, it is set up to replicate and maintain the pattern of development used to grow the economy starting after World War II.
Consider a block of streets. The streets department will handle the design and construction of the pavement surface, sidewalks, and drainage systems. A separate utility department – with its own staff and hierarchy – will handle the underground utilities. A maintenance department will plow the snow, mow the boulevards, and fill the potholes. Parks staff will put in the street trees and shrubs. The zoning department will handle the regulations for adjacent development conforming to a plan put together by the planning department. The housing department will work on any housing issues on the properties aligning the street while the economic development department will deal with any business development issues. Public safety departments will respond to emergencies, but their operations will remain isolated from other parts of the city. All of this is coordinated and supported by an administrative staff.
It’s set up this way to be efficient. The streets people might coordinate with the parks people, but they don’t have to understand what the parks people do. It’s a different silo; streets handles their duties and parks h
andles theirs. Guidance can be efficiently sent down each hierarchy to be executed. Each silo can develop their own internal expertise, culture, and champions.
While this approach is efficient, it lacks adaptability. Once a silo and hierarchy system is established, there is internal inertia that resists change. Repeated business cycles have forced most of the private sector – any part that relies on innovation – to address this shortcoming, largely by reorganizing into a flatter, team structure. Local government, with its different response to stress, has largely resisted this kind of realignment.
Some local governments have adopted a team approach for major projects, but the teams are subordinate to the silo structure and the relative hierarchy of each silo remains. The values of the department with the largest budget tend to dominate. For example, a street reconstruction project is more likely to prioritize moving traffic instead of building wealth by adding street trees because the engineering department has a much larger budget, and thus far greater clout, than the parks department.
Local governments are under constant stress to do more with less. With programs short of funding, staff priorities shift toward work that produces cash. Lots of time and energy is spent seeking grants and other funding from the federal and state governments. Many staff will commit senior resources to lobbying legislators and building relationships with those who can bring in new revenue. Others will work with large developers to bring in outside capital for new projects while generating fees for the city.
Local governments are predisposed to be internally focused on their own systems. They are highly responsive up the government food chain, adapting to available revenue streams by shifting priorities to projects that can receive state and federal funding. They are also highly responsive to businesses and developers from outside the community, who are viewed as having the capacity to bring new resources to the table.
Where local governments focus on the residents of the community, it is most often in the context of considering them customers whose needs and expectations are to be satisfied in a cheerful manner, instead of collaborators in a joint project known as the city.
This might have all made sense at a time when America’s cities were merely attempting to replicate a fixed model of development. It’s the wrong system for cities whose objective is to build wealth. Cities that are going to make productive use of what they have already invested in need flexibility, nuance, and – most critically – a culture that embraces early failures as a learning mechanism.
Local government needs to be reimagined, beginning with new values and objectives.
A Focus on Broad Wealth Creation
Growth is the unifying objective within modern local governments. All silos and hierarchies can align themselves around the pursuit of growth and thereby meet the priorities – directly or indirectly – of senior leadership and the broader community. Many a bad idea has been pursued without pause because it contained the hope of new growth.
Growth is an old economy objective. For local governments seeking to create successful human habitat, the centrally orienting objective needs to shift to wealth creation. Broad-based wealth creation. Cities must sacrifice growth to build stability, to close the gap between private wealth and long-term public liabilities.
This new approach requires cities to be flatter, more flexible, and increasingly strategic in their actions. They need to be able to do small projects, to iterate collaboratively and embrace failure as a learning mechanism. They must add value to routine maintenance and facilitate the next increment of maturing with a minimal amount of friction.
This doesn’t mean less local government. In fact, a collaborative approach, one that takes its cues from a humble observation of where people struggle, is labor intensive. A city pursuing growth as a commodity will value the lowest possible cost in all its activities, but a city focused on building wealth pays extra for the creation of value.
Table 9.1 offers a sample of how the core priorities of a city must change to support a new approach of building wealth.
Table 9.1 How a City’s Priorities Must Shift to Build Wealth
Department Conventional Priorities
Strong Towns Priorities
City Engineer Reducing congestion. Building measurable wealth with each project.
