Are Suburbs a Ponzi Scheme?
A conversation with Tracy Hadden Loh on urban inequality, housing, transit, zoning, and more.
📚 Housekeeping notice: Premium subscribers will receive the draft first chapter of my book later this week.
Earlier this week, I spoke to Tracy Hadden Loh about the challenges facing cities, and some policies that can address them — covering housing, transit, taxation, office conversions, and more.
Tracy is a Fellow at the Brookings Institution, where she researches the interaction between urban policy, real estate development, and local communities. She is a data scientist, with a Ph.D. in city and regional planning, and a former local government representative.
The recording and transcript are available below.
If you're more into audio, you can listen to our chat below or on Spotify, Apple Podcasts, and beyond.
⚠️ This transcript was generated automatically by a machine. I cleaned it up a bit, but I'm sure it still contains some mistranscriptions.
UPLOAD How To Revive Our Cities_
[00:00:00] Dror Poleg: without further ado, maybe Tracy, I'll throw it to you. What does it mean to work for a think tank that tackles urban problems? What does a day in the life of Tracy Hadden Loh look like?
[00:00:10] Tracy Hadden Loh: That's a great question. Working at a think tank means I do research about urban problems full-time and that I do that research in a particular kind of way that's intended to.
[00:00:22] Change the real world. So I focus exclusively on research. Unlike a professor, I don't have any teaching responsibilities. And the audience that I do my research is the city leaders that are responsible for stewarding our urban places every day. The language that I use to communicate my findings and the mediums in which I publish my findings are all targeted at that audience as opposed to an audience of other scholars, my peers.
[00:00:55] Dror Poleg: So you're not a. on Twitter, you mean you're like a serious person. And you're right for people who are actually supposed to be taking your thing seriously. And to be honest, making big decisions based
[00:01:05] Tracy Hadden Loh: on that . Before Covid, I think maybe I did think a big part of my job was being right online, but the pandemic was a really big wake-up call for me in that there is no point in doing what I do if it isn't helping people, and places.
[00:01:24] So it helps sharpen my thinking in terms of the kinds of projects I'm working on, how I spend my time and the, and how I evaluate whether I'm successful or not. It's not enough for me anymore to get retweets I want to actually shape policy and to help the people who are trying to help places get the outcomes that they.
[00:01:50] Dror Poleg: That makes sense. And I think obviously it's clear now beyond your personal journey that cities really need a lot of help now in our kind of grasping at all sorts of new ideas...
[00:02:22] So Tracy, when you look at cities today, what are you most worried about?
[00:02:29] Tracy Hadden Loh: I am most worried about inequality. It's what I was most worried about before the pandemic, but it. It was really scary how much worse inequality got along a lot of dimensions during the pandemic. And I see the real world consequences of extreme and worsening inequality every day.
[00:02:50] Like for example I I just got back from a funeral of a. A public sector employee who was who was murdered while intervening to prevent a mass shooting
[00:03:04] Dror Poleg: that's the public transport in the train in Washington. Yes. Yeah. And so you mentioned inequality a big word. I think people understand it in different ways.
[00:03:15] Can you flesh it out for us a little bit? When you're saying concerned about inequality, what does it mean? Maybe give it some color with some numbers and. , what are the consequences? Why should we worry about it?
[00:03:26] Tracy Hadden Loh: In practical terms what concerns me about inequality is when some people and some places have the things that they need in order to have access to opportunity and a good quality of life.
[00:03:40] And other places don't have those things because, I'm not saying everyone has to have the same things, but that I think it's important that that everyone has a chance and. Whether it's transportation and the number of jobs that are within a 30 minute trip of your house, or whether it is the cost of housing in your area, or whether it's the wages that are available for jobs that you can get.
[00:04:11] There's a lot of different ways to measure inequality and what I am. Working towards is an economy in which everyone can do well, and have a chance to provide for themselves.
