As federal funding shifts from investment to cuts, local governments must act now. Conducting “stress tests” will help assess risks, engage stakeholders, and develop response plans. Proactive planning ensures communities can adapt and protect essential services amid fiscal uncertainty.

The Trump Administration’s policy shifts have created financial uncertainty for cities and states. NYC’s Comptroller analyzed the city’s reliance on federal funds, highlighting risks to entitlement programs, public services, and infrastructure. This model can help other municipalities assess their fiscal exposure. With federal cuts now a reality, local governments must prepare for the impact.

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.

Opportunity Zones have attracted over $100 billion in investments, addressing local issues like housing shortages. Moving forward, a "2.0" version is proposed to adapt to market changes like the real estate crisis and industrial growth. Effective local leadership and targeted investments are key to ensuring these zones create lasting, sustainable economic impact.

Opportunity Zones, introduced by the 2017 Tax Cuts and Jobs Act, are designed to attract private investment to distressed communities. In six years, Opportunity Zones have sparked $100 billion in investment, particularly in housing development. Alabama's Opportunity Alabama (OPAL) has emerged as a successful model, mobilizing local and national investments, with a focus on building a sustainable capital access ecosystem.

England's experiment with metro mayors aims to decentralize power from the highly centralized government, allowing local leaders to better address regional challenges. However, true devolution requires three key steps: granting fiscal autonomy to mayors, involving them in industrial policy design, and empowering them to compete globally. This would enable cities to drive local growth and reduce the gap between London and other regions, marking a true shift in governance.

Pittsburgh is well-positioned to lead in "physical AI," leveraging its strong robotics and AI ecosystem, academic institutions like Carnegie Mellon, and innovation initiatives. Challenges like limited venture capital persist, but the city’s resources could drive advancements in defense, healthcare, and infrastructure.

The U.S. is undergoing a major industrial revival, shifting power from "superstar cities" to regions with strong manufacturing bases. Driven by the need to remilitarize, reshore, and decarbonize, this transition has resulted in over $1.4 trillion in public and private investments in sectors like clean energy, semiconductors, and electric vehicles (EVs) as of September 2024.

In light of this, our analysis focuses on the distribution of high-value Department of Defense (DoD) contracts across U.S. metropolitan areas. We examined contracts exceeding $500 million, along with modifications that increased their value above this threshold between 2021 and 2024.

Pittsburgh has the potential to lead the AI revolution due to its top-tier research institutions, affordable living, and skilled workforce. By attracting investment and building the right infrastructure, the city can capitalize on its strengths in AI and robotics.

A new economic geography is emerging, driven by reshoring production, decarbonizing the economy, and government investments in infrastructure and technology. Some cities are successfully using these investments to revitalize downtowns, fostering innovation and transforming urban areas to align with broader economic changes.

The U.S. is experiencing an industrial transformation reshaping its geography and impacting metropolitan and regional economies. This shift sees new cities becoming industrial hubs and necessitating coordinated regional development efforts.

Innovation districts—compact urban areas that foster collaboration among academic institutions, corporations, startups, and entrepreneurs—are evolving in response to global trends such as geopolitical shifts, economic decarbonization, and the need for diverse talent. These districts are transitioning from centers of discovery to hubs that both innovate and implement solutions, adapting to new challenges and opportunities.

Kensington Corridor Trust or KCT is a neighborhood trust started in 2019 whose mission is to acquire and redevelop real estate on a disinvested commercial corridor and place it into long-term community control to preserve culture and affordability while building neighborhood power and wealth.

Bilbao Metropoli 30, a public-private partnership established over three decades ago, has been instrumental in transforming Bilbao from an industrial hub facing economic decline into a modern cultural metropolis. Key projects like the Metro (opened in 1995) and the Guggenheim Museum (1997) spearheaded this revitalization, leading to further developments such as the Euskalduna Congress and Concert Hall, Bilbao Exhibition Centre, and the new Bilbao Airport. This comprehensive strategy addressed unemployment, pollution, and urban decay, positioning Bilbao as a model for urban regeneration.

Esperanza has partnered with the Nowak Metro Finance Lab, Aspen Institute Latinos & Society, and Reinvestment Fund to understand how Eastern North Philadelphia can remain a cohesive stronghold for the Latino community while channeling community-oriented investment. This report showcases three key initiatives that Esperanza is in the process of developing to protect vulnerable residents from potential displacement.

Eastern North Philadelphia faces displacement pressures from rising property values. To address this, Esperanza proposes initiatives like a community land trust for affordable rentals, a trust for below-market commercial rents, and a preservation district to support local businesses and prevent chain store dominance.

St. Louis formed a public-private partnership during the pandemic to address immediate needs, leading to a 10-year jobs plan. By merging five organizations into Greater St. Louis, Inc., the city aims to unify efforts for economic growth and urban regeneration.

The National Defense Industrial Strategy (NDIS) focuses on modernizing the defense ecosystem with resilient supply chains, workforce readiness, flexible acquisition, and economic deterrence. Cities play a key role in this strategy, as they house military bases, manufacturing facilities, and innovation hubs, contributing to national security and economic growth through increased defense investments.

The U.S. industrial landscape is shifting with reshoring of manufacturing, driven by federal investments. Cities like Phoenix and Columbus are attracting new industries, and to thrive, metropolitan areas must foster collaboration between public, private, and civic sectors for sustained economic growth.

The unplanned growth of many U.S. cities has led to urban sprawl and economic inequality. As cities expand without comprehensive planning, the benefits of growth are unevenly distributed, worsening disparities and limiting access to resources. Addressing this requires better coordination between local governments, developers, and stakeholders to ensure sustainable and inclusive development.