What Makes a City Business Friendly?

This is a guest blog post by Jon Lieber, Chief Economist at Thumbtack

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Every year local lawmakers are flooded with studies purporting to tell them what makes their city a good (or in some cases, bad) place for business. The same city can receive a high grade in one report and a low grade in another – this year San Jose ranked 1st in one ranking of “Best US Cities for Small Business” and 121st in another ranking of “Best Cities to Start a Business.” It can be difficult to keep all the different rankings straight.

Thumbtack has developed an annual survey in partnership with the Ewing Marion Kauffman Foundation that differs in one fundamental way from these other lists – this survey asks small business owners directly what they think makes for a friendly business environment. By asking the owner-operators of these businesses about their perceptions of the local business climate, we learn from them what works and what doesn’t work about their governments.

This year nearly 13,000 small business owners participated in our survey – these are largely service professionals such as photographers, personal trainers, and house cleaners who use Thumbtack to find new business. The surveyed group largely reflects the geographic spread and demographic diversity of business owners nationwide, and from their responses we graded 82 cities and nearly every state along 11 metrics of the area’s friendliness towards small business.

For the third year in a row, we found that service professionals valued three things above all others in their local government: a licensing system that is simple and makes compliance easy; a tax system that has clear rules and is easy to understand; and training and networking programs that help service professionals get their businesses up and running, comply with the local rules, and meet other professionals in their industries.

Licensing and regulation

About half of the service professionals in the sample reported that they were required to be licensed by at least one level of government. Of this group, 62 percent said they faced licensing requirements from more than one level of government, while a full 25 percent said they were licensed by all four levels of government we asked about – city, county, state, and federal.

Although professional licensure requirements tended to reduce friendliness scores overall for those who faced them, the comments included with survey responses revealed that licensed professionals were of two minds – one group tended to say the government should back out of their business altogether, while the other group wanted to see an increase in enforcement to prevent unlicensed professionals from undercutting them on price. In general, service professionals did not express a desire for an unregulated marketplace, but wanted regulations that were easy to comply with and did not consume time they could be spending on a job. One pro said that the two days he wasted pulling permits for installing a hot water heater was two days he could’ve been working and earning a living for his family.

Taxes and Training

The effects of licensure requirements were so strong that they were actually twice as important as the friendliness of the tax code in determining perceptions of overall friendliness. When it came to taxes, tax rates were not a major complaint of our respondents – 2/3rds of all professionals say they pay their “fair share of taxes.” Instead what mattered more was the ease of understanding and ease of complying with local tax laws. Professionals who felt they understood their taxes were more likely to say a city was friendly towards them.

Finally, the largest factor under a local government’s control that affected overall friendliness scores was the availability of training and networking programs to help professionals succeed. 57 percent of survey respondents said they had never before run their own business – these professionals wanted to focus on serving their customers, and said they appreciated help from local community organizations in understanding and following the rules of the road for businesses. Professionals who said they knew of training and networking programs offered by the government ranked their governments 10 percent higher than those who didn’t.

The Kauffman Foundation’s Index of Entrepreneurial Activity shows that entrepreneurship can be a safe harbor for cities during difficult economic periods – as individuals lose their jobs during economic downturns, entrepreneurship tends to rise as they turn towards self-employment to keep their skills up or help pay the bills, and it declines again as the labor market recovers. This suggests that cities that create the right environment for entrepreneurs will be better positioned to weather challenging economic periods. Listening directly to entrepreneurs as the Thumbtack survey does can help cities understand which policies are making them small business friendly and which are keeping small business at bay.

Headquartered in San Francisco, Thumbtack is a consumer service that helps millions of people accomplish the personal projects that are central to their lives. Thumbtack introduces customers to experienced professionals who are available, interested and qualified to meet their specific needs. Whether looking for a painter for their home, a math tutor for their child, or a DJ for their wedding, Thumbtack provides anyone in the U.S. with an easy and dependable way to get started, compare options, and hire with confidence.

NLC’s Big Ideas for Small Business report provides helpful strategies for how cities can create a more business friendly environment. 

Lieber headshotAbout the Author: Jon Lieber is chief economist for Thumbtack, where he studies trends in the labor market, entrepreneurship, and the small business economy. He has previously acted as an economic policy advisor for the United States government, serving in the U.S. House of Representatives, the United States Senate, and the President’s National Economic Council at the White House.

More than money: Alternative incentives that benefit companies and communities

Construction in Raleigh, N.C.

