8 policy ideas the president should feel more than free to steal.
America's cities may not have been a focus of this year's presidential campaign, but the economy certainly was. And all the evidence we have is that our urban areas, where some 80 percent of us live, are the true drivers of our economy. If the next president wants to find a way to jump start innovation and entrepreneurship, consumer spending, the housing market, and yes, the creation of jobs, focusing on policy areas that strengthen America's cities is a no-brainer, regardless of party affiliation. (Or at least, it should be.)
And so below you'll find eight of our favorite federal urban policy ideas, gathered in advance of Tuesday's election results, that we now hope someone on President Obama's team will print out and tape to their forehead. Heck, why stop there: you can do it, too! [NOTE: This has been updated slightly since it first posted Tuesday evening, to reflect the results of the election]
Reform and cap the home mortgage interest deduction and spend the savings on low-income housing. Currently, the federal government funnels about $35 billion a year in housing aid to families making more than $200,000 a year through the widely popular but counterproductive home mortgage interest deduction. Yonah Freemark and Lawrence Vale made a strong argument for creatively restructuring this housing aid in a recent New York Times op-ed:
The National Low Income Housing Coalition (N.L.I.H.C.), working with Representative Keith Ellison, Democrat of Minnesota, and more than 350 organizations nationwide, suggests reforming the deduction by converting it to a credit, capping eligible mortgages at $500,000 and using the proceeds to finance the National Housing Trust Fund.
This is a good idea: it would increase the number of middle-income families qualified for homeowners’ aid but reduce expenditures over all by cutting spending for the wealthy. Were about $30 billion in saved funds redirected to the poor, as the coalition proposes, federal funding for affordable housing could be almost doubled with no change in the deficit.
Raise the gas tax by 15 cents a gallon. This recommendation comes from the bipartisan Simpson-Bowles debt reduction commission. The gas tax, currently at 18.4 cents a gallon, feeds the Highway Trust Fund that pays for road infrastructure and mass transit across the country. The fund is on its way to insolvency, though (an ironic byproduct of the fact that we have more fuel-efficient cars and hybrids on the road today). In the long term, most experts agree that we need to move away from the gas tax toward some kind of user fee to fund transportation infrastructure, but in the meantime, nearly doubling it is our best bet. This will be wildly unpopular (with politicians and drivers). We should do it anyway. A slightly smaller hike of 10 cents has been projected to cost U.S. households on average about $9 a month.
Create a national infrastructure bank. Transportation is not the only infrastructure we’re bad at funding. The same applies to bridges, ports, waterways and energy systems. These projects are often funded by Washington according to earmarks, not actual significance. A new national infrastructure bank with an independent board could finance only those projects with the greatest regional or national value, leveraging private capital to pay for projects normally funded entirely with public money. This approach, similar to one that’s been used in Europe, Asia and Latin America, would also re-frame infrastructure as an investment rather than an expense. You can read more pleas for this idea here, here and here.
Reform the Federal Railroad Administration and enable regional high-speed rail funding. There's wide agreement that European-style high-speed rail would make the most sense here in the U.S. in the Northeast corridor and along the California coast. But neither will come to fruition until their two main obstacles are removed: the puzzle of how to ensure dedicated funding for them, and the dysfunctional Federal Railroad Administration.
On funding, we like former Interior Secretary Bruce Babbit's idea of copying the strategies behind the original Interstate Highway Act of 1956, which owed its passage to "a lot of discussion, brokering, setting goals" with governors, as Babbitt puts it. Via Better Cities & Towns:
The biggest difficulty, he indicated, is that high-speed rail requires a dedicated form of financing. Would the country as a whole be willing to pay for a system serving seven or so states? That’s highly unlikely, said Babbitt. “There are 43 states that will say no to an earmarked tax.”
The way to overcome that obstacle is by establishing a gasoline tax that would be paid by residents of the Northeast corridor states, he argued. “That’s the lesson of the Interstate Highway Act. We need to get back to dedicated user fees. It should be focused on regional users.”
As for the FRA, thanks to our friends at Market Urbanism for tweeting this link to us earlier, which includes a brutal recap (written five years ago) of the agency policies that led to the debacle that is Amtrak's Acela service. We'll let Eric McCaughrin of the East Bay Bicycle Coalition remind us of all the gory details:
Amtrak's botched attempt at a high-speed train is a good case study in the problems caused by the FRA. As originally designed, the Acela was supposed to provide high-speed rail service on the Northeast Corridor (NEC) between Boston, New York, and Washington DC with speeds as high as 150 mph.
