Better Cities Project https://better-cities.org Policy Solutions for America's Cities Thu, 20 Feb 2020 01:11:52 +0000 en-US hourly 1 https://wordpress.org/?v=5.3.2 https://better-cities.org/wp-content/uploads/2019/10/cropped-bcp-favicon-2-32x32.png Better Cities Project https://better-cities.org 32 32 As gig-economy platforms proliferate, cities struggle to keep up https://better-cities.org/economic-prosperity/as-gig-economy-platforms-proliferate-cities-struggle-to-keep-up/ Thu, 20 Feb 2020 00:57:29 +0000 https://better-cities.org/?p=1272 A sector impacting more than a third of the workforce is hobbled by lagging municipal regulations. What can change?

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Hoping to take their place alongside behemoths like Uber, Lyft and AirBnB, dozens of emerging apps and platforms are hoping to be the next big thing, capturing a piece of the explosive growth in the gig economy. But are the cities where these services will operate ready?

Cities are responding to this flood of new entrepreneurs and their enablers in a range of ways, few of which look at the long-term challenges of a sector that’s evolving significantly faster than traditional regulatory frameworks are equipped to deal with.

Gig-economy work attracts those who want to make some extra money on the side, those with variable-hour work needs and, increasingly, those who simply want to work for themselves. That’s a lot of people – up to 75 million workers, or roughly a third by Federal Reserve estimates. The household names are Uber, Lyft and AirBnB, but the category also covers dozens of other platforms as well as freelance workers.

The sheer number of potential business models and workers involved in the gig economy presents a challenge to city officials. In the short term, response from some cities has been nearly bi-polar.

Many recognize that the growth of gig-economy work – expanding three times faster than the American workforce as a whole – could be encouraged or expanded by reducing or more quickly processing up-front permitting, paperwork and fees. Others have reacted with narrow policies clearly designed to protect politically favored constituencies or existing businesses.

Many cities, seemingly working at cross purposes, are doing both.

And therein lies the challenge for municipal leaders: Existing regulatory frameworks never anticipated the explosive growth of the gig economy and are likely not prepared for it. At the same time, the do-something-now responses in many communities are often tailored to a specific new platform or business model in ways that can either lock in their incumbency or prove inadequate when the next generation of services comes along.

Tackling red tape in New York City and Salt Lake City

New York City undertook an initiative to make doing business less cumbersome for entrepreneurs. The Red Tape Commission was formed to gather feedback on the largest sources of frustration for local business owners. The top problems reported by business owners? Poor turnaround times for permit and license processes (nearly 45% had to wait between 6-12 months), fines and inspections, taxes, and fees.

The Red Tape Commission also suggested setting a maximum time allowance for agencies to process a permit or license request. But more can be done: Broadly reducing or eliminating these foot-in-the-door roadblocks for new gig-economy workers would help the nation’s gig-economy workers – as many as 75 million people, according to the Federal Reserve – quickly move from wanting to work to actually working, with ripple effects throughout the local and national economies.

Sometimes, it’s a matter of personnel as well as process.  Former Salt Lake City Mayor Jackie Biskupski campaigned on the promise of decreasing business permit wait time, and followed through by streamlining permit processes and hiring more staff at the request of overwhelmed directors. As a result, Salt Lake City cut average business permit wait time by almost 50%. “When businesses want to invest in Salt Lake City, we don’t want to get in the way,” Biskupski said.

Taking a longer view at city hall

City leaders should do what they can to reduce paperwork, permitting and fees – simple, baseline measures to boost the local economy by allowing more people to experiment with entrepreneurship. But beyond that, staff and elected officials should look beyond the platform or app of the moment to ask themselves what a more-flexible regulatory and permitting framework looks like.

Such a framework could take many forms — sweeping, comprehensive overhaul at one extreme or, more likely, a multi-tier system that provides an easier onramp for gig-economy platforms and their workers. The “north stars” in deciding which options are right for any city come down to:

  • How do we balance the need to license and tax businesses and the positive economic impact of allowing thousands of potential new entrepreneurs to flourish? As some cities and even entire states are finding out, gig-economy work is pervasive but also fragile. Big, well-intentioned policies designed to force these new platforms to treat workers more like employees can have many unintended – and income-reducing – side effects.
  • How do we make “yes” the default answer on innovation? New businesses and business models, by definition, need room to experiment. As long as reasonable health and safety standards are met, these experiments should be welcome and encouraged.
  • How do we keep the playing field level? With one-third or more of workers engaged in the gig economy, any regulatory or political unfairness has deep ripples across the population. Gig economy workers and the platforms they use for business should expect city regulations that maximize people’s right to earn a living without interference from incumbent competitors.

Ultimately, no single set of rules, fees and regulations is likely to fairly govern both the five-star hotel downtown and the bedroom-community homeowner who wants to rent out part of his or her house from time to time. But mayors and city council members interested in riding the gig economy’s economic wave should focus on simplifying things at the front end for these workers, while preparing frameworks for a flourishing-but-unpredictable future.

Plenty of platforms

New platforms and applications servicing the gig economy appear almost weekly. Below are some that, potentially, could have licensing or policy impacts at the local level.

HopSkipDrive – A ridesharing solution for those seeking assistance with child transport.

Zimride – Carpooling platform.

CampSpace – Allows users to find rental properties for camping.

JustPark – Matches people who need parking, with someone who can offer parking space for a single day or for extended periods.

Neighbor – This “AirBnB of space storage” allows people with extra space to rent it to others in need of storage.

Splacer – Special-event platform that includes both traditional venues and private areas.

Luxe –Enjoy the luxury of valet parking anywhere.

SharedEarth – This land sharing app enables users to offer a piece of land to someone else to grow a garden. In return the landowner receives a share of the harvested crops.

BoatSetter – Boat-rental platform.

RV Share – Recreational vehicle rental platform.

EatWith – Allows chefs to prepare menus in their homes for clients.

Care.com – A market maker for caregiver jobs including supervising children, helping seniors, watching pets, and looking after homes during vacation.

DogVacay –This app matches pet owners with potential pet sitters.

CrowdMed – One-to-many platform for seeking medical advice from a multiple sources.

Zeel – Home-massage platform.

GlamSquad – Matches beauty artists with individuals seeking a makeover or makeup services.

Your Mechanic – Marketplace matching those who need vehicle repair with mechanics.

Dolly – Offer your truck and services to help someone move!

Carvertise – Have your personal vehicle wrapped in advertising and get paid to do it!

Instacart – Grocery delivery service.

Presto Instashop – Mystery shopping service that pays consumers to evaluate how a business is performing.

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A closer look at Kansas City’s fare-free transit proposal https://better-cities.org/transportation-infrastructure/a-closer-look-at-kansas-citys-fare-free-transit-proposal/ Mon, 17 Feb 2020 23:45:24 +0000 https://better-cities.org/?p=1255 The idea seems to have been advanced with little analysis or regard for similar, failed efforts in the past.

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Rep. Ayanna Pressley (D-Mass.) told a progressive audience at Howard University on February 7 that, “Public transit should be free.” This is just the latest call for free transit; the issue has been bubbling up around the country in the past few months, started in large part by some misreporting of events in Kansas City, Missouri.

In December, city leaders instructed the city manager to work with transit officials on a policy that would “include a funding request in the next fiscal year budget to make fixed route public transportation fare free within the City.” The city’s next fiscal year does not begin until May 1, ad the just-released budget proposal does not include enough money for fare-free buses.

That was picked up around the country and misreported as a done deal. Vox seems to have been first, reporting that Kansas City, “will be the first major US city to offer free bus service to residents by 2020.” Citing Vox, The New York Times reported that Kansas City, “declared that their buses would become fare-free this year.” A Worcester, Massachusetts magazine took it one step further and reported the matter in the past tense, claiming that, “Kansas City, Missouri, got rid of bus fares earlier this month.” Not to be outdone, NBC Boston aired a report that seemed to claim that Kansas City’s buses have been free for two years.

