Competition among providers of infrastructure is often limited, because the investments required to build and maintain infrastructure are so extensive, durable, and immobile that the cheapest way to serve a given market is often with a single firm. This phenomenon is known as natural monopoly in economics jargon. How best to protect consumers from this lack of competition has been a topic of intense debate in infrastructure circles, and it’s one that is summarized in the recently published Lincoln Institute book Infrastructure Economics and Policy: International Perspectives. 

Privatization   

In the 19th century, virtually all modern infrastructure—including canals, railroads, steamships, electric power, streetcars and subways, telegraph and telephone systems, and local water supplies—was built and operated by private companies. Most of these systems were nationalized or municipalized only after the turn of the century, and often not until the 1960s and 1970s in those developing countries that declared their independence around that time. 

These new state-owned enterprises (SOEs) sometimes performed well at first, but often grew less efficient, provoking consumer complaints of high prices and poor service as well as government concerns about the burden of funding large SOE deficits. These concerns helped provoke the most recent round of privatization reform, starting in the 1990s and 2000s. Privatizations were relabeled as Public-Private Partnerships (PPPs) to emphasize the hoped-for cooperative nature of the reforms. Greater emphasis was placed on developing the means to regulate prices that would be accepted as fair by both investors and their customers. 

Antonio Estache, a professor at the Universite Libre de Bruxelles, summarizes research on this recent round of privatizations in chapter 11 of the book. Estache’s findings will leave both critics and supporters of privatization disappointed. For example, he estimates that private finance accounts for only 17 percent of total finance for the typical PPP project, with the bulk of the remainder still to be raised through government bonds and loans or by grants or loans from international financial institutions. By sector, privatization is much more common in ports and electricity generation and relatively rarer in electricity distribution, roads, water, or sanitation. 

Particularly troubling are Estache’s interpretations of research on the effects of private ownership on performance. Ownership alone does not appear to significantly improve infrastructure access and affordability for the poor. Ownership may have an effect on costs, but that influence may weaken once the “easy” measures to increase labor force productivity have been exploited. Estache blames this disappointing performance on the failure to address major governance issues including “corruption, lack of technical skills, lack of commitment to allocate the resources needed to get the regulatory job done, and lack of accountability for failing on any or all of the previous issues.”  

Regulation 

Given that controversy over monopoly played an important role in the nationalization of private infrastructure companies in the first half of the 20th century, it is not surprising that a great deal of energy has been devoted to devising price-setting schemes for PPPs that would be accepted as fair by both consumers and investors. The most popular approach has been to use competitive bidding, to award a contract to build and operate an infrastructure facility for a fixed term, say 10 or 30 years. However, this approach works well only if the contract is relatively complete, in that it anticipates all important future developments and provides workable contingencies for them. Contracts that prove to be incomplete typically require politically controversial renegotiation. Furthermore, the risk that a contract will prove to be incomplete increases greatly with the duration of the contract, and infrastructure investments typically require long contracts. 

In chapter 12, Sock Yong Phang, professor at Singapore Management University, uses several case studies to examine two alternative strategies to competitive contracting: cost-of-service regulation and price-cap regulation. The former allows the regulated firm to charge prices sufficient to recover specified accounting costs; the latter specifies the maximum increase in prices allowed in a set period, usually five years, but allows the firm to keep the difference as profit if the actual price increases are less than the increases allowed under the cap. 

Phang argues that the evaluation of these two approaches depends on the priorities and objectives of the regulator. The use of cost-of-service regulation implies concern about the financial health of the regulated firm, and especially its ability to raise capital, while the use of price-cap regulation suggests concern about the firm’s technical efficiency and record of innovation. Other possible goals include access and affordability for the poor or protection from monopoly abuse.  

In chapter 13, Sir Ian Byatt—a pioneer in the practice of price-cap regulation as the regulator of Britain’s water industry during the first two decades after its privatization—describes the challenges faced and the lessons learned during his tenure. Two themes emerge: first, the importance of the regulator being politically sensitive and proactive, and second, how many other critical decisions a regulator faces besides periodically setting the allowed caps on prices. These decisions include the firm’s capital structure, quality of service, treatment of ancillary activities, and the possibility of competitively contracting for major stand-alone facilities. The combined lessons of Phang’s cases and Byatt’s tenure illustrate the practically irresistible pressures for, and potential pitfalls of, regulatory mission creep. 

