Cities

A Visit to the Temple of Urban Progressive Leadership

At a major conference, city leaders embrace the growing dynamism of their communities but still resist giving up control.

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Lyft President and Co-Founder John Zimmer. Stay tuned for a ReasonTV interview.
Reason

The woman sitting next to me during the opening speeches and seminars of the second annual CityLab "Urban Solutions to Global Challenges" convention Monday would occasionally murmur out loud her approval at comments by former New York Mayor Michael Bloomberg or current Los Angeles Mayor Eric Garcetti.

"That's right," she would respond to opening comments from Bloomberg about the importance of innovations coming from city leaders to make the lives of urban citizens better and safer. Only those who were sitting next to hear could hear her. It wasn't like she was responding to a preacher at a tent revival. Nevertheless, those who think proponents of progressive urban political leadership have a near-religious fervor that government management can fix all ills would be amused.

Reason journalists in Los Angeles were invited to attend CityLab, sponsored by The Atlantic, The Aspen Institute, and Bloomberg Philanthropies, downtown in the fancy JW Marriott Hotel right next door to the Staples Center. The two-day conference brought mayors and city leaders from across the world to talk about how government makes things better. And if things weren't getting better, they would talk about how government should make things better.

I decided going into the conference that I would try to suppress my libertarian skepticism that the entire event would just be that big urban progressive worship service at the altar of "doing something." It was a hard task, given panels with titles like "Narrowing the Gap: How Cities Can Fight Income Inequality," and "Block by Block: Inclusive Approaches to Building Better Neighborhoods." My government solution, "Stay the hell out of it and focus on providing basic government services," would likely not match theirs.

And while, indeed, the entire conference was mostly a celebration of urban interventionism, setting aside my skepticism helped me attune to what libertarians and those who don't believe more government is a cure-all might see as positive developments.

Urban leaders generally love and promote the dynamism of cities, when they approve of the outcomes. They especially love it when shifts in city dynamics create new trendy developments for the creative and leadership classes. The conference featured a couple of "pop-up" street festivals, which, though the concept of pop-up shops and restaurants has been around for a while, have become trendy as of late.

You wouldn't necessarily know it from the way cities have been attacking ride-sharing services like Lyft and Uber, but city leaders do seem to be hip to the realization that the "sharing economy" is not just a short-term development but a major shift in urban consumer service delivery. The CEOs of Lyft and Airbnb (a room rental service) spoke on panels about the future of urban mobility and the nature of the "sharing city." (Full disclosure: I used Lyft's app to travel to and from the conference to avoid dealing with downtown parking.) Airbnb CEO Brian Chesky used this year's world cup in Brazil to note that his service helped increase the amount of people who could attend the event even after all the hotels filled up. Thus, services like Airbnb can relieve the pressure to build more hotel rooms to meet demand that is temporary and ultimately leave behind properties that wither from disuse (as we often see from buildings that are constructed to serve the Olympics). What city leaders love about the "sharing economy" is that it emphasizes the concept of the urban village. Using these services actually brings residents together, bringing new life to the romantic ideal urbanists have of connected communities.

Why this matters to us urban-loving libertarian types is that it is prompting debate over the extent cities have regulated what its citizens can and cannot do. Several panelists made it clear that city leaders need to understand that these changes are here to stay and that they need to adapt the rules. In typical urban progressive fashion, there wasn't really much of a discussion about how the old rules that entrenched a taxi cartel was done for the benefit for a handful of players and had the additional effect of making it very hard for others to enter the industry. Instead, Arun Sundararajan, a professor focusing on the new "sharing economy" type services at New York University, simply acknowledged that the old regulations were designed to protect people in the absence of these modern methods of being able to easily and publicly rate the quality of services you've received. He did note the fear of "incumbents" about how these changes were playing out, and this is apparently a call to action for cities to help these workers transition into a new system in some fashion. (One of the Lyft drivers told me that more and more cab drivers are joining up with their service, so they seem to be figuring it out on their own.)