Like cities around the country, Kansas City is wrestling with how to pay for fare-free buses, with cost estimates ranging from $8 to $12 million annually. No one is sure because the city hasn’t analyzed the implications of going fare-free. The area transit authority, KCATA, has offered free bus passes to veterans and students in the recent past, and claims that over the past few years 23 percent of riders have paid no fare.

Underscoring the uncertainty, in an interview with a local newspaper, KCATA CEO Robert “Robbie” Makinen flippantly offered, “Just because nobody else is doing it, that’s not a reason for us not to do it. What’s wrong with trying it? What’s the worst thing that happens? It doesn’t work, and Robbie gets fired.”

Fare free buses are not without risk. Other cities have tried it—and abandoned it.

A 2002 study authored by Jennifer Perone and Joel Volinski of the Center for Urban Transportation Research concluded:

Based upon the findings of this synthesis, it is concluded that a fare-free policy might be appropriate for smaller transit systems in certain communities, but is ill-advised for larger transit systems in major urban areas because experience shows that in larger systems, a tremendous amount of criminal activity, as well as a sharp increase in ridership, caused higher maintenance costs, labor costs, and operational costs and drove away existing riders.

In a 2012 book, “Implementation and Outcomes of Fare-Free Transit Systems,” Volinski details a fare-free pilot program in Austin, Texas. Ridership increased by as much as 70 percent, but there were issues of, “overcrowded buses, disruptive passengers, and unhappy bus operators.” The program was discontinued. Denver tried a similar fare-free program but saw the same results and discontinued it.

Transit passengers say lower fares are not a priority. A 2019 survey of 1,700 riders around the country conducted by TransitCenter found, “What we heard is that most low-income bus riders rate lowering fares as less important than improving the quality of the service.”

Unfortunately, a “draft mini-report” on fare free buses by the University of Missouri-Kansas City only made matters worse; making bold predictions by omitting any measure the costs of such a policy. Local leaders often fall prey to so-called economic impact analyses of municipal policy, claiming that spending public funds on transit will drive jobs and private investment. Those studies often fail to not only consider spending offsets, but claim as an impact investments that would likely have happened anyway or happened for other reasons entirely. The realities of municipal transit is that it often increases congestion and requires more energy, not less.

One other impact not often considered is that going fare free may hinder a transit agency from improving the quality of service, not just by stripping them of funds, but by stripping them of information. Dr. Byron Schlomach at Oklahoma State University points out that, “Pricing plays an important role even in 90 percent subsidized, publicly-owned enterprises like bus transit. It can provide information for where and when the service is most highly valued and serve as an indicator for where resources should be allocated.”

How would any transit agency collect information on the popularity of routes if not through the farebox? Perhaps it could install people-counting sensors on every bus entrance, but that’s an additional expense not often considered in this debate.

Rep. Pressley and local leaders around the country seems to be jumping into this before it has given the issue any serious consideration. And while city leaders may mean well, public policy requires more than good intentions. Our national experience with large scale fare-free transit is not promising and what we know about the specific plans to offer fare-free bus service do not instill confidence.

National and local leaders owe taxpayers and passengers more consideration of the benefits and costs of such policies before calling for such dramatic changes.

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Biden’s city-based visa program: An idea worth a deeper look https://better-cities.org/economic-prosperity/bidens-city-based-visa-program-an-idea-worth-a-deeper-look/ Mon, 17 Feb 2020 19:53:37 +0000 https://better-cities.org/?p=1247 The presidential candidate may not have done well in early primaries, but one of his immigration ideas has bipartisan support.

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Former‐​Vice President and presidential candidate Joe Biden—the Democrats’ frontrunner—released his immigration plans in December, and they contain some interesting surprises. In particular, Biden states that he would allow states and localities to sponsor visas for immigrants—an idea that my colleagues and I have written of for the last several years. So far, Sen. Ron Johnson (R‑WI) and Rep. John Curtis (R‑UT) have introduced bills to create a state‐​sponsored temporary worker program.

But the idea is starting to gain some more traction among Democrats. Biden’s immigration platform states that it:

Creates a new visa category to allow cities and counties to petition for higher levels of immigrants to support their growth. The disparity in economic growth between U.S. cities, and between rural communities and urban areas, is one of the great imbalances of today’s economy. Some cities and many rural communities struggle with shrinking populations, an erosion of economic opportunity, and local businesses that face unique challenges. Others simply struggle to attract a productive workforce and innovative entrepreneurs.

As president, Biden will support a program to allow any county or municipal executive of a large or midsize county or city to petition for additional immigrant visas to support the region’s economic development strategy, provided employers in those regions certify there are available jobs, and that there are no workers to fill them. Holders of these visas would be required to work and reside in the city or county that petitioned for them, and would be subject to the same certification protections as other employment‐​based immigrants.

Unfortunately, Biden still endorses the idea that the “same certification protections” should apply to these city‐​sponsored workers. That undermines a key benefit of state and local control: the ability to innovate with the rules for eligibility. Not every state and locality has the same labor market needs, and so the main benefit of the idea is to allow a policy marketplace of competing ideas to develop. Nonetheless, Biden’s endorsement could pave the way for compromise with Republicans interested in more local control and Democrats who want to see more immigration.

Other good ideas in Biden’s plans include “increase[ing] the number of visas offered for permanent, work‐​based immigration based on macroeconomic conditions.” He notes—as I have on many occasions—that the employment‐​based green card limits of 140,000 aren’t responsive to the growth in the economy or employer needs, and he would update those numbers as well as exempt from the cap any Ph.D. STEM graduates. He would also end the country caps on employment‐​based visas. He also endorses a temporary visa for family members of U.S. citizens caught in endless backlogs. Like other Democratic candidates, he supports a pathway to citizenship for illegal immigrants.

He also would end many of the current administration’s problematic border and enforcement policies. Most notably, he would stop the public charge rule that is designed to keep out all low income immigrants who don’t speak English well or have college degrees, and he would end asylum policies—like capping the number of people who can request asylum at ports of entry—that encourage illegal immigration.

President Obama earned his nickname as the Deporter‐​in‐​Chief. It is possible that if Joe Biden becomes president, he could separate himself from that legacy.

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

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Seeking a more worker-friendly economy, some cities, states push employee ownership https://better-cities.org/economic-prosperity/seeking-a-more-worker-friendly-economy-some-cities-states-push-employee-ownership/ Mon, 17 Feb 2020 18:24:35 +0000 https://better-cities.org/?p=1239 Businesses owned by employees are rare in the U.S.; some governments are trying to change that.

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AURORA, Colo. — Cassie Larimer is the assistant director of Happy Ladybug Early Learning, a child care center and preschool tucked into a one-story brick building in this city east of Denver. But her new business cards, emblazoned with a cheery ladybug logo, just say “owner.”

Larimer isn’t technically an owner — yet. The new business cards reflect the ambitions of the center’s cofounders, Elvan Goksu and Umit Kaya, who hope to turn Happy Ladybug into a worker-owned cooperative — meaning that the center’s 13 staff members would hold shares in the business and help manage it.

Goksu and Kaya hope the new business model would increase teacher pay, reduce staff turnover and lift some of the burden of running the business day-to-day from Goksu’s shoulders.

“Teacher burnout is a big thing, and teacher turnover rates are very high,” Goksu said one recent morning, sitting in the office she and Larimer share while small voices babbled away in the classrooms nearby. “At this age group, we believe it’s very important for kids to have continuity of care.”

Colorado Gov. Jared Polis and like-minded policy leaders in other states want more businessowners to follow Goksu’s example. Polis and others who back employee-ownership — a term that can mean everything from cooperatives to stock options — say that sharing ownership can improve pay and working conditions, reduce wealth inequality and give retiring entrepreneurs another way to pass on their companies.

“We think it is a best practice in capitalism that leads to better long-term economic growth,” Polis, a Democrat, told Stateline last month.