State-Owned Enterprises 

SOEs were considered a key to economic growth by many developing countries in the post-colonial period of the 1950s and 1960s. The private sector often consisted of small traders and enterprises without the resources or appetite for the heavy investment that was generally thought to be needed at the time for development. The attraction of SOEs faded in the face of their disappointing performance, leading to various reform efforts in the 1970s and 1980s and ultimately to the privatization of many in the 1990s and 2000s. However, SOEs remain significant players in the infrastructure sector, especially in China and India. 

In chapter 14, O. P. Agarwal, who has worked on transportation and energy policy for the government of India, the World Bank, and the World Resources Institute, and Rohit Chandra, an assistant professor at Indian Institute of Technology Delhi, examine the changing roles of SOEs. 

Agarwal and Chandra map the global landscape of SOEs and compare the performance of SOEs versus the private sector. Despite their less efficient performance, SOEs still have plausible reasons to exist; for example, the inability of the market to supply classic public goods such as local road networks. Most important, Agarwal and Chandra recognize the evolving role of SOEs over the last decade as they have become more versatile through innovations in organizational form, financial management, PPPs, and private contracting. 

In the end, no single solution has emerged to the competition problems caused by infrastructure’s reliance on costly, durable, and immobile investments. Private ownership is common in many developed countries, particularly in certain sectors such as telecommunications and electricity generation. SOEs are very important as well, however, and dominate infrastructure in China and India, the world’s most populous countries. A great deal of effort has gone into the design of regulatory schemes to replace the standard approach of long-term contracts awarded by competitive bidding processes. While there have been notable advances, particularly with price-cap regulation, so far every scheme has its limitations. 

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. They are the editors of Infrastructure Economics and Policy: International Perspectives. 

Image: London Skyline Credit: Nikolay Pandev via GettyImages.

Infrastructure upgrades and facilities are desperately needed around the world, but governments often struggle to pay for the high costs of developing and maintaining them. The newly published Lincoln Institute book Infrastructure Economics and Policy: International Perspectives includes two chapters that address issues related to infrastructure finance, including the development of innovative and replicable financing models. 

Basics of Infrastructure Finance 

In Chapter 9, economist Akash Deep of the Harvard Kennedy School explains why financing is a key challenge in infrastructure development. Governments must typically pay the costs of infrastructure up front, while the benefits are spread out over many years. This difference between the timing of costs and benefits is generally bridged through borrowing.  

It is important to note that financing differs from funding. The funder is the entity that ultimately bears the cost of the infrastructure, either the general public (in the form of taxes) or the direct users (in the form of user charges). Those who finance the project are the borrowers and lenders who reconcile the timing of the benefits and costs. Those borrowers and lenders can be public or private. The capital structure can be determined to reflect the riskiness, and the cost of financing, and thereby the financial value of infrastructure. Proper structuring and risk allocation can make infrastructure finance more efficient and less risky. 

Because infrastructure investments often have a long payback period, investors are typically less interested in infrastructure than other assets. Deep illustrates the potential for innovation in financing infrastructure, including efforts to tap the huge and growing savings in insurance and pension funds. Managers of such funds prefer the combination of modest but stable long-term returns that infrastructure offers, but they are often required to maintain their debt portfolio at investment grade or higher. One solution developed by the European Investment Bank is to provide direct financing (in the form of subordinated debts) or financial guarantees to make the investment less risky for insurance and pension funds. 

A more widely imitated innovation is infrastructure funds modeled after those pioneered by Australia’s Macquarie Group in 1996. The Macquarie Group introduced features such as pooling equity from multiple projects, active asset management, financial engineering, and listing on capital markets–reforms that made infrastructure equity funds more liquid and especially attractive for pension funds. Infrastructure funds have attracted both institutional and retail investors, thereby significantly expanding the pool of equity available for infrastructure investment. 

Infrastructure Finance through Land Value Capture (LVC) 

The benefits and costs of infrastructure are typically specific to the location where the project will occur. In urban locations, where the supply of land is limited and the infrastructure on it is often immobile, the benefits created by infrastructure often result in an increase in the value of land. In such cases, the public sector can fund infrastructure improvements by imposing property taxes, selling development permissions, or utilizing similar measures to capture all or part of the uplift in land value that the improvements create. Such measures ensure that the parties who benefit from the improvements pay to support them. 

Chapter 10, written with Yu-Hung Hong, former director of the Samuel Tak Lee Real Estate Entrepreneurship Lab at MIT, and Du Huynh of Fulbright University Vietnam, examines the record of land value capture around the world. Value capture is especially promising in developing countries, which have enormous infrastructure needs but fewer alternative funding sources. Chapter 10 focuses on the experiences of Brazil and Vietnam with one of the most important types of value capture—the sale of development rights.  

