This article was originally published by the American Planning Association and is reprinted with their permission. 
 
With 47 miles of coastline subject to punishing inundation, Boston is considering a range of innovative techniques to build resilience against the inevitable impacts of climate change. But one of the most groundbreaking features of this effort may well be the mechanism to pay for it. 

City officials last year established a Climate Resiliency Fund to help finance the berms, seawalls, and natural systems restoration that will help protect real estate in the vulnerable Seaport district and other potential flooding hotspots. Private developers will make contributions to augment local, state, and federal funding. 
 
The mechanism will be applied to the estimated $124 million cost of protecting a city-run, 191-acre coastal industrial park, but is poised to become a template for building resilience at many other vulnerable areas. 
 
While chipping in to help build defenses seems to be an obvious thing to do, the resiliency fund reflects an important recognition: Public investments in critical infrastructure benefit the private sector by boosting property values—and in the case of rising seas, allow land to continue to be usable. 

“There’s been a cultural shift,” said Brian Golden, who retired this spring as director of the Boston Planning and Development Agency after eight years of service. With such a huge task—preparing for 40 inches of sea level rise by 2070 across a landscape of hundreds of acres of squishy landfill dating back to colonial times—developers understand they have to pitch in and foot part of the bill, he said at the Lincoln Institute’s Journalists Forum in April. 
 
“We don’t get a lot of people balking at any of this,” he added, suggesting that developers have come to understand exactions and charges for climate infrastructure as a basic reality of the times, and appreciate the consistency and predictability of the policy. “If you’re doing business with us . . . you’re going to be paying to build some resiliency measures.” 

Don’t ‘Leave Money on the Table’ 

What’s happening in Boston reflects a growing consensus around the world, rooted in the concept of land value capture: the retrieval of increased land and property values specifically associated with government action and public investment. Just as a new transit line can increase values for properties all along it, resilience infrastructure can be shown to do the same. That increase in value is identified as the land value increment. 
 
Allowing the private sector to enjoy those benefits without making any contribution is increasingly recognized as the equivalent of “leaving money on the table,” noted Enrique Silva, director of International Initiatives at the Lincoln Institute. 
 
Value capture won’t fully finance climate adaptation efforts, but can become part of a “stack” of public finance arrangements that jurisdictions can leverage together, said Lourdes German, executive director of The Public Finance Initiative and a Lincoln Institute board member, also speaking at the Journalists Forum. Drawing contributions from developers and landowners can help fill critical gaps that often remain at the local level, after national and state funding is allocated. 
 
The search for the necessary revenue to fight the battle against climate change, estimated by the UN to be some $90 trillion worldwide through 2030, is certain to intensify. Governments have been using versions of value capture in Brazil, Colombia, Ecuador, the United Kingdom, and throughout Asia for many years. Officials in Miami are studying similar mechanisms to help pay for resilience infrastructure in that flood-prone city. 

Protecting Assets 
 
The argument for developer contributions is bolstered by the quality of the climate action efforts, which build confidence that real estate assets on urban land will indeed be protected. Boston has been taking steady steps for decades to address climate change in its planning, backed up by changes to zoning regulations and its broad application of Article 80, which provides the discretion to approve projects with certain strings attached. The Climate Ready Boston plan won an APA award in 2019, and Singapore’s Lee Kuan Yew World City Prize bestowed special recognition for the city’s efforts to address climate change in an older coastal city. 

It may have taken the climate crisis for landowners and developers to accept the obvious benefits of such government-funded interventions, said Golden. In the past, public investments that enhanced land and property values may have been regarded as a gift to the private sector or a form of stimulus for economic activity. Now the enormity of the task—fending off the water in some places, letting it be absorbed in others—is clear to all the stakeholders, who are more willing to be part of such a daunting, but necessary, effort. 

“It’s an old city, our building stock is fundamentally 19th century and early 20th century, and none of this was considered,” said Golden, referring to climate impacts and flooding. “And it’s not just about the benefit to metropolitan Boston. We are, after all, the economic engine of all the New England states. So people are, in 2022, signing up for this. They get it.” 

 
Anthony Flint is a senior fellow at the Lincoln Institute, host of the Land Matters podcast, and a contributing editor to Land Lines. 

Image: Boston’s Seaport District. Credit: Denis Tangney Jr. via iStock/Getty Images Plus.

Several major sources of radical uncertainty are currently affecting the performance of infrastructure and will likely shape infrastructure in the future: climate change, automation, the sharing economy, and the COVID-19 pandemic. Our book, Infrastructure Economics and Policy: International Perspectives, recently published by the Lincoln Institute of Land Policy, attempts to determine how the infrastructure sector should cope with these radical uncertainties. 

Three chapters of the book assess the impacts of climate change, automation, and the sharing economy, respectively, and discuss how public policies should respond to these challenges. The COVID-19 pandemic erupted while we were preparing the book, and little evidence was available on which to assess its impacts on infrastructure. These impacts are becoming increasingly clear now as data and empirical studies are emerging, and we have included our thoughts on them below.  

Climate Change 

Severe weather conditions and natural disasters due to climate change can seriously disrupt infrastructure services and damage or destroy infrastructure facilities, from transit lines to power lines. These impacts typically vary from one locality to another. For example, forest fires are a major concern in California, while rising sea levels are more important to Miami. As a result, Henry Lee, the author of chapter 18 of the book and a faculty member at the Harvard Kennedy School, argues that effective adaptation policies will mainly emerge at lower levels of government, in a bottom-up process.  

Lee predicts that the magnitude of investments in climate-resilient infrastructure over the next few decades will be unprecedented. He discusses the characteristics of these investments and the scope of the transitions that will be required in the transportation, electricity, and water sectors. After identifying the governance challenges that underlie all climate mitigation and adaptation options, Lee proposes changes in governance to enable more effective planning, delivery, and management of infrastructure. His main messages are as follows: 

• Honoring the commitments made by many nations to achieve net-zero emissions by 2050 will require unprecedented investments in infrastructure.  
• Local governments are likely to lead in developing adaptive policies, since the nature and extent of climate damages vary so much by location. 
• The electricity sector will be by far the most affected by efforts to mitigate emissions as electricity replaces direct burning of fossil fuels for mobility, heating, cooling, and manufacturing and as countries shift to solar, wind, and other renewable sources that require more sophisticated and extensive grids and standby capacity to remain reliable. 
• In the water sector, changes in precipitation will require some areas to import water, increase desalinization, or encourage conservation by raising prices. 
• Transportation infrastructure will be the least affected, although many vehicles are likely to be powered by electricity or hydrogen.  
• For these investments to succeed, four changes in the governance of infrastructure are needed: (1) reduce the number of agencies and levels of government with overlapping responsibilities; (2) streamline the process for siting facilities; (3) address stranded financial and human assets; and (4) reduce the bias for spending on disaster relief rather than disaster prevention. 

Autonomous Vehicles 

The second radical uncertainty examined in the book is automation and other new technologies that have emerged rapidly in recent years, thanks to advancements in information technologies such as cloud computing, the internet of things, and artificial intelligence. Whether these new technologies will revolutionize the infrastructure sector is the central question examined in chapter 19 by Shashi Verma, director of strategy and chief technology officer at Transport for London (TfL). Verma reminds us that fundamental infrastructure change typically comes only very slowly. Then, using autonomous vehicles (AV) as a case study, he discusses the economics of AVs, the likely impacts of automation on other modes and consumer behavior, and the institutional challenges it faces before its widespread acceptance. He offers the following advice: 

• AVs may prove to be among the rare fundamental changes in infrastructure technology, on par with the invention of the internal combustion engine, and especially disruptive to our cities. 
• Policy makers should take actions to prepare for the arrival of the technology, including licensing, allocation of road space, economic support to public transportation, and control over pricing structure. 
• Between one-half and three-quarters of the cost of a taxi ride covers hiring the driver. If AVs could save on driver cost, this would stimulate an increase in travel and pose an existential threat to public transportation. The latter would be competitive with AVs only during peak hours and even then, only where it is protected from traffic congestion. 
• Road congestion would likely increase greatly with the rising use of AVs unless there is a large increase in ride-sharing. The only unmitigated benefit would be a large reduction in the land required for parking. 

