At Lincoln House May 2014

George McCarthy Named New President of Lincoln Institute

George W. "Mac" McCarthy, an economist at the Ford Foundation dedicated to improving conditions in metropolitan areas worldwide, has been named the 5th president of the Lincoln Institute of Land Policy.

Beginning July 1, McCarthy, 57, will succeed Gregory K. Ingram, who is retiring after serving as president since 2005. McCarthy will bring new vision and a fresh perspective to the Cambridge-based think tank as it continues to promote dialogue and sound land use policy in the U.S. and around the world, said Kathryn J. Lincoln, chair of the board of directors at the Lincoln Institute.

"His experience bears so much on the work of the Lincoln Institute, and he bridges the worlds of policymakers, the academy, and the public arena," said Lincoln. "He is visionary and energetic, and his leadership will be transformational."

A story on the appointment appeared in today's edition of The Boston Globe.

As director of Metropolitan Opportunity at the Ford Foundation, McCarthy has supported collaborative regional efforts to overcome the social, economic and spatial isolation of disadvantaged populations living in and around metropolitan areas worldwide.

"This is a pivotal and important time for cities around the world. The Lincoln Institute plays a unique and extremely important role in identifying the central importance of land policies, across a range of social and economic challenges," said McCarthy. "The story of opportunity is told in how we organize ourselves spatially. Without an effective response, we will double the one billion people living in unplanned settlements around the world's cities in the next thirty years. Land use decisions made today will dictate the life chances of generations to come."

The Lincoln Institute of Land Policy, founded in 1974, is a private operating foundation and think tank with an international scope, with a focus on global urbanization, urban planning, and tax policy as it relates to land.

As director of Metropolitan Opportunity, McCarthy sought to improve access to jobs and other opportunities by coordinating regional planning efforts, transportation and infrastructure investments, and housing development policies to alleviate poverty and reduce its concentration within metropolitan areas.

Before becoming director in 2008, he administered a Ford Foundation program that focused on using homeownership to build wealth for low-income families and their communities. That work centered on improving housing and housing finance markets to increase the chances that low-income homeowners could succeed in exiting and staying out of poverty.

Prior to joining the Ford Foundation in 2000, he was a senior research associate at the Center for Urban and Regional Studies at the University of North Carolina at Chapel Hill. He has worked as professor of economics at Bard College; resident scholar at the Jerome Levy Economics Institute; visiting scholar and member of the High Table at King's College of Cambridge University; visiting scholar at the University of Naples, Italy; and research associate at the Centre for Independent Social Research in St. Petersburg, Russia.

He earned a Ph.D. in economics from the University of North Carolina at Chapel Hill, a master's degree in economics from Duke University and a bachelor's degree in economics and mathematics from the University of Montana. The son of two public school teachers in Massachusetts, he grew up in Boston and Sharon, Mass., and taught in the Weymouth public schools for two years. He will be returning to the Bay State from his current home in Westchester County, N.Y., where he lives with his wife, Tootie Larios, an actress, and their three dogs.

Ingram, president of the Lincoln Institute of Land Policy since June 2005, was previously Director-General of Operations Evaluation at the World Bank, where he also held positions in urban development and research, and was Staff Director for the World Development Report 1994, Infrastructure for Development; he was also an associate professor of economics at Harvard University. The previous leaders of the Lincoln Institute were H. James Brown, Ronald Smith, and Arlo Woolery.

The Lincoln Institute of Land Policy is a leading resource for key issues concerning the use, regulation, and taxation of land. Providing high-quality education and research, the Lincoln Institute strives to improve public dialogue and decisions about land policy.

Considering infrastructure

A diverse group of experts and practitioners led a discussion on urban infrastructure with writers and editors at the annual Journalists Forum on Land and the Built Environment, put on by the Lincoln Institute of Land Policy, Harvard University's Graduate School of Design, and the Nieman Foundation for Journalism at Harvard University.

The two-day forum March 28-29 began with a presentation on transforming streets and public spaces by Janette Sadik-Khan, former transportation commissioner of New York City and now at Bloomberg Associates. Noting that installing bike lanes, a bike-share program, and car-free spaces in Times Square prompted opposition from drivers and businesses and those who viewed the initiative as "vaguely French," blogger Josh Stephens pondered whether there was any "wisdom in the hysteria."