The case of São Paulo, Brazil, is internationally known and widely praised; the city developed a market-oriented value capture program, auctioning Certificates of Additional Construction Potential, or CEPACs, to developers in exchange for the right to build at greater density in designated areas. The city has used the proceeds to pay for affordable housing, transportation upgrades, and other public goods. 

The case of Ho Chi Minh City, Vietnam, is more controversial: through ad hoc procedures, the city sold the development rights to convert rural land for urban development. Both cases confirm that sales of development rights can generate substantial proceeds, often more than enough to pay for the extra infrastructure needed for the associated development. But the examples also show that successful implementation requires a clear and widely accepted delineation of property rights. Also important are a system of registries and impartial courts to record and protect those rights, a realistic and reasonably detailed land use master plan, and politically skilled sponsors. 

As both chapters illustrate, governments around the world are finding innovative ways to finance infrastructure. Given the urgent need for global infrastructure investments and upgrades, these methods should be more widely implemented and embraced.  

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 China Program at the Lincoln Institute of Land Policy. They are the editors of Infrastructure Economics and Policy: International Perspectives. 

Image: Octavio Frias de Oliveira Bridge, São Paulo, Brazil. Credit: R. M. Nunes 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.

Amid claims by corporations and other institutions of lowered carbon footprints and net-zero pledges, the city of Burlington, Vermont, is going green with a special commitment, promising to eliminate fossil fuel use across the board by 2030. 
 
Vermont has long been a progressive kind of place with a population dedicated to environmental measures, whether solar and wind power, electric vehicles, or sustainable farming practices. Burlington, its change-agent capital—the place that gave rise to Bernie Sanders, after all—became the first city in the country to source 100 percent of its energy from renewables in 2014. Now, city leaders are ready to go even further. 

“This isn’t just a governmental goal, it’s a community-wide goal,” said Miro Weinberger, Burlington’s four-term mayor, in an interview on Land Matters, the podcast of the Lincoln Institute of Land Policy. 
 
With its electric power coming from renewable sources, the conversion can proceed for “electrifying everything,” he said, from cars and trucks to heating and cooling systems for buildings. The strategy is a mix of incentives and regulation, such as a planned ordinance to phase out fossil fuel-based mechanical systems in major buildings. 

Green-minded utilities have been a critical element, bolstering the political will that has only grown in strength over time, Weinberger said. But he adds that “we are still fighting this battle with one hand tied behind our back because it is not a level playing field for new electrification and renewable technologies. The costs of burning fossil fuels are not properly reflected in the economics right now.” 

Getting the energy mix right is especially important given Vermont’s growing population. Reflecting on a surge of both climate and pandemic “refugees” moving to Vermont for the quality of life, Weinberger acknowledged that “We’ve seen big new pressures on our housing markets . . . It’s worse than it’s ever been. The silver lining of that may be [that] it may finally force Vermont to get serious about putting in place land-use rules at the local and state level that make it possible to build more housing.” 

A native Vermonter who was first elected in 2012, Weinberger attended Yale and Harvard’s Kennedy School, and worked for Habitat for Humanity before founding his own affordable housing development company. He’s also a part-time athlete, playing catcher in an amateur over-35 baseball league.  
 
The net-zero pledge has become a full-time occupation, but one that has underscored the importance of mayors and cities in confronting the climate crisis, he said. 
 
“This is making a decision to lead in this area and to make change, and you can have a big impact,” he said. “At a time when clearly the climate emergency is an existential threat, at a time when clearly the federal government is paralyzed in (its) ability to drive change, and when many state governments are similarly gridlocked, mayors and cities can really demonstrate on-the-ground progress. I think when we do that, we show everybody else what’s possible.” 
 
The edited interview will appear in print and online as the Mayor’s Desk feature in Land Lines magazine—a series of Q&As with innovative chief executives of cities all around the world.  
 
The Lincoln Institute’s work on climate change is spelled out on the website page Our Work. 
 
You can listen to the show and subscribe to Land Matters on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or wherever you listen to podcasts. 