The Sharing Economy 

The third radical uncertainty examined in the book is the sharing economy. Sharing is an economic model of acquiring, providing, or sharing access to goods and services using online platforms. What impacts might the sharing economy have on infrastructure services and assets? In chapter 20, authors Andrew Salzberg and O.P. Agarwal explore this question using a case study of urban transportation. Salzberg is responsible for public policy at Transit, a leading public transportation app in North America, and before that worked as an executive at Uber. Agarwal served in the Indian Administrative Service and the World Bank and is currently chief executive officer of World Resources Institute India.  

Over the last decade, new methods of sharing motor vehicles (Zipcar, Car2Go, Uber, Lyft, DiDi, Ola, and others) and smaller motorized electric vehicles like e-bikes and scooters (Bird, Lime, Gojek, etc.) have grown rapidly around the globe. Salzberg and Agarwal discuss the potential benefits, costs, and risks of shared vehicles, and argue that the sharing economy model has the potential to improve the use of fixed assets and thereby allow wider access to services. However, the current experience of shared vehicles in the U.S. indicates that the market penetration remains tiny, as most people still prefer individualized mobility services. Therefore, whether the service will grow to a significant size remains uncertain. The authors predict that new regulations will emerge to address the disruptive impact of this model on traditional businesses. More important, public policies related to road and parking pricing and congestion charges will be crucial to the future of the sharing economy in the urban transportation sector. Their chapter also delivers the following specific messages: 

• The sharing economy is not an altruistic neighbor-to-neighbor exchange, but a digital transaction connecting asset owners with users by taking advantage of improvements in technology. 
• In theory, car sharing could greatly increase asset utilization, since personal cars are used only about five percent of the time. Simulations have shown that a ubiquitous shared vehicle network—using right-sized vehicles, potentially including AVs, and moving 100 percent of motorized travel—could dramatically reduce peak-hour congestion, the number of vehicles on the road, and the roadway and parking infrastructure needed to accommodate a given quantity of passenger travel. These model results are optimistic, however, in that they assume that travelers will shift to a sharing mode that is highly efficient from a systemic perspective. In reality, the long-term decline in carpooling suggests how difficult it is to convince two or more people to ride together in the back of a car. 
• Infrastructure managers could encourage sharing by imposing per-vehicle congestion charges or by designating priority lanes for carpools. 
• The future of micromobility services, such as electric scooters and bikes, seems especially dependent on designating street space where the vehicles could be safely operated by people with different levels of skill. 

The COVID-19 Pandemic 

During the production of the book, researchers were actively studying both the effects of infrastructure on pandemic severity as well as the effects of the pandemic on infrastructure. One of the first studies of the former appears in chapter 3, in which the World Bank’s Sameh Wahba, Somik Lall, and Hyunji Lee argue that infrastructure shortages and affordability challenges have exacerbated exposure and community contagion risk from COVID-19 across poor neighborhoods in developing cities around the world. Many other cities, including some of the major cities in China and Europe, adopted the opposite policy of attempting to reduce contagion by deliberately limiting access to infrastructure through lockdowns, quarantines, and other similar measures. How successful these measures have been in reducing the spread of disease and whether those reductions are worth their often-substantial economic costs is a matter of continuing and intense debate. Other emerging takeaways include: 

• Public transit systems around the world lost much of their ridership and passenger revenues. Moreover, these systems seem unlikely to be able to fully bounce back even after the pandemic is over. Former riders are now more used to working at home and meeting online, and are more inclined to view riding on crowded public transportation as a health hazard.  
• The consequences of a long-term shift from public transit to driving would be a financial disaster for public transit operators and traffic gridlock in our largest and most congested cities. It is important to consider what public policies are required to revitalize public transit systems, and to enable them to cope with future pandemics. 
• A likely increase in public infrastructure spending is an important part of post-pandemic economic recovery programs. The primary objectives of these programs are to increase employment and revitalize the economy, and this funding can speed up the delayed construction of public infrastructure works, clear maintenance backlogs, and perhaps finance some “shovel-ready” projects. The key question is whether this is the right time for increased public investment for new mega-infrastructure projects. 

Policy makers often assume that infrastructure investment would have significant multiplier effects on other parts of the economy. However, a review of empirical analyses of economic stimulus programs, presented in chapter 2—authored by Gregory Ingram (former president of the Lincoln Institute) and Zhi Liu—suggests that in developed economies, infrastructure spending has little stimulus effect in the first several years, after which the economy is likely to have begun growing again anyway. These analyses find little to no short-term economic impacts, even when the long-term economic impacts are clearly positive. The small short-term impacts are due in part to the substantial time required to prepare and construct a project and in part to the crowding out of private investment by public investment. Therefore, it is important to select and include the most valuable and shovel-ready projects in the stimulus programs.  

José A. Gómez-Ibáñez is the Derek C. Bok Professor Emeritus of Urban Planning and Public Policy at Harvard University. Zhi Liu is senior fellow and director of the China Program at the Lincoln Institute of Land Policy. 

Image: A woman in the back seat of a rideshare. Credit: halbergman via GettyImages.

The Lincoln Institute of Land Policy will facilitate discussions about business site selection, preparing for an uncertain future, and racial equity at the American Planning Association’s National Planning Conference, which will be held in San Diego April 30 to May 3, and online May 18 to 20.

The Lincoln Institute will also host a booth (#601) in the exhibit hall, with multimedia displays and a wide range of publications. Policy Focus Reports will be available at no cost, and there will be a 30-percent discount for books, including Megaregions and America’s Future, Design with Nature Now, and Scenario Planning for Cities and Regions: Managing and Envisioning Uncertain Futures.

Further details about Lincoln Institute sessions can be found below.

MONDAY, MAY 2

9:30­ to 10:15 a.m. PDT | The New Site Selection Tool for ESG Strategies (Room 7B)

Team NEO, the Fund for Our Economic Future, the Center for Neighborhood Technology, and the Lincoln Institute of Land Policy partnered to develop an interactive online tool. All stakeholders in planning and economic development can use it to begin to make better land-policy decisions.

Speaker:

Christine Nelson, Team NEO, Northeast Ohio

11:00 a.m. to 12:30 p.m. PDT | Planning with Foresight: Preparing for an Uncertain Future (Room 06)

Explore how to use foresight—a future-focused approach to strategic decision making that leverages diverse perspectives—to understand future dynamics and address them in participatory planning. Presenters introduce foresight and explain why it’s important for planners. They describe methodologies to identify and review future trends relevant to planning; develop scenarios; create agile, resilient plans; and engage communities.

Panelists:

Petra Hurtado, American Planning Association, Chicago, Illinois

Ryan Handy, Lincoln Institute of Land Policy, Cambridge, Massachusetts

Sagar Shah, AICP, Naperville, Illinois

Alexsandra Gomez, American Planning Association, Chicago, Illinois

Joseph DeAngelis, American Planning Association, Chicago, Illinois

WEDNESDAY, MAY 18

12:30 to 1:30 p.m. PDT | Acknowledging and Righting Planning’s Racial Equity Wrongs

(Virtual, Channel 1)

Learn about planning’s role in historical and systemic racial discrimination and how it resulted in current racial inequity and community disparities, understand why it is important for planners and planning departments to clearly and publicly commit to addressing racial inequities and learn how to communicate this commitment to your community, and explore planning directors’ actionable methods to address racial inequity.

Panlists:

Heather Sauceda Hannon, Lincoln Institute of Land Policy, Cambridge, Massachusetts

Margaret H. Wallace Brown, City of Houston Planning & Development Department, Houston, Texas

Emily Liu, Louisville Metro Planning and Design Services, Louisville, Kentucky

Donald Roe, St. Louis Planning and Urban Design Agency, St. Louis, Missouri

Photo by Art Wagner/E+ via Getty Images

Sonya Comes is a grandmother and a longtime resident of eastern Kentucky who never imagined owning her own home. She was divorced and renting a family member’s house when she learned about the Hope Building program. Run by the Housing Development Alliance (HDA), a nonprofit affordable housing developer in her area, Hope builds affordable homes and provides construction training for people in recovery. 