Rich Cavallaro, president of Skanska USA Civil Inc., acknowledged the D+ grade and $1.6 trillion funding shortfall for infrastructure in the US. Instead of high-priced megaprojects, however, he suggested more targeted ways of making infrastructure more resilient, in anticipation of more climate-related disasters: equipping tunnels with floodgates and giant inflatable plugs, raising up grates and power substations, and designing parking garages and similar facilities so they can be flooded and cleaned up when waters recede.

The inter-connected impacts of global urbanization requires a broader framework for urban infrastructure, outside of the "box" of individual metropolitan areas, said Neil Brenner, professor of urban theory at the GSD. "We need to update our cognitive map of urbanization," he said. Pierre Bélanger, associate professor of landscape architecture at the GSD, predicted that working with nature - and even allowing certain abandoned areas return to a wild state - would eclipse the traditional approach of controlling water and putting streams in pipes. Reinventing and designing new infrastructure in the urban environment is possible but requires political leadership, added landscape architect Margie Ruddick.

Addressing the critical question of equity - who the infrastructure is for - Stephanie Pollack, associate director of the Dukakis Center for Urban and Regional Policy at Northeastern University, called for better metrics and engagement to satisfy the true needs of those who use public transportation. "We measure equity ... in education and health care, but not in transportation. We have no concept of how a transportation system would be 'fair.' " Higher-income residents in transit-oriented development, for example, don't tend to use the transit, displacing residents who do and forcing them to move further away.

One instance where cities are willing to invest billions in infrastructure is in putting on mega-events like the World Cup and the Olympics, despite evidence of little payoff in terms of permanent jobs, revenues, or branding, said Judith Grant Long, associate professor of urban planning at the GSD. According to Esquire, one new road in Sochi could have been paved with caviar and it would have been cheaper. The International Olympic Committee could help cities better plan and deliver more compact, "right-sized" games; Barcelona, Rome, Tokyo, Munich, Montreal, and London have all worked hard to transform Olympic villages for long-term use.

Lincoln Institute president Gregory K. Ingram led an evening conversation with David Gergen, senior analyst at CNN and co-director of the Center for Public Leadership at the Harvard Kennedy School, at the Nieman Foundation's Lippmann House, exploring shifts in power and politics from states and the federal government to cities. Mayors may not routinely become president, but they are practical problem-solvers at center stage, Gergen said. "Cities are where the experimentation is taking place."

On the second day of the forum, Robert B. Olshansky, professor of Urban and Regional Planning at the University of Illinois Urbana-Champaign, and Laurie A. Johnson, principal at Laurie Johnson Consulting|Research, surveyed how several nations are better coordinating disaster relief and recovery efforts. Building long-term resilience as part of that process was the subject of the recent report Lessons from Sandy. Ryan Ellis, postdoctoral research fellow at the Belfer Center for Science and International Affairs at the Harvard Kennedy School, addressed the complex challenge of security and infrastructure, revealing the cloak-and-dagger world of cyber attacks, vulnerabilities, and zero days.

Public-private partnerships, private roadway building and operation, and tolling systems have marked innovations recently in the financing of infrastructure, said José A. Gómez-Ibáñez, professor at the GSD and the Harvard Kennedy School. Arguably since the completion of the interstate highway system, the federal role has been unclear; the challenge is showing the public who benefits from projects, in justifying who pays. The Supreme Court decision in the Koontz case may influence how private developers pay for environmental mitigation or affordable housing in the future, said GSD professor Jerold S. Kayden.

Susannah C. Drake, principal at dlandstudio pllc, detailed creative approaches such as retooling the waterfront apron of lower Manhattan and capping sunken highway trenches through urban neighborhoods. Advances in technology make infrastructure less expensive, compared to the massive investments of the New Deal, but the nation cannot just seek to rebuild what has been built. Marcus M. Quigley, principal at Geosyntec Consultants, showed how smart technology and dynamic, intelligent controls can transform major facilities. "We can change the way our infrastructure acts on our behalf," he said. "Every time we repave a street or a sidewalk, we're burning an opportunity."