Woman with two children from Ladybug Early Learning
Teacher Brooke Kaufman works with preschoolers at Happy Ladybug Early Learning in Aurora, Colorado. The child care center and preschool is becoming a worker-owned cooperative. Photo courtesy Happy Ladybug Early Learning.
Employee ownership has a history of bipartisan support. President Ronald Reagan championed the idea in the 1980s as “a path that befits a free people,” and in 2016 the GOP platform included support for the business model. Republican lawmakers in states such as Iowa and Missouri have in the past decade approved new tax breaks to encourage employee ownership.

But the idea has increasingly been championed by progressive Democrats, such as presidential candidates and U.S. Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, who want to boost the fortunes of working people at a time when more and more wealth is concentrated in the hands of the ultra-rich.

“Real wages are flat, defined benefit pension plans have been killed off, most companies don’t contribute to your 401(k) — it’s basically your savings,” said Joseph Blasi, director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University. “People are looking for a different form of capitalism.”

Several state and local governments are trying to help businessowners sell shares to their workers.

Polis last year established a Commission on Employee Ownership to promote the concept and identify barriers to forming employee-owned businesses. The state’s economic development agency will this month launch a $100,000 loan fund to help businesses cover the costs of changing their ownership structure.

Massachusetts lawmakers last year relaunched a state office, which had lost funding during the Great Recession, that helps businesses make the transition. In recent years, cities such as New York; Berkeley, California; and Madison, Wisconsin, also have funded programs that help businesses convert to employee ownership.

But businesses that are either owned or majority-owned by workers are rare in the U.S. economy. And experts say converting to employee ownership is a time-consuming, expensive process that requires businesses to be in good financial shape.

Happy Ladybug has been trying to form a cooperative for three years. “I don’t know if [the challenge] was unexpected,” Goksu said, “but it’s been definitely frustrating.”

Some labor relations experts also doubt that employee ownership will be the key to a more worker-friendly economy, as some union leaders hoped back in the 1980s.

“That’s fairly marginal to the overall direction of the economy, and who’s got the control, and who’s got the power,” said Mike Slott, a former union activist and part-time lecturer in the Department of Labor Studies and Employment Relations at Rutgers.

Saving capitalism

Defined broadly, employee ownership can encompass a wide sweep of American companies, from law firms run by a team of partners to startups that compensate workers with equity.

Blasi, however, defines employee-owned businesses as those that are at least 25% owned by workers. He focuses on two business models: worker-owned cooperatives and Employee Stock Ownership Plans (ESOPs).

While worker cooperatives can be organized in all kinds of ways, ESOPs are federally regulated trusts with a defined structure. In an ESOP, employees participate in a trust, the trust owns shares in a business, and workers can cash out their shares when they quit or retire. Congress decades ago created significant tax advantages for businesses that create an ESOP.

Worker cooperatives typically have around 10 employees, but companies part-owned by ESOPs — such as the Publix supermarket chain — can have thousands.

There are about 400 worker cooperatives and about 6,300 ESOPs in the United States, Blasi said. That’s a tiny share of firms nationally: There are about 6 million firms in the United States, according to the U.S. Census Bureau, including about 2 million with four employees or more.

About 90 new worker cooperatives were formed across 15 states over the past five years, according to estimates from the U.S. Federation of Worker Cooperatives, a national membership group, and the Democracy at Work Institute, its think tank affiliate. But the number of ESOPs fell by 14% between 2001 and 2016, according to an analysis of U.S. Labor Department data by Blasi and his colleagues.

There’s no single explanation for why the business models aren’t more common, said Peter Molk, an associate professor at the University of Florida Levin College of Law who studies theories of firm ownership.

Employee ownership may not be the best structure for certain businesses, such as companies that want to raise capital quickly, he said. Worker-owned businesses may also be harder to manage, because employees get more of a say in business decisions. “Different employees can want different types of things, so trying to get consensus on issues can be more difficult,” Molk said.

Supporters point to research from Blasi and other experts that shows employee ownership can reduce turnover, diminish the likelihood of layoffs and make workers wealthier.

“In the United States, homeownership is the first and biggest way that families create wealth for themselves and business ownership is the second,” said Alison Lingane, co-founder of Project Equity, a San Francisco Bay Area-based nonprofit that advises companies and cities on employee ownership.

Supporters also say communities benefit when retiring owners sell to their workers.

“There’s thousands of businesses that close each year because an owner retires,” said David Hammer, executive director of the ICA Group, a Northampton, Massachusetts-based nonprofit that promotes employee ownership. “If we can do things to prevent that, then that’s a benefit to those workers, that owner, and the community in which they operate.”

But detractors argue that some forms of employee ownership don’t make sense, particularly ESOPs, which are treated under federal law as a type of retirement plan. “They’re just atrociously bad as retirement plans,” Sean Anderson, teaching associate professor of law at the University of Illinois College of Law, said of ESOPs. “They’re inherently undiversified investments.”

Still, many policymakers encourage employee ownership and hope to use the coming wave of baby boomer retirements as a catalyst for converting more businesses to the model.

Last year, Massachusetts lawmakers approved $150,000 to relaunch a state office that advises businesses on employee ownership. The services will be provided by the ICA group and Working Wealth, another Massachusetts nonprofit.

Massachusetts state Rep. Paul Mark, a Democrat who pushed for the funding, hopes this year to convince lawmakers to create a capital gains tax break on shares sold to ESOPs or worker cooperatives.

Cities in California, Florida and Washington have partnered with Project Equity to count the number of small businesses with retiring owners and to promote employee ownership, and other cities such as New York and Madison fund services that help businesses make the switch.

Universities, nonprofits and philanthropists also have established seven state-level centers that support employee-owned businesses, including in Colorado.

Since last fall, the Massachusetts office has advised 12 companies on employee ownership, with one likely to convert, Hammer said. Project Equity in 2018 started working with four Berkeley businesses considering employee ownership, Lingane said.

Colorado trailblazer

In Colorado, the issue has been particularly high-profile thanks to Polis, who was a serial entrepreneur before he became a politician and has advocated for employee ownership for years.

“My business experience is in the tech sector, where employee ownership is the norm, usually through stock options,” he told Stateline. His companies used stock option incentives from the mailroom to the boardroom, he said. “For me, that was just a given value.”

Polis’ employee ownership commission has been holding roundtables with banking and legal groups to spread information about the services employee-owned companies need.

Colorado’s economic development agency will also manage a loan fund, approved by state lawmakers in 2017, that will lend businesses up to $10,000 to help them cover the legal, accounting and advisory costs associated with changing their business model.

There are about 50 or 60 worker-owned cooperatives in Colorado and about 135 businesses with an ESOP, said Amy Beres, executive director of the Rocky Mountain Ownership Center, a Denver-based nonprofit that advocates for and advises employee-owned businesses.

Interest in the model seems to be increasing, Beres said. “In the last six months of 2019 we had the same amount of calls from businessowners asking about employee ownership as we had the entire year before,” she said.

Colorado officials point to success stories such as Namasté Solar, a solar panel design and installation company headquartered in Boulder that’s been worker-owned since its founding in 2005 and is currently organized as a worker cooperative. The company also has some private investors.

“There’s no doubt that our success is because of our company model,” said co-founder Blake Jones. Namasté Solar employs about 200 people, including 110 employee-owners.

Employees need to invest $5,000 to buy a share in the company. (A loan program can help.) Before they can become co-owners, they’re paired with a mentor and taught management skills, such as how to read financial statements.

Workers installing solar panels
Namasté Solar co-owner Nate Meltzer, right, and employee Jep Grosboll work on a home solar installation in the foothills of Boulder, Colorado. Namasté Solar co-founder Blake Jones says the company’s business model has led to higher-quality work and more referrals. Photo courtesy Namasté Solar.
Worker ownership has led to thoughtful growth and a committed workforce, Jones said, a strategy that helped Namasté Solar survive the Great Recession and outlast many of its competitors. “They care more,” Jones said of his team. “That translates to better customer service, and better-quality work.”

The company culture of asking for feedback and building consensus can be frustrating at times, said Teri Lema, a human resources specialist at Namasté Solar who has been a co-owner since 2006. She said it took long, sometimes exhausting discussions to create the internal policies that guide the company today.