[00:04:28] Dror Poleg: Before we get to each of these individually and think a little bit about policies that can alleviate them, are there any examples whether it is comparatively within the US or elsewhere of cities that are doing a better or worse job at it that could visualize, the difference between a city that is more equal or creates more equal opportunities compared to a city that doesn't.
[00:04:51] Tracy Hadden Loh: I think that every city is struggling with this and it's hard to find examples of places that have already achieved shared prosperity. That is, right now, in many ways it feels like an elusive goal.
[00:05:04] , but. A place where I've been spending a lot of time lately and that I think there are important lessons to be learned is Chicago, in the United States. I think that people who aren't from Chicago maybe they hear a lot about gun violence in the news, for example, and they think oh this is a place that has problems.
[00:05:22] And and this isn't a good example, but actually, Chicago is a place where. The cost of housing is much more attainable than most other, big high growth US cities. It's a place where there are a lot of jobs and the, a lot of those jobs are accessible to a broad variety of people, and it's a place where the city leadership is making a really concerted effort to link the wellbeing of.
[00:05:55] The entire city's economy with the wellbeing of each neighborhood through really carefully designed policies, and I'm really impressed with the work that
[00:06:06] Dror Poleg: they're doing there. . So I didn't plan to dive too deeply into Chicago, but it is actually interesting. So the, the common narrative on places like Chicago, I'm sure a lot of people just heard what you said, say, yeah, of course.
[00:06:17] It's affordable. It's a city that got hollowed out with, the America's industrial base, basically moving first maybe elsewhere on this continent and then moving beyond, plus automation. So of course housing is affordable because there's just not a lot going on there. But in the same breath you said, it's also a place with a lot of jobs.
[00:06:36] Which would surprise some people. So the reason that even though there's economic growth in jobs and housing remains affordable is because of. Some unique magic formula to Chicago, or is it because there's just still enough supply that like demand still didn't catch up to supply, even though it is growing, but at some point we should expect Chicago to have the same problems that other prosperous cities are suffering from?
[00:07:00] Or what are those specific policies that you mentioned that, that have
[00:07:03] Tracy Hadden Loh: Certainly like post deindustrialization and post suburbanization? Chicago is benefiting from the fact that it just has. The infrastructure, whether it's housing or transportation or whatever, to hold like a million more people.
[00:07:16] It, it is that extra capacity that is helping the city in some ways, but also what we've seen in the last 20 years, 20, 30 years, is that the biggest US cities have been doing better in the transition to, from a service economy to a knowledge economy. , because. , they have a lot of talent and they agl, they just glomerate a lot of different kinds of jobs and that inherently lends itself to innovation.
[00:07:45] Google is, OP just opened up a huge new office in Chicago, but there's also a lot of growth in agricultural. And food science in Chicago which makes sense given Chicago's history in the food economy of the United States. And there's also just a lot of. Labor in Chicago, there's, there are still a lot of people there.
[00:08:11] , and so companies that need workers. Even if it's just a call center, for example, Chicago is an attractive place to go because it's a really tight labor market right now, and you can find workers there.
[00:08:22] Dror Poleg: Makes sense. So let's try to dive into a few specific policies, both like tried and true or innovative to, to address inequality.
[00:08:31] And maybe we'll start with housing because we already touched on that and that's probably the one of the biggest things on people's minds. What can we do to make housing more affordable?
[00:08:42] Tracy Hadden Loh: So the vast majority of housing in the United States is produced by the private sector, and the only way to make it more affordable is to control the costs that go into producing housing.
[00:08:55] . So there's a few basic categories of that. There's the cost of land, the cost of materials, the cost of labor, the cost of capital, and the cost of. Marketing, finishing, whatever. Yeah. There is a limited amount that the public sector that we can do to control any one of those costs.
[00:09:18] . But anything that we can do to get those costs down will help the sector produce more housing and to make that housing more at.
[00:09:27] Dror Poleg: and what have cities done to, to affect any of those levers successfully that other cities can learn
[00:09:33] Tracy Hadden Loh: from. Making publicly owned land available for development is the most obvious way to control the cost of land because it's already owned by the public sector.