Post adapted from Smart Incentives

Specialized services can complement financial incentives, while taking the concept of a partnership between business and community to a new level. Guest blogger Swati Ghosh, the International Economic Development Council‘s Director of Research and Technical Assistance, reports below on an interesting new paper addressing these and other alternative incentives.

Of all the tools that economic developers use to attract businesses to their community, incentives are the most controversial. Typically financial in nature, incentives are direct subsidies to businesses in the form of tax breaks, loans or grants. Proponents maintain that such subsidies are necessary to grow jobs locally as they reduce the cost, or risk, of doing business in a community. Critics, on the other hand, argue that there is no direct link between economic activity and such business subsidies, and some even suggest that they are a drag on economic growth.

Economic developers should closely follow an emerging alternative – programs and services that assist businesses but are not direct financial subsidies. Termed alternative incentives, these are investments in community programs that strengthen the business climate or that help a particular business in a way that benefits the broader community. They are a win-win: For businesses, alternative incentives can reduce the cost or risk of doing business in a community, yet communities retain these investments even if a firm shuts down or relocates to a different community.

IEDC’s Economic Development Research Partners program has developed a new paper focusing on alternative incentives. It is not an argument against the use of financial incentives; rather, it advocates for increased use of alternative incentives either alone or in conjunction with financial incentives. The paper, “More than Money: Alternative Incentives that Benefit Companies and Communities” (PDF), examines five categories of alternative incentives:

  • Talent/Workforce development
  • Real estate and permitting
  • Research and data
  • Networking and promotion
  • Infrastructure improvements

The paper is based on a survey of the IEDC membership to understand usage of over 40 different types of alternative incentives. It also includes several examples of organizations that have successfully utilized alternative incentives for business attraction and expansion, alone or in conjunction with other financial incentives. The paper concludes with recommendations for ways that economic developers can use alternative incentives effectively:

  • Focus on building relationships
  • Examine your organization’s strengths and utilize them creatively
  • Offer a wide spectrum of services
  • Bring along the key stakeholders
  • Focus on the needs of the community

As scrutiny, clawback provisions and other restrictions on the use of financial incentives increase, it may be beneficial to examine other options to support businesses. Alternative incentives not only stay in the community, but bring less of a burden in terms of monitoring and legal costs – benefits that every community and EDO can agree on.

90 Years of Helping City Leaders Improve the Local Business Climate

Seattle, Washington“How does a city government work with local industries, businesses, and institutions to keep them in the city and improve communications with them?” This crucial question was raised by Mayor Sam Schwartzkopf of Lincoln, Nebraska, in a 1968 article in NLC’s previously published Nation’s Cities magazine titled “You Have to Work to Keep Industry.” In today’s economic climate, the issue of business retention and expansion remains a prominent issue for city leaders and economic developers.

While many mayors and city councils across the country recognize the value of attracting new industries and businesses, there is also a growing emphasis on fostering local talent and supporting entrepreneurs and small businesses.

Mayor Schwartzkopf suggested back in 1968 that NLC members should consider adopting a city program he launched in Nebraska to personally visit local shops and companies and ask how the city can be of service to them. The Mayor and his team aimed to meet with as many of the city’s 300 firms as possible.

“Although the attraction of new firms and industries to any community is always extremely important, I feel that city government today must show its present industries that city government is deeply interested in them and that city government wants them to be interested in their city,” Schwartzkopf wrote in his article. “I strongly feel that city government must know what its industrial, business, and institutional leaders are thinking; what they would like to see done within the city.”

Some of the business assistance that Mayor Schwartzkopf provided as a result of his visits included providing increased police presence to an outlying industrial neighborhood, removing street parking to help reduce traffic congestion, modernizing street lighting, and dispatching city engineers to inspect the quality of a storm sewer near a steel company.

This type of support for the local business community is very similar to what we see today from cities involved in NLC’s Big Ideas for Small Business network. Our recent report on small business development highlights two key strategies for developing a business-friendly climate – proactively engaging the local business community and creating advisory councils with representation from small business.

As we highlight in the report, the city of Seattle’s Business Retention and Expansion Program (BREP) strives to retain and grow early-stage business through proactive outreach initiatives. The city staff who lead BREP aim to provide 250 businesses with direct assistance every year. The Seattle program has already helped hundreds of businesses find funding opportunities, select new site locations, and navigate government regulations.

In Cincinnati, the city formed a Small Business Advisory Committee (SBAC) as a mechanism for the local small business community to advise city officials on policies and programs. The SBAC voices the concerns of business owners and works in collaboration with city officials to find solutions to common problems. One of the city’s accomplishments since the establishment of the SBAC has been to streamline the permitting process by creating “jump teams” of city employees that work in coordination to assist small businesses.