As per tradition, the forum included two sessions devoted to "Practicing the Craft." Brian McGrory, editor of The Boston Globe, detailed efforts to integrate "searingly relevant" journalism in a digital business model that is sustainable. The Globe has more readers than ever, he said. Inga Saffron, architecture critic for the Philadelphia Inquirer, who won the Pulitzer Prize shortly after the forum, joined Chicago Tribune architecture critic Blair Kamin, Jerold Kayden, and Greg Ingram and Armando Carbonell from the Lincoln Institute, in a conversation on the interaction between journalists and expert sources.

Several participants among the 40 journalists and Nieman fellows filed dispatches, including Roger K. Lewis at The Washington Post, Tim Bryant at the St. Louis Post-Dispatch, and Christopher Swope at Citiscope.

Governing and financing cities

The fast-growing cities of the developing world would benefit from a major overhaul in governance structure, to improve the financing and delivery of essential services, according to Governing and Financing Cities in the Developing World, by Roy W. Bahl and Johannes F. Linn. This latest Policy Focus report examines more than 50 cities in the developing world in the midst of the rapid urbanization, and recommends a new relationship between major cities and national governments that combines autonomy and national fiscal planning.

Big cities generate the most dynamic economic development, the strongest links to the global economy, and the resources to help poorer countries become more competitive and prosperous. But they also draw migrants who need jobs and housing, leading to demands for better infrastructure and social services, increased congestion, environmental damage, and social problems.

Governments in developing countries face two key challenges: how to capture a share of the economic growth to finance the needed expenditures, and how to manage cities so that the urban economy functions efficiently, services are delivered cost-effectively to all, and citizens have a voice in governing the city.

The authors identify two fundamental challenges: how to manage complex vertical and horizontal urban governance structures, and how to raise the finances to promote efficient, equitable, and sustainable metropolitan growth. The report explores local revenue instruments, with a focus on property-based local taxes and user charges, as well as external revenue sources such as intergovernmental transfers, borrowing, public-private partnerships, and international assistance.

Among the conclusions drawn from prevailing practice:

  • Developing country governments tend to be more centralized; their metropolitan areas tend to be more fragmented; their cities are less self-financing and, hence, more reliant on transfers; they borrow less and have fewer PPPs; and they rely more on external aid financing, especially in the poorest countries.
  • There are few lasting, overall success stories of metropolitan governance and finance in developing countries. Hong Kong and Singapore have had tremendous and sustained success, but they are special cases due in part to their status as city-states. Bogotá and Shanghai have also become successful cities in recent decades, but significant problems now confront both cities due to changes in city management (Bogotá) or a buildup of legacy issues, including congestion and pollution (Shanghai).
  • Too few central governments have clear strategies for supporting the development of the metropolitan areas in their countries. With few exceptions - for example, Astana, Kazakhstan - national-level authorities do not focus on developing visions and strategies for their metropolitan areas; rather, they deal with them in an often-undifferentiated manner from other local or regional jurisdictions.
  • Political economy is at the heart of the metropolitan finance problems in both developing and industrial countries. Entrenched interests preserve the status quo; short-term time horizons and misaligned incentives result in putting off difficult decisions; and corruption in and around government undermines effective public service provision and financing.
  • Some innovative financing and management practices have emerged. These include the use of information and communications technology (ICT) and geographic information systems (GIS) in land use planning and property taxation; land value capture; metropolitan bond issues; municipal development funds for channeling grant and loan finance together with capacity-building assistance; and PPPs in infrastructure finance and alliances in slum improvement.

Clearly there are no blueprints or silver bullets. But the ideal metropolitan area of the 21st century might have these characterstics: decentralized authority and consolidated government at the metropolitan level; self-financing, relying on a combination of well-designed and well-administered property taxes, nonproperty taxes, and user charges; capital investment needs financed by well-regulated borrowing and public-private partnerships; and limited reliance on grants.

Governing and Financing Cities in the Developing World was preceded by the book Financing Metropolitan Governments in Developing Countries, by Bahl, Regents Professor of Economics, emeritus, and founding dean of the Andrew Young School of Policy Studies at Georgia State University; Linn, resident senior scholar at the Emerging Markets Forum in Washington, DC, and a nonresident senior fellow at the Brookings Institution; and Deborah L. Wetzel, country director for Brazil at the World Bank. The research has been the basis for a webinar series on governance and finance produced by the World Bank.