[00:09:43] And especially in legacy cities like Chicago that have experienced population declines, there's, there are large amounts of publicly owned. But even in high growth cities, like on the coasts or in the Sunbelt it's very common to find, big parcels of publicly owned land. And making those available for affordable housing is a sort of, Like obvious first thing you can do.
[00:10:09] So the second thing that I think there's a lot of room for improvement on is the overall cost of construction. Which, is driven in large part by just how complicated it is to get projects done, the regulatory requirements, the building code. There are a lot of things that cities could do in order to reduce the cost of construction, whether it's slashing the cost of hookup fees to utilities or.
[00:10:35] Providing automatic approval for certain types of designs or floor plans. And then cities can also address the cost of capital. Many cities now have affordable housing production trust funds and they can use those public funds in order to make available attractive financing for the production of affordable.
[00:10:56] Dror Poleg: All right. And any cities, again here doing it better than others or like paving a path or setting any case studies that others can learn from or be encouraged by. .
[00:11:05] Tracy Hadden Loh: Yeah, so I live in Washington, DC and I think that DC has done a lot in to open the spigot in terms of housing production, but even in a place like DC I think that there is a, there's still a lot of room for improvement, so I don't think that there's anyone out there who's best in class.
[00:11:25] and this is something where I think there is just across the board, huge opportunity to address what is the number one cost for US households.
[00:11:36] Dror Poleg: And I see a question from the floor already. Maybe I'll even feature it from Joe Weis. Har Hi Joe related to housing and then incentivizing and capital costs.
[00:11:47] In Detroit, and I know that generally in the air at the moment, there's a lot of discussion of land value tax. I think Tyler Cohen and Bloomberg just published something actually against it today, but at least keeping the discussion alive. Any thoughts on that?
[00:12:02] Tracy Hadden Loh: So this is one of those things where the devil's in the details, and this is true about everything that needs to happen for cities right now.
[00:12:10] Like it's not as simple as just writing a listicle , on a website oh, convert offices into housing, investment public spaces. It's like these things are like hypothetically good ideas, but you have to work through very carefully. , what the details are and how to do it in order to make sure that you achieve your intended consequence and not unintended consequences.
[00:12:30] , land value tax is one of these things that I think does have strong potential to reduce barriers to reuse of land that has already been developed. , or to incentivize the development of vacant land. But you ex exactly. The details of how you do it are very context sensitive. So for example, in a city like Detroit that has huge amounts of publicly owned land and huge amounts of vacant land, the.
[00:13:10] the, that land is not currently producing anything from a tax revenue perspective. So a land value tax that would increase the carrying cost of that land doesn't affect a municipal land bank. While it, yeah, but it, what it does do is at least not create a tax penalty for improving
[00:13:30] Dror Poleg: the. do you
[00:13:32] Tracy Hadden Loh: see though?
[00:13:33] But it still doesn't, it doesn't really address what the economic issue is. That is a barrier to development in Detroit, which is weak demand. Yeah. In higher cost cities, I think that a land value tax done appropriately, especially for commercial real estate, makes more sense because it can really facilitate the adaptive reuse of existing commercial real.
[00:13:56] Dror Poleg: That's what I was thinking. That, even the Tyler Cohen piece from this morning, I dunno if you've seen it, but for those not familiar with the term at all, land value tax in super, super short is basically taxing land just for being there. Not taxing necessarily just the economic activity that happens on top of land as we currently do, which means that it.
[00:14:16] Theoretically encourage people to put land to always, its highest and best use at any given moment, which means like converting it to things that are being used, building more housing on top of it or even if it is already put to good use and it's monopolizes something in the way that generates a lot of revenue to make sure that we capture more of that revenue and we spread it to other places and other things that can benefit society as a whole.
[00:14:41] I noted the Tyler Cohen argument for this morning focused more on a place like Palo Alto about housing, single family housing, specifically how to upzone that areas. But one thing that struck me that he was sidestepping or ignoring was the more relevance of this solution maybe to cities that are already prosperous, like New York or like maybe San Francisco two years ago that now have some assets that are already.