Discussion of ride-sharing services took a strange turn in the panel on the future of urban mobility. The concern: If urban travel costs were too cheap, it meant service providers would not be making enough money to thrive. It's this frustrating thread and excuse for urban progressive economic interventionism that drives libertarians bonkers. Lyft President John Zimmer pointed out to the panel that reducing transit costs gives the poor that much more freedom to move, to travel to jobs, and gives the poor the flexibility to hold down jobs and become less poor. This is, of course, something cities already know and use to justify heavily subsidized mass transit services. Perhaps cities themselves are also worried about the competition? But even though ride-sharing services are cheaper than taxis (currently) they're probably not cheap enough replace buses or trains for the subsistence-level poor. Who knows what the future may bring, though? Mayor Garcetti is insisting on pushing forward light rail expansion for Los Angeles, but he also announced his support for bus rapid transit lanes and for preparing the city for a future with driverless cars.

An excellent panel on Tuesday, "Made in [your city here]: The Next Generation of Urban Manufacturing," embraced the dynamic changes in the past 30 years that have destroyed many American major manufacturers but have given rise to thousands of smaller, boutique manufacturers across the country. The panel, which included Flint Mayor Dayne Walling, was important in that it recognized that the broad zoning processes popularized by cities to control growth the way they (or those with money to influence) wanted was hampering the dynamic potential to adjust to changes in manufacturing needs. Walling spoke of manufacturing facilities in Flint diversifying to produce multiple goods, while Kate Sofis, Executive Director of SF Made, a group for San Francisco-based manufacturers, was there to first of all explain that San Francisco still had manufacturers, but also how zoning had changed. She described a situation where the city was in some places zoning on a case-by-case, lot-by-lot basis, which is almost like not zoning at all. It still puts the position of giving the city too much power over what people can do with their property (and frankly invites corruption), but it is nevertheless an embrace of  a dynamic urban environment that does not depend on large, fixed major industry manufacturers from the days of yore.

Speaking of the days of yore, the low point of the panels I attended had to be "Narrowing the Gap: How Cities Can Fight Income Inequality." Led by The Atlantic Senior Editor Richard Florida, he of the obsession with the demographic he calls the "creative class," Florida grumbled his way through a rant about the declining influence of unions as a source of the problem, invoking his dad's old job back in the good old days and sounding like what would happen if Aaron Sorkin became a street preacher. As is unfortunately typical in discussions of income inequality, there was no comparison between the actual lives of the poor today versus the poor from back then (as in consumer power or comfort of living). It was just a numbers game with no real context. There are parts of America where income inequality is as high as it is in third-world African countries! Except some of the countries where income distribution is more equal than the United States are places like India and Indonesia. It's a terrible misuse of an economic indicator, and Florida's call for an increase in minimum wage is unchallenged by any grasp of actual consequences, as usual. The panel was completely at odds with the others at the conference, disinterested in any engagement as to whether government behavior and regulation may contribute to the difficulties of poor people engaging in their own entrepreneurship in a city that regularly shuts down businesses.

Instead, hilariously, Florida turned to Bill Perduto, mayor of Pittsburgh, for his solution to income inequality. Perduto's plan? He's going to use Tax-Increment Financing (TIF) districts with the Pittsburgh Penguins to fund the redevelopment of a former arena site. This hoary system prone to cronyism and corruption that Reason took to the woodshed back in 2006 was presented to the crowd like a magician performing a particularly amazing new trick. But, Perduto explained, he will require contractors to hire labor at "prevailing wages," which is whatever unions have managed to get cities to declare. This is also not a new innovation and is frankly just business as usual for government-driven redevelopment projects. This both drives up the cost of the project to taxpayers and locks out smaller companies who can't afford to pay employees this jacked-up cost. It only improves income equality for the people with the right connections, and it wouldn't surprise me to find out that the people who land these jobs were already working above median wages.  

I was quick to make my way to a panel titled "Cleaning Up Corruption: Building a City Hall Everyone Can Trust." Here, I found a different disappointment: Hardly anybody was interested in attending. At the time the panel was scheduled to start, there were about seven of us in the room. A few more filed in as the panel went on, but I don't believe there were ever more than 20 people in there.