Lingering gloom for city budgets

The Great Recession continues to wreak havoc on city budgets long after it officially ended, depriving many of the nation's largest central cites of tax revenue even as the economy recovers, according to a new data analysis by Adam Langley and Andrew Reschovsky of the Lincoln Institute, and Howard Chernick at Hunter College and the Graduate Center, City University of New York.

America's cities saw tax revenue decline significantly beginning at the start of this decade, according to the analysis of 2011 data that has been added to the Fiscally Standardized Cities database on the Lincoln Institute's website. The FiSC database provides detailed annual fiscal information on 112 of the nation's largest central cities, from 1977 to 2011.

The downturn begain in 2010, as average real per capita general revenues fell by three percent from their 2007 level. This decline continued in 2011, with per capita real revenues nearly five percent below where they were in 2007.

The FiSC database provides a full picture of revenues raised from city residents and businesses and spending on their behalf, whether done by the city government or by a separate overlying school district, county, or special district. The database was constructed using data collected by the Governments Division of the U.S. Census Bureau.

The decline in real per capita revenues between 2009 and 2011, is attributable to a decline during those years of the two most important sources of revenue for cities - the property tax and state aid. On average, the property tax accounts for one-quarter of general revenues for the 112 cities in the database. Other taxes, such as general and selective sales taxes, account for 13 percent, and charges and fees levied on residents, tourists, commuters, and businesses, represent on average 17 percent. Intergovernmental revenues from states and the federal government average nearly 40 percent of total revenue.

Real per capita property tax revenues declined on average by 1.6 percent between 2009 and 2010, and by 4.8 percent between 2010 and 2011. State aid, meanwhile, declined by nearly four percent. Revenues from local sales and income taxes also declined steadily during the course of the recession. By 2010, these revenues were 12 percent below 2007 levels. In 2011, they increased slightly reflecting the slowly improving economy.

The largest revenue reductions occurred in Florida and in the West, with particularly large reductions between 2007 and 2011 in Las Vegas (20.2 percent), Sacramento (17.8 percent), Miami (13.9 percent), Fort Lauderdale (13.2 percent), and Phoenix (13.0 percent). Revenue increases between 2007 and 2011 occurred in a handful of cities including Baltimore, Buffalo, Ft. Worth, Minneapolis, and San Francisco.

In terms of expenditures, in 2011 the average city in the database had per capita current expenditures of $4,473. One third of current expenditures were for education. Spending for public safety accounted for 14.1 percent of expenditures.

In 45 central cities, spending fell between 2007 and 2011. In six cities, including Reno, Richmond, Sacramento, and San Diego, real per capita spending fell by more than 10 percent. During the same four-year period, spending rose by more than ten percent in 20 cities, including Baltimore, Buffalo, Pittsburgh, and San Antonio.

The impact of the Great Recession on central cities' finances is an unfolding story. Fuller assessment of that impact must await the availability of comprehensive data for 2012 and 2013. But given the slow rate of economic recovery combined with recent fiscal trends, and the likelihood that many cities got through the recession by deferring expenditures for capital maintenance and wage increases, most cities appear to be in for leaner times for an extended period.

Land and the City

Leading scholars in housing, demographics, urban expansion, fiscal policy, and the environment will convene for Land and the City, the Lincoln Institute's 9th annual Land Policy Conference June 1-3, 2014 at The Charles Hotel in Cambridge. At the same time, the book based on last year's conference, Education, Land, and Location, edited by Gregory K. Ingram and Daphne Kenyon, has been published. That volume explores the nexus of residential location and public schools, funding by local governments for education, equality of opportunity, and racial and socio-economic segregation.

Land and the City is set to begin with a pre-conference presentation by Kairos Shen, Director of Planning, Boston Redevelopment Authority. The conference's first session, "Urban Growth and Demography in the U.S.," chaired by William Fischel of Dartmouth College, will be led by Dowell Myers and Hyojung Lee of the University of Southern California; the discussant is Ann Forsyth, professor at Harvard University's Graduate School of Design.