[00:15:05] the density is already there. So it's not about up zoning, but it's just about, okay, should I keep an office building empty or a strip of shops empty or does it become unaffordable to me now as the owner and I'm forced to actually put it to a different use in order to be able to afford the carrying cost.
[00:15:21] So it seems that I think we're we share the same view there. Welcome back to offices to housing conversions and take in a moment. But I want to touch on a few other policy levers that you mentioned. . The second one is transportation. What can cities do here to tackle inequality? Why is it so important and who is doing it well,
[00:15:41] Tracy Hadden Loh: so it's really important because transportation is the number two biggest cost for households.
[00:15:47] And so in the context of an economy where there are some people who have very low incomes relative to the rest of the population, one of. Easiest ways to help those people other than just giving them money. is to is to address their highest costs and , especially if you live in a place where you have lower access to the good things in life.
[00:16:14] Whether that is as simple as groceries or whether it's as important as a broad variety of jobs. Providing good transportation access to those things, that's something that people need and it's also something that people. Doing something about that is really meaningful to improving people's quality of life, and the best way to do that is to support transit
[00:16:39] Dror Poleg: and.
[00:16:40] All of those things cost money, right? Now we're looking both at a situation where cities are struggling and at the same time we're basically demanding them to get even better at what they do and be even better than what they were when. They were a little more prosperous. How do we pay for all this?
[00:16:58] Is there some kind of period of transition where we just have to assume there'll be a shortfall and I don't know the federal government steps in? Are there other strategies? How do we finance these kind of extra investments both in development and in transit? .
[00:17:13] Tracy Hadden Loh: So I think you're raising a really important point here, which is that I don't think it's going to work to leave even the wealthiest cities in the US, at least on their own, in order to pay for some of the adaptations that are going to be necessary to adjust to just like what the pace of change during Covid has been.
[00:17:34] And I, and then also, some of the infrastructure improvements that are needed are, these are regional infrastructure improvements that are bigger than any one city. So there is a role for the federal government here. A role that the federal government has always played in. Especially making one time capital available in order to make these adaptations and improvements
[00:17:59] Dror Poleg: and related to this.
[00:18:00] I see a few people in the comments are Angry about us not mentioning zoning yet, which seems to be such a big deal in terms of, again, both up zoning and how we use land. And not just in terms of different uses, but also how we use public space and parking space and valuable land in the broader sense possible.
[00:18:16] Tracy Hadden Loh: So let's put that baby to bed really fast. Okay. Which is that I've written a ton about zoning and and the barrier that zoning is to both addressing inequality and to creating a productive built environment. I think that these points are out there and that , what I am focused on now in my work is not just being right over and over again about I've been talking about the need for zoning reform for 20 years now I think it's important that people also understand that zoning reform is not a magic solution that's gonna fixed downtowns and segregation. I absolutely believe that we need zoning reform, but there are other reforms that we need too. And my role that I play in the ideas ecosystem is to stay out at the edge.
[00:19:04] and keep pushing for the other things that no one's talking about yet that we're also going to need, not just to repeat points I made 15 years ago about how we need to abolish single family zoning and how the word mixed Zeus zoning is a paradox. is, or an oxymoron.
[00:19:20] Dror Poleg: Let me tease out a specific angle here that might be more on, on the edge, or at least like very timely and relevant, like tying the last two points that you made.
[00:19:29] So we have a situation where it seems like the federal government is increasingly needed in order to kind of reposition, rejuvenate helps cities adapt to some extent also state governments are required to step in into cities. At the same time, one of the issues, particularly in the US with zoning, is that it's very much controlled, very close to the ground level.
[00:19:53] In a way that means that you, on the one hand you can say it's very democratic, local communities can decide whatever they want. On the other hand, it means that, you're getting infrastructure funded by a whole city, or a whole state, or even a whole country, and you're not putting this infrastructure to its best use because of your local choices.
[00:20:11] So that was always a, a. A point of contention and that seems to be rising up as well. I know in various states, most recently here in New York, the governor said that, she wants to force some places outside of the city of New York City to up zone to build more housing basically around state.
