Competitive Instinct

Indianapolis Mayor Stephen Goldsmith is serious about cutting back city hall.

William D. Eggers from the August/September 1993 issue

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business world, is not giving up. "We'll get some them done," he pledges. "It's just happening too slowly."

Goldsmith is also bringing his vision of self-governance to two of the city's two most troubled housing projects. The management of the projects will be turned over to private firms—chosen by the residents themselves—for an 18-month period. At the end of the 18 months, the residents of Barton Towers and Concord Village will have the choice of staying with the private contractor, going back to the housing authority, or taking over management themselves. What makes this plan unique is a built-in work incentive: Rents will go up if incomes go up, giving the private manager motivation to find jobs for project residents.

Following the cue of Jack Kemp, whom he admires, Goldsmith criticizes regulatory barriers to home ownership and entrepreneurship. He is fond of telling the story of Paul Veyer, an artist who owns a small graphic-design shop downtown. After 20 years, Veyer decided to

replace his storefront awning. The materials cost him about $15O, and he figured he could put it up in a day. By the time he had gotten five different permits, hired an attorney, and submitted two plans to myriad officials, however, it was six weeks later and his bill was more than $1,000.

To identify and remove such unnecessary regulations, the mayor created a deregulatory SWAT team called the Regulatory Study Commission (RSC). The RSC also does cost-benefit analyses on all proposed regulations.

While poring through the municipal code, deregulators have found reams of outdated ordinances. Shuffleboard operators were required to obtain special licenses—as were residents who happened to keep milk cows in their back yards. The RSC's biggest first-year success was getting the Asbestos Abatement Commission to abandon proposed

regulations which would have made the city's asbestos standards far more stringent than current state and federal regulations. Regulatory reform will save government and business $16 million to $50 million a year.

The RSC is beginning to move into more politically controversial areas. A few of the city's 28 different development-permission processes have been eliminated, but bureaucratic roadblocks have hindered progress on this front. Deregulating prices and market entry

for taxicabs is on the drawing board, as is the idea of giving regulatory breaks to start-up businesses in distressed areas now designated enterprise zones.

Goldsmith has also targeted poorer neighborhoods for substantial infrastructure improvements. So why is Goldsmith, a Republican mayor whose political base is in the suburbs, expending so much time and effort on the heavily Democratic inner city? "Over the next 20 years, if we write off 100,000 people into poverty and abandon them from the marketplace, the rest of the community cannot be economically successful," he says. Right now the city's poorer neighborhoods are not in terrible shape, but he points to cities like Chicago and Detroit as warnings of what will happen unless Indianapolis takes steps to reverse the decline.

Goldsmith's attention to the inner city has won him accolades from some unlikely circles. "Steve Goldsmith is the first person to come along and actually ask my people what it is they want from the mayor," says Orlando Jones, who spent 10 years in public housing and now heads up the Black Family Forum. Jones likes Goldsmith's emphasis on community policing and says privatization "will open up the door for a lot more economic opportunity" for minority-owned businesses.

Democratic City-County Council Member Jeff Golc, who represents a district where only 42 percent of the residents over 25 have graduated from high school, also praises Goldsmith. Under the previous administration his district was ignored, says Golc. "I got two calls from Hudnut [the former mayor] in four years." In a little over 16 months, Golc had already collaborated on two inner-city development projects with Goldsmith and supports the mayor's downsizing of city government and philosophy of empowering neighborhoods.

Some Republican leaders are less enthusiastic. I sat down with a group of prominent spokespeople from suburban neighborhood groups (most of them Republicans) and was somewhat taken aback by the harshness of their criticism of the mayor they helped elect. On Goldsmith's top-to-bottom restructuring of city government: "He wants to be known for reinventing what need not be reinvented." On their access to the mayor: "We know more about neighborhoods than him or his group of young CPA and corporate attorney advisers. You'd think he would listen to us, but he doesn't." On municipal federalism: "A way to shove the grunt work, the everyday essential housekeeping services, to the neighborhoods."

The criticism reflects in part a split in the Republican party between the empowerment, free-market, enterpriser types and the moderate country-clubbers. The principal concerns of these self-appointed neighborhood leaders have little to do with free-market economics. They worry about building code and zoning violations and dislike people who operate businesses out of their homes. Their access to the mayor and their interaction with city regulators are their traditional sources of political clout. Under Hudnut they had more regulators and more access. They have lost both under Goldsmith. One of his first official acts was to lay off more than half the code-enforcement officers. And if they're mad now, they'll go ballistic when his deregulating team starts attacking restrictions on development, signage, and landscaping.

But the mayor is unlikely to back down. He is still very popular with Joe and Jane Suburbanite, who have better things to do than run around screaming about building and signage violations. And he's stubborn. "After a while most politicians get worn down into the soft solution that accommodates all the various interest groups," says SELTIC commissioner Reilly. "It can take the best Folks and wear them down to the point of moral compromise, but not Stephen Goldsmith. He just keeps bullying ahead."

If Goldsmith is successful in turning Indianapolis into the country's first 21st-century city, what will city hall look like? The mayor ponders this one for a minute. "You'll have obviously smaller government, more outsourcing [privatization], dramatically increased neighborhood-based service provision, and a much higher percentage of people involved in protecting and developing their own areas. Government will act more as a skilled purchasing director, rather than a service provider."

Henry Kissinger once said, "The task of the leader is to get people from where they are to where they have not been. The public does not fully understand the world in which it is going. Leaders must invoke an alchemy of great vision." The average Indianapolis resident isn't yet aware of it, but Stephen Goldsmith is taking the city where no large American city has gone before. His vision, which combines the new and the old—a lean, service-oriented, computer-age city hall mixed with the 19th-century New England township—just may be the best hope for the future of our big cities.