In "Planning for Urban Growth," chaired by Eugenie Birch, professor at the University of Pennsylvania and co-director of the Penn Institute for Urban Research, Shlomo Angel from New York University will share insights from his ongoing monitoring of global urban expansion. Angel, as a visiting fellow at the Lincoln Institute, is author of Planet of Cities and the Atlas of Urban Expansion, an online resource that is being updated and expanded for 2015. The discussant is Michael B. Teitz of University of California, Berkeley.

Karl "Chip" Case of Wellesley College, co-founder of the Case-Shiller Index, will chair "U.S. Housing Policies and Outcomes," led by Dan Immergluck, professor at the Georgia Institute of Technology, considering the impact of foreclosures on neighborhoods. The discussant is Jim Follain, senior fellow at the Rockefeller Institute, and co-author of the Lincoln Institute Policy Focus Report Preventing Housing Price Bubbles: Lessons from the 2006-2012 Bust. Laurie Goodman, Urban Institute, will follow with an assessment of ongoing housing finance reform, and the discussant is Bill Apgar, Harvard University.

In a focus on municipal finance, chaired by Henry Coleman, University of New Jersey, Rutgers, Steven Sheffrin and Grant Driessen, both of Tulane University, will look at the past and future of urban property taxes, joined by the discussant John M. Yinger of Syracuse University. Adam Langley, research analyst at the Lincoln Institute, is set to share findings from recent updates to the Fiscally Standardized Cities online database. The discussant is Michael Pagano, University of Illinois at Chicago.

Martim Smolka, director of the Program on Latin America and the Caribbean, will chair a session on housing in the international context, with independent consultant Eduardo Rojas examining the Latin America experience from 1960 to 2010, and Stephen Malpezzi of the University of Wisconsin-Madison as the discussant. Joyce Y. Man, past director of the Lincoln Institute's China program and the Peking University-Lincoln Institute Center for Urban Development and Land Policy, will present a paper on China's land and housing policies with David Geltner and Xin Zhang, both of the Massachusetts Institute of Technology, as discussants.

The question of adaptation to climate change will be addressed in a session chaired by Lincoln Institute senior fellow Armando Carbonell, chairman of the Department of Planning and Urban Form. Amy K. Snover, University of Washington, and William D. Solecki, Hunter College of the City University of New York, will present, with Elisabeth Hamin, University of Massachusetts, Amherst, and Matthias Ruth, Northeastern University, as discussants.

Finally, the subject of socioeconomic stratification and housing, in a session chaired by Joan Youngman, chairman of the Department of Valuation and Taxation at the Lincoln Institute, will be examined by Evan McKenzie, University of Illinois at Chicago, and discussant Gerald Korngold, of New York Law School. A comparison of socio-economic segregation in schools in the US and Latin America, 1964-2012, will be presented by Anna K. Chmielewski of Michigan State University, with Tara Watson of Williams College as the discussant.

This is the 9th year of the Land Policy Conference. The papers and discussant commentaries are compiled in a conference volume published each spring. Education, Land, and Location, based on the proceedings of the 8th annual Land Policy Conference in June of 2013, includes coverage of such topics as school choice, charter schools, and home schooling; the importance of cognitive skills for economic growth; the role of the property tax in school finance and alternative revenue sources; the structure of school districts; transportation to school; effects of school location; and housing policies that can unlink education and location.

Previous volumes in the Land Policy series have been: Infrastructure and Land Policies (2013) Value Capture and Land Policies (2012) Climate Change and Land Policies (2011) Municipal Revenues and Land Policies (2010) Property Rights and Land Policies (2009) Fiscal Decentralization and Land Policies (2008) and Land Policies and Their Outcomes (2007).

Odds & Ends

A tale of two powerful planners: Olmsted vs. Moses in Buffalo at the Congress for the New Urbanism next month ...Resilience, smart cities, and resolving land use disputes were among the topics explored at the American Planning Association's National Planning Conference April 25-30 in Atlanta ... This month's highlighted working paper: Approaches to Local Regulation of Shale Gas Development, by Tushar Kansal and Patrick Field.

— ANTHONY FLINT, Lincoln Institute of Land Policy

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