Where’s Our Growth Agenda?

Dec. 21, 2018

At i point during this calendar week's panel discussion at the Union League organized by the Center Urban center District that featured an eclectic mix of CEOs, borough leaders and entrepreneurs, Brandywine Realty Trust CEO Jerry Sweeney, arguably the urban center's most vociferous vox for economic growth , zeroed in on one of the key roadblocks that continues to export Philadelphia to an economical growth rate that lags behind 23 of our elevation 25 peer cities.

"Nosotros suffer from an astonishing lack of backbone from a public policy perspective," said Sweeney. "There is no courage involved when we pass laws without thinking about how to pay for them." Sweeney argued that, as well often, we pass legislation driven largely by anecdote, and he called out members of his own class—the business aristocracy—for not joining him in insisting that inclusive economic growth exist "our Due north Star."

Sweeney's comments made me think of the Fair Work Calendar week legislation that Quango recently passed. Don't become me incorrect: From a fairness perspective, there'south no question that helping some 130,000 Philadelphia citizens by mandating predictive scheduling in the workplace is a good matter. Just permit's not pretend that this will brand a paring in our horrific poverty rate, or that it will jumpstart our anemic economic growth. It's fair , merely information technology doesn't increase opportunity, and nor is information technology growth-oriented.

The ideas at the Matrimony League were great, but I couldn't assistance but wonder if they were existence wasted on the already converted. Modify will but come when middle class workers who feel their city has flipped them the bird become convinced that at that place'south such a thing as inclusive growth, and that it will benefit them.

When he kicked off the Union League event, visionary CCD CEO Paul Levy starkly laid out the problem. At a time when the federal and state governments have left cities to fend for themselves, the political left has defaulted to adopting redistributive policies at the local level. Problem is, in Philadelphia, at that place's hardly any tax base left to taxation. Levy has said it, and written it for The Denizen, often: "We are not a tale of 2 cities," he reiterated at the Union League. "Nosotros are a tale of one city that's not growing fast plenty to accost locally the problems we inherit."

Despite the success of Center Metropolis and Academy City, (which combine for 53 percent of all Philadelphia jobs), we still suffer from an exodus of heart and working class residents. Since 2010, 62,000 more residents of metropolis neighborhoods left for homes in the suburbs than moved from the suburbs into the city. In both black and white neighborhoods exterior downtown, Levy explained, more than households who brand over $125,000 per year are moving out of the city than moving in. Astonishingly, 81 percent of households that left Philadelphia between 2010 and 2022 had no children, giving lie to the conventional wisdom that information technology's our subpar schools driving urban flight.

It's really not that complicated: People follow jobs. Outside of Center City, Levy reports, 40 percent of Philadelphia's workforce reverse commutes to the suburbs every day. In contrast, merely 15 percent of New York City residents practise the same.

That's what Levy means when he says we're one city that'due south non growing fast enough. His panelists all, like Sweeney, had trenchant observations to make when asked: Where do we get from here? At the terminate of the day, though, one critical question was left unanswered past the Union League panel: How practise we become where we want to go in a way that doesn't leave half the metropolis behind?

Della Clark, President of The Enterprise Centre , talked about the hope of Opportunity Zones to spur investment; Michael Forman, CEO of FS Investments (a supporter of Denizen events), talked well-nigh his company'south fiscal literacy programme—currently in eleven schools—and laid out the type of programmatic thinking we seldom run across from government: the city ought to fix goals and timetables, he argued, so we tin can "piece of work toward our goal of growing the pie and making it more than attractive to do business in Philadelphia."

Mike Pearson, CEO of Spousal relationship Packaging , spoke of our need to "enhance the literacy level of the problem," positing that at that place'southward "no mutual dialogue about how we got to this state of affairs," before recommending three books that, he promised, would shed precisely the right amount of light, including the seminal The New Jim Crow by Michelle Alexander; Shari Reams of PNC Real Estate championed pursuing a stable investment climate and highlighted PNC's 60 new affordable workforce housing units in Philadelphia; and entrepreneur and philanthropist Richard Vague highlighted the revolution that is already hither in the burgeoning genetic engineering infinite, in which, he explained, Penn'south recent $12 one thousand thousand investment has leveraged $300 million in outside investments for companies that are doing groundbreaking stuff, like advancing cancer cures and restoring sight to the blind.