While the economic landscape has evolved in many ways since 1968, Mayor Schwartzkopf from Lincoln knew back then what remains important today: getting the business friendly basics right is critical to supporting and growing local businesses. NLC is grateful to still be providing research, education and best practices about how cities can do just this.

NLC at 90: Supporting Our Nation’s Veterans

NLC is celebrating 90 years of making cities better place to live. Read the anniversary kick-off letter from NLC President Chris Coleman, mayor of Saint Paul, Minn.

NLC supported veteran education opportunities following the Vietnam War. Photo courtesy of Morehead State University

Photo courtesy of Morehead State University

As NLC celebrates its 90th anniversary, we again join the nation in pausing this Memorial Day weekend to reflect on the sacrifices made by the men and women who have served in our armed forces.

Today, as in the past, cities face the reality of thousands of veterans returning home from the battlefield. With their unique skills and experiences, veterans are assets to our communities.

To support veterans and their families, NLC works with local leaders to ensure our veterans successfully reintegrate into communities after their time in the military has ended.

In the wake of the Vietnam War, NLC partnered with the Office of Economic Opportunity to establish the Veterans’ Education and Training Services (VETS) program. The program worked with veteran “peer counselors” in Chicago, Cleveland, Denver, Detroit, Indianapolis, Los Angeles, Miami, Newark, Providence, Seattle and Wichita.

Peer counselors worked with veterans to help them connect to education and training programs, employment counseling, housing and other services.

In the program’s first three and a half years, more than 25,000 veterans were connected to some form of assistance. An outside evaluation of the VETS program noted, “The most effective programs tended to be those with strong ties to local governmental agencies.”

Today, NLC’s work to support veterans continues. As the country’s presence in Iraq and Afghanistan declines, our military is undergoing force reductions due to changing global needs. The confluence of these factors with an economy continuing to recover from the Great Recession has led to veteran unemployment rates that have been above the national average, particularly for veterans who have served after September 11th.

These challenges are one element that can explain why young veterans and their families are already being seen among the ranks of our nation’s homeless.

To help end this national tragedy by the federal goal of 2015, NLC has partnered with The Home Depot Foundation. By supporting cities, sharing best practices and engaging with local efforts, The Home Depot Foundation, NLC and cities have been a part of a 24 percent decline in veteran homelessness since 2010.

This progress is due to a focused effort by the President and agencies such as the Department of Veterans Affairs, HUD and the U.S. Interagency Council on Homelessness. While these federal agencies have provided resources and technical support to communities, it has been the collaborative work driven by city leaders that has powered this change.

From San Diego to Salt Lake City, Phoenix to St. Paul, New Orleans to Washington, D.C., cities are at the center of efforts that are uniting all levels of government with the non-profit community, faith communities, the business sector and philanthropies.

Cities will always be hubs of economic activity and services. Ensuring veterans receive the dignity of a safe place to call home and the opportunity to continue serving their community has been a hallmark of NLC’s first 90 years.

Moving forward, NLC and our members will continue our presence on the front lines to honor our veterans and their families.

Elisha_blogAbout the Author: Elisha Harig-Blaine is the Principal Associate for Housing (Veterans and Special Needs) at NLC. Follow Elisha on Twitter at @HarigBlaine.

Business Incentive Initiative

This post was written by Ellen Harpel, founder of Smart Incentives and president of Business Development Advisors LLC (BDA), an economic development and market intelligence consulting firm. Post originally appeared on Smart Incentives blog.

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Local businesses in New York City’s West Village. Source: Flickr user wallyg

City leaders have many concerns about the cost and effectiveness of economic development incentives in their communities, as we learned from the session on economic development financing tools during last year’s Congress of Cities. A new initiative working to develop best practices for evaluating incentives at the state level will help local elected officials whose communities use state incentive programs for business attraction. It should also provide some guidance for cities striving to assess their own local incentive programs.

The Pew Charitable Trusts recently announced the launch of the Business Incentives Initiative. This Initiative will help improve data collection, management and reporting within state incentive programs in order to “improve decision-makers’ ability to craft policies that deliver the strongest results at the lowest possible cost.”

Pew and the Center for Regional Economic Competitiveness will engage leaders from seven states (IN, LA, MD, MI, TN, OK, VA) to develop best practices for evaluating economic development incentives by:

  • Identifying effective ways to manage and assess economic development incentive policies and practices.
  • Improving data collection and reporting on incentive investments.
  • Developing national standards and best practices that states can use to successfully gather and report data on economic development incentives.

