Experimenting at the Metropolitan and Regional Scale
Below is the Nowak Metro Finance Lab Newsletter shared biweekly by Bruce Katz.
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January 27, 2023
(co-authored with Egon Terplan, Chelsea Gaylord, and Kevin Myers)
This newsletter has a longstanding affinity for metropolitan and regional thinking and action. As laid out in The Metropolitan Revolution (the 2013 book co-authored with Jennifer Bradley), metropolitan areas and their broader regions have emerged as the driving units of the global economy and the appropriate geography for solving cross-jurisdictional challenges like climate, economic competitiveness, housing, transportation, and workforce. The book extolled efforts in places as disparate as Cleveland, Denver, and Houston to bring governance into alignment with the reality that economic, environmental, and social challenges, alone and together, do not respect artificial, administrative boundaries. For these challenges, the geography of “real world” solutions are metropolitan in scale, even if general purpose local governments and specialized public authorities are bounded and fragmented.
The metropolitan nature of American life and the need for regional interventions has only become more relevant in the last decade. Today, the US is undertaking a radical energy restructuring, upgrading our faltering infrastructure, and reshaping our communities to respond to climate risks. At the same time, much of the country is struggling with disconnected mobility systems built around the private automobile and growing alarm with housing affordability that stretches far beyond coastal regions that have long had a mismatch of housing supply and demand. Binding these issues together is the need for multi-jurisdictional responses and solutions.
To tackle these issues, there are a series of organic experiments happening in metropolitan regions that span urban and rural areas. These solutions are also occurring against the backdrop of an unprecedented, once-in-a-generation burst in federal investment. New federal funding will support outcomes such as the development of regional innovation hubs (such as Clean Hydrogen Hubs) and new battery storage facilities, and/or encourage regional collaboration to compete for funds that integrate workforce development, permit streamlining, and infrastructure investments that benefit the entire community as opposed to single firms.But these experiments, like many advances in our federal republic, are being led by a disparate set of actors with little central direction or even recognition. Further, federal encouragement towards regional collaboration does not necessarily establish enduring regional institutions or strengthen existing ones. As a result, some successful solutions or pilots from a program’s investment may never be brought to scale. Others may phase out because of a lack of institutional structure or capacity for ongoing implementation.
With purpose and intentionality, burgeoning regional efforts combined with some changes at federal and state levels could scale to forge a new place-based governance that engenders greater competitiveness and accelerates the shift to a more sustainable, inclusive future. Some states already actively promote regional planning and economic development to serve as models as we navigate disruptive economic dynamics and the flood of disparate federal funding.
An intriguing mix of realities necessitates and drives a new metropolitanism. Consider the following:
- Re-shoring of manufacturing is impelling a fresh assessment of economic geography. Over the past two years, manufacturing employment has recovered from the fallout of the pandemic, growing by about 32,000 jobs per month. Recent announcements of new opportunities around semiconductor facilities in Arizona, New York, and Ohio and battery plants in Georgia, Nevada, Michigan, and Tennessee are driving a set of basic queries: What is the catchment area for new workers? What are projected commuting patterns and transportation options? How extensive is the local supply chain network? What is the access to natural resources and necessary energy? What is the relationship between production facilities and centers of research excellence? The answers to these questions are never local in nature; they necessitate a wider-eyed lens on metropolitan and regional ecosystems which are intricate and integrated.
- An accelerated transition to a climate friendly future requires a broader geographic focus. Reducing greenhouse gas (GHG) emissions implicates building, transportation, and energy sectors, all of which operate at the metropolitan scale and beyond. In particular, the clean energy economy requires a new emphasis on regions. The fossil fuel-based economy relies largely on energy extraction from a limited number of (often rural) places into metropolitan regions. In contrast, wind, solar, and other renewable sources are more readily available as part of a distributed energy network in nearly all regions. While there will still be significant transmission of renewable energy from non-metropolitan areas (e.g., solar farms in the desert or offshore wind), the clean energy economy will be more distributed. At the same time, utilities span broad territories, often crossing metropolitan, if not state, lines.
- Despite initial declines in congestion, total amounts of driving are higher in many US metros today than before the pandemic. Traffic congestion results from numerous factors, including sprawling development patterns; the spatial mismatch between where people live, work, shop, and go to school; and the general lack of frequent and reliable public transit service. Jurisdictional fragmentation contributes to these land use patterns and resulting congestion due to limited coordination between adjacent cities that are motivated by different fiscal needs. Metropolitan regions with more housing in denser, walkable communities and higher concentrations of employment centers, universities, and shopping areas adjacent to transit have lower rates of vehicle miles traveled. Other solutions such as managing demand through road pricing also require regional and state support for implementation. Here, again, solutions must be designed and delivered at the metropolitan scale to be fully effective.