In all these cases, cities are no longer waiting for Superman to bail them out. Nor are they merely reflexively tax and spending, the go-to motility of Mayor Jim Kenney, who has increased spending past 17 percent during his time in office, with little return yet to show on that investment.

Information technology was a stirring conversation that made you feel we're not that far away: Great stuff is happening hither, and at that place are local patriots thinking deeply well-nigh how to bulldoze change. Just, after a while, something started to feel a niggling…off. The speakers were bully, and Levy was, as usual, dead-on.

Simply I kept coming back to the fact of where nosotros were: The Union League. Now, I have nothing against hoity-toitiness; it'due south but that, strategically, information technology felt odd to take a chat about aware economic growth in one of the last bastions of the one percent. I own't hating on anyone; but if we actually want to spur economical growth that reaches all of Philadelphia, wouldn't we have a better take a chance of being listened to if we took this joint on the road, and have these conversations in church basements and Costless Library branches in the very neighborhoods Levy singles out equally those most in demand of pro-growth interventions?

Every bit Levy's statistics illustrate, more than one-half of our city feels like they've been left behind. The ideas at the Union League were great, just I couldn't help but wonder if they were being wasted on the already converted. Modify will only come up when middle course workers who feel their city has flipped them the bird go convinced that at that place'south such a thing every bit inclusive growth, and that information technology volition benefit them.

For likewise long, middle class workers, and those aspiring to the middle class, have been given a faux, overly simplistic option: Tax cuts for the rich on i hand, safety net handouts on the other. What if the urban center said to its citizens, at that place are ways to smartly invest in your hopes and dreams, and nosotros're going to bet on y'all. Considering we're all in this together.

That would entail putting along a plan for truly inclusive growth, one in which the plutocrat class sees its own self-interest as inextricably tied to a working guy getting a heighten and not having to worry most whether he can afford to make next semester's ballooning tuition payment. And it would too require of the average worker that he not resent capitalists making a fair share of scratch, provided crony capitalism and greed and shady dealings go checked at the door. The good news is that other cities accept experimented with novel ideas that, in effect, say to plutocrat and worker alike: Your good fortune aligns with the common proficient.

Here are just a few of my faves:

The Opportunity Zone Opportunity . Della Clark was right to talk nearly the transformative potential of Opportunity Zones. Written into concluding twelvemonth's Trump Tax Cuts and Jobs Act, the designation of over iii,800 census tracts beyond the country as "Opportunity Zones" was pushed through past Republican African-American Senator Tim Scott of South Carolina, not coincidentally afterwards Trump'southward shameful morally relativistic response to the racist melee in Charlottesville. When Scott didn't bury Trump in the aftermath of that horror, he was able to go his legislation on the revenue enhancement cut calendar, giving private investors a new incentive—centered effectually the deferral, reduction, and elimination of capital gains taxes – to invest in places that are normally disregarded.

"Given this impetus, which could unlock hundreds of billions of dollars in equity uppercase, private and public actors are talking about community investment more than than any time in recent memory," writes Drexel's Bruce Katz.

The irony ought not to be lost on progressives. Thanks to this provision, Donald Trump simply might end upward having washed more to motility much-needed majuscule into distressed urban communities than his predecessor. If we're going to truly be solutions-focused and not driven by ideology or personal counterinsurgency, progressives should suck it up and take reward of the Opportunity Zone opportunity, no matter who gets the credit.

Solving Our Ain Problems . Speaking of Katz, he'due south the national guru for this blazon of pro-opportunity, pro-growth economic development. When he spoke at our Ideas We Should Steal Festival terminal calendar month, he eschewed the usual options of seeking bailouts or reflexively tax and spending, and talked instead nigh the ways cities tin can rise upwards and solve their ain problems.