Today, Comes is a homeowner who “couldn’t be happier” with her house, which sits on land in Perry County, Kentucky, that has been transformed from an abandoned trailer park into a growing rural neighborhood outside of Hazard, the county seat. “I believe the Hope project has affected the community in a great way,” she adds. 

Launched in 2019, Hope Building is part of a broader effort by HDA to fix the broken local housing market in the four-county area it serves. Over the years, HDA has grown with support from key partners including Fahe, a regional community development financial institution (CDFI) with a focus on affordable housing; Mountain Association, a CDFI focused on Appalachian Kentucky; the Appalachian Impact Fund of the Foundation for Appalachian Kentucky; and the Appalachian Regional Commission (ARC), a state-federal economic development partnership created in the 1960s. Now HDA is poised to expand the Hope program, proving the viability of the model while addressing critical needs related to housing availability, workforce development, and substance abuse recovery. But the organization needs to line up flexible, creatively secured loan capital to supplement its existing funding. If all goes according to plan, a new venture called Invest Appalachia will help HDA do just that. 

A regional social investment fund that grew out of a series of convenings with funders, researchers, entrepreneurs, and others in 2016 and 2017, Invest Appalachia is designed to help fill critical investment gaps in Central Appalachia. In places like Perry County, where the median household income is $33,640, it intends to provide the kind of flexible, forgiving investments and blended capital that larger funders aren’t always able or willing to make, by partnering with regional networks and attracting new impact capital primarily from outside the region.  

The creation of an enabling environment for capital in Perry County, which has become something of a hub of community development, is no accident, says Sara Morgan, chief investment officer of Fahe and treasurer of the board of Invest Appalachia: “Good financing comes at the end of a long trajectory of work and planning.” 

Perry County hasn’t always been an obvious target for investors—then again, neither has most of Appalachia. The cross-sector projects and innovative capital stacks springing up around the region have been informed by the experience of regional community development actors and networks during the past three decades. Together, they have worked to establish a new investment ecosystem in Central Appalachia, one committed to the long-term vision of building an inclusive, sustainable economy after decades of disinvestment in this region and its people. 

The Roots of Resilience 

Appalachia reaches from southern New York into Mississippi and Alabama, largely following the contours of the mountain range that gives the region its name. Central Appalachia is the heart of the region, comprising sections of southeastern Ohio, eastern Kentucky, West Virginia, southwestern Virginia, eastern Tennessee, and western North Carolina. Significant swaths of its culture and economy have long been tied to the rise and fall of the coal industry. 

In 1964, when President Johnson declared a national War on Poverty, Appalachia was the campaign’s poster child, providing the backdrop for press footage of the “poverty tours” he undertook to drive home his message. Johnson wasn’t the first president to recognize and attempt to address the major economic disparities between Appalachian states and their neighbors, but he formalized investments in solutions ranging from housing to hot lunches with the creation of ARC in 1965. ARC was tasked with overseeing the economic development of 423 counties across 13 mountainous states.  

Since then, ARC has made 28,000 targeted investments and invested more than $4.5 billion. That funding has been matched by over $10 billion in other federal, state, and local funding. Those investments have made a significant difference on the ground, supporting projects like the Hope Building program, but the commission cannot singlehandedly support the region, nor was it designed to. 

With the collapse of major industries—coal, manufacturing, and natural gas—throughout the last three decades, Appalachians left with only remnants of extractive economies had no choice but to build internally to survive, restarting local economies nearly from scratch. The retreat of major industry coincided with the disappearance of community banks; more than 80 percent exited the market, mostly merging with larger banks. Reduction in local bank ownership, from 80 percent to 20 percent in rural areas, has led to larger government institutions, like ARC and the U.S. Department of Agriculture (USDA), working with CDFIs to fill the gaps.  

Even when funding has been available, it hasn’t always been clear what to fund. In Appalachia, supply chain issues and investment logic devoid of social considerations have long hurt the people who live there. Since there are no buyers for high-end, healthy products, for instance, the local markets won’t sell any. There is no profitable consumer base for broadband, so why invest the time and resources into bringing it to rural, mountainous areas? This type of market calculation has long left the region in a vicious cycle of vulnerability. 

Andrew Crosson, founding CEO of Invest Appalachia, points to the region’s reputation as a “risky” place for investment and the lack of capital as “the end product of a series of decisions that investors, policy makers, and economic forces have made that result in those communities being disinvested.” Current efforts in the region, he says, “are making up for generations of lack of wealth-building opportunity, which will require more credit enhancements [and] more technical assistance . . . market-rate capital won’t solve the issue of broken or underdeveloped markets on its own.” 

In the 1990s, a group of regional nonprofits created the Central Appalachian Network (CAN) to develop common analysis, scale projects across the states, and work together on longstanding issues. Initially focused on the region’s food systems, the network expanded its scope to address a broader array of community development strategies, including clean energy, tourism, workforce development, and waste reduction. Twenty years after the creation of that network, the philanthropic community followed suit. The direct effects of the 2008 financial crisis meant funder investments were down, dipping as much as 10.5 percent nationally during the peak of the Great Recession. In Appalachia, funders began to collaborate more closely, cofund where possible, and share analysis to help shield the region from these economic impacts. Informal gatherings led to the formation of the Appalachia Funders Network (AFN), which aligned its investment efforts with CAN and its priorities.  

Crosson began working with CAN and the budding AFN in 2012. With support from the Ford Foundation, ARC, and the USDA, CAN managed a collaborative initiative with several regional nonprofits to create a robust local and regional food system. Over time, this regional alignment illustrated the impact of high-level collaboration: In 2018, nearly $3 million in value chain investments contributed to around $20 million in annual revenue and 1,608 jobs for local farms and food businesses. 

But after nearly a decade of collaboration between funders and practitioners, both networks realized that traditional philanthropy and government grants could not address the scale of Appalachia’s economic obstacles. Community lenders and the Federal Reserve banks were becoming increasingly involved in the funders network and working to develop a pipeline of investment-ready deals. Fahe alone claimed a “cumulative impact of over a billion dollars . . . serving more than 616,694 people,” and other CDFIs were working hard to provide loans and financial advisory services to businesses and nonprofits. But the Central Appalachian region needed more investment capital, and new types of capital, to achieve the scale of revitalization needed. 

This recognition sparked the years of stakeholder conversations that led to the creation of Invest Appalachia. That groundwork included participating in the Connect Capital program run by the Center for Community Investment at the Lincoln Institute (CCI), which set up the organization to be adaptable to regional needs and nationally competitive in fundraising (see sidebar). That experience was critical to Invest Appalachia’s design, Crosson says, and helped secure the $2.5 million ARC POWER grant that provided initial seed capital and operating funds. Due to the deep network organizing and collaboration that had been occurring in the region, Invest Appalachia had investment-worthy projects to pitch as it began the hard work of raising the flexible capital it needs to start making an impact on the ground. 

With a focus on the role of capital and the ability of individuals, businesses, and communities to access that capital, Invest Appalachia is “taking the pieces that work well and supercharging them, helping them reach further into underserved communities and helping the existing dollars go further,” Crosson said. 

INVEST APPALACHIA AND CONNECT CAPITAL 

In 2018, the Center for Community Investment at the Lincoln Institute (CCI) launched Connect Capital to help communities attract and deploy capital at scale to address their needs. The first cohort consisted of six teams, including a group of community development practitioners and other leaders from Central Appalachia. That team included Sara Morgan, chief investment officer of Fahe; Deb Markley, vice president of Locus Impact Investing; Andrew Crosson, who would become the founding CEO of Invest Appalachia; and several other CDFI and philanthropic leaders.  