The panel, unfortunately, seemed to be focused on international corruption and bribery scandals in foreign countries, though a United Nations representative named Tanja Santucci pointed out that 80 percent of government corruption actually takes place on the municipal level. She described the tools they encouraged countries and governments to use to tamp down on corruption and my ears perked up when she mentioned "civil forfeiture." During the Q&A "session" (in quotes because I was the only person with a question) I mentioned the issues we have been having here in America with law enforcement agencies abusing our asset forfeiture system to seize property from people who had not been proven to have broken a law. Since she had been talking about government corruption in third world and developing nations, I was curious as to whether there concerns that this tool to fight corruption could itself become corrupt. She did acknowledge that some countries forbid such systems in their constitutions. Peter Eigen of anti-corruption group Transparency International was supportive of the tool and seemed to think that the ability to seize property without having to prove a crime was actually a benefit. He, though, used the example of several corrupt African princes who had their property in France taken and sold. He saw it as a way of getting some form of social justice when the criminal legal system didn't work. That's a problematic attitude to take. He of all people should understand how any tool that gives government power can itself be corrupted. The same tools to punish princes can be used to punish paupers.

Left entirely out of this conference about the management of cities was any mention of one of their own bigger problems—the public employee pension crisis. There was no panel offering innovations to avoid going bankrupt. There were no bus trips to visit nearby bankrupt San Bernardino. There would be no concern expressed that all of this innovation is pointless if cities had no way to pay for anything because all their money was tied up in pension debt. There would be no discussion about how these costs are making it harder and harder to even provide basic services to those poor people they worried about. Garcetti mentioned a water main break that shut down busy Sunset Boulevard (there have actually been two in the past week) as part of the challenges he has to deal with as mayor, but absolutely no discussion of where city resources have been tied up.

There was, as the very last conference, a discussion of how cities are throwing tax breaks left and right at Hollywood in a race to the bottom to lure the industry to their city. In what is probably an unintentionally amusing end to the conference, moderator and Atlantic Editor in Chief James Bennet asked the panel whether there would be any less film and television production if no city was providing tax incentives. Nobody on the panel believed there would be less production, but it might not look quite as good and producers would just have to consider other factors when deciding on where to film. It was, whether intentional or not, an admission that government intervention was really not needed on behalf of the film industry and it was all just a big game of "bringing home the bacon." Not that it's going to stop anytime soon.

NEXT: Court Strikes Down North Carolina Voting Restrictions

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  1. “80 percent of government corruption actually takes place on the municipal level.”

    This is a truism and why I cringe every time I hear talking points about how “we know better how to spend money at the local level”.

    I lived in an American Dream upscale suburban town….and the level of corruption in even this most “purebred” of localities was off the charts. WAY off the charts. I came away thinking that the Feds are relatively efficient (in comparison).

    Sounds like an informative conference – it’s impossible that anyone of any political stripe would agree with all the ideas expressed, but it’s nice to see people talking about stuff.

    1. 80% of what? How does one define “government corruption?”

      The author doesn’t say. I wouldn’t formulate any opinions about this until I understood the data in considerably more detail.

  2. “At a major conference, city leaders embrace the growing dynamism of their communities but still resist giving up control.”

    If these places are anything like SF, they are run by the elected officials of the pub sec unions.
    They are not about to ‘give up control’, as if they did, the population would immediately gut the retirement benes.
    Not
    going
    to
    happen.

    1. I lived in sf for a couple of years. Since cal public employee retirement benefits constitute about 3% of the budget I never really got into gnashing my teeth to dust about them like you do. I figured these people are my neighbors and if my tax money goes to making an octagenarian’s day a bit brighter than I have no problem with that. Better to give her the money than some right winger fighting commies in the army. Know what I mean?

