2019 Newsletters
Linked below are Nowak Metro Finance Lab newsletters, shared biweekly by Bruce Katz.
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I am thrilled to co-author this newsletter with Megan Humes, a Senior Associate with the Centre for Public Impact (CPI), a nonprofit founded by Boston Consulting Group.
For the past several months, Megan and I (ably assisted by Dan Vogel at CPI and guided by Matt Bergheiser and Sarah Steltz at University City District) have conducted a City Case of the West Philadelphia Skills Initiative. Read more...
In October 2018 I visited Dayton for the first time as part of an Opportunity Zones effort I had undertaken in partnership with Accelerator for America. I did not know then that Mayor Nan Whaley and Shelley Dickstein, her indefatigable City Manager, had a surprise in store for me. They and their colleagues took me for a tour of the Dayton Arcade, an historical gem that was on the verge of rebirth and renewal. Read more...
Anyone who spends 10 minutes watching a Democratic presidential debate knows that we are living through a period of grand re-questioning. None of this should be surprising to urbanists, since cities are at the vanguard of solving the world’s toughest challenges (e.g., growing climate challenges, rising income, wealth, health and spatial disparities) from the bottom up. Given their lead position, cities around the world are re-examining conventional norms around growth, governance and finance and, in the process, creating the new urban social and sustainable contract. Read more...
On Sunday, the Nowak Metro Finance Lab at Drexel University, Accelerator for America and Blueprint Local released Towards a New System of Community Wealth, a new paper by the two of us, Jihae Lee, and Daniel Palmer.
The paper makes some large observations and offers some big ideas for reform and transformation. Read more...
On a visit to West Chicago earlier this year, the two of us had a chance to tour the Illinois Medical District and surrounding neighborhoods and participate in a discussion about Opportunity Zones organized by Accelerator for America and Anna Valencia, Chicago’s dynamic City Clerk.
The Illinois Medical District, or “The IMD” as it is popularly known, is the second largest urban medical district in the United States. Formed in 1941 by state legislation, it consists of 560 acres of medical research facilities, labs, a biotechnology business incubator, four major hospitals, two medical universities and more than 40 health related facilities. The IMD has more than 29,000 employees, 50,000 daily visitors and generates $3.4 billion in economic opportunity. Read more...
Dozens of mayors will descend upon Copenhagen next week for a meeting of C40, a network of the world’s leading cities committed to addressing climate change. The urgency of the gathering cannot be understated. With climate impact and climate advocacy on a meteoric rise, cities are at the vanguard of both mitigation and adaptation solutions. This is because many cities possess the powers and resources to reorient key sectors of the economy, particularly the energy, buildings and transportation sectors, that disproportionately drive carbon emissions. Cities also represent networks of public, private and civic leaders and institutions that are pragmatic at the core and less likely to be hijacked by partisan rancor and ideological polarization, the curse of our times. Read more...
The other night I re-watched Marshall Corry’s 2005 documentary, Street Fight, about the 2002 Mayoral race in Newark, New Jersey that pitted Cory Booker versus Sharpe James. I highly recommend this film: you will get the full measure of Cory Booker not only as an exceptional leader but as an individual accustomed to battling long odds.
The title of the documentary prompted this newsletter. There is another street fight underway in the United States between major forces: small business versus big box, owner-occupants versus absentee landlords and quality versus parasitic capital. Read more...
During the depths of the Great Recession, the jargon “Too Big to Fail” became commonplace jargon in the effort to restore order to a financial system run amok. The consolidation of financial power has multiple implications. During my exploration of Opportunity Zones, I have observed a fundamental disconnect between the compartmentalized lending and investment practices of large financial institutions (and silo-driven federal and state governments for that matter) and the small, integrated but still nascent regeneration efforts of innovative practitioners in urban communities. I call this disconnect “Too Big to Function.” Read more...
Several months ago, in a paper I wrote for the Knight Foundation (download paper), I identified the lack of local capacity as one of the major barriers to Opportunity Zone success. Read more...
As many of you know from my work with Jeremy Nowak on The New Localism as well as previous newsletters, I regard this period as an era of profound shift in power and responsibility. We are moving from a system of 20th century problem solving that was top down, led by national governments and specialized, vertically organized agencies to a 21st century modus operandi that is bottom up and designed and delivered by horizontal networks of institutions and leaders across multiple sectors and disciplines. Read more...
Eighteen months have passed since the Opportunity Zone incentive created a renewed focus on investing in America’s economically distressed neighborhoods. Through our respective work, in close collaboration with Accelerator for America, we have traveled to over fifty communities across the U.S. to understand and help implement pieces of this new way to invest in American communities. Read more...
Over the past several months I have become intensely focused on how anchor institutions can work harder for the cities where they are anchored. Here is a piece I authored for The Future of Universities Thoughtbook about the role universities should play by the year 2040. The book should be published by the end of August. Read more...
Yesterday the Nowak Metro Finance Lab at Drexel University released the first in a series of City Cases: Cincinnati’s Over-The-Rhine: A Private Led Model for Revitalizing Urban Neighborhoods. Creation of this series was a high priority of Jeremy Nowak and myself in starting our new venture at Drexel, now (unbelievably) a year old. We believed that cities, given their immense and growing responsibilities, require new governance and finance models that organize public, private and civic capital in novel ways. Most 20th century institutions, frankly, are ill-equipped to meet the challenges of our times. They are too tired, too compartmentalized and too narrowly focused (on “housing” or “convention centers” or “stadia” or “community development”) to take the holistic view necessary to drive transformative change. Read more...