But she prefers the back-and-forth to working at a company where major business decisions are made by a small team of managers focused on profits. For instance, a few years ago the co-owners voted to renew the leases on the company’s Boulder and Denver offices even though moving to a third location would have cut costs. “We value having our work located near where we live,” Lema said.

Growing pains

Converting to employee ownership can be challenging, however.

Since most workers can’t afford to buy out their boss, becoming employee-owned typically means crafting a leveraged buyout, Hammer of the ICA group said. For that to work, the company must be financially stable and, ideally, easy to value.

It’s more complicated than selling to a competitor or a private equity firm. Hammer said that in the past year or so, his organization has worked with three child care companies that were initially interested in employee ownership, but then sold to a buyer who made a cash offer.

At Happy Ladybug, teachers have struggled to find time to discuss the future cooperative, including its bylaws. And some employees were initially skeptical. “There were a few teachers who gave us a lot of pushback,” Larimer said, either because they had no interest in ownership or worried it would mean more work.

The new business model won’t affect day-to-day management of Happy Ladybug, because Goksu will remain the director and teachers already plan their curriculums and co-create workplace policies, Goksu and Larimer said.

Teachers will, however, get a share in the profits. “We’re not big enough to offer a great dental plan, or a 401(k),” Larimer said. “My bonus that I will get, for whatever the profit is, could be the 401(k) contribution.”

Creating an ESOP is even more complicated and costly, because the federal government strictly regulates the trusts.

Odell Brewing Company, a Fort Collins, Colorado-based craft brewer, transitioned from family ownership to a mix of family, management and ESOP ownership in 2015. While the new structure will preserve the company culture and help the founders transition into retirement, co-founder and Board Chairwoman Wynne Odell has mixed feelings.

Not only was the process expensive, but at a certain point, new hires will have to wait for a shareholder to retire or leave before they can join the trust, she said. “There are so many ways that you can compensate your employees in more immediate ways,” she said, such as by offering a more generous 401(k) contribution.

Employee ownership isn’t necessarily permanent. New Belgium Brewery, the largest craft brewery in Colorado and an employee-owned company, was recently sold to an international company in a sale approved by its ESOP participants.

But for Polis, the deal was illustrative. “Rather than just the investors making money, the workers also see a benefit from this transaction,” he said.

Overall, $190 million is being disbursed to past and current employee-owners, Leah Pilcer, New Belgium’s director of communications and public relations, said in an email. More than 300 people will receive more than $100,000.

Despite the challenges, Goksu said she plans to keep pushing to turn her company into a cooperative. She thinks it’ll be good for business, and perhaps more importantly, she wants to support her team.

“It may not be something that you can count, but it makes you feel good about trying to do the right thing.”

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Policing by algorithm: Does it work? Is it fair? https://better-cities.org/criminal-justice-public-safety/policing-by-algorithm-does-it-work-is-it-fair/ Mon, 17 Feb 2020 00:46:32 +0000 https://better-cities.org/?p=1259 Out of over 50 agencies surveyed, none indicated they had examined effectiveness of 'data-driven' approach.

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Predictive policing software is being used by law enforcement agencies nationwide, yet a review suggests that almost none of its users, past or present, have clear ways to measure the effectiveness or accuracy of the tool, a lack of oversight many researchers consider irresponsible.

“I remember the only heads up I really got about PredPol was from my chief coming to our briefing and telling us, ‘We have this great new tool. We’re going to support it. It’s PredPol, and it’s going to reduce crime,’” said Captain Brian Bubar of the San Pablo Police Department, whose 2.4 square-mile California town has fewer than 40,000 people.

Bubar was a San Pablo patrol officer when the department acquired the program in 2013; the department’s subscription ended on July 31, 2015. PredPol, one of the first predictive systems, was created by Los Angeles Police Department and University of California, Los Angeles, and it has been used in dozens of departments now, employing law enforcement data from the previous days and months to generate recommended areas for patrolling.

MuckRock has submitted requests to more than 50 agencies known to have used the technology, asking for information on their predictive policing training and use. Of those that have responded, a few have been able to send their contracts, input datascientific papers written by PredPol’s makers, annual mayoral presentations, and even some training materials, but none have been able to provide validation studies.

“I was never able to explain how it was identifying these boxes, how it was telling us to get to these points, which I think was a huge component [of its failure], because it did not give an opportunity to give the system validity to the officers,” said Bubar. “And that could happen in a department our size. At the time, we didn’t have a dedicated IT infrastructure. We didn’t have a committee to learn how to incorporate our training staff, incorporate the sergeants, to educate them on these new systems, who were able to get the buy-in from the staff to give it a chance. It was just kind of delivered in our laps, and we were told to use it.”

Using data generated by unfair or questionable policing strategies to train a computer system can simply result in automation of that bias.

Though it is sold as “crime prediction” and officer allocation tools for under-resourced agencies, one of the reasons predictive policing tools are so controversial is the contention that they are built on and reinforce racial bias. Using data generated by unfair or questionable policing strategies to train a computer system can simply result in automation of that bias.

“You have to understand that every bias that goes into an instrument’s development is going to be manifest in the tool’s ability. It’s a great concept, but it doesn’t recognize that human behavior is negatively impacted when we use algorithms to predict it. You look at the research: blacks are twice as likely as whites to be targeted for certain behaviors when those behaviors are evenly distributed,” said Howard Henderson, founding director of the Center for Justice Research at Texas Southern University. “You can’t adopt an instrument without validating. That’s unacceptable.”

A report from the AI Now Institute found that some police departments cited by the Department of Justice for unfair policing practices use data from those eras to inform predictive policing systems.

“These tools are not sufficiently well-tested. They’re biased premises that, in some cases, are faulty. They’re based on a process of learning that I think are misapplied. And in the case of person-based predictive policing, they’re based on assumptions and structures that we’ve already seen have huge numbers of problems. I don’t see any reason to keep using them until we know, what is it exactly that they’re trying to do,” said Suresh Venkatasubramanian, professor at the University of Utah.

Many academics argue that, as they’re currently built and used, predictive policing systems shouldn’t be employed by police at all. In early October, more than 400 academics signed onto a letter to the LAPD Commission challenging claims that scholarship supports use of the tool.

“We keep telling ourselves, ‘We’re not stupid. We know correlation does not equal causation.’ But we’re going to use it anyway,” Venkatasubramanian said. “Why are you going to use it anyway?”

In addition to the concerns around encoding biased policies into police equipment, local validation and accuracy checks are important for seeing whether a system can realistically help an agency. Multiple police departments have said they stopped using PredPol because it simply did not work for them, suggesting areas they already knew to be problematic or not offering suggestions that could work with the existing demand created by daily urgent needs for service.

“It became almost offensive to patrol officers when the city commits funding to a new analytical tool that’s supposed to reduce crime. We need to be out in high visibility,” Bubar explained. “These were things that we were already identifying.”

Changes to standard procedure

LAPD, one of the longest users of PredPol, announced only last month that it would begin measuring the effectiveness of its data-driven policing techniques—nearly eight years after it started using them. An April report from the LAPD’s Inspector General found the department needs a lot of improvement around how it captures data and evaluates the fairness of the tool’s application. At a meeting in mid-October of the Los Angeles Police Commission, representatives from the LAPD acknowledged the shortcomings.

To address them, the department will be creating a data-driven policing unit and a reference manual detailing how it is used.

Dozens of other departments still use similar technology, but community pressure is starting to limit deployments.

“I think that’s where the change has occurred. LA and Philly are places where you can see good examples of this, but that’s because of the enterprising nature of the local community that they were able to do this,” said Venkatasubramanian. “To expect or require communities to be the source of pushback is unfair, although, yes, that’s probably the only way it’s going to happen.”

One point at which oversight might be implemented is during the initial procurement or subsequent justification meetings with city councils.