The firehose of federal investments is welcome news to an underfunded infrastructure system, previously outdated approach to national industrial policy, and the absence of a national plan to address climate change. In the past 18 months, Congress has enacted nearly $3.87 trillion across the American Rescue Plan (ARPA), Infrastructure Investment & Jobs Act (IIJA), CHIPS and Science Act (CHIPS), and Inflation Reduction Act (IRA).
However, the siloed nature of these investments also reveals how our funding approach from the national government is out of alignment with the regional and metropolitan organization of our economy.
Funds are being channeled through hundreds of new and established programs across dozens of agencies and sub-agencies. Each has different rules for different recipients along different timelines and via different allocation methods (formula grants versus competitive programs versus innovative financial mechanisms versus tax incentives). The end result is a Rubik’s Cube of government programming and investment.
The geographic coverage of recipients of federal dollars is literally all over the map. Some agencies, like state departments of transportation, operate at the state level. Some, like port and airport authorities, are hyper-specialized and organized to carry out a specific function, often in relatively small territories. Some issue areas, like broadband and energy, are dominated by many private utilities and providers that do not have a common geographic footprint.
There are a few exceptions to this rule. The CHIPS legislation seeks to promote regionalism by encouraging local and state government collaboration to provide community-wide incentives for on-shoring the semiconductor industry. The Build Back Better Regional Challenge (BBBRC) from the US Economic Development Administration (EDA) strengthened and leveraged preexisting regional economic development. The Department of Energy’s Regional Clean Hydrogen Hubs program seeks to create six to ten regional “networks of hydrogen producers, consumers, and local connective infrastructure.”
Perhaps most significantly, funding and provisions in IIJA create new opportunities to coordinate cross-sectoral solutions through Metropolitan Planning Organizations (MPOs). First established by the 1962 Federal Highway Act to facilitate inter-local cooperation on transportation-related projects, over 400 MPOs now exist and are tasked with adopting Regional Transportation Plans. These plans are long-term in focus and aim to ensure that transportation projects are continuing, comprehensive, and cooperative (the 3Cs). MPOs have grown in capacity and scope in the last several decades, fueled by expanded planning requirements in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and federal programs like the Sustainable Communities Initiative. Now under IIJA, MPOs may also engage in “Housing Coordination Plans” to align transportation investments with housing needs and employment and must use 2.5% of their highway planning funds to increase accessible transportation options, including transit-oriented development. While commuter sheds, rail corridors, housing, and economic development strategies transcend boundaries, this new enabling language creates opportunities for metro areas to serve as an important base for regional collaboration as MPOs begin to integrate issues of housing and economic development into their transportation planning processes.
Countless other regional coalitions bring together business, labor, universities, local governments, and other key leaders to establish long-range strategies. The proliferation of models, as well as geographic scale and topical diversity, is indicative of the U.S. history of bottom-up experimentation in governance and must be codified and leveraged during the next decade.
As deployment of federal investments continues apace, a number of states and communities are experimenting with new models of metropolitan intervention. These examples provide a solid foundation for improvements in policy, practice, and governance going forward.
Five trends are notable:
1. A growing number of MPOs demonstrate how local governments can collaborate to solve interdependent problems. Some MPOs already consider issues like housing, land use, economic development, and climate adaptation while tracking holistic-focused performance metrics.
In California, MPOs are required to produce long-range land use and transportation plans that demonstrate where to add housing while also reducing GHG per capita. These requirements are tied to the state’s scoping plan for carbon neutrality, and MPO’s must shift funding and/or identify land use and transportation policies in order to meet GHG reduction targets. MPOs are also including climate adaptation and resilience policies and assessing climate risks, which also support state goals. This expansion of traditional regional planning has also fueled creative approaches that span from regional economic development plans to new regional housing finance authorities to neighborhood, housing, and infill infrastructure plans to conservation mapping. In one example, the Bay Area’s MPO, the Metropolitan Transportation Commission (MTC), requires municipalities to have a Complete Streets policy and gives preference on certain grants for projects located in cities with affordable housing or anti-displacement laws for some competitive regional grants.
California has also provided significant funding to implement these plans, including the $600 million Regional Early Action Planning (REAP) Grants of 2021 to accelerate infill housing strategies. The majority of the funding will flow to MPOs for implementing their adopted long-range plan with sub-grants to local governments and communities within their regions. REAP was inspired in part by the Sacramento Area Council of Government’s “Green Means Go” effort to identify infill development areas with infrastructure deficiencies that could support low carbon development.
As a result, California’s 18 MPOs have emerged as major players with high capacity, and some have large geographic coverage. MTC has over 350 employees and covers a nine-county region with nearly 8 million residents, and the Southern California Association of Governments covers a six-county area with 19 million people (the largest MPO in the country). Other MPOs represent single counties yet have a history of collaboration on issues such as air quality and policy advocacy (i.e., San Joaquin Valley Policy Council). Additionally, three northern California MPOs collaborate on the “Northern California Megaregion working group.”