[00:20:29] Sponsored train stations. Do you see some opportunity here for some sort of realignment where we tie these two issues together where we say, okay, we, you need, cities need more help from states and from the federal government, which includes a lot of new investment in infrastructure. And in return, we want to rethink zoning, or at least to change the balance of power between kind of the broader interest of the whole country or the whole state and whatever local communities have the power to.
[00:20:56] Tracy Hadden Loh: Yes. I think that's something that we absolutely have to do, and I think that we do already see signals in the policy space that both a variety of red and blue states and the federal government are trying to think about how to link these two things together. The bottom line is that we experienced.
[00:21:18] Multiple generations of growth in which we were able to act essentially, like resources were unlimited, land was unlimited, and money was unlimited. And in large part, the way that we've reacted to the crisis of Covid is to just do that again. To do that thing that we know. , which is turn the money printer.
[00:21:42] and in reality, none of these resources are unlimited and we need to start working smarter, not harder. Where I see us hitting limits here is that I think we're still just toying around the fringes. So for example, if you look at our infrastructure spending, we'll come up with one cute little million dollar program that's like incentives for municipalities to, upzone where there's infrastructure capacity.
[00:22:08] But then we'll have. a trillion dollars in infrastructure spending that we're just pouring down the same old drain. That we have always poured it down and there's a real lack of leadership at every level about. What it would take in order to start rea. There are extremely powerful political interests that are really invested in the status quo as it is, and that aren't the ones who are gonna feel the pain as the status quo starts to fail.
[00:22:40] So how we get out of that political paradox, that is the part that I think no one has figured out yet, and that absolutely is keeping me up at night.
[00:22:49] Dror Poleg: One, I think the optimistic view. is that, some of that status quo is just being demolished by reality. A lot of people who are holding onto very valuable assets and that used to be very politically powerful in cities are just now themselves getting desperate.
[00:23:03] And I think over the next 18 months are probably gonna get even more desperate. I see on the horizon and between the lines it seems like what you seems to be talking about as well, potential for some kind of urban new deal of sorts. That's right. Of the federal government and state governments and cities having to sit together and reshuffle a lot of things.
[00:23:22] In order to address all sorts of policy outcomes that, that, again, that are important beyond a specific neighborhood or even a specific city for the economy as a whole. How to create more opportunity, how to enable more people to enjoy the fruits of prosperity and how to at least moderate the.
[00:23:38] income inequality to to a certain extent before we run out of our official time, and we are gonna stay longer and take on some more questions. I wanna, I want to touch on a couple more specific topics. One is, so we office to housing conversions came up and I know that's a very kind of hot topic at the moment as well.
[00:23:56] How feasible is. , what outcome should we even aspire to hear? Like I know you've written a bit about, do we want to turn CBDs into just like any other residential neighborhood? Do we want something else? Is there some kind of relationship between good housing and good jobs? Like how do we, what do we want to achieve and how should we think about it?
[00:24:15] Tracy Hadden Loh: Okay, so first off, I think the feasibility is a. A distraction from what we need to really be talking about right now. Just realistically if a building is obsolete and not useful anymore, then either it will fall vacant and be abandoned, or somebody will pick it up and do something else with it.
[00:24:38] They'll just figure out how. Adaptive reuse is just problem solving. There are people who love to do this. Any problem can be solved. if it can't be, just tear the building down and put something else there in its place. . The issue is not the feasibility, it's how much it's gonna cost and who's gonna pay.
[00:24:56] And then also the kind of the scope and scale, like how much of this really needs to happen and at what pace does it need to happen in order to address some of these. We're like placemaking level impacts that are coming from having a lot of half empty offices. Which is more of the public problem than just one half empty office is really sounds like that building owner's problem and not anybody else's problem.
[00:25:23] Dror Poleg: Again, encourage everyone to drop more questions cause we're gonna give them another 10 minutes or so. But that's my last official question to Tracy. So we spoke, we spent 30 minutes, it went by really quickly on, some of some ways to revive cities to improve them and to tackle urban inequality.