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

Image: Burlington, Vermont Mayor Miro Weinberger. Credit: Miro Weinberger

 
Further reading 
 
Burlington Issues 2021 Net Zero Energy Roadmap Update (City of Burlington) 

Armed with new regulatory power, Burlington City Council commissions plan to reduce carbon output (VT Digger) 

Vermont’s largest city on track to hit ‘net zero’ by 2030 (Associated Press) 

Power to the People: Why the rise of green energy makes utility companies nervous (The New Yorker) 

This interview, which has been edited for length, is also available as a Land Matters podcast. 

When he was elected in 2017, Randall L. Woodfin became the youngest mayor to take office in Birmingham in 120 years. Now 40 and nearly a year into his second term, Woodfin has made revitalization of the city’s 99 neighborhoods his top priority, along with enhancing education, fostering a climate of economic opportunity, and leveraging public-private partnerships. 

In a city battered by population and manufacturing loss, including iron and steel industries that once thrived there, Woodfin has looked to education and youth as the keys to a better future. He established Birmingham Promise, a public-private partnership that provides apprenticeships and tuition assistance to cover college costs for Birmingham high school graduates, and launched Pardons for Progress, which removed a barrier to employment opportunities through the mayoral pardon of 15,000 misdemeanor marijuana possession charges dating to 1990.  

Woodfin is a graduate of Morehouse College and Samford University’s Cumberland School of Law. He was an assistant city attorney for eight years before running for mayor, and served as president of the Birmingham Board of Education. 

ANTHONY FLINT: How do you think your vision for urban revitalization played into the large number of first-time voters who’ve turned out for you?  

RANDALL WOODFIN: I think my vision for urban revitalization—which, on the ground, I call neighborhood revitalization—played a significant role in not just the usual voters coming out to the polls to support me, but new voters as well. I think they chose me because I listen to them more than I talk. I think many residents have felt, “Listen, I’ve had these problems next to my home, to the right or to the left of me, for years, and they’ve been ignored. My calls have gone unanswered. Services have not been rendered. I want a change.” I made neighborhood revitalization a priority because that’s the priority of the citizens I wanted to serve. 

AF: With the Infrastructure Investment and Jobs Act and the American Rescue Plan Act bringing unparalleled amounts of funding to state and local governments, what are your plans to distribute that money efficiently and get the greatest leverage? 

RW: This is a once-in-a-lifetime opportunity to really supercharge infrastructure upgrades and investments we need to make in our city and community. This type of money probably hasn’t been on the ground since the New Deal. When you think about that, there’s an opportunity for the city of Birmingham citizens and communities to win.  

We set up a unified command system to receive these funds. In one hand, in my left hand, the city of Birmingham is an entitlement city and we’ll receive direct funds. In my right hand, we have to be aggressive and go after competitive grants for shovel-ready projects. 

With our Stimulus Command Center, what we have done is partner not only with our city council, but we’ve partnered with our transportation agency. We have an inland port, so we partner with Birmingham Port. We partner with our airport as well as our water works department. All of these agencies are public agencies who happen to serve the same citizens I’m responsible for serving. For us to approach all these infrastructure resources through a collective approach, that’s the best way. We have an opportunity with this funding to supercharge not only our economic identity, but also to make real investments in our infrastructure that our citizens use every day. 

AF: The Lincoln Institute has done a lot of work aimed at equitable regeneration in legacy cities. What in your view are the key elements of neighborhood revitalization and community investment that truly pay off? 

RW: This is how I explain everything that happens from a neighborhood revitalization standpoint. I’ll first share the problem through story. The city of Birmingham is fortunate to be made up of 23 communities in 99 neighborhoods. When you dive deep into that, just consider going to a particular neighborhood in a particular block. You have a mother in a single-family household where she is the responsible breadwinner and owner. She has a child or grandchild that stays with her. She walks out onto her front porch, she looks to her right, there is an abandoned, dilapidated house that’s been there for years that needs to be torn down. She looks to her [left], there’s an empty lot next to her. When she walks out to that sidewalk, she’s afraid for her child or her grandchild to play or ride the bicycle on that sidewalk because it’s not bikeable. That street, when she pulls out from the driveway, hasn’t been paved in years. The neighborhood park she wants to walk her child or grandchild down to hasn’t had upgraded, adequate playground equipment in some time. She’s ready to walk her child or grandchild home because it’s getting dark, but the streetlights don’t work. Then she’s ready to feed her child or grandchild, but they live in a food desert. These are the things we are attempting to solve for.  

One is blight removal, getting rid of that dilapidated structure to the right of her. We need to go vertical with more single-family homes that are affordable and market rate so [we don’t have] “snaggletooth” neighborhoods where you remove blight, but now you have a house, empty lot, house, empty lot, empty lot. 