2. Metropolitan business and civic groups are engineering collaborations between key stakeholders including companies, research universities, infrastructure agencies, and workforce centers. This kind of regional collaboration has been underway for some time in areas like Cleveland and Indianapolis to great effect. Federal programs like BBBRC are demonstrating how cities, suburbs, and rural areas can scale distinctive industry clusters, drive quality job growth, and achieve equitable outcomes together.
One example is the Greater St. Louis metro area, which will receive $25 million through BBBRC to implement inclusive economic growth in manufacturing, geospatial, and bioscience clusters. Greater St. Louis, Inc helped rally leaders on both sides of the Mississippi River around a unified vision, rather than fractured and fragmented approaches as in the past. St. Louis has been one of the most decentralized economies and segregated communities for decades, and a new Advanced Manufacturing Innovation Center will be located on the north side of the city as part of the effort to address historic disinvestment in the neighborhood. The center will provide services to a broad network of manufacturing companies across the metro area, providing north side residents meaningful job opportunities and giving St. Louis a leg up as supply chains reconfigure.
3. Philanthropy is leading efforts to develop equity-focused regional economic development strategies. In Fresno, the DRIVE initiative convened by the Central Valley Community Foundation has identified racial inequities as the core impediment to regional prosperity. Through the effort, the region has presented a strong and unified vision for inclusive growth to both state leaders and federal funders. In 2022, DRIVE secured the largest allocation of BBBRC funding at $65 million for their Future of Food initiative.
4. Large utilities and energy production companies are driving new forms of collaboration between a disparate array of metropolitan stakeholders. Backed by new federal subsidies, they are moving quickly to transition from coal burning power plants to an array of renewable energies and investing in battery capacity to store renewable power. This transition can only happen if utilities partner in novel and extraordinary ways with cities, counties, developers, business chambers, and others. Utilities like DTE in Michigan are already creating new Integrated Resource Plans that factor in the impact of federal incentives on the mix of energy sources. Federal engagement and state oversight can ensure that these plans be both sustainable and inclusive, benefiting neighborhoods and communities that have long been neglected.
5. A small number of states are creating competitive programs that require multi-jurisdictional and multi-sectoral collaboration around economic development plans. In 2022, California launched the Community Economic Resilience Fund, which provides the state’s 13 identified economic regions with $5 million in funding to establish a High Road Transition Collaborative to create plans for inclusive growth through networks of business, labor, government, education, community, and workforce leaders. The CERF program will also distribute an additional $500 million to implement priority projects identified in these plans. The state’s economic development agency, GoBiz, is also increasing their support and hired staff for each of the 13 regions to serve as liaisons that connect regional needs with state programs.
A similar effort has existed in New York since 2010. There, 10 regional economic development councils have competed annually for a range of state economic development investments. These councils have enabled continuous collaboration across city and county lines around authentic competitive assets and advantages. To date, the program has provided over $7.5 billion in awards to more than 9,200 projects statewide and is a substantial force for regenerating older industrial communities like Buffalo and Syracuse.
The upshot is that the US is undergoing a burst in metropolitan experimentation. These efforts recognize that metropolitan areas and broader regions are the right geographic scale to solve interrelated challenges regarding transportation, housing, climate action, and job creation. In each case, these efforts are collaborative in nature and include a range of stakeholders representing community, business, government, and education. As such, these places are on the front lines of national efforts to prepare US infrastructure for the 21st century and accelerate the shift to a carbon neutral economy.
Looking ahead, we must accelerate these metropolitan innovations in multiple ways:
- Federal and state governments could provide direct funding to regional economic planning efforts or give preference to projects from multi-jurisdictional collaborations when awarding competitive funds. They could also leverage MPOs by building their capacity, delegating a larger role for MPOs in long-range economic and land use planning, and prioritizing climate-friendly MPO projects for funding.
- Philanthropies could invest in seed funds for inclusive regional economic planning efforts while also directly funding under-resourced community-based organizations to participate in existing processes. This would enable philanthropy to leverage other public investment while ensuring that tackling long-standing inequities is a core focus of those efforts, similar to the Irvine Foundation’s work.
- Metropolitan business groups could embrace and lead an inclusive approach to economic development that focuses on quality over costs and supports the needs of those with the fewest resources. They could also partner with local governments, universities, labor unions, community-based organizations, and others in their regions to develop and prioritize projects and initiatives, similar to KC Rising’s multi-pronged effort to accelerate an inclusive economy.
The US economy has long been driven by metropolitan regions. The current moment and infusion of federal funds can leverage our distinct and interconnected regional economies by supporting and improving existing regional institutions such as MPOs and investing in new regional processes and institutions. This is our metropolitan moment again, but only if we learn from, strengthen, and replicate the current models out there.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University. Egon Terplan is the Cornish Chair in Regional Planning at UC Berkeley’s Department of City and Regional Planning and a former Senior Advisor in the Governor’s Office of California. Chelsea Gaylord and Kevin Myers are Graduate Research Analysts at the Nowak Lab.