As project manager Jeff Chapman explained in an interview with Bloomberg BNA:

This initiative builds on Pew’s ongoing project to help state policymakers implement ongoing evaluation of economic development incentives. As states work to measure the effectiveness of these programs, they often find they lack the data needed to determine whether an incentive is producing the expected outcome. Further, there is currently no source that has identified and compiled the best practices on how to overcome this obstacle.

All states were invited to submit proposals to participate, and seven were selected. They have agreed to commit top decision-makers from economic development, revenue, and other relevant state agencies to work intensively with Pew throughout this 18-month program. Each of these seven states has also already begun to address the challenges associated with economic development incentive program management and evaluation. The Pew team will work with the states to develop and implement tailored solutions for each state, while also paving the way for development of best practices and training that will be available to all states.

I am pleased to be part of the Center for Regional Economic Competitiveness team working with Pew on this important effort. Our role will be to leverage our economic development and incentives expertise to provide technical assistance to the states.

Here at Smart Incentives, we have emphasized the importance of data, analysis, transparency and accountability in economic development incentive use. The lack of quality data regarding compliance and effectiveness is a significant problem for the economic development field and policymakers trying to do what’s best for their communities. The Business Incentives Initiative represents a notable step forward in enabling smart incentive use in all states.

HarpelEllen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. 

Contact: eharpel@businessdevelopmentadvisors.com or ellen@smartincentives.org. Follow Ellen on Twitter @SmartIncentives.

Local Governments Expand Incentive Programs for Technology Companies

This is a guest post by Ellen Harpel, president of Business Development Advisors and Founder of Smart Incentives.

Incentives are taxpayer backed programs used to influence business decisions and spur company investment or job creation in specific locations. Incentive use has expanded tremendously over the past several years, though the exact amount of money devoted to incentives is unknown.

We do know that incentives are no longer reserved for special, targeted projects, but are offered to entities of all types and sizes. They include bonds, grants, investments, loans, and tax breaks. They might be used to provide capital, reduce taxes, prepare or purchase a facility or site, build or extend infrastructure, or recruit and train a workforce.

Over the past few weeks several communities in the Greater Washington region have either proposed or implemented changes to their incentives policies in the hopes of attracting more technology companies. Here is a quick rundown of some of their actions:

Arlington, VA: Proposed expanding the definition of eligible businesses that can take advantage of Technology Zone incentives that reduce the Business Professional and Occupational License tax on gross receipts. If implemented, smaller business (<100 workers) and expanding firms (not just new businesses) in a broader set of technology fields will be eligible for a 50% rate reduction ($0.18 instead of $0.36) in all 4 of the County’s Technology Zones.

Digital DC: The District of Columbia has committed $1 million to a venture fund that would provide $25k-$250k grants to early stage tech entrepreneurs locating in a designated corridor in the city. These businesses would also be eligible for funding for building rehabilitation or office construction. Digital DC adds to existing DC Tech Incentives and incubator/accelerator programs supported by the city.

WeWork co-working space in DC’s Shaw neighborhood, part of the city’s newly designated technology corridor. Photo Credit: WeWork

WeWork co-working space in DC’s Shaw neighborhood, part of the city’s newly designated technology corridor. Photo Credit: WeWork

Prince George’s County, MD: Approved creation of a science and technology business district in order to create jobs by providing tax incentives, streamlining permitting and approvals, and fostering collaboration among academia, government and industry. The district in the northwestern portion of the County includes College Park (University of Maryland), Greenbelt (NASA Goddard Space Flight Center) and Beltsville (USDA).

Alexandria, VA: A Business Tax Reform Task Force has as one of its objectives to “identify revenue or other incentives that the City can deploy to attract businesses and encourage beneficial development aligning with the City’s Strategic Plan.”

Incentives have become more important to business investment decisions and the day-to-day work of economic development. We founded Smart Incentives because we believe it is vital for state and local leaders to have access to high-quality business intelligence, data and analytical tools to make the best decisions for their community.

Smart Incentives helps communities make sound decisions throughout the economic development incentives process. We serve cities and economic development organizations by providing in-depth business research on companies seeking incentives and business case analyses for incentive projects. Smart Incentives is also at the forefront of efforts to develop better processes for monitoring compliance and evaluating the effectiveness of incentive programs.

HarpelEllen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. 

Contact: eharpel@businessdevelopmentadvisors.com or ellen@smartincentives.org. Follow Ellen on Twitter @SmartIncentives.

WUF 7 Day One: Are ‘Cities of Opportunity’ Really Possible?