      I basically vote for my economic best interest, but if given the choice to pay a couple of measly dollars to my local government to provide for a better public sector than, ok, here’s 5 or 10% of my salary, california. For others though it’s all about keeping those dollar bills in the 401k. It must be a pitiable, cloistered experience.

      1. american socialist|10.1.14 @ 9:02PM|#
        Hi, dipshit

        “I lived in sf for a couple of years. Since cal public employee retirement benefits constitute about 3% of the budget I never really got into gnashing my teeth to dust about them like you do.”

        That’s because you’re an ignoramus.

        1. http://www.letstalkpensions.co…..sion-myths

          How much money did taxpayers like me pay for your stint in the army fighting commies? Maybe you are afflicted with a profound case of the projection blues?

          1. american socialist|10.2.14 @ 12:37AM|#
            “How much money did taxpayers like me pay for your stint in the army fighting commies”

            Commie dipshit when called on bullshit:
            “Hey! Look over there!”
            Way to go dipshit!

          2. Oh, and dipshit, what does a union propaganda site have to do with a supposed pension that I don’t get?
            Is it because you’re a lefty douche, dipshit?

      2. You’re also either:
        1) A slimy bastard hoping some sophistry flies,
        or
        2) A cherry picking asshole,
        or
        3) A fucking liar, dipshit:

        “For fiscal year 2010-11, The City’s obligation is about $325 million. By 2013, that number is projected to be more than $600 million. (Now would be a good time to breathe into a brown paper bag.)”
        http://www.sfexaminer.com/sanf…..id=2136654

        1. Yeah but facts dont matter because statism is all the rage these days

  3. Scott, thanks for attending and reporting. This is fascinating stuff.

    I’m curious about that 80% corruption figure. What do they count as corruption — just bribes and such? Or do they count misdirected taxes, subsidies, and other market distortion?

    Corruption fascinates me, partly because I see it as just market correction, like leaks in a dam being how nature corrects for interfering with natural water flow.

    1. They didn’t drill down that far, focusing mostly on how they fight it. Given their emphasis it seems mostly that they’re focusing on bribes and the most obvious forms of illegal corruption, not the kind of corruption on intent that we’d also like to draw attention to.

      I’m not sure they even understood when I explained to controversy about police asset seizures here in America.

      1. Oh, I should add (and I wished I had room for it in this story but it’s already so long) the mayor of Athens, Greece, was on the panel and one of the things he pointed out was that government inefficiency and overregulation feeds bribery and corruption problems.

    2. In the case of my American town.

      The corruption consisted of EVERYTHING, but just to touch on some of it.

      1. Lockheed Martin bought politicians at even the lowest levels and populated government bodies with their employees – they bought pols largely by giving them jobs or contracts and connections.

      2. The powers at the local, county and state level were so certain of absolute power that they had orgies, drug and booze parties and even a local dungeon. A murder which involved these was quickly settled (the evidence would have exposed all)

      3. a $5K campaign contribution buys a contract for the township worth 300K to 1 Million per year. I was more appalled by how cheap they sell things than the fact that they did!

      4. Promotions for Corruption – local judges, lawyers and small time operatives were elevated to county and state judicial appointments for selling out in various ways – these ways often concerning breaking zoning and planning and other laws to allow for vast development and contracts.

      5.Auditing was a joke – when the auditors finally came in it was way too late and the auditors are usually a friend of the pols anyway.

      6. Funneling the money to friends and pols – typical scenario would be large new taxes for “open space” protection and the buying up friend’s farms at 5 to 10X the market price.

      In my newer small town the corruption is more garden variety old style – that’s like the guys at the dump pocketing the fees paid in cash, nepotism, etc.

      1. craiginmass|10.1.14 @ 7:39PM|#
        “In the case of my American town.

        The corruption consisted of EVERYTHING, but just to touch on some of it.”

        As a lefty twit, you should be quite pleased. lefties want more government!

      2. just goes to show you proggies
        “Ain’t no government like no government”

  4. Hi Scott,

    About half of your article seems to dwell on the myriad of different services available to city-dwellers and, at the same time , argues that progressives have killed these services. Can I just file those couple of paragraphs under cognitive dissonance .