Moving automobiles quickly. Providing an abundance of mobility options within the city.
Securing state and federal funding to build new stuff. Working to have a tax base sufficient to support ongoing maintenance obligations.
City Planner Enforcing regulations. Facilitating the next increment of maturing.
Ensuring adequate parking. Ensuring adequate tax base.
Separating uses and reducing nuisances. Ensuring new buildings fit with the neighborhood pattern.
Projecting future growth and making plans to handle it. Implementing adaptable systems that will respond to changing market conditions.
Zoning. Urban design.
Economic Development Recruiting one business that adds 50 new jobs. Helping 50 existing businesses add one new job each.
Handing out subsidies to new businesses. Reducing the burdens on existing businesses.
Creating jobs. Creating an environment that promotes job creation.
Economic hunting. Economic gardening.
Parks Building new park facilities. Leveraging existing parks to improve the value of surrounding properties.
Creating a parking lot to attract more users. Creating more walking and biking connections to serve nearby users.
Soliciting federal grants. Creating opportunities for locals to financially support your efforts.
Building things that are easy to maintain. Building things that are worth maintaining.
Housing Authority Building affordable housing. Ensuring that affordable housing is easy to build everywhere.
Financing an apartment building with 20 affordable units. Helping 20 property owners each build one accessory apartment.
Fighting blight. Restoring confidence.
Transit Coordinator Serving corridors. Connecting productive places.
Serving only the disadvantaged. Serving everyone.
Covering a large area. Providing frequent and reliable service.
Making transformative improvements as a catalyst for growth. Scaling transit to the current level of development. Maturing transit along with the neighborhood.
Appling for federal grants to make large improvements. Using the resources available today to get things going.
Public Safety Designing city to match the desired equipment. Acquiring equipment to match the desired city.
Decreasing response time. Preventing collisions.
Growing the service area. Improving service to core neighborhoods.
Stopping any initiative that might have safety implications (i.e., “You can’t do this because . . .”). Mitigating safety implications of proposed initiatives (i.e., “To make this safe we will need to . . .”).
Maintenance Ensuring the city is easy to maintain. Ensuring the city is worth maintaining.
These shifts in thinking are critical, but they won’t happen without intentional restructuring, starting with an effort to break down silos. Project teams are an excellent way to start this process. For cities seeking to build wealth, no project can be one- dimensional. Assigning projects to a team of equal professionals with the common directive to “add value and grow the community’s wealth” is better than simply giving a project to one department to complete and then allowing others to comment.
In fact, I would recommend putting a nontechnical person in charge of managing the team during the project development phase. This is the part of the project where values and priorities are asserted. It’s too easy for technical people to elevate their own area of expertise to the highest priority; after all, they understand it deeply, having often sacrificed the pursuit of more general knowledge in order to build specialized expertise. Technical people are helpful, but not in conceptualizi
ng complex human habitat.
Over time, the structure of local government must shift from hierarchical silos based on areas of expertise to geographically focused teams employing people with a broad range of abilities. These teams should be evaluated based on the success of their focus area, particularly in building wealth. No more accolades for people who merely perform transactions, such as permits issued, subsidies given, or miles of roadway constructed.
Celebrate Maintenance
If the community is going to have a commitment to intense, ongoing maintenance of high-productivity neighborhoods, it must celebrate the people who lead that effort. To the extent that local governments celebrate anyone today, it’s generally the person who brings in the big project, gets the large grant, or delivers on some expansion undertaking. There is something cultural about this we must intentionally struggle against.
Consider an organization having three projects requiring equally technical skill sets. Project #1 is high profile. If it goes well, there will be a lot of handshakes, photo opportunities, and awards. If it doesn’t, it will make everyone involved look bad, but the organization will still be okay. Project #2 is routine but still in the public eye. If it goes well, there won’t be a lot of accolades, but if it goes poorly, it will really damage the organization’s credibility. Project #3 is mundane to the extreme. If all goes well, nobody will even be aware it was done, but if it should go wrong, it will destroy the organization along with all pensions, equity, and legacy value.
Which project does the best project manager get assigned to? Which of the three is assigned to the worst?
Strong Towns Page 18