Connect Capital provided training in CCI’s capital absorption framework—a set of organizing principles that helps groups identify shared priorities, create a pipeline of investable projects, and strengthen the enabling environment of policies and practices that makes investment possible. Morgan, Markley, and Crosson said the training on pipeline development—an approach that encourages moving away from a model of scarcity and competition for resources toward a collaborative model—was critical for the region, and for the development of Invest Appalachia. Participating in Connect Capital catalyzed the launch of the new entity and equipped it with the tools to succeed. 

As a multistate investment group tackling issues like economic development, the Central Appalachia team was unlike other participants, says Omar Carrillo Tinajero, director of innovation and learning at CCI, who ran the Connect Capital program. Tinajero was impressed with the team’s dedication to democratic decision making and to creating a partnership built on trust, he says, noting that the capacity communities need to be ready to absorb capital flows from the strength of relationships. Struck by how expansive the investment pipelines had to be, CCI supported the team as they identified the large-scale deals that now make up the majority of Invest Appalachia’s planned first round of investments. 

Capital Ideas 

Invest Appalachia launched with four major sectoral priorities: clean energy, creative placemaking, community health, and food and agriculture. These priorities were identified through a multiyear collaborative research and design phase involving a variety of regional stakeholders, including members of CAN and AFN, CDFIs, public agencies, and community development groups. The fund’s investment strategy will be guided by a board of 14 diverse stakeholders, and a Community Advisory Council and Investment Committee will oversee the deployment of funds, drive sector priorities, and define and measure goals and impact. 

The Hope Building program, which has provided a path to affordable homeownership for Sonya Comes and others, offers an example of how Invest Appalachia would add to capital stacks across the region in the area of community health. A potential investment in Hope could leverage millions in total investment from the Housing Development Alliance, ARC, Fahe, and the Appalachian Impact Fund housed at the Foundation for Appalachian Kentucky. Invest Appalachia can support existing investors by helping to meet the need for flexible and subordinate loan capital in these types of innovative investments, “de-risking” partially secured debt through credit enhancements like loan loss reserves. This would make it possible for HDA to create more jobs, build more homes, and leverage more financing. 

Morgan, who noted that Fahe has invested in HDA for over 20 years, sees affordable housing as “a driver for economic recovery” and hopes Invest Appalachia can access resources that can bring this project, and others like it, to scale. Invest Appalachia aims to play this kind of role in projects ranging from downtown revitalization to solar energy installations. 

Crosson is currently conducting a capital drive with the backing of Richmond, Virginia-based Locus Impact Investing, the fund’s investment manager, and says the fund is on track to close its first round of capital raise by the end of the second quarter in 2022. The total target for the Invest Appalachia Fund, an LLC affiliate managed by the nonprofit, is $40 million by early 2023, which will be invested over a seven-year period. This repayable investment will be complemented by a catalytic capital pool of philanthropic funds that will support inclusive pipeline development and help investment-worthy projects become investment-ready. 

The catalytic capital pool will provide flexible, grant-like funds that help projects seeking investment to address capacity, collateral, or risk issues that are preventing them from accessing repayable capital. As Crosson wrote in a recent Nonprofit Quarterly article, “Without credit enhancements, subsidies, and other flexible non-extractive capital to accelerate and de-risk projects, large-scale investment will not reach the underserved residents of low-wealth places like Appalachia.” Meanwhile, the Invest Appalachia Fund, LLC, will be a source of repayable investment in the form of large, flexible loans deployed alongside and in support of other regional investment partners like CDFIs. This fund intentionally takes on more risk than most lenders, in order to leverage capital into difficult-to-invest projects. Due to its blended structure, it will be able to absorb this risk and still return capital and concessionary (below-market) returns to investors. 

Crosson says Locus Impact Investing was a natural fit to serve as the fund’s investment manager, because of its track record in creative financing and its roots in the region. Deb Markley, VP of Locus, has been working in the region for more than three decades. Markley characterized Invest Appalachia as an “essential, trusted partner” and said she believes Crosson has the right kinds of networks and trust to overcome the challenges inherent in a resource-scarce rural region, where new or ambitious community development efforts sometimes encounter historically informed skepticism or resistance. 

“For too long, Appalachia has been defined by what it lacks,” Markley wrote in an article on the Locus website. “By lifting up investment opportunities and supporting locally rooted practitioners and financial institutions, Invest Appalachia is reflecting a new narrative about the region to outside investors—presenting Central Appalachia as a place of opportunity and vision. As an innovator in the community capital space, Invest Appalachia is proof positive that rural regions can and do nurture creativity and provide lessons for other parts of the country.” 

Raising over $50 million in capital is no small task, but many regional stakeholders are hopeful that Invest Appalachia will succeed on the national stage. The fund is pitching a message of opportunity to investors and national foundations rather than reinforcing and uplifting stereotypical images of Appalachian poverty. As a result, Invest Appalachia is beginning to attract investors ready to make a long-term commitment to transform the region.  

A Culture of Collaboration 

National investors are consistently surprised at the diversity of projects and level of collaboration and trust among Appalachian lenders, Crosson says. They wonder how a persistently poor, economically marginalized, chronically underinvested region has built a community investment ecosystem with the capacity to absorb and deploy catalytic capital for transformative change. They’ve asked some version of that question so much, in fact, that the Appalachian Investment Ecosystem Initiative (AIEI), a coalition that includes Invest Appalachia, Locus, Fahe, regional CDFI partner Community Capital, and others, created an online resource called By Us For Us: The Appalachian Ecosystem Journey to chronicle the region’s movement and capacity building and to highlight regional success stories. 

Coauthored by former Mary Reynolds Babcock Foundation Deputy Director Sandra Mikush, this regional chronicle is designed to provide context and recommendations for funders as they seek to support under-resourced communities. It also provides a potential roadmap for other rural areas where regional networks and partnerships are coalescing, such as the Delta and rural Texas. 

While stakeholders in Central Appalachia have made significant progress in building a thriving, functional investment ecosystem, they still face obstacles to long-term economic success. Policy makers in many Appalachian states tend to favor tax cuts for corporations—a stance likely to attract more parasitic boom-and-bust industries—rather than seeking to make deep investments in and create incentives for local businesses. And that demeaning national narrative about the region’s people lingers: that they are uninvestable, and unwilling or unable to work hard to change their situations. Invest Appalachia’s messages to national investors and planned investments in the longtime work of communities will help combat these narratives and, in concert with many partners, pave the way for reimagining what is possible for the region. 

In Decolonizing Wealth, author and social justice philanthropy advocate Edgar Villanueva describes the need to fight a separation worldview and cultivate integration in order to achieve balance. That philosophy is guiding the effort to build a more inclusive, sustainable, and resilient economy in Central Appalachia. “If we are going to turn the needle on Appalachia, we need to work together,” said Morgan of Fahe. “It is my hope that Invest Appalachia will raise resources that we are not able to access because it is a new type of vehicle, and I know Invest Appalachia will bring consistent capital that will help us develop a pipeline of deals to coinvest on. The resources will go farther together.” 

FROM SOLAR POWER TO SMALL FARMS: PRIORITY PROJECTS 

Invest Appalachia will focus on four key areas of investment: 

Clean Energy, including renewable energy, energy efficiency, clean manufacturing, abandoned mine land reclamation, energy democracy, and green buildings. Emerging priorities include a partnership with the Appalachian Solar Finance Fund, leveraging $1.5 million in SFF grants to provide over $500,000 in credit enhancements and $8 million in repayable financing for medium-scale solar development in the region. 

Community Health, including health care, housing, education and childcare, built environment, and behavioral health. Likely opportunities include affordable housing projects like HDA’s Hope Building, as well as flexible financing to help get community health facilities up and running to provide substance abuse recovery, primary care, and more. Many of these projects are capital-intensive, requiring loan amounts in the millions for construction and working capital. 

Creative Placemaking, including downtown revitalization, commercial real estate, public spaces, tourism and recreation, and arts and culture. Early priorities include leveraging investment for renovations and real estate projects that can anchor downtown revitalizations, as well as local infrastructure to help businesses capitalize on the rapidly expanding outdoor recreation tourism industry. Brick-and-mortar projects require a blend of capital, including subordinated loans of up to $2 million that Invest Appalachia is positioned to make. 

