For a better experience, click the Compatibility Mode icon above to turn off Compatibility Mode, which is only for viewing older websites.

Infrastructure with a Purpose

Below is the Nowak Metro Finance Lab Newsletter shared biweekly by Bruce Katz.

 

Sign up to receive these updates.   

 

Two weeks ago, I traveled to Toronto to participate in the Good Roads Conference. My talk, Mastering the New Disorder: Cities, Infrastructure and the Post Pandemic Economy – The New Localism, focused on the role of cities and metropolitan areas in delivering the unprecedented federal infrastructure investments that are being made in the United States.

The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), signed by President Biden in November 2021, makes some of the largest investments in transportation, water, bridges, rail and digital infrastructure in the country’s history, and includes new investments in climate resiliency and low-emission technology to ensure we can adapt to the impacts of climate change. Combined with the funds made available by the American Rescue Plan, these legacy-forming measures have the potential to remake the American economy and reshape the physical landscape of communities.

Despite the attention paid to the size and scope of federal infrastructure investment, the success of our national effort will be determined by the effectiveness of state allocation and local design and delivery. The federal government is bankrolling this moment; but all of this is dependent on networked governance in cities and metropolitan areas and the marshalling of private and civic resources. Only at the local level will a myriad of infrastructure investments be pulled together for cumulative rather than disjointed impact and long term rather than short term effect.

The central challenge for US cities and metropolitan areas today is to resist deploying the fire hose of federal funding for yesterday’s infrastructure, that was designed in a different era for different purposes. As the maxim goes, “infrastructure is not an end in itself; it is a means to an end.”

Over the past two years, my colleagues and I have been working with dozens of cities and metropolitan areas across the United States first to address the economic fallout from the pandemic and now to plan and deliver the future. With funding flowing at unprecedented levels, a good portion of this work involves helping cities design solutions that match the scale of problems, avoid the pitfalls of the pre-pandemic economy and affirmatively deliver a more inclusive and sustainable future.

Given the complexity of challenges and the fragmentation of federal investment, there is still no clear roadmap or easy recipe to codify and repeat. But here are early signals about how cities are organizing to use infrastructure to drive next generation outcomes and transformative impact.

First, cities are seeking to combine infrastructure investments to drive the regeneration of core districts and corridors. Federal infrastructure investments open up real possibilities for regenerating disparate parts of cities — particularly waterfronts, downtowns, innovation hubs, commercial and industrial corridors — through a “whole infrastructure” approach. A growing number of cities are now using a new tool, Investment Playbooks, to enable this by identifying, prioritizing and costing out concrete projects that can access federal resources, leverage private and civic capital and together add up to a “big bang” effect. This tool follows the simple maxim that “failing to plan is planning to fail”; federal resources may now be ample but only localities can design specific projects that are fit to place and ripe for investment. US cities have learned the hard way that transformative visions without capital specifics drive conversation, not investment.

Investment Playbooks have already been created for Dayton’s downtown, El Paso’s health innovation corridor and disadvantaged commercial corridors in Buffalo, Greensboro, Philadelphia and Pittsburgh. Probably the most ambitious Investment Playbook in progress is in Erie, Pennsylvania, a former industrial city of 100,000 people that is reimagining the economic purpose of its waterfront, downtown, adjoining low-income neighborhoods and industrial areas. The draft Playbook prioritizes 25 separate projects that have the potential, together, to make Erie a poster child of older industrial city revival. Those projects include a layering and alignment of different federal infrastructure investments in transportation, energy, broadband, port reconstruction and remediation of polluted industrial sites, successfully overcoming the fragmentation of federal programs.

Second, cities and metros are working to use infrastructure to enable the regionalization of supply chains and the re-shoring of manufacturing. As my colleague Scott Bernstein has noted, the national discourse has overly focused on “fixing” pandemic induced supply chain deficiencies by moving goods that are now stuck off the coast of Southern CA. In Scott’s view, we need to envision a future state that includes “the domestic re-shoring of production and manufacturing, the regionalization and networking of production and distribution with associated planning, regulation, and investment, and the backing off from extreme “lean-ness” in production and distribution systems toward the re-adoption of available slack capacities, such as reserves and inventories of goods, materials and services.” All of this requires a re-evaluation of the spatial distribution of manufacturing and goods movement in the US and a frank assessment of which sectors, firms and workers are currently served by our road, rail, transit, water and air systems.

Interestingly, recommendations for how to use infrastructure investments to improve regional supply chains is being prompted by a non-infrastructure program. In mid-2021, the Biden Administration put forward a $1 billion Build Back Better Regional Challenge to advance national competitiveness by scaling distinctive industry clusters. The program was smartly structured as a multi-phased process. The funding — up to $500,000 for technical assistance grants awarded to 60 winners of a first phase, and between $25 million and $100 million for project execution awarded to a final group of 20 winners — was large enough to attract 529 applicants from across the country.

Given the focus on advanced industries, which naturally involve the domestic and international movement of goods and services, many applicants included a wide variety of infrastructure investments in their proposals. For example, the states of Connecticut and Rhode Island are working to be first movers on the Blue Economy and dramatically expand the production and placement of off-shore wind turbines and technology driven responses to environmental pollution and climate change. Those ambitions cannot be achieved at scale unless investments are made in discrete infrastructure projects like the upgrading of the New London Port in Connecticut (to make it a staging area for wind turbine assembly) and the Narragansett Bay in Rhode Island (to make it a laboratory for scientific assessment of climate change shifts).

Third, cities and metropolitan areas are adamant about using infrastructure spending to catalyze an inclusive recovery that reduces entrenched racial and ethnic disparities on income and wealth. Efforts underway include ambitious initiatives around supplier diversity given that the US federal government, through direct and indirect spending, is the largest player in what my colleagues and I call The Procurement Economy.