The use of a tool making predictions or decisions about force deployment is akin to implementing a policy stance, says Deirdre K. Mulligan, faculty director of the Berkeley Center for Law and Technology, and as with any policy enacted by law enforcement, there needs to be thought and intention behind its adoption.

“When it comes to predicting crime the underlying data is so fraught that it seems it can’t do anything but play racism forward,” wrote Mulligan. “I’ve been focused on all the policies that are embedded in the ‘tools,’ and the need for agencies to understand that adopting a tool may be akin to adopting a policy and, therefore, requires expertise, reasoned decision making, and public participation. How do we make sure the public is informed and in control of key normative decisions when processes are offloaded to an algorithm?”

This work is licensed under a 

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New survey of mayors yields strong support for infrastructure, climate action https://better-cities.org/clean-open-fair-government/new-survey-of-mayors-yields-strong-support-for-infrastructure-climate-action/ Tue, 28 Jan 2020 04:48:02 +0000 https://better-cities.org/?p=1144 Mid-size and large-city elected leaders want projects -- and vision from Washington -- in the spotlight.

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According to Boston University Initiative on Cities’ 2019 Menino Survey of Mayors, city executives believe infrastructure is the most important issue presidential candidates should be talking about on the campaign trail.

In an open-ended question, 45% of mayors said infrastructure was the issue related to cities they hoped was discussed during the election, a response with so much consensus that the next top answer was housing affordability with only 15%.

Twenty-five percent of mayors cited water, wastewater, and stormwater projects, more than any other type of infrastructure project, when asked what type of “large” infrastructure project they would prioritize if they were given an unrestricted grant. This is a 40% increase since the question was last asked in 2015.

“Mayors are absolutely right that few issues matter more for our country’s future than investing in essential infrastructure – whether it’s roads and bridges, housing, mass transit, water systems, or any of the other structures that are too often taken for granted,” said Edward Skyler, executive vice president, global public affairs at Citi and former deputy mayor of New York City, in an announcement about the survey. “Neglecting the infrastructure needs of our growing cities can deepen inequality.”

Roads, transit and climate change are on most mayors’ minds

Click on the image above to download a copy of the full report in PDF format.

Beyond thinking about federal funding, the mayors’ thoughts about infrastructure extended into roads and mass transit, as well as bicycle and pedestrian friendliness.

Overall, more than three quarters of mayors believe their cities are “too oriented towards cars,” with over a third “strongly” agreeing with that statement despite research indicating that, in nearly all cities, transit is an energy hog compared to private vehicles. Likewise, nearly half of all mayors believe travel for bicyclists, persons with disabilities, and pedestrians is not safe in their cities, while fewer than 10% believe the same for car drivers and mass transit riders.

Nearly three quarters of mayors believe cities should make their roads more accessible to bicycles even if it means sacrificing driving lanes or parking, with just under a third “strongly” agreeing with that statement.

While mayors are concerned about the safety of road users, survey responses indicate their preferred policies are not always consistent with transportation safety best practices in speed limits, parking, and cycling.

Large majorities of mayors believe that their speed limits are set at the right levels and enforced adequately. Similarly, substantial proportions express favorable views of their cities’ current parking levels and pricing, despite the problems of over-aggressive parking minimums. Over three-quarters of mayors endorse painted bicycle lanes as safe alternatives to physically separated lanes — contrary to statistical analyses of bicycle accident data.

Mayors worry about cars contributing to climate change. Two-thirds of respondents believe vehicles are the biggest source of greenhouse gas emissions from their city, and the same percentage believe it’s important to improve their city’s electric vehicle infrastructure, even if it means less parking for non-electric vehicles.

But mayors disagree along party lines on whether cities should play a strong role in reducing the effects of climate change, even if it means sacrificing revenues and/or expending financial resources. While 92 percent of Democrats believe this (55% “strongly”), only one quarter of Republicans do. Overall, 70% of mayors agree, and, increasingly, there are worries that climate risk may be priced into municipal debt.

From workforce development to opportunity zones, a focus on the economy

Almost half of all mayors (48%) believe that high tech jobs will be substantially more common in their cities in five years than they are today. Other commonly cited growth sectors included health care/medicine (29%) and service jobs (13%).

When it comes to preparing the local workforce for those shifts in the economy, mayors are all-in on youth programs (79%) and broadly support programs for people with criminal records (52%) and ethnic minorities (50%). However, programs most likely to help existing workers transition into new careers, such as those without a college degree (39%), those without a high school diploma (35%) and older workers (7%) are less broadly supported.

Results from the survey. The question asked was: “For which groups do you have targeted workforce development initiatives?”

The survey also asked mayors about their attitudes and expectations for opportunity zones in their cities, which were created by the 2017 Tax Cuts and Jobs Act to give tax benefits to those who invest in designated areas of need.

Nearly three-quarters of America’s mayors are happy with the opportunity zones selected in their cities, despite criticism by some that the program will ultimately benefit wealthy developers over communities in need. Six in 10 mayors believe the program will have a large and positive impact on their city’s economy, while less than a quarter say it will lead to gentrification and residential displacement.

The 2019 Menino Survey of Mayors is the only national representative survey of American mayors, surveying mayors from cities of more than 75,000 residents. In total, 119 mayors from 38 states were interviewed throughout the summer of 2019.

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New municipal-finance report uncovers top performers, laggards among largest U.S. cities https://better-cities.org/clean-open-fair-government/2020-municipal-finance-report-americas-top-cities/ Mon, 27 Jan 2020 23:08:49 +0000 https://better-cities.org/?p=1112 Irvine taxpayers can rejoice; those in New York might have something to worry about.

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The 2020 Financial State of the Cities (FSOC) surveys the fiscal health of the 75 largest municipalities in the United States. This data, released January 28 by Truth in Accounting (TIA) found that although 63 cities carried varying levels of debt, some quite large, there is some good news.
Click on the image above to download a copy of the full report in PDF format.

Twelve cities have more assets than obligations, a key indicator of long-term financial health. TIA designated these cities as “Sunshine Cities” because the government has money left over after all of the city’s bills are paid. Irvine, California can claim to have the best city finances in the U.S. with a $380 million surplus. If you were hypothetically to divide that figure by the number of Irvine taxpayers, each taxpayer’s share is $4,100, which is what TIA calls a Taxpayer Surplus™.

The other top five Sunshine Cities are Washington, D.C., Charlotte, Fresno and Plano. While these cities are currently in good shape, TIA cautions against assuming these surplus funds should immediately be given back to the taxpayers or used for new spending.

Future economic downturns could adversely affect future tax revenues and the value of assets being held in retirement plans, which could diminish the city’s surplus. In some cases, the excess assets are held by the city’s pension plans and must be used to pay future benefits, not for government operations or other debt.

The second piece of good news is that cities have become more transparent about their retirement debt. This gives elected officials and the public a truer picture of the government’s finances based upon the audited Comprehensive Annual Financial Reports (CAFRs). The FSOC study was based upon fiscal year 2018 CAFRs, in which the cities were required by a new accounting standard to report the vast majority of retiree health care debt on their balance sheets. Three years ago, governments using Generally Accepted Accounting Principles were required to report the pension debt on their balance sheets.

TIA found that the amount of retiree health care debt that was not reported on the 75 cities’ balance sheets dropped from more than $27.5 billion for fiscal year 2017 to less than $1 billion for fiscal year 2018.

The bad news, however, is that TIA identified 63 “Sinkhole Cities” that lack the necessary funds to pay their bills. TIA calculates a Taxpayer Burden for these cities, which is the amount of money needed to pay bills divided by the number of city taxpayers.

TIA designated New York City as the worst city with a Taxpayer Burden of $63,100. Chicago, Honolulu, Philadelphia and New Orleans round out the top five Sinkhole cities.