Food and Agriculture, including local food systems, small farms, healthy food access, nontimber forest products, and farmland conservation. Potential projects include support for food hubs and intermediaries in need of flexible working capital or infrastructure financing in the $200,000 to $1 million range, as well as subsidized loan funds to support beginning and disadvantaged farmers. 

Alena Klimas specializes in philanthropic engagement and writes about economic development and culture in Appalachia. She has collaborated with many organizations and initiatives in the region through her past work with the Appalachia Funders Network and Rural Support Partners, a mission-based management consulting firm. Klimas grew up in West Virginia and currently lives in Asheville, North Carolina. 

Lead image: Invest Appalachia will support a portfolio of projects including downtown revitalization efforts, working closely with the Foundation for Appalachian Kentucky and other partners. Credit: Foundation for Appalachian Kentucky.

When Jacob Gonzalez moved from Seattle back to his hometown of Pasco, Washington, to work for the region’s Council of Governments in 2013, his housing needs were both seemingly straightforward and surprisingly difficult to address. “All I wanted was a tiny apartment for me and my CDs. I didn’t even have a pet,” he explains. “But there weren’t many apartments, and I wasn’t going to stress myself out by paying for space I either didn’t need or couldn’t afford, or by paying for an older apartment that didn’t have what I wanted it to have.” So he moved in with his parents. 

Gonzalez joined the City of Pasco as a planner in 2018 and is now the planning manager for the city’s Community and Economic Development department. These days, he rents a small cottage a few miles from his childhood home. He recognizes that his option to fall back on family for temporary housing is a luxury most of his fellow residents of Pasco do not have. “Thanks to my parents, I had choices. Maybe I didn’t like my choices, but at least I had them, whereas a lot of our community members don’t have that flexibility. For many of them, housing is a challenge on a month-to-month basis.” 
 
Like virtually every community in the United States, Pasco is facing a significant shortage of affordable housing. Located on the rich soils of the Columbia Basin in southeastern Washington, Pasco is a city of about 80,000 residents and is part of the Tri-Cities, a regional hub that includes the cities of Kennewick and Richland and is collectively home to about 300,000 people. Established by the Northern Pacific Railway Company in the late nineteenth century, Pasco is largely agricultural. For many decades it has been considered an affordable place to buy a home in a region with high housing costs. 

Until a few years ago, Pasco could accommodate those buyers with housing stock that is 70 percent detached single-family and mostly built prior to 2000. However, Pasco has grown significantly in the past two decades and is now one of the fastest-growing cities in Washington. Today, Pasco is home to a relatively young and demographically diverse population; the median age in the city is 29, compared to 38 nationally, and more than half of residents identify as Hispanic or Latino. The rapid population growth is due at least in part to Pasco’s rapidly diversifying economy, which has expanded beyond its agricultural base to include job opportunities in public health and local government services. 

As the population has grown, land and housing costs have risen. In Pasco, the median home price has increased about 60 percent in less than five years, from $237,600 in 2017 to $379,000 in 2021. That’s in line with an average increase of 66 percent across Washington during the same time, but dramatically higher than the 21 percent national increase. According to Pasco’s 2018–2038 Comprehensive Plan, more than 15,000 additional units of housing will be required by 2038 to accommodate the projected 48,000 new residents. At its current rate of production, city staff estimate, Pasco will fall about 5,000 units short of that target.  

Pasco is not alone in grappling with housing issues related to rapid growth, says Martha Galvez, executive director of the Housing Solutions Lab at New York University’s Furman Center for Real Estate and Urban Policy. “Growth has been a really common theme among small and medium-sized cities,” Galvez notes. “Some of that growth is due to people migrating out of the big, hot coastal cities to smaller places where you can get more space for your dollar. And some of it is because these places are gaining jobs and attracting industries.” That’s the case in Pasco, where Amazon is building two warehouses, each more than one million square feet, and Darigold recently announced plans to build North America’s largest whey processing center. 

Broadly speaking, the shortage of affordable housing options plaguing nearly every community in America is at least partially the result of a significant decline in the production of single-family homes beginning in the mid-2000s, combined with stagnant wages and rising land and housing costs. The shortage has only worsened during the COVID-19 pandemic: low interest rates have stoked demand just as construction costs have increased due to labor and material shortages and supply chain challenges.  

Across the country, places like Pasco are exploring how land use decisions can help address the housing affordability crisis. Last year, Gonzalez and his colleagues participated in the Housing Solutions Workshop run by the Furman Center and Abt Associates, in partnership with the Lincoln Institute. Designed to help leaders from small and midsize communities develop and implement balanced and comprehensive local housing strategies, the program invited applications from communities with populations between 50,000 and 500,000, and selected participants through a competitive national process. Gonzalez says the workshop helped him and his colleagues better identify barriers to increasing the availability of affordable housing in Pasco and meaningful actions they could take. 

It was good timing. Two years earlier, the state of Washington had passed House Bill 1923, which offers communities the opportunity to qualify for planning grant assistance in exchange for a range of actions that promote urban density, such as authorizing multifamily zoning in areas previously zoned for single-family homes and approving smaller lot sizes. That legislation created an opportunity for Gonzalez and his colleagues. 

“We could apply for a grant, so that’s always appealing,” says Gonzalez. “And the legislation included a list of proposed code amendments we could make. So my department recommended three code amendments to the city council and the mayor.” 

In January of this year, the city of Pasco became one of 52 communities across Washington that have adopted some of the code amendments proposed in HB 1923. By doing so, Pasco is reforming the city’s approach to land use and demonstrating the critical role local governments can play in promoting housing affordability. 

Zoning for All 

Pasco’s historic approach to land use reflects its longstanding identity as a place where homeownership is affordable to people priced out of the region’s better-known cities. Because of this cultural expectation of affordable homeownership, the city’s primary focus has been ensuring a supply of single-family homes, and that was reflected in its zoning. Prior to the city council vote, 84 percent of the land that was zoned residential in Pasco was restricted to single-family homes. 

The result of zoning like this, which is common in communities across the country, can be not only a housing shortage, but also numerous missed opportunities for a more affordable, diverse range of housing options, says Michael Andersen, a senior housing researcher at the Sightline Institute, which researches economic and policy issues in the Pacific Northwest. 

“The effect of only allowing multifamily housing in such a small area is that you constrain the volume of lots that could be plausibly built on,” Andersen says. “And you then have to wait until whoever owns one of those lots is interested in doing something with it. Part of the way to increase the number of homes being built is to increase the odds on any given property that it is time to do something on that land. In hockey they say that you miss 100 percent of the shots you don’t take. With this zoning, Pasco decided not to take 84 percent of the shots.” 

Gonzalez and his colleagues understood this, so they worked with the city council to revise the city’s housing policies. Under an amendment to the city’s municipal code adopted in late January, 68 percent of land that is zoned residential will now be eligible for some forms of multifamily housing, including duplexes, triplexes, and, in some instances, small apartment buildings oriented around a courtyard. This represents a roughly fourfold increase in land available for multifamily properties, and allows for the development of “missing middle” housing—properties that occupy the middle of the housing spectrum, between detached single-family homes and massive multifamily developments. Missing middle housing usually includes two to twelve units, and can be built in a neighborhood of single-family homes without seeming out of place or altering the feel of the area. 

Creating opportunities for missing middle housing offers numerous benefits. For starters, missing middle housing can accommodate developers who would like to build properties other than detached single-family homes, and residents who would like to live in a smaller unit. It can also increase the availability of affordable housing, says Andersen. “Depending on the style, the homes may share walls or wood frames or exteriors, which not only reduces the cost of building missing middle housing but also helps to keep down the price of existing housing by providing affordable alternatives. Additionally, missing middle units can help tip a neighborhood into a level that it can support a bus line or a small commercial hub with a little corner grocery store, a coffee shop, something like that, which makes for a more walkable community and is also good for local economic development and social interactions.” 

