Nowak Lab Newsletters
Linked below are Nowak Metro Finance Lab newsletters, shared biweekly by Bruce Katz.
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Michael Saadine and I recently attended a remarkable retreat on Fogo Island, off the coast of Newfoundland. The retreat, hosted by Shorefast and the Canadian Urban Institute, focused on ways to bridge the gap between global capital and local economies — moving money into “place”. Participants included community practitioners as well as representatives from financial institutions and capital providers.
In his January 1959 State of the Union, in the waning years of his presidency, President Dwight Eisenhower called for a Commission on National Goals. In a speech dominated by Cold War concerns and gargantuan military spending, Eisenhower took the privilege of the presidency to “express something that is very much on my mind.”
Local and state actors have been taking stock of what the current moment in Washington means, assessing regional exposure to the effects of federal agency restructuring, spending cuts, workforce reductions and radical shifts in trade, immigration, health and science policies. For the most part, a broad array of federal grantees, borrowers and recipients are responding to the immediate impacts. Yet the interconnectedness of city and metropolitan regional economies — and the public, private and civic institutions that drive them — means that there will be longstanding, reverberating effects, with multiple, domino-like second and third order effects.
Amidst the daily noise and chaos, the US has begun a grand experiment, the radical defederalization of roles and responsibilities in the nation. We have seen versions of this movie before of course, particularly during the 1980s when the Reagan Presidency drove state innovations around health care and welfare reform. But this 21st century version of defederalization is happening at an unprecedented speed and scale, with much less ideological consistency and coherence and no coordination — NONE — between layers of governments.
The country is in a moment where the distribution of responsibilities and resources between local communities and the federal government is shifting. The last four years have been defined by large federal investments, while the current moment can best be defined as rapid retrenchment, with budget cuts being discussed at an unprecedented scale.
The National Housing Crisis Task Force released the first tranche of tools in its State and Local Housing Action Plan for communities. The introduction to the State and Local Housing Action Plan summarizes all of the expected tools we plan to release in the coming months.
The past 5 weeks have been painful to observe and experience. The Trump Administration has, in rapid fire fashion, moved to pause and condition federal funding, reduce the federal workforce, impose tariffs on trading partners and defy judicial orders. On Tuesday, the House passed a budget resolution that would continue tax policies enacted in 2017 (at a cost of roughly $4 trillion over the next 10 years) while reducing federal spending by $2 trillion over the next decade, with Medicaid and Supplemental Nutrition Assistance Program (SNAP) being the primary targets.
The U.S. housing system, long supported by consistent federal policies, faces unprecedented uncertainty due to recent government shifts. While programs like the Low-Income Housing Tax Credit and Housing Choice Vouchers have historically underpinned affordable housing, new administrative actions threaten to disrupt this stability.
In light of recent federal disruptions, cities and metropolitan areas must unite and take charge to protect their economies and residents. Local leaders need to organize quickly, collaborate across sectors, and adapt to the challenges ahead. This new localism requires agility and coordination to defend against federal changes, leverage opportunities, and ensure long-term prosperity. The time to act is now.
Housing has dominated state and local headlines, the federal campaign trail, and even this newsletter of late. But you wouldn’t know it if you were moving within private capital circles. Rather, the talk of the town in the public markets, amongst lenders, and at private equity conferences is data centers: housing for chips.
Opportunity Zones (OZs) have emerged as a significant tool in driving investment into underdeveloped areas, offering a compelling case for their continuation and expansion. Since their inception in 2017, OZs have attracted nearly $100 billion in private capital, according to the Economic Innovation Group (EIG).
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