Taxpayer burden or surplus by city

Links on city names go to in-depth reports on each city.
RankCitySurplus(+) or Burden(-) Per Taxpayer
1Irvine+$4,100
2Washington, DC+$3,500
3Charlotte+$3,400
4Fresno+$3,200
5Plano+$2,800
6Stockton+$2,600
7Lincoln+$2,500
8Aurora+$2,200
9Arlington+$2,100
10Tampa+$1,700
11Raleigh+$1,400
12Tulsa+$100
13Corpus Christi-$300
14Oklahoma City-$400
15Long Beach-$500
16Greensboro-$700
17San Antonio-$1,100
18Wichita-$1,200
19Louisville-$1,300
20Bakersfield-$1,600
21Fort Wayne-$1,700
22Minneapolis-$1,900
23Henderson-$1,900
24Las Vegas-$2,100
25Virginia Beach-$2,100
26Colorado Springs-$2,300
27Chula Vista-$2,300
28Orlando-$2,300
29Saint Paul-$2,300
30Riverside-$3,300
31Austin-$3,300
32Indianapolis-$3,500
33Memphis-$3,700
34El Paso-$3,900
35Los Angeles-$4,000
36Toledo-$4,100
37San Diego-4,500
38Sacramento-$4,600
39Columbus-$4,800
40Cleveland-$5,100
41Detroit-$5,100
42Mesa-$5,300
43Santa Ana-$5,400
44Seattle-$5,400
45Phoenix-$5,500
46Albuquerque-$5,800
47Anaheim-$6,200
48Denver-$6,500
49Omaha-$7,100
50Anchorage-$7,800
51Tucson-$8,100
52Jacksonville-$8,500
53Lexington-$9,100
54Dallas-$9,400
55San Jose-$9,400
56Kansas City, MO-$9,800
57Atlanta-$9,900
58Boston-$10,200
59Miami-$10,600
60Houston-$11,600
61Fort Worth-$12,300
62Milwaukee-$12,800
63St. Louis-$14,500
64Pittsburgh-$15,600
65Cincinnati-$15,600
66Baltimore-$16,000
67San Francisco-$17,000
68Nashville-$18,400
69Portland-$18,400
70Oakland-$18,600
71New Orleans-$18,800
72Philadelphia-$25,500
73Honolulu-$26,400
74Chicago-$37,100
75New York City-$63,100

Taxpayer Burdens occur when politicians decide to make promises on paper without fully funding the programs. TIA emphasizes the need to fix the wording of balanced budget requirements so civil servants can count on their retirement programs, and future generations are not forced to pay for current bills.

To that end, TIA has put together some best budgeting practices called FACT-based budgeting. FACT stands for full accrual calculations and techniques. These practices help governments live up to the intentions of their balanced budget requirements. Because many governments calculate their budget on a cash-basis, debt has accumulated and current costs have been pushed onto future taxpayers. Many governments ignore millions, if not billions, of dollars of compensation costs, related to earned pension and other retirement benefits, when calculating their budgets. This is the main reason for cities’ Taxpayer Burdens.

TIA makes the Financial State of the Cities, their individual city reports and the financial data they have gathered from the CAFRs available to the public on their website Data-Z.  To add context to its Taxpayer Surplus/Burden amounts, this online database contains more than 700 data series and allows users to create charts that compare cities and states using demographic, economic and financial data. The website also includes a report on the federal government and financial data for the U.S. government.

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‘Jane Jacobs goals through Robert Moses tactics’ https://better-cities.org/media-commentary/strong-towns-book-review/ Sat, 25 Jan 2020 23:01:33 +0000 https://better-cities.org/?p=1085 From Reason magazine

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Strong Towns: A Bottom-Up Revolution To Rebuild American Prosperity, by Charles L. Marohn Jr., John Wiley & Sons, 240 pages, $25

In the years after World War II, flush with cash and optimism, American planners “skipped the messy iterations” of gradual urban and suburban growth, Charles L. Marohn Jr. explains. Instead, they subsidized ambitious new developments and saddled them with codes aimed at keeping them static. After all, once you’ve figured out the perfect design, why let anyone tinker with it?

“There is no anticipation of change, incremental or otherwise,” Marohn writes of this approach in his book Strong Towns. “The building won’t adapt, the block won’t evolve, and the neighborhood won’t transform over time, at least not easily. As it is built, evermore will it be, world without end.”

The design wasn’t really perfect, of course. These massive community plans made few accommodations for the human need to make adjustments based on experience.

Marohn, a professional engineer and land use planner, co-founded Strong Towns, a nonprofit dedicated to improving the development and growth of cities. His eponymous book at times may seem like a romanticized view of yesteryear, when city leaders were just…better. But city leaders weren’t better before the rise of zoning and similar tools—there were just fewer of them, and they had less authority to carry out grand schemes.

Marohn takes readers everywhere from ancient cities to post–Civil War rail towns, demonstrating how urban centers once grew organically, constantly adjusting themselves to account for new information. Many of these places failed, but the ones that thrived evolved incrementally, taking on additional responsibilities for services like roads and public safety—but always doing so slowly.

Modern planners have failed repeatedly to accommodate the realities on the ground. In his 2018 book Order Without Design, Alain Bertaud recounted his work as an inspector in 1965 Algeria, where residential building permits insisted on “the rules, norms, and regulations for land development and construction” of France. French planners thought they had perfected urban design, so they saw no need to take into consideration the “income, culture, traditions, and climate” of this distant North African country.

Under such end-of-history planning, communities cannot adapt. You needn’t go to Algeria to see examples. Consider the challenges a homeowner faces if he wants to have a “granny flat” on his property, or the gauntlets that must be run by such entrepreneurial innovations as Airbnb.

Many homeowners have bought into that same planning mirage, and they aren’t about to risk their investment by letting their communities evolve. As a result, Marohn writes, “A neighborhood of single-family homes must remain a neighborhood of single-family homes. The person living there is unable to turn higher property values into a redevelopment opportunity that expands the number of units.” As the community stagnates, people move up by moving out; the neighborhoods they leave behind decline and decay.

All this exacts a cost on public resources. Many cities and towns have viewed short-term growth as a good thing, not mindful of the long-term costs of upkeep for roads, pipes, traffic lights, and so on. When the costs of infrastructure maintenance come due, urban leaders attempt to pay for it with the short-term revenue of yet another development—if they don’t defer maintenance altogether. It’s a game no one can win. Ask the people of Detroit, a city that (among many other errors) embraced suburban growth early on, only to be hit with the crushing costs of upkeep. “When you take a prosperous and stable city, spread it out at tremendous cost over an enormous area, denuding and bisecting the original fabric as part of the transition, then saddle it with decades of liabilities, you end up with Detroit,” Marohn warns.

The most financially productive parts of a city are not necessarily the ones you expect. With some exceptions in “highly gentrified areas,” he writes, “poorer neighborhoods tend to financially outperform wealthier neighborhoods.” They pay vastly more property tax and retail tax per acre, and they likely house more people. The planned development may seem like a wealthy enclave, but the cost of public infrastructure to serve it—roads, water and sewers, public safety, and the like—can significantly decrease its value to the city.

Marohn argues that many cities will eventually have to deal with the problem Detroit faced: an inability to support suburban and exurban development. He advocates a sort of triage, the strategy in an emergency situation of assigning limited resources sparingly to save as many lives as possible. “If we can have this conversation about human lives,” he writes, “we can have it about neighborhoods.” People who want to live in suburbs and exurbs should be welcome to do so, of course, but they ought to bear the cost of the infrastructure that such far-flung communities require.

By now, many city governments have realized that the costs of suburban infrastructure far outweigh any benefits of the growth. So they set out to develop their cities’ cores and attract people back downtown. Density is their rallying cry: Increase the number of taxpayers living off the same existing infrastructure to save money. Instead of office parks and shopping malls, urban planners advocate building convention hotels, streetcars, and down-town stadiums.

But that’s not a great idea either. On one of Marohn’s podcasts, the former city council president of Sandpoint, Idaho, described this as an attempt to achieve “Jane Jacobs goals through Robert Moses tactics.” In 1960s New York City, Moses was the planner who proposed several expressways through Manhattan; Jacobs was the author and activist who championed the people in the paths of Moses’ plans. Today’s planners may have learned the dangers of subsidized suburban development, but they’re still addicted to top-down development schemes.