While not everyone in Pasco supports the idea of denser housing, Gonzalez is confident that the community benefits from at least having the option to build it. “Our community is growing very quickly. People are moving here in their twenties and maybe they don’t want to buy a home, and we also have people who are older and want to age here. They can’t do that if the only option is to buy a detached single-family home,” he says. “That’s why we need a lot of everything—detached homes, townhomes, apartments—because, as a municipality, we have to plan for the needs of the community, and not just for preferences. Sure, there may be a preference for a big house on a large lot, but that should not preclude us from removing barriers and restrictive policies to make other forms of housing more attainable.” 

In addition to accommodating missing middle housing, the Pasco City Council passed a second code amendment that allows for “lot size averaging,” which allows individual lots in a multiparcel housing development to fall below the city’s minimum lot size requirements as long as the project’s average lot size can meet the requirement. In Pasco, where residential lots tend to be quite large—an average of 13,068 square feet, compared to 6,345 square feet in the western United States and 8,177 square feet nationally—allowing for smaller lots is a smart idea, says Andersen. 

“When you’re talking about lot sizes, you’re effectively telling residents that in order to live here you have to purchase or rent a certain amount of land,” says Andersen. “When the lot sizes are as large as Pasco’s, that’s a lot of land, and that cost can be a barrier to entry.” Larger lots also typically mean increased infrastructure costs. According to research by the Victoria Transport Policy Institute, urban sprawl can increase the cost of providing public services and infrastructure by 10 percent to 40 percent. As Andersen explains, that can lead to increased housing costs. 

The code amendments are also designed to encourage the creation of housing that increases access to hospitals, schools, major transportation routes, parks, and other critical services by allowing for slightly more flexibility. As Gonzalez explains, the emphasis on access stems from the fact that transportation costs are high in Pasco. According to the Center for Neighborhood Technology’s Housing and Transportation Affordability Index, Pasco residents spend 24 percent of their income on transportation and have the third-largest transportation costs as a percentage of total household costs among the state’s 20 largest cities (CNT 2022). By increasing access, the planning staff hopes to reduce transportation costs, in turn reducing overall household costs. 

To further reduce barriers to creating more housing, the Pasco City Council passed a third code amendment that authorizes the creation of Accessory Dwelling Units (ADUs) on all residential parcels that contain a single-family home. The amendment allows the ADU to be either attached—to a garage, for example—or freestanding, does not include a minimum parking requirement, and does not require the owner of the ADU to occupy the primary residence. While there is a maximum allowable size—the smaller of either 1,000 square feet or 55 percent of the primary dwelling—there is no minimum size requirement, nor are there design requirements beyond ensuring that the ADU complements the home. 

“We don’t want to overburden people or unnecessarily complicate the process,” explains Gonzalez. “That’s why we ultimately decided not to require parking. If we did, there would be many fewer lots that could feasibly have an ADU because the only place to put parking would be in the front yard. We wanted to avoid a situation in which our policies technically allow something, but in practice make it almost impossible to do.” 

Pursuing a Balanced, Comprehensive Strategy 

Pasco’s rezoning efforts are just one of the steps the city is taking to address housing affordability. The city also offers a down payment assistance program to first-time homebuyers, is working to identify opportunities to partner with local and regional stakeholders to better address housing needs, and is about to undertake a Housing Action Plan. Officials in Pasco are also exploring tax incentives and taking advantage of House Bill 1406, a revenue-sharing program for local governments that allows a percentage of local sales and use taxes to be credited against the state sales tax for housing investments. 

Still, Pasco aims to do more, says Gonzalez: “There was a lot of focus in the workshop on taking a balanced housing approach that addresses all the different aspects of our housing needs. We aspire toward it, but we aren’t there yet.” 

That idea of a balanced and comprehensive strategy is critical to effectively tackling housing issues, says Ingrid Gould Ellen, a professor of Urban Policy and Planning at New York University and the faculty director for the Furman Center. “There is no magic bullet to solve a jurisdiction’s housing challenges,” says Ellen, who coauthored Through the Roof: What Communities Can Do About the High Cost of Rental Housing in America, a Lincoln Institute Policy Focus Report (Ellen, Lubell, and Willis 2021). “Housing problems are complex and usually touch on a lot of different functions and policies that implicate different parts of local government, including the housing department, the planning department, and the buildings and finance departments.” 

Given the multifaceted nature of housing shortages, Ellen encourages local governments to adopt comprehensive strategies that use the full set of tools available to the various departments. As she explains, “localities that do not adopt a comprehensive approach run the risk of creating well-intentioned, well-designed housing plans that could be thwarted by, say, zoning codes that don’t allow for certain types of construction, or a tax code that disincentivizes the development of rental housing when it is rental housing you’re trying to promote through subsidies.” In taking a more comprehensive approach, local governments can take full advantage of their entire suite of resources, and can also align agencies that may otherwise remain siloed and at risk of unintentionally undermining each other.  

In addition to a housing plan that is comprehensive, Ellen advocates for one that is balanced, by which she means a plan that addresses a range of housing issues rather than a single barrier. “Partially, that’s a political issue,” she explains. “If you focus on a range of goals, then you are more likely to gain political acceptance and support.” She says a balanced plan is more likely to succeed by recognizing and addressing the multidimensional nature of housing challenges.  

In Through the Roof, Ellen and her coauthors Jeffrey Lubell and Mark A. Willis provide a framework for a balanced and comprehensive housing strategy that centers on advancing four broad goals (see figure 1). 

“This four-part framework for a balanced and comprehensive housing strategy groups individual policies into broader categories, so communities can assess where there are gaps in their local housing strategy and work to close them,” says Adam Langley, associate director of U.S. and Canadian programs at the Lincoln Institute. “The number of local housing programs and their scope often matters less than ensuring that a community has implemented at least one tool to address each part of the framework—that’s why it’s so important to consider comprehensiveness.” 

This framework is central to Local Housing Solutions, a joint initiative of the Furman Center and Abt Associates that provides actionable resources and step-by-step guidance to help cities develop, implement, and monitor housing strategies. With an emphasis on affordability and equity, the program is specifically targeted to local governments, both because their role is frequently overlooked in discussions of housing challenges, and because of their significant and unique power to address housing problems. 

“While all levels of government are important, local governments are particularly well-positioned to quarterback their local housing strategies,” Ellen explains, citing the local nature of the housing market and the power local governments have over the most critical tools affecting housing policy, including land use, building codes, permitting, and, at least to some degree, property taxes. “Even though the majority of the funding is coming from the federal government, and to a lesser degree the state government, it’s not just spending that matters. Those key decisions over how much housing can be built, what kind of housing can be built, and who can live where are really important and happen at the local level.” 

The Furman Center launched the Housing Solutions Workshop to support local governments as they make those decisions. In addition to Pasco, the 2021 cohort included teams of five to six senior leaders from Bethlehem, Pennsylvania; the City of Bozeman and Gallatin County, Montana; Huntsville, Alabama; and the City and County of Kalamazoo, Michigan. 

“In the workshop, our delegation kept finding ourselves talking about the fact that we have all these great policies, yet our development standards don’t get us there,” Gonzalez says. “The more we talked—and continue to talk—about it, the more I understand the importance of focusing on the implementation piece, which is the most difficult part. It’s especially true in a place like Pasco, where we have had years of rapid growth, years of not producing enough housing, and years of not having the right regulatory structure in place. I’m seeing now that we really have to dive into our objectives and measurements and strategies. We have to ask ourselves if our strategies are feasible. Are they practical and relevant for Pasco or are we just copying and pasting a policy from another city?”  

For Gonzalez, that shift in focus toward implementation is exemplified in the city’s recent passage of the three code amendments. “We didn’t make any mandates. We aren’t requiring property owners to build these types of housing. We are just making it an option, whereas two weeks ago it wasn’t an option. And by doing so, not only do we save builders and residents from the headache of not being able to do what they want to do, but we also streamline the permitting process, which is often a significant barrier, because we’ve made it so that there’s no longer a need to rezone the property. So it better aligns our comprehensive plan with our development standards.” 