"In Copenhagen and Hamburg, they have public asset corporations, public or privately owned and publicly managed institutions that are able to have all the land owned by the government—urban center, county, land, port authority, airport potency, stadium authority, redevelopment authority—and put it into one corporate vehicle and get the revenue from the disposition of that publicly owned state to invest in infrastructure, innovation, inclusion," Katz said.

If nosotros really want to spur economic growth that reaches all of Philadelphia, wouldn't we have a better chance of being listened to if we have these conversations in church basements and Free Library branches in the very neighborhoods Levy singles out as those nearly in need of pro-growth interventions?

Of class, here, nosotros know that the city is—and shouldn't be—in the gas, water and airport business. (In 2015, Council President Darrell Clarke shamefully didn't even hold a single hearing on the Nutter administration program to sell the Gas Works, which would have been at least a cyberspace $400 million windfall for the city). But beyond those assets, there is no chief list of all that the metropolis owns. Katz says that's no surprise.

"You think at that place'd be a website, but it doesn't piece of work like that," Katz said. "If you want to actually finance big scale infrastructure, you need to know what the government owns, the value of what information technology owns, and take a disposition strategy and then the public tin benefit from it equally opposed to having a burn down sale because everyone is desperate. I think with big data and analytics we tin begin to build a platform for this new kind of finance in the U.S. We act similar nosotros're poor. Nosotros're not. These are the wealthiest cities in the globe. What nosotros don't have are the mechanisms that are tried and tested primarily in Northern Europe to get beyond revenue enhancement and regulate."

Infringe From The Silicon Valley Playbook in Urban America . Katz has been intimately involved with the nonprofit Accelerator for America , the brainchild of Los Angeles Mayor Eric Garcetti, which brings Silicon Valley-similar support in the form of networks, mentorship, and capital to borough entrepreneurs on the front lines of building ladders to the heart class. Their slogan reads: "With Washington cleaved, local innovators are taking activity."

Concurrently, endless cities are birthing " innovation districts " in or almost low-income areas that desperately need infusions of capital. These ecosystems are engaged with their cities, non sequestered from them. They comprise their neighborhoods' citizens into their plans and capitalize on the buildings and historical features already at that place, improving declining areas while providing more opportunities for residents and businesses. Oklahoma Urban center has transformed its in one case-gold Automobile Alley, which had seen refuse in the 1970s and 1980s, into sought-afterward real estate by revitalizing its bevy of old machine dealerships. And Durham, North Carolina'southward downtown is booming thanks to what ane researcher calls the city'southward "formula for equitable, far-reaching equitable success."

Other examples abound, from Chattanooga, Tennessee, to San Diego to Buffalo, New York. In all such case studies, startup culture isn't separate and apart from pockets of claiming, but, rather, tethered to it. In Detroit, Motor City Friction match is in its 3rd year of supporting inner-city entrepreneurs with grants, mentoring, and workspace. The grants have generated $33 million of investments in long-neglected neighborhoods. And merely last week, our ain Michael Nutter and Christina Weiss Lurie were among the bold-faced names behind 100K Ventures , the accelerator put together by venture capitalist Robert Wolf to focus on investing in early stage companies in Flint, Michigan. Information technology's a for-profit enterprise, with a social bear upon aptitude.

Now, not all of these programs will exist widely transformative. But in all these cases, cities are no longer waiting for Superman to bail them out. Nor are they but reflexively taxation and spending, the become-to move of Mayor Jim Kenney, who has increased spending by 17 percent during his time in function, with little return yet to prove on that investment.

Other cities are putting inclusive economic growth forepart and center on the agenda. And they're telling that story to themselves, and almost themselves. Levy and his panel are saying, and doing, all the correct and practical things. They're driven by a sense of local patriotism, and are loyal to data, not ideology. But hither's hoping that the next step is taking that message of inclusive growth out of the Marriage League and onto the streets so that those who experience left out can start to feel like they once over again accept a place in the futurity of Philadelphia.

Photo: Peter Bond via Flickr

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Source: https://thephiladelphiacitizen.org/wheres-our-growth-agenda/

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