[00:25:41] And I feel like there's a bigger question behind all this. When we see now the world getting reshuffled with remote work and people making kind of different choices and are liberated to make those choices, It brings me to the question rhetorical, of course, but I'd love to hear your answer.
[00:25:57] Why should we even save cities at all? Why not let the chips fall where they may and see what happens. What is the historical role and importance of cities and how do we expect them to be important to our future? .
[00:26:10] Tracy Hadden Loh: Yeah. So I think for people like you and me who spend a lot of our lives online talking to other people, it can be easy to lose the threat on this.
[00:26:18] Looking at the commercial core of the top 45 US cities we are talking about in every single case, not just in coastal superstar cities , but in every single take case we're talking about the single biggest and densest job center. within that, in, within each of those entire regions. Okay. And not just by a little bit, we're talking about a job center where if only half of the jobs come back to, in-person work in typical US downtown, and 100% of the jobs come back to every other job location within that region. And that is an extreme and ridiculous scenario. That's definitely not gonna happen.
[00:27:01] . But even if that did happen, , these commercial course would still be the biggest and most important job centers in their entire regions. So this is not just about cities and it's not just about the people who own property downtown. These are the single most important nodes in our regional economies and thus our overall economy.
[00:27:22] So their wellbeing is something that concerns all of us and is not something that we can afford to let fail if we want to have a successful economy that provides for our. .
[00:27:38] Dror Poleg: Said. Let's try to pick up a few questions from the floor. So Greg Walters, how do you see the work from anywhere Revolution impact on inequality in relation to cities and I guess more broadly?
[00:27:53] Tracy Hadden Loh: . ,
[00:27:53] right? It's big. So work from home is a metaphor for inequality and that some people from work can work from home and some people cannot. And so already you can see that it's simply it's simply a metaphor for it. But I think what Greg's getting at is that, remote work has the potential to make inequality worse because, Workers who have the ability to work remotely are typically significantly higher income.
[00:28:19] Than other kinds of workers. And so the idea that the highest earning workers in the economy now have the ability to physically withdraw from. , all other people . Yeah. Is that, is something that it's not hard to imagine what the implications of that could be for inequality and just for social cohesion.
[00:28:45] Dror Poleg: . Yeah. I think at the heart of Covid Lockdowns, I think that was a really striking chart. I think it was the Washington Post where you see people who can work from. Particularly white collar, tech, but not just tech. Really a slight kind of dip in employment, but then very quickly going back to normal and even growing.
[00:29:05] On the other hand, people who can't work from anywhere are just experiencing the worst financial crisis. since the Great Depression. And both of these things happen in parallel, in the same world, in the same place, exactly where people, ex people experiencing completely different realities.
[00:29:20] Obviously I agree with you and have written a lot about, I also think that remote work will have a. Will increase inequality, at least left to its own devices, but
[00:29:31] Tracy Hadden Loh: the solution is not to ban remote work or something like that. Remote work is absolutely here to stay. The trick is figuring out how to make remote work for us.
[00:29:41] And not against us. Any
[00:29:44] Dror Poleg: thoughts on that so far?
[00:29:47] Tracy Hadden Loh: I do think that a big chunk of the answer here is going to be significantly re-envisioning where local governments get their tax revenue from. , the way that we tie , taxes related to economic production to place.
[00:30:04] First of all, inhibits remote work, right? It means that all but the largest employers can't just allow their employees to live anywhere because then they'd have to comply with the tax laws of anywhere. And that's a huge, so that's a huge barrier to unlocking the possible dynamism of remote work while at the same time it leaves the local governments left behind by remote work, really short revenue.
[00:30:26] And Philadelphia as a city that's extremely dependent on wage, taxes, revenue that only comes in if the workers are physically present in the city. Okay. Immediately comes to mind as that is something that's gonna have to be rethought. And the city of Philadelphia can't do that alone. The state of Pennsylvania is going to have to be a partner.