Instead of more grand plans, Marohn wants a return to the days of light regulation and incremental growth: Let the landscape evolve, improving through trial and error. More specifically, he calls for relaxing restrictive zoning rules and focusing on maintaining existing infrastructure rather than building new facilities.

Hike through a New England forest, and you may come upon low stone walls that were previously used to mark farm territory up to the time when the plot’s output could no longer justify the effort and expense of working the land. In much the same way, Marohn suggests that because many suburban developments would be unsustainable if the true costs of infrastructure were passed on to residents, they ought to be allowed to go to seed. This may seem like bitter medicine, but he thinks it’s the only realistic way to move beyond decades of bad bets and hollow promises.

Marohn’s diagnosis rings true. Cities are being flooded with bad development advice characterized by conflicts of interest, inflated estimates of economic impact, and requests for public subsidies that would distort market forces—this time in the service of urbanization. Meanwhile, elected leaders look for anything that looks like a quick win, regardless of the long-term consequences. And all of this is done with unjustified confidence about what the future will bring.

“The curious task of economics,” F.A. Hayek once wrote, “is to demonstrate to men how little they really know about what they imagine they can design.” Marohn aims to inject that same spirit of humility into municipal administration. Policy makers, planners, and think tank wonks don’t have all the answers. They should admit how little they really know about what they imagine they can design and allow people acting freely to lead the way.

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Urban transit turns out to be an energy hog https://better-cities.org/transportation-infrastructure/urban-transit-energy-efficiency/ Sat, 25 Jan 2020 18:31:38 +0000 https://better-cities.org/?p=1054 Boosters regularly tout a laundry list of transit benefits; one might not stand up to scrutiny.

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Transit is often touted as a way to save energy. But since 2009 transit has used more energy, per passenger mile, than the average car. Since 2016, transit has used more than the average of cars and light trucks together.

Automobiles and planes are becoming more energy efficient each year. But the annual reports of the National Transit Database reveals that urban transit is moving in the opposite direction, requiring more energy to move a person one mile in each of the last four years.

Transit has been less energy efficient than the average car since 2009. Light trucks (vans, pickups, SUVs) may soon become more efficient than transit as well. 2018 automobile data are not yet available; 2017 numbers are estimated from this report; prior years are from the Transportation Energy Databook.

The reason for this is simple: ridership is declining, but transit agencies aren’t proportionately reducing miles of transit service. As a result, the average occupancies of buses and other transit vehicles has declined in every year since 2013. While transit agencies may be purchasing more fuel-efficient vehicles, the increase in average efficiencies per vehicle mile can’t make up for the loss in passengers.

Transit occupancies have steadily declined since 2013. Bus” includes commuter bus, rapid bus, trolley bus, and conventional bus (which the FTA calls “motor bus”). “Rail” includes commuter, heavy, light, and hybrid rail and streetcars, but not monorail or automated guideways. “All” includes all transit, not just bus and rail.

These numbers are based on the National Transit Database, which reports the number of gallons of Diesel fuel, gasoline, natural gas, and other fuels as well as the number of kilowatt-hours of electricity that are used by transit systems across the country. I’ve converted these numbers to British thermal units (BTUs) using standard factors, such as that a gallon of Diesel fuel has 138,500 BTUs.

For electricity, I also took into account the fact that two-thirds of the energy used in a power plant is lost in generation and transmission. In other words, in order to deliver 1 kilowatt-hour (3,412 BTUs) of energy to a customer, an electrical system must consume the equivalent of 10,236 BTUs of fossil fuels or other energy at the power plant. Electric motors tend to be more efficient than internal combustion engines, but when the losses from generation and transmission are accounted for, the efficiencies are about the same.

Energy Consumption by Mode

The calculations show that ferries and streetcars use huge amounts of energy per passenger mile, as do automated guideways (i.e., people movers), which aren’t shown in the chart but average even more energy per passenger mile than ferries. Buses and light rail are well above the average automobile.

Ironically, the most energy-efficient transit mode–van pools–is the one that is based on conventional automobiles rather than large buses or railcars.

Commuter and subway/elevated trains (heavy rail) appear to be more efficient, but this is largely because commuter- and heavy-rail numbers are dominated by New York where occupancy rates are high. Commuter rail lines in such regions as Dallas-Ft. Worth, Miami, and even Philadelpha use far more than the average amount of energy per passenger mile, as do heavy rail lines in Baltimore, Boston, Los Angeles, and Miami. Perhaps the biggest surprise is the DC Metrorail, the nation’s second-most heavily used rail system, which consumes almost 25 percent more energy per passenger mile than the average light truck used in 2017.

Rail BTU Use and CO2 Production

Rail SystemBTUsGrams CO2
COMMUTER RAIL
Alamont1,04476
Albuquerque3,834281
Boston2,736200
Chicago Metra1,977158
Chicago N. Indiana2,852190
Connecticut9,741713
Dallas-Fort Worth4,876357
Denver2,776178
Los Angeles2,600190
Maryland2,952181
Miami4,012294
Minneapolis North Star3,318243
Nashville6,452472
New Jersey Transit2,728108
New York Long Island RR1,85751
New York Metro-North2,75278
Orlando6,212455
Philadelphia DOT2,44087
Philadelphia SEPTA4,879175
Portland-Boston2,622192
Salt Lake City2,758202
San Diego3,118228
San Francisco1,430105
Santa Rosa SMART2,335171
Seattle1,638120
Virginia Ry Exp1,788131
HEAVY RAIL
Atlanta2,11188
Baltimore14,579552
Boston3,417127
Chicago3,391126
Cleveland4,674302
Los Angeles4,34090
Miami5,138223
New York MTA1,77034
New York PATH2,38955
Philadelphia PATH4,760110
Philadelphia SEPTA4,026144
San Francisco1,87939
San Juan2,14177
Staten Island5,344103
Washington4,342232
Light Rail
Baltimore6,933263
Boston3,421127
Buffalo7,601146
Charlotte4,091150
Cleveland15,223982
Dallas5,584286
Denver3,796243
Houston4,388224
Los Angeles3,33769
Minneapolis-St. Paul4,227197
NJ Hudson-Bergen4,682108
NJ Newark5,643130
Norfolk7,592253
Phoenix2,07683
Pittsburgh10,831388
Portland2,74334
Sacramento5,153107
Salt Lake City4,699336
San Diego2,28347
San Francisco4,31190
San Jose5,200108
Seattle1,60715
St. Louis4,182327
STREETCARS
Atlanta19,672816
Charlotte8,706319
Cincinnati13,674882
Dallas-DART26,3831,350
Dallas-McKinney4,051207
Detroit14,542730
Kansas City3,269256
Kenosha32,9382,094
Little Rock40,9612,167
Memphis18,009787
New Orleans3,337165
Philadelphia4,857174
Portland2,71533
San Francisco5,761120
Seattle13,641125
Tacoma5,14047
Tampa8,759381
Tucson12,907515
Washington56,9973,041
HYBRID RAIL
Austin2,773203
Denton5,264385
NJ River Line2,530185
Oakland3,194231
Portland3,812275
San Diego2,689197

Energy Consumption by Urban Area

The numbers for individual urban areas are even worse for transit. Among the largest 100 urban areas, transit is more energy-efficient than cars only in New York, San Francisco-Oakland, and Honolulu. Transit in Atlanta and Portland is less energy-efficient than cars but more than the average light truck. Just about everywhere else, transit is a real energy hog. The adjacent table has numbers for the 54 urban areas. Among smaller urban areas, Stock- ton (which is the 102nd largest area) appears to be more energy efficient than cars, but only because the Altamont Commuter Express is attributed to Stockton.

Even where rail transit appears to be more energy efficient than driving on an operational basis, this doesn’t account for the energy costs of construction. Urban roads carry far more passengers over their lifetimes than rail lines, so the energy cost of construction per passenger mile is much higher for rail transit. Rails must be rebuilt about every 30 years, which also requires large amounts of energy. Heavy use of steel and concrete also has a high greenhouse gas cost.