    As for your dismissive comments about someone caring about the creative class I would just say that my definition of a model city is not a collection of mark zuckerberg clones. I’ll be the first to admit its allegorical evidence, but from the Facebook posts of my friends that live in sf, who continue to talk about the presence of “tech assholes”, I don’t think I’m the only one that feels this way.

    1. allegorical=anecdotal, of course.

    2. Progressives have always hated the city. Look at Josiah Strong denouncing the waves of catholic immigrants and alchohol. Look at the populist party and later FDR’s support for farm subsidies. Look at Robert Moses bulldozing NYC.

      Cities today suffer from zoning laws. Zoning laws price out the poor and minorities, leaving them trapped in low income and jobless areas. Poor people can’t provide services to high income workers who live in cities because of anti-density zoning legislation. Matt Yglesias has written a great book about this, as has Ryan Avent.

      Other cities have seen skilled workers migrate because of the progressive highway system. The low skilled, who cannot afford cars, are trapped in jobless cities.

      The war on drugs and occupational licensing both make cities worse places to live in, driving those who have money to the suburbs.

      Fannie and freddie and the home mortgage interest deduction act as carrots by subsidizing sprawl.

      Ed Glaeser, E Michael Jones, and John norquist are the best writers on the government’s war against cities.

    3. american socialist|10.1.14 @ 7:35PM|#
      “Hi Scott,”

      Hi dipshit!
      File ’em under “lies”.

      1. Oops!
        My mistake, dipshit! I thought you were filing *YOUR* paragraphs!
        Those, of course, are the lies.

  5. my neighbor’s aunt makes $69 /hr on the laptop . She has been without a job for 10 months but last month her pay was $15014 just working on the laptop for a few hours. view it now….

    ???? http://www.netjob70.com

  6. I give up, what’s a pop-up street festival? Is that like a flash mob? “Pop-up” can’t mean “temporary” in this context, because all street festivals are temporary.

    1. It’s a new fashion statement meaning the statists will give you permission so long as you don’t stay too long.
      Unless they decide you can stay, depending on your guanxi.

      1. Ah, I see you are a racist too. Nice. Maybe the Bay Area just isn’t for you. You sure do spend a lot of time complaining about it. I loved it there. Maybe it’s because I’m not a right-wing douche.

        1. “Ah, I see you are a racist too.”

          What is the definition of “racist” and “racism”?

          1. Technically its a made up word since we are all Homo Sapiens sapiens (no racial genetic differences exist). so it means whatever made up definition applies to it at the time to instill outrage in the mind of the reader.

            Basically nothing more than a mind game to perpetuate an ancient dusty ideal that we are different based on nothing more than the melanin content of our skin cells to continue dividing the people who make up our world to perpetuate violence of the state.

            because if we realize that we are all the fucking same, we wouldn’t have a need for states, without the state humans cannot make slaves of other humans, they cannot rob you of your productivity under the guise of safety.
            because we realize for the first time that since were all the same that no one is capable of running the show for everyone else and its just best to mind your own business, work hard, and enjoy life

          2. AlgerHiss|10.2.14 @ 8:48AM|#
            “What is the definition of “racist” and “racism”?”

            What lefty dipshits say when they’re called on their bullshit.

        2. – racism card pulled simply for using a foreign term: check
          – confusing libertarianism with conservatism: check
          yep, you’re a socialist all right

          1. “Cuz baby, I’m an Anarchist, and your just a spineless liberal”

            1. I don’t throw rocks at Starbucks either, so maybe i’m a spineless anarchist

              1. Nah just an Anarcho-Capitalist, we appreciate that someone has to pay for that, and the work that is put into running a business and turning it into a corporate empire exploiting stupid progs and serving them “teh evulh” GMO coffee.

        3. american socialist|10.2.14 @ 12:40AM|#
          “Ah, I see you are a racist too”

          Hi, commie dipshit!
          A brand, new lie? Imagine my surprise!

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