[00:30:45] Coming up with something that is viable and equitable in order to make sure that governments have the revenue they need to deliver the services that they're responsible for.
[00:30:57] Dror Poleg: Related to that, this question from s v it seems like our system, again, US centric, seems to have allocated disproportionate political power to rural and suburban areas, particularly you spoke about the importance of those hubs, those cities, those dense areas.
[00:31:13] to everything around them. Sometimes to tens of millions of other people who don't necessarily live in that city or even within the metro. I know that Richard McGahey, he re recently published a book about that as well in Equal Cities about the fact that systematically we're basically design a system where all of the people that benefit from the existence of the city don't really participate in maintaining the city, including in addressing a lot of that inequality.
[00:31:36] So the city creates wealth for everyone. But the people in the city basically don't get enough back from all of those other people that , that their existence contributes to.
[00:31:46] Tracy Hadden Loh: Are you saying the suburbs are a Ponzi scheme? .
[00:31:50] Dror Poleg: They're not a Ponzi scheme but yeah, I. I live on a suburb of New York City very close to the city.
[00:31:56] I can walk to the train station. The train station is five minutes from my house and it takes me 30 minutes to get to the center of Manhattan, and yet I'm not allowed to build anything that a single family home. on my plot of land, I would happily turn it into a six family or a 12 family. Of course, some of my neighbors might shoot me for saying that.
[00:32:16] But somebody paid to, to create that train line. And more importantly, I benefit from being close to the city. . And I'm not paying any taxes to the city cuz I'm just not part of it technically. So I pay my property taxes to my local town in order to finance the local school and other things.
[00:32:33] But New York City gets almost nothing back from me, even though I'm getting something out of it. How do you see it?
[00:32:40] Tracy Hadden Loh: I think that has that's been a dynamic an American dynamic since the beginning of this country, and so I. . I'm not invested in like a fantasizing about a utopia where we a hundred percent solve it, right?
[00:32:54] So like you're talking about, New York Plunkett of Tammany Hall was writing about how mad people in Albany made him more than 150 years ago. I think that this dynamic is always going to exist to a certain extent, and that we. That what we need is a feasible amount of intervention by states and the federal government in order to stabilize cities and and prevent the worst case scenarios from becoming reality.
[00:33:31] so I'm looking for a pragmatic center left coalition, . That will invest in transit in a new way and that will make minor tweaks to the tax code, including the tax credits that are available and how they're distributed in order to let cities save themselves. .
[00:33:57] Dror Poleg: So maybe we'll take just a couple more.
[00:33:59] And again, feel free to, to drop some more, if something strikes me, I might extend it a little further. This question from Doug is interesting. I'm gonna rephrase it because it's long, but then also maybe expand it a little. So he is talking about, in the Bay Area, it seems that during Covid we did a lot of kind of ad hoc things that turned out to be really cool.
[00:34:17] Converting parking spots into outdoor dining. And now we seem to be going back to to what we used to like. We're canceling a lot of initiatives that seem to have already taught us important lessons about stuff that actually really works and is really nice and makes the city better. I'll expand it even further.
[00:34:33] There is a lot of stuff that we know that is really good for cities. Why is it so hard? Why do we keep going back and try and trying to learn the same lessons? What's preventing us from just sticking to, to how things are, for example, parking. It's really between the government and itself.
[00:34:48] It's not like anyone owns it and they have to appropriate it from anyone. The streets. City governments can decide tomorrow that, there's no more free parking and that, restaurants can have outdoor dining or that, at least trash could be on the road instead of on the sidewalk.
[00:35:03] Why is it so hard? Simple question. Of course, .
[00:35:06] Tracy Hadden Loh: So I think some of it is just a lack of imagination about what's possible. And just so you know, I think you will find in the United States, like somewhat of a lack of awareness amongst the kind of the average. Person, even like the average urban leader.
[00:35:21] About. what cities are like globally. And I'm not just talking about Europe, . So I, I think some of it is that, but some of it is also that cities are extremely constrained in their ability to adapt. It's not as easy as just oh, I snapped a finger and then I got rid of all of the parking.