As the 2020 campaign takes hold, Democratic candidates have been issuing ambitious proposals about the platform role of the federal government: helping people live productive lives via a robust and secure safety net and (mostly) enhanced investments in health care and housing. We have been hearing much less about how the federal government helps places build prosperous futures by mobilizing the energies and expertise of sub-national players like states, counties, cities, universities and non-profits around issues like innovation, infrastructure and climate change. Read more...
Over the past several months, I have been working with a disparate group of colleagues on two signature studies. Julie Wagner, Tom Osha and I have been writing an update to the 2014 report, “The Rise of Innovation Districts,” in collaboration with the new Global Institute on Innovation Districts. At the same time, Karen Black, Luise Noring and I have been preparing an analysis of Cincinnati’s Center City Development Corporation (3CDC), in collaboration with Drexel’s Lindy Institute for Urban Innovation and Accelerator for America. Both reports are near completion and will be released in June. Read more...
In 1969, the Indiana state legislature consolidated the city and county governments of Indianapolis and surrounding Marion County. In one act, “Unigov” increased Indianapolis’ population by about 250,000 and its land area by about 275 square miles, establishing it as one of the top U.S. cities (its population of 863,000 in 2017 made it the 16th most populous city in the United States). Read more...
As I engage with dozens of communities around the country on Opportunity Zones, I am often asked “Where are the philanthropies?” The question is rooted in some simple math and hard market realities. The Opportunity Zones tax incentive could generate tens of billions of dollars in market equity investment in low-income communities, which could, in turn, leverage hundreds of billions of dollars more in conventional lending, concessionary capital and public subsidy. Most Opportunity Zones are in desperate need of such investments given their high rates of poverty and vacancy and the absence of businesses and business demand. Yet there is a disconnect today between the orientation of capital allocators (who have access to countless tax advisors, accountants and lawyers) and community advocates (who are more familiar with policy or subsidy driven tools). Read more...
Today, the Department of Housing and Urban Development issued a Request for Information, seeking public guidance on how HUD can leverage the economic and social impact of Opportunity Zones. As part of the Request, HUD crunched the numbers and revealed the remarkable way in which Opportunity Zones overlap with public and assisted housing, home to millions of low-income Americans. Read more...
Over the past ten days, I have been in Israel and the United Kingdom exploring how to adapt US market dynamics and tools — innovation districts, opportunity zones, city investment prospectuses — to foreign shores. As often happens when I leave the United States, a trip abroad has sharpened my sense of the special assets that America possesses at home and some of our keenest liabilities. Read more...
On Monday, Accelerator for America, Drexel University’s Nowak Metro Finance Lab, the Economic Innovation Group and The Governance Project hosted a packed Opportunity Zone Investor Summit at Stanford. The Summit celebrated a milestone: over the past year, 27 cities have used a common template to design Opportunity Zone Investment Prospectuses to help communicate their assets and unveil projects that are investor ready and community enhancing. While cities have largely constituted the first wave of Prospectus adopters, the tool is already being applied at the metropolitan and neighborhood scales and could form a useful tool for states and rural counties. Read more...
Our continued visits to Opportunity Zones across the country (most recently Austin, Dayton, Kansas City, Norfolk, Baltimore, and San Antonio) and our conversations with literally dozens of practitioners reinforce our sense that the new federal tax incentive is (unexpectedly and slowly) driving the creation of a new system of community economic development. The process of invention is messy, haphazard and chaotic even by U.S. standards, made more complicated by the fact that a new class of investors and a relentless market orientation has been introduced into a system that has been largely dominated by a closed loop of actors motivated by either federal bank regulation or social impact. Read more...
The Opportunity Zone incentive is a new community investment tool established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income communities. The Act creates a tax incentive for investors to re-invest their capital gains into dedicated Qualified Opportunity Funds (“QOF”). Of the 8,762 census tracts across the county that have been designated as Opportunity Zones, 2,905 (33%) either contain a hospital or are ½ a mile from a hospital. While much of the early attention given to Opportunity Zone investing has focused on many of the “usual suspect” cities, hospitals and healthcare systems are a unique institution in that they’re represented in almost every kind of community—serving big city neighborhoods, mid-sized cities, small towns, and rural areas. Hospitals can play a leading role in efforts to attract, organize, and even make QOF investments in the communities that they serve. Read more...
In the past couple months, the national media has been replete with stories about the pitfalls of Opportunity Zones. Some stories have focused on the curious selection of robust, gentrifying areas Zones, raising the prospect that scarce federal resources will be allocated for projects that would have happened anyway and merely spark more gentrification. Other stories have focused on projects that either benefit well-off global companies or have little social value. There is even a Trump angle to explore given the real estate interests of the Kushner clan. Read more...
In the past week, there has been a flurry of articles about mayors (and former mayors) running for president (see, e.g., http://time.com/5510973/pete-buttigieg-mayors-president/). The announcements of South Bend Mayor Pete Buttigieg and former San Antonio Mayor Julian Castro (and the likely announcements of former mayors like Senator Cory Booker and (former) Colorado Governor John Hickenlooper) have clearly captivated the media. Read more...
As many of us involved in cities know, the indirect effects of large policy changes are often more important than the direct ones. The development of cities in the latter half of the 20th century was driven more by the Interstate Highway Act (negative) and the Immigration Reform Act of 1965 (positive) than by any law with “Urban” or “City” in the title. The Opportunity Zones tax incentive is shaping up as another federal intervention with multiple, indirect effects. Read more...
Happy New Year! As many of you know, I (and a group of fellow travelers) have become virtually obsessed with building a new set of local institutions that align with our 21st century economy and society and unlock and deploy capital for a new kind of purposeful growth. Read more...