Gonzalez knows that the recently adopted code amendments are not a panacea, and that Pasco has more to do to ensure that it is providing affordable housing options for all. And he is excited to continue with that work. In the coming year, he hopes to work with the Pasco City Council to reconsider existing development standards, including height and lot coverage, in order to identify opportunities to create a more modern, and more flexible, code. He also hopes to look into the policies that govern nonconforming properties—those that comply with earlier standards but not current ones—in an effort to ensure that policies are applied “based on health and safety, and not aesthetics.” He’d like to work more closely with neighboring cities Kennewick and Richland, which are experiencing similar shortages of affordable housing. And he wants to investigate density bonuses and tax exemptions for multifamily developments, among other things. 

“There is an urgency to the work,” he explains. “Fifteen years ago, when our comprehensive plan was adopted, there was no such thing as Uber or apps or on-demand pizza delivery. We have to change our policies so that they make sense for today’s residents, and for future residents. I think our community members deserve that.” 

Housing Affordability Initiatives at the Lincoln Institute 

In 2020, the Lincoln Institute embarked on several new housing-related projects, recognizing the importance of land policy in the housing affordability debate and its implications for reducing poverty and inequality, which is one of the Lincoln Institute’s six core goals. As part of this work, a cross-departmental team issued a call for research proposals, seeking to better understand barriers to implementing housing solutions at the scale needed to effectively address the U.S. housing affordability crisis and strategies to overcome those barriers. The commissioned papers cover a diverse set of topics and geographies, from case studies of U.S. political coalitions built to advance housing affordability to an exploration of the impact and applications of France’s fair-share housing law. The Lincoln Institute partnered with the NYU Furman Center and Abt Associates on the 2021 Housing Solutions Workshop described in this article, and hopes to offer another iteration of the workshop. The team will also undertake new research on state and local policies to improve housing markets. 

Loren Berlin is a writer and communications consultant specializing in housing and economic opportunity. Read more about her at www.lorenberlin.com. 

Lead image: The population of Washington’s Tri-Cities region, which includes Pasco, Richland, and Kennewick, grew 19.8 percent between 2010 and 2020. Credit: alohadave via iStock/Getty Images Plus.

For years, innovations in alternative mobility—scooters, e-bikes, autonomous vehicles—have focused on how individuals get around. But the pandemic era has put fresh emphasis on a different mobility goal: moving stuff around. 

The demand for rapid delivery has increased sharply in the past two years, and it doesn’t seem to be abating. By some estimates, companies like Door Dash see the quick delivery of groceries alone adding up to a $1 trillion market. With major companies from UPS to Domino’s trying out new ways to deliver their products, the pace and range of vehicle experiments has accelerated—and that is likely to impact the design, planning, and regulation of urban and suburban spaces. 

While it’s unclear which of these experiments will pan out, it’s undeniable that new kinds of delivery vehicles are or soon will be on our streets. With new questions arising, urban design thinkers, retail and technology companies, and municipalities are working to address the convergence of increasing delivery demand and new vehicle forms. Leading the micro-mobility pack is the e-bike, a form that’s been around for decades but has lately become strikingly popular: with sales up 145 percent since the pandemic started, e-bikes now reportedly outsell electric cars. John MacArthur, a program manager at Portland State University’s Transportation Research and Education Center (TREC), has been researching their potential—including the “tantalizing hope” that micro-mobility tech gets more people out of cars—for the better part of a decade. Last year, he taught a new class focused on cities dealing with all manner of new micro-mobility experiments, or “technologies being thrust in the public right of way.” 

Students in that class found that the pandemic was inspiring a range of responses from cities. On the one hand, work-from-home trends reduced and reconfigured car-centric commuter patterns. In Portland and elsewhere, MacArthur notes, that led to the creation of more bike and bus lanes. On the other hand, delivery demand spiked, leading to concern about a corresponding spike in single-occupancy delivery vehicles. 

MacArthur’s research connected him to Portland’s B-Line Urban Delivery, a 12-year-old firm that operates a fleet of electric cargo trikes that can handle 500-pound loads. With input from TREC and B-Line, Portland is now considering ways to create “micro-delivery hubs.” In this model, a truck brings a load of deliveries to a strategic location, with e-bikes or other micro-vehicles handling the last mile for each delivery, reducing traffic congestion. Such experiments are already underway in Europe, where delivery giant UPS has been experimenting with e-bikes, delivery hubs, and other “sustainable logistics solutions.” 

MacArthur acknowledges that complicated zoning and other issues are involved. But the bigger point is that Portland is among the cities proactively grappling with the future of mobility and how cities can respond to it and, more important, shape it. Shaping the response to new vehicle forms was a theme of a recent “Rebooting NYC” research project spearheaded by Rohit Aggarwala, a senior fellow at the Urban Tech Hub of the Jacobs Technion-Cornell Institute at Cornell Tech. Aggarwala—who previously led mobility work for Sidewalk Labs and recently joined New York City government as commissioner of the Department of Environmental Protection and the city’s chief climate officer—sketches the broader context. “If a vehicle is designed to fit well in traditional traffic, then it is almost by definition not designed to be a good urban vehicle,” he says. Cars, pickups, and SUVs are built for highways; their makers put far less emphasis on, say, turning radius or other factors that would make them more suited to the narrower confines of urban streets. 

Thus the rise of new, smaller autonomous vehicles such as the Nuro, shaped like a diminutive van and about half the width of a conventional sedan; with no driver, it’s designed to haul up to 500 pounds of cargo. The startup might be best known for a limited pilot program in Houston with Domino’s, offering “the world’s first fully automated pizza delivery service.” 

While such wee vehicles are pitched as virtuously reducing not just pollution but also traffic congestion, the reality is that they’re often fundamentally unsuited to real-world traffic. So where can they go? 

Another recent pilot program involving startup Refraction AI’s REV-1 had the three-wheeled, washing machine–sized autonomous vehicle hauling pizzas via bike lanes in Austin, Texas—a development that some cyclists were not pleased about. “What if in two years we have several hundred of these on the road?” one bike advocate asked a local journalist. Yet another startup, Starship, has been testing its small mobile robot—a 55-pound object with the footprint of a wagon—in several cities, using sidewalks. This, too, has met with a mixed response. Such responses signal a major potential flashpoint, but also, perhaps, an opportunity. Aggarwala points out that in New York and other cities, bicyclists and e-bike users (who are often delivery workers) have long battled over bike lane use. In many cases, bike advocates have fought for years or decades to establish dedicated lanes, and have little interest in seeing them clogged with newfangled motorized vehicles of any kind.  

But the problem isn’t the e-bikes or AVs or robots, each of which offers positive alternatives to traditional cars, Aggarwala says: “The problem is all these alternative vehicles being shoehorned into an incomplete network of generally unprotected lanes that are way too narrow.” Thus the “Rebooting NYC” proposals include creating New Mobility Lanes. This would involve widening and expanding the city’s existing bike lanes into a “network that can accommodate both bicycles and these new vehicles.” 

Other researchers have made similar proposals for “light individual transport lanes,” with varying specifics but a common goal. “You’re basically providing more space for different kinds of vehicles,” says MacArthur of PSU. “That’s the big question that planners will have to face in the next five years.” It’s a knotty challenge for municipalities caught between the ambitions of tech companies, the limits on local regulation resulting from superseding state or federal rules, and the reality that even designating bike lanes in the first place depends more on mustering political will and popular support than it does on the planning that underpins it. 

On that last point, Aggarwala suggests a potential opportunity. As a political matter, bike lanes are often seen as benefiting just a portion of the population at the expense of everyone else. But pretty much everyone has been stuck behind a delivery vehicle. And, maybe more to the point, more of us than ever have come to depend on those delivery vehicles. So rejiggering the way road space is divided doesn’t just benefit the few—it’s for nearly everyone. In other words, Aggarwala asks: “What if you broaden the relevance of a bike lane by expanding its use?” 

Clearly a wave of new-vehicle experimentation is poised to disrupt the delivery business, in a time of unprecedented demand. It’s worth thinking about how planners and policy makers can not just respond to that wave, but harness it to help make city streets more functional and accessible for all. 