[00:35:39] Okay. If a city's gonna get rid of all of its parking, that means that they are gonna forego all of the revenue that they currently derive from parking and. Cities need to have balanced budgets so that revenue has to be replaced by something else. So that means that you have to believe that, for example, the additional sales tax revenue that you might receive from relocating that space from car storage to retail or, and food retail in particular that would be that you would actually see that trade off workout that requires.
[00:36:12] A leap of faith on the part of the city that requires a cfo, f who isn't extremely conservative. In how they make revenue estimates and, you
[00:36:24] Dror Poleg: know, not of course the federal and state probably help as well that we discussed. Yeah. And not, and
[00:36:29] Tracy Hadden Loh: so not, and not every city has those things.
[00:36:30] Yeah. In order to. . And then I think also the important thing to understand specifically about the Covid moment is that a lot of these like pop-up or pilot relocations of public space, they're just pop-ups or pilots and they're not like flawlessly executed right there.
[00:36:48] There were like also some problems with them and in order to make them permanent, There are capital costs associated with making these kinds of adaptations properly once again. Now we're not just snapping our finger, we're not just replacing loss revenue. We also have to pay for capital costs, and that means also accepting the disruption of, for example, like maybe some amount of construction to build a plaza, or redo carbon gutter for a big new bike lane or something. We have to accept construction right now. Accept construction right now at this moment when. People are, we're trying to like, get more people to come downtown and don't necessarily want them to find we ripped up all the streets.
[00:37:26] . So it's just it's just a tough moment. It's a tough moment for cities, revenue wise. It's a tough moment for them to, when construction costs are really high to commit to making these kinds of investments. And so I, I think. . Some cities are in a financial situation where they are able to use their ARPA dollars to do these kinds of improvements, and you're seeing that, but other cities are really stuck in more of a quandary and are having to just use their ARPA money in order to replace lost revenue and to build themselves out.
[00:37:57] Dror Poleg: So it sounds like a lot of what we're discussing keeps boiling down to that urban new deal of sorts of okay, there's a lot of stuff that even if we experimented with you, Apply it on a broader scale. There's budgetary issues here that cities will not be able to handle on their own or at least out of their own free will.
[00:38:17] Tracy Hadden Loh: not on their own, but cities can also do more with what they have. I think there is all, there is a need for cities to do everything that they can within their own power to revise their tax codes and to reevaluate how they're raising revenue. And then also to think about how they are making investments in order to generate more leverage.
[00:38:41] For the city in the future. Which this applies to everything from publicly owned land to, public investments in private projects.
[00:38:50] Dror Poleg: So maybe we'll end with one final question to try to be optimistic or practical. . So what do you see as the low hanging fruits at the moment for cities?
[00:39:01] What are some 2, 3, 4, 1 easy things that every city can do tomorrow, or at least within the next 12 months that would make a meaningful impact on, again, on inequality, on economic vitality? An opportunity.
[00:39:18] Tracy Hadden Loh: I'm about to make some commenters. So happy by saying Zon. I think that it's time for us cities to move to the next generation of how entitlements are made and managed, and that there is a way to do this that is both a lot more flexible.
[00:39:39] in terms of what the entitlement grants to the landowner, but also a lot more fruitful in terms of what the entitlement yields to the city as a whole and to the greater society, the public and the cities that are not just like tweaking at the fringe with a little bit of incentive zoning here and there.
[00:40:04] , but are thinking really big about. How are these entitlements created? Who are they for and how are they allocated? This is a money printer that cities can just turn on and they should.
[00:40:19] Dror Poleg: Excellent. Tracy, it sounds like there's a lot more for us to discuss for everyone who found this.
[00:40:26] Keep in touch. Follow Tracy and I on Twitter. You can see our handles at the bottom of the screen, @DrorPoleg and @LohPlaces. Thank you everyone for watching and for listening.
[00:40:36] Tracy Hadden Loh: Sure. Thanks for having me.