The purchasing power of infrastructure agencies can be a vehicle for growing Black- and Brown-owned firms that can design, engineer, construct, maintain and finance next generation projects. To that end, cities like San Antonio are working with the Aspen Institute and the Nowak Lab to invent Procurement Playbooks to unleash the full potential of federal infrastructure spending to grow Black- and Brown-owned businesses. These Playbooks are intended to build on lessons learned by the supplier diversity efforts of major anchor institutions like universities, hospitals and corporations in Baltimore, Chicago, Cleveland and Philadelphia and elsewhere, public procurement efforts among leading public authorities in the US (like the LA Metro and the New York/New Jersey Port Authority) as well as municipalities in England and Scotland.

Beyond procurement, new infrastructure spending will demand high volumes of skilled labor. My partners at Accelerator for America have developed a Gold Standard Playbook for Workforce Development. This Playbook shows how cities are building a diverse workforce with career pathways in the transportation industry and the skills to build and maintain new sources of clean energy, assemble and service electric vehicles, install new broadband cable and support millions of new customers as they come online, enhance cybersecurity capabilities across sectors and perform environmental remediation work on brownfields, lead pipe replacement, home weatherization and energy efficiency retrofits. The list goes on and on.

Fourth, cities and metros are exploring how to use infrastructure to advance climate mitigation and adaptation. As you can imagine, efforts in this area cover a broad swath of interventions. Several winners of Build Back Better Regional Challenge technical assistance grants, including the LA metro, Washington State and Newark, New Jersey, have focused intensely on the decarbonization of the logistics supply chain.

As several colleagues and I recently detailed (Charging Forward on Electric Mobility – The New Localism), states like Michigan and cities like Columbus, Ohio are seeking to respond to the demand for electric vehicle charging stations precipitated by the accelerated electrification of the mobility sector. The Infrastructure Investment & Jobs Act includes $7.5 billion over the next five years for two key charging programs overseen by a new Joint Office of Energy and Transportation, with a goal of delivering 500,000 charges across the country. Partnering with the American Electric Power and Mid-Ohio Regional Planning Commission, Columbus has already mapped priority charging locations to optimize EV charging placement, and the city added over 200 electric vehicles to local fleets.

And cities from New York to New Orleans are adapting European methods to respond to America’s water infrastructure challenges. Overwhelmed wastewater systems, washed out roads, shorted electrical circuitry and flooded transit stations revealed the poor and aging condition of many of these important systems. The rebuilding of the nation’s water system goes beyond repair and restoration. Rather, cities are also working to capture and soak up storm and rain water — rooftop vegetation, porous pavements and soils — rather than building expensive infrastructure to channel it away.

Finally, cities and metros are exploring ways to use infrastructure spending to boost technological innovation and the formation and scaling of public and private sector responses. Infrastructure spending will create enormous demand for smart technology solutions:

  • Tech marketplaces that can boost supplier diversity by making seller demands and buyer credentials transparent, across a plethora of agencies and authorities;
  • Smart grid solutions as hundreds of thousands of small- and large-scale projects are projected to come to fruition in the coming decades; and
  • Sensors that can monitor and communicate the environmental and economic impact of extreme weather, traffic congestion and other dynamics so consumers can modify behavior in real time.

The City of Columbus and Columbus Partnership collaborated to form Smart Columbus, a smart city initiative that leverages over 30 utility, academia, government, transit, and private sector partners to reimagine mobility for the region. Awarded a total of $50 million in 2016 through the U.S. Department of Transportation’s first Smart City Challenge, the initiative catalyzed pilot projects that enhanced human services, leveraged existing technology, and tested emerging technologies. The Smart Columbus Acceleration Fund, seeded by private sector funding scales and sustains Smart Columbus programs.

These five moves — around regeneration, supply chains, inclusion, sustainability and technological innovation — are not the full sum of what is happening in the United States. But they are a powerful snapshot of the different kinds of strategies that could make up a radically different approach to city building in the post pandemic environment.

And these moves are supported by other reforms in governance and finance. Several cities, for example, have been working with Accelerator for America and the Nowak Lab to create Stimulus Command Centers to enable coordination and cumulative impact across fragmented federal programs. In Dayton and Louisville, Mayors appointed senior executives to create and lead new teams to set priorities and deploy flexible COVID relief funds and coordinate engagement with public-private stakeholders. In San Antonio, Mayor Nirenberg established an Executive Roundtable of leaders from public authorities and a local military base to coordinate metro-wide infrastructure planning and competitive grant applications.

Other cities are acting to reform public authorities and other institutions to enable smart value capture mechanisms to ensure that public infrastructure investments yield long term public wealth. Tulsa, Oklahoma, for example, created a new Tulsa Authority for Economic Opportunity (TAEO) last year modeled after European successes in Copenhagen and Hamburg. This new authority, a product of the merging of multiple existing authorities and entities, will own substantial assets, including multiple parking structures and surface lots in the downtown, large landholdings prime for redevelopment just outside of downtown, residential lots throughout the city, and a hangar leased by American Airlines. Excitingly, these assets generate stable cash flow and have the potential to generate even more revenue through smart development and disposition, which then be reinvested into the poorest neighborhoods in the city.

The period following the COVID-19 pandemic will take years to settle. It has the potential not only to reshuffle the order of successful cities but to redefine what we even mean by success. For cities that are organized, deliberate and purposeful, there is the tantalizing prospect of using infrastructure spending to leapfrog, diversifying and greening their economies to become more economically resilient, socially inclusive and environmentally sustainable.