This is the second post in a series of blogs on the World Urban Forum 7 in Medellin, Colombia.

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The theme of the United Nations World Urban Forum 7 in Medellin, Colombia, is “Equity in Development — Cities for Life;” or what I prefer to call “Cities of Opportunity.”

According to the United Nations, it is now estimated that two-thirds of the world’s urban population live in cities where income inequality has been increasing. In many cases, this increase has been staggering. These inequalities can be seen in urban spaces, with cities divided by invisible borders that create social, cultural and economic exclusion.

This conference has been designed to provide city leaders with the tools they need to create cities in which the design, governance and infrastructure of cities has a direct and positive impact on the lives and opportunities of their inhabitants. In other words, this conference is about ensuring that cities of opportunity remain possible, and become a reality.

Over the conference’s seven days there will be lectures, dialogues, discussion groups, training sessions, roundtables and assemblies.

Among these will be:

  • A mayors’ forum in which mayors and their representatives will discuss how urban planning, design, legislation, governance and finances can be strengthened to ensure equitable local development; and share experiences how urban leaders have been able to reduce urban inequalities and move toward equitable development;
  • A United Cities and Local Governments (UCLG) sponsored discussion on how to provide basic services to under-served communities;
  • Training sessions addressing diverse topics such as the use of public space to reduce inequities, food security in low income areas, workforce strategies in urban slums, building safe cities through inclusive participation, sustainable communities, learning to respond to mega-disasters, ensuring resiliency and responding to youth violence;
  • Assemblies designed to address major urban issues including youth, gender equality and business; and
  • Side events such as one on urban innovation and inclusive governance meant to supplement the conference’s agenda.

Among the speakers will be such luminaries as:

  • Richard Florida, professor at the University of Toronto and New York University and senior editor of The Atlantic;
  • Joseph Stiglitz, Nobel Laureate in Economics and professor at Columbia University
  • Judith Rodin, Ph.D., president of the Rockefeller Foundation
  • Richard Sennett, professor at the London School of Economics and New York University;
  • Ricky Burdett, professor of Urban Studies and director of the London School of Economics Urban Age Programme; and
  • Sarah Rosen Wartell, president of the Urban Institute.

What remains to be learned in the ensuing days is how cities of opportunity should be conceptualized and ultimately implemented. Stay tuned.

Cities lead, but cannot go it alone

An extended conversation with NLC President Chris Coleman. Listen to an abbreviated podcast of this interview on NLC’s Sound Cloud account.

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As the end of the year approaches, top 100 lists, year-in-reviews and “person of the year” recognitions are beginning to make their rounds. What are the year’s biggest themes in politics, culture and entertainment? How about for cities? Despite some notable challenges in cities across the country, 2013 has been a year marked by a gradually improving economy, improving city fiscal conditions and a sense that people are “rediscovering” cities and all they have to offer.

I was pleased to recently have a conversation about these themes with NLC President Chris Coleman, mayor, St. Paul, Minnesota. His experience as a mayor during some of the country’s most challenging times provides a unique perspective on the state and future of American cities. Below is the discussion we had on December 13, 2013.

As we’ve recently highlighted in our 10 Critical Imperatives Facing Cities report, cities are facing challenges – many of which are nationwide issues. In your perspective, what should be the role of cities in tackling some of our country’s toughest challenges, such as access to higher education, immigration and aging infrastructure?

Cities don’t have the luxury of not tackling every issue, because every issue is going to affect their community. So whether or not they’re the primary lead on an issue such as higher education or even primary education, cities have to play a role. We have to get our kids ready for college, we have to make sure they’re successful in kindergarten through 12th grade and we have to understand the relationship between what’s happening in the classroom and what’s happening in the rest of the community. Whether you’re a mayor who has mayoral control over the school district or a mayor, such as me, who plays a significant role in the education process – that’s a critical issue evolving even more as an essential role of the city than it historically has been.

Cities don’t have the luxury of not tackling every issue, because every issue is going to affect their community.

But for instance, you can say veterans issues are a federal issue, but the veterans are living in our communities – and too often they are living on our streets. Fiscal stability – obviously we are primarily in charge of our own destiny, but many of our resources are dependent on state and federal resources that are beyond our direct control. Every community is going to have a little different set of priorities within these 10 critical imperatives we’ve described, and may have some things that were not necessarily  identified as a top 10 issue. And there are going to be issues that may be best served by the federal government or the state government or the county government – but regardless of the issue, cities have a stake and an important role to play in creating solutions.

In our work at NLC, we’ve witnessed the powerful role of the mayor to act as a convener or an agenda