That child, we have to invest in that sidewalk so they can play safely or just take a walk. We have to pave more streets. We have to have adequate playground equipment. We have to partner with our power company to get more LED lights in that neighborhood, so people feel safe. We have to invest in healthy food options so our citizens can have a better quality of life. These are the things related to neighborhood revitalization that I frame and address to make sure people want to live in these neighborhoods. 

AF: What are your top priorities in addressing climate change? How does Birmingham feel the impacts of warming, and what can be done about it? 

RW: Climate change is real. Let me be very clear in stating that climate change is real. We’re not near the coast and so we don’t feel the impact right away that other cities do, like Mobile would in the state of Alabama. However, when those certain weather things happen on the coast in Alabama, they do have an impact on the city of Birmingham. We also have an issue of tornadoes where I believe they continue to increase over the years and they affect a city like Birmingham that sits in a bowl in the valley. Around air quality, Birmingham was a city founded from a blue-collar standpoint of iron and steel and other things made here. Although that’s not driving the economy anymore, there’s still vestiges that have a negative impact. We have a Superfund site right in the heart of our city that has affected people’s air quality, which I think is totally unacceptable. Addressing climate change from a social justice standpoint has been a priority for the city of Birmingham and this administration. What we are doing is partnering with the EPA for our on-the-ground local issues. 

From a national standpoint, Birmingham joined other cities as it relates to the Paris Deal. I think this conversation of climate change can’t be in the isolation of a city and unfortunately, the city of Birmingham doesn’t have home rule. Having the conversations with our governor about the importance of the state of Alabama actually championing and joining calls of, “We need to make more noise and be more intentional and aggressive about climate change” has been a struggle. 

AF: What about your efforts to create safe, affordable housing, including a land bank? 

RW: I look at it from the standpoint of a toolbox. Within this toolbox, you have various tools to address housing. At the height of the city of Birmingham’s population, in the late ’60s, early ’70s, there was about 340,000 residents. We’re down to 206,000 residents in our city limits. 

You can imagine the cost and burden that’s had on our housing stock. When you add on homes passing from one generation to the next and not necessarily being taken care of, we’ve had a considerable amount of blight. Like other cities across the nation, we created a land bank. This land bank was created prior to my administration, but what we’ve attempted to do as an administration is make our land bank more efficient. Then driving that efficiency is not just looking toward those who can buy land in bulk, but also empowering the next-door neighbor, or the neighborhood, or the church that’s on the ground within that neighborhood to be able to participate in purchasing the lot next door to make sure, again, that we can get rid of these snaggletooth blocks or snaggletooth neighborhoods, and go vertical with single-family homes. 

Another thing we’re doing is acknowledging that in urban cores, it’s hard to get private developers at the table. What we’ve been doing [with some of our ARPA funds] is setting aside money to offset some of these developer costs to support not only affordable but market-rate housing within our city limits, to make sure our citizens have a seat at the table so they can feel empowered, if they choose to want to actually have a home, that there’s a path for them. 

AF: Finally, tell us a little bit about your belief in guaranteed income, which has been offered to single mothers in a pilot program. You’ve joined several other mayors in this effort. How does that reflect your approach to governing this midsize postindustrial city? 

RW: The city of Birmingham is fortunate to be a part of a pilot program that offers guaranteed income for single-family mothers in our city. This income is $375 over a 12-month period. That’s $375 a month, no strings attached, no requirements of what they can spend the money on. 

Every city in this nation has its own story, has its own character, has its own set of unique challenges. At the same time, we all share similar fates and have similar issues. The city of Birmingham has its fair share of poverty. We don’t just have poverty, we have concentrated poverty, [and] guaranteed income is another tool within that toolbox of reducing poverty. Birmingham has over 60 percent of households led by single women. That is not something I’m bragging about. That is a fundamental fact. A lot of these single-family mothers struggle. 

I think we all would agree, no one can live off $375 a month. If you had this $375 additional funding in your pocket or your homes, would that help your household? Does that help keep food on the table? Does it help keep your utilities paid? Does it help keep clothing on your children’s backs and shoes on their feet? Does it help you get from point A to B to keep your job to provide for your child? 

This is why I believe this guaranteed income pilot program will be helpful. We only have 120 slots, so it’s not necessarily the largest amount of people, but I can tell you over 7,000 households applied for this. The need is there for us to do every single thing we can to provide more opportunities for our families to be able to take care of their families.  

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

Image courtesy of Anthony Flint. 

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.