In order to procure the world's best off-the-shelf train for the least amount of money, Amtrak decided to buy an existing design from a European or Japanese manufacturer, who have decades of experience building and operating high-speed trains. The winner of this competition was a consortium of Bombadier and Alstom (the French TGV builder).
Then, in 1999 with Acela planning fully underway,
the FRA pulled the rug out by issuing regulations for high-speed rail service requiring trains to withstand 800,000 pounds force without deformation. The 800,000 figure is an arbitrary number dating back to the 1920s; this mandate has since been increased to 1 million pounds.
The buffering requirement confounded Bombadier. Train weight is of crucial importance as it affects the amount of track wear, noise, and energy costs. To meet the buffering regulation, the train would have to be significantly bulked-up. The result was a highspeed train nearly twice as heavy as its European counterparts. As such, the Acela has been described variously as a tank-on-wheels and a bank-vault-on-wheels. Indeed, an overweight train like Acela would be banned from the European high speed rail network.
Deploy social impact bonds. While we’re at it looking for novel funding schemes, this one would help pay for social programs that serve, for instance, foster children, criminal offenders, the mentally ill or drug addicts. These are the types of initiatives that tend to get hit first with budget cuts. But social impact bonds, already tried in Britain, could connect private investment to public good to keep such programs alive. John Roman and Jeffrey Butts at the Urban Institute explain how it worked in Britain here:
A social investment bank called Social Finance issued a 5-million pound bond to finance services for 3,000 recently released prisoners. Private investors, including community foundations and other charitable organizations, purchased the bond with the promise that if recidivism among the returning prisoners was reduced by 7.5 percent, they would receive a 7.5 percent return on their investment after six years, paid by the government. Even larger reductions in recidivism would result in greater returns.
Why would investors buy such bonds? Private donors, charities, and charitable foundations whose mission is to do good work and improve communities are betting that the profits they earn will allow them to do even more good work and more community development than they otherwise could. If the program flops, they are no worse off than if they had invested directly through grants.
Make “location efficiency” a thing and use it in federal policy. The Center for Neighborhood Technology popularized this idea with its Housing + Transportation Index measuring the two interrelated costs of living. Often, if you have a cheap house in the suburbs, you spend a lot on gas, while a more expensive apartment in a walkable neighborhood can come with dramatically lower transportation costs. This tradeoff speaks to location efficiency: How close is your home to the places you need to go – to your job, your grocery store and your favorite pub? Walkable neighborhoods are "location-efficient;" suburban subdivisions are not.
Under the Obama Administration, the Department of Housing and Urban Development has begun to take a greater interest in this concept. Imagine if the federal government created a clear and unified definition for "location efficiency" and then used it as a metric to determine which local projects merited federal grants or other support. What if you could qualify for a larger federally backed mortgage on a "location-efficient" home?
Reform elections so they aren’t as chaotic as they were today. Seriously, why in America in 2012 should it take several hours of waiting in line to cast a simple ballot?
Some solid ideas to solve this, via our Atlantic colleague Andrew Cohen:
Congress ought to pass a "Voters' Rights Act," which guarantees a mail-in option and ensures significant early-voting hours for 10 days before a federal election. That would give working people -- you know, the real "middle class" -- four full days over two weekends to cast their ballot. Congress also ought to expand the scope of the Voting Rights Act, the venerable civil-rights statute, to force local election officials everywhere in America (and not just in Southern jurisdictions) to justify restrictions on voting rights.
And the next president, whoever he is, ought to quickly empanel another Commission on Federal Election Reform to investigate these partisan state schemes and recommend ways to achieve meaningful reform. Former Supreme Court Justice Sandra Day O'Connor should head that commission. And former U.S. Attorney Patrick Fitzgerald should head up its investigative functions.
Invest in protecting our largest coastal cities from rising sea levels: The next president should do anything he can to reduce the carbon emissions that are contributing to global climate change. But the tragic truth is that even if America does everything possible to combat rising sea levels, sea levels are still going to rise. If Superstorm Sandy taught us anything, it's that we're well past due on discussing serious infrastructure solutions to this looming problem. Let's get started right away, while the political climate is primed. In the case of New York, here's five possibilities worth considering.
Top image: Andrew Kelly/Reuters