Rob Walker is a journalist covering design, technology, and other subjects. He is the author of The Art of Noticing. His newsletter is at robwalker.substack.com. 

Image: Nuro, an autonomous vehicle company founded by two former Google engineers, has partnered with companies including Domino’s, CVS, Walmart, and FedEx on delivery pilot projects in several U.S. states. Credit: Domino’s.

Citing the increasing demand for water even as drought is shrinking supplies, several national organizations representing planners, water utilities, and other key stakeholders have issued a call to action urging more comprehensive integration of land and water planning and management.  

The statement emerged in the wake of Connecting Land and Water for Healthy Communities, a virtual conference held in July 2021 that was cosponsored by the American Water Resources Association (AWRA) and the Babbitt Center for Land and Water Policy. After the conference, which was attended by more than 200 water and planning professionals from around the country, organizers released the findings to address why fragmentation of land and water management occurs and how to repair and prevent it. They also released a set of guiding principles to help land and water managers better recognize and build upon the connections between their work. In addition to AWRA and the Babbitt Center, the American Planning Association’s Water and Planning Network and the American Water Works Association (AWWA) signed on to the statement. 

“The fact that multiple organizations signed off on this statement is a really good outcome of the conference, and we hope to build upon that,” said Sharon Megdal, director of the Water Resources Research Center at the University of Arizona, who cochaired the 2021 conference with Jim Holway of the Babbitt Center. “Places all over the world are feeling pressure to their water supplies due to water quality concerns and the changing climate,” said Megdal, who is also a board member for AWRA. “Taking available water resources into account is critically important when planning for land uses, [but] there is a lack of connection between water planners and land planners.”  

There are many reasons for that disconnect, including the fact that decisions related to land and water have historically been made by different departments or agencies. “Siloing didn’t start as a bad thing,” notes Bill Cesanek of APA’s Water and Planning Network, which provides a platform for interdisciplinary exchange about water-related issues and boasts approximately 500 members. “Different agencies focused on different problems and created different solution sets.” Too often, though, those solutions didn’t take into account the complicated relationship between land and water, leading to issues ranging from supply shortages for new developments to contamination in water sources.  

“We need to make sure we don’t stay in these siloes,” said Chi Ho Sham, president of AWWA, a nonprofit scientific and educational association dedicated to managing and treating water. AWWA’s membership includes 4,300 utilities that supply about 80 percent of the country’s drinking water and treat almost half of its wastewater. “We need to reach across to other disciplines to take a holistic view on the availability and quality of water—the world’s most vital resource.”  

That’s true whether you’re in the drought-stricken West, the flood-prone East, or somewhere in between, says Joanna Endter-Wada, professor of natural resource and environmental policy at Utah State University: “Growth-related plans have to take water into account.” Endter-Wada, who coauthored the findings statement and cochairs AWRA’s Policy Committee, noted that she knows of at least one state-level water official who has already brought the statement into policy conversations. In April, the Rocky Mountain Land Use Institute will use it as a backdrop to a seminar series on opportunities and challenges facing communities due to the Colorado River Basin shortage declaration.  

“This is not just a one-off statement,” Endter-Wada says. “Given the challenges the world is confronting, we will keep sharing the science and making the argument. The power of words and the power of action go together.” 

That steady drip of communication is key, agree Cesanek and his Water and Planning Network cochair Mary Ann Dickinson, who send a regular newsletter to their members and maintain a collection of reports, toolkits, and other resources on the APA website. Cesanek thinks the message about the importance of integrating land and water seems to be getting out; he pointed to a new book about comprehensive planning written by David Rouse, a Water and Planning Network steering committee member and former APA director of research. The book touches on both green infrastructure, a nature-based urban stormwater management approach, and One Water, an integrated approach to water management that prioritizes sustainability and community vitality. This type of integrated approach “needs to be applied universally, and climate change has made that all the more apparent by exacerbating not only a lack of water but excess water,” Cesanek says. 

Promoting conceptual, scientific, and management frameworks and techniques like One Water is one of six guiding principles laid out in the joint statement. The others include balancing the health of human and ecological communities; incorporating diverse perspectives; honoring and learning from traditional and tribal knowledge; protecting land critical to drinking water source protection; and utilizing collaboration, engagement, and boundary-spanning tools.  

The call to action, which marks the first such collaboration between the four organizations, “was just one example of the partnerships that emerged from the AWRA conference,” said Faith Sternlieb, senior program manager at the Babbitt Center and coauthor of the findings statement. Sternlieb noted that plans are in the works for a follow-up conference in 2023, and said organizers hope to focus on the “action” part of the recent call to action.  

Sham said he is optimistic about the collaborations underway and looking forward to the 2023 conference, as well as other opportunities to keep this conversation going: “We need time for folks to meet up, think about the big issues, and come up with solutions.” 

It’s a conversation that is increasingly urgent in an era marked by history-making drought, floods, and extreme weather. “We face a lot of challenges due to climate change,” said Megdal of the University of Arizona, who published a reflection inspired by the findings statement. “We can only do a better job if we put our heads together.” 

Katharine Wroth is the editor of Land Lines.

Image: A national call to action recommends embracing frameworks like One Water, an integrated approach to water management that prioritizes sustainability and community vitality. Credit: Courtesy of Brown and Caldwell.

Stretching from Portland, Maine, to Norfolk, Virginia, the Northeast megaregion is a powerhouse of the knowledge economy. Yet it struggles with grinding congestion, escalating climate change risks, and skyrocketing housing costs—problems that too often fall to the region’s more than 1,500 individual cities, towns, villages, and boroughs to solve. 

The Northeast and a dozen other U.S. megaregions will shape the country’s future over the next century. Each one is a network of metropolitan areas united by history, culture, economics, and shared infrastructure and natural resource systems. They contain only 30 percent of the nation’s land, but most of its people. As a new book makes clear, they face complex challenges that require planning, policy, and governance that cross traditional political boundaries. 

Written by planning scholars Robert D. Yaro, Ming Zhang, and Frederick R. Steiner, Megaregions and America’s Future explains the concept of megaregions, provides updated economic, demographic, and environmental data, draws lessons from Europe and Asia, and shows how megaregions are an essential framework for governing the world’s largest economy. 

Far from being a substitute for a strong national government, megaregions are, in the authors’ view, the perfect geographic unit for channeling federal investment and managing large systems such as interstate rail, multistate natural resource systems, climate mitigation or adaptation, and major economic development initiatives. 

“Creating national, megaregional, and metropolitan governance systems will require a reinvention of the federal system and a nationwide program of innovation and experimentation unlike any that the country has undertaken since the New Deal almost a century ago,” the authors write. 

The book pays particular attention to defenses against sea-level rise and storm surges, calling for regional alternatives to the “go-it-alone approach” of cities like Boston and New York, and to high-speed rail, which could open access to opportunity as it has in other highly industrialized countries. Building better rail networks within cities and regions is critical to the success of high-speed rail, the authors write. 

Geared to urban and regional planners and policy analysts, staff and decision makers in transportation, environmental protection, and development agencies, faculty and students in related fields, as well as business leaders, Megaregions and America’s Future includes a case study of the Northeast—the nation’s oldest megaregion and the source of the concept—but delves deeply into every megaregion, from the Great Lakes to the Gulf Coast to Southern California. 

The book builds on two decades of Lincoln Institute scholarship on megaregions, including several books on the European model and Regional Planning in America: Practice and Prospect, a foundational text in the field of regional planning.

“This ambitious book makes the case for recognizing American megaregions as a driver of policy, planning, and investment,” said Sara C. Bronin, a planning professor at Cornell University. “It provides a road map for breaking down jurisdictional boundaries to address urgent needs in affordable housing, ecosystem vulnerability, and transportation-system connectedness—and it is essential reading for anyone hoping to broaden their thinking about our national trajectory.” 

Will Jason is director of communications at the Lincoln Institute of Land Policy.

Image: DKosig/iStock.