Urban AreaBTUsGrams CO2
New York2,34194
Los Angeles4,218287
Chicago3,395197
Miami4,854324
Philadelphia4,435210
Dallas-Ft. Worth6,482441
Houston4,066290
Washington4,459277
Atlanta3,172204
Boston3,477202
Detroit4,601326
Phoenix5,296389
San Francisco-Oakland2,616115
Seattle4,101280
San Diego3,648240
Twin Cities4,479300
Tampa-St. Petersburg5,601417
Denver4,027279
Baltimore4,425269
St. Louis5,062378
San Juan4,483314
Riverside7,231581
Las Vegas4,274341
Portland3,270159
Cleveland5,821417
San Antonio6,013466
Pittsburgh5,242341
Sacramento6,642392
San Jose4,531264
Cincinnati5,399394
Kansas City6,895523
Orlando5,000370
Indianapolis6,844500
VA Beach6,032419
Milwaukee5,329389
Columbus7,309565
Austin5,103373
Charlotte4,687305
Providence4,746347
Jacksonville6,514488
Memphis6,811495
Salt Lake4,011293
Louisville5,101372
Nashville5,472396
Richmond4,397344
Buffalo4,875309
Hartford4,958363
Bridgeport5,671413
New Orleans6,598458
Raleigh6,156443
Oklahoma City5,971449
Tucson5,293383
El Paso4,714390
Honolulu2,746200

Greenhouse Gases

Though transit is less energy efficient than cars, it emits slightly fewer greenhouse gases per passenger mile than the average car. Transit was actually worse than the average car as recently as 2010, but by 2014 it had reduced its climate footprint by 25 percent.

It accomplished this partly by converting from Diesel to other fuel sources, originally biodiesel but more recently compressed natural gas. In addition, the nation’s electric industry has converted from heavy reliance on coal to heavy reliance on natural gas. Both of these changes reduced greenhouse gas outputs per unit of energy. Since 2014, however, declining transit ridership increased greenhouse gas emissions per passenger mile by about 7 percent.

The main transit energy trend over the last decade has been the replacement of Diesel fuels with compressed natural gas, which paralleled the electric industry’s conversion from coal to natural gas.

Calculations of greenhouse gas emissions are straightforward for most fuels since burning a gallon of gasoline, Diesel, or natural gas results in specific outputs of carbon dioxide. For electricity, I presumed that the electricity used by a transit agency is generated by a the combination of power sources used in the agency’s state, as reported in the Department of Energy’s State Electricity Profiles. Even if a transit company claims that it buys renewable energy, the reality is that electricity is fungible, and renewable energy consumed by a transit agency means less renewable energy for someone else.

While transit scores better than automobiles overall, this is only because of New York, which produces some 44 percent of transit riders and whose electricity profile claims to emit less than half the national average of carbon dioxide per kilowatt-hour. However, New York doesn’t generate enough electricity to satisfy its needs and must import some, and the greenhouse gases attributable to imported electricity is unknown.

Two-thirds of all states are net electricity exporters, and some major exporters such as Texas and Wyoming generate most of their electricity with fossil fuels. Many of the importer states, including California and New York, generate most of their electricity from non-fossil-fuel sources, but their imports are probably more dependent on fossil fuels.

For a sensitivity analysis, I assumed that electricity brought into net importer states was generated by the national average of fuel sources. Under this assumption, electric-powered transit generated 22 percent more greenhouse gases in California, 15 percent more in New York, and about 7 percent more in Massachusetts, Maryland, and Virginia, while Washington DC transit generated 17 percent less greenhouse gases. For the most part, these numbers aren’t big enough to fuss about, especially since we can’t accurately estimate the mix of sources of energy that is imported into the various states. The greenhouse gas emissions shown in the adjacent tables are based on state electricity profiles with the caveat that the actual numbers in California and New York are probably higher while DC is probably lower.

Based on the state profiles, transit is more greenhouse-gas-efficient than cars nationwide, but it is more efficient than cars in only seven out of the nation’s 100 largest urban areas. Further, transit is more greenhouse-gas-efficient than light trucks in only three more urban areas. Thus, driving a car or light truck is more greenhouse-gas-friendly than transit in 90 of the nation’s 100 largest urban areas (and all but a handful of the smaller ones).

The results of my calculations of energy consumption and greenhouse gas emissions for each transit agency, mode, and urban area are in my 2018 Transit Database summary spreadsheet. For details on how to use this spreadsheet, see this policy brief.

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The real state of the city? https://better-cities.org/media-commentary/the-real-state-las-vegas/ Sat, 18 Jan 2020 22:25:19 +0000 https://better-cities.org/?p=1077 From the Las Vegas Review-Journal

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To really appreciate Las Vegas Mayor Carolyn Goodman’s recent State of the City address, you need to start with a basic idea: This city was built on risk.

From the first settlers to the casino operators who followed and even the developers remaking downtown over the past several years, the story of Las Vegas is the story of people and companies having a vision and taking a chance.

Risk means reward. Not for everyone and not every time. But the benefits flowing from those striving to do something big and experimental are all around us and part of what makes the city work.

Which is why it’s so surprising that Goodman and City Hall seem focused on protecting developers and corporations from risk.

The mayor had good news to tell. From new residential and commercial developments to growth in gaming and hospitality, major initiatives to help the homeless and growth in the medical district, Goodman’s presentation was a hit parade.

But it was also a laundry list of deals and incentives that all share a common theme, a sort of benign paternalism that ultimately comes down to: We’re from City Hall, and we know best. There’s still risk. But increasingly, it’s transferred away from project owners and onto taxpayers.

We like to think Las Vegas is different — and it is. But we’re not so different that trends visible across the nation have no impact here.

So what do we know?

We know more than a third of the U.S. workforce is involved in the gig economy — from Uber drivers to freelancers, AirBnB owners and others — and that percentage is on an upswing. Las Vegas and city halls across America like big, shiny projects because they look good in the headlines and there’s a lot of political power in playing gatekeeper. But for hundreds of thousands of people here, good economic development likely means getting City Hall out of the way, not spending millions of taxpayer dollars to subsidize a new headquarters.

We also know neither Las Vegas nor any large city in America fully covers its long-term infrastructure costs. Those 17,000 new residences in Summerlin West may bring new residents and welcome revenue to the city, but the roads and utility infrastructure are a long-term liability. Saddling our children and grandchildren with a bill tomorrow for benefits we enjoy today is one of the most immoral things City Hall or any government can do.

Finally, we know a lot of money is wasted. Las Vegas spends hundreds of millions of dollars on developer incentives and deals, including tax increment financing, a tool local governments have abused so thoroughly that California, the state that invented the approach, eventually outlawed them. Research from the W.E. Upjohn Institute shows that, overwhelmingly, most would have made the relocation and expansion decisions they ultimately made without incentives.

But back to Goodman. One of the mayor’s few defensive moments came over controversial new ordinances banning camping and sleeping in public areas, measures that directly impact the homeless. Declaring she wouldn’t see Las Vegas become a “skid row harbor” like “other cities in the 9th Circuit Court of Appeals” — a slap at Los Angeles and San Francisco — Goodman declared that the city was showing compassion toward its exploding homeless population.

It’s tempting to praise any effort to help the city’s most vulnerable. But it’s hard to miss that the city’s build-big model for economic development is also what drives its approach to social services.

Would the millions being spent on a new low-barrier shelter in the Corridor of Hope have better served the city’s homeless if the money were allocated to smaller organizations experimenting with a variety of approaches? We don’t know. Because that’s not how we do things here.

Goodman embraces civic paternalism. Saying elected officials in city government are “responsible” for (not “to” — “for”) the voters they serve and claiming that it is the job of city government to “show compassion,” are good throwaway lines, but they’re not what government should do or what it does well.

Mayor Goodman and the city government took a victory lap on Jan. 9. And while they deserve credit for getting a lot done, it’s fair to ask if the current let’s-make-a-deal environment is helpful over the long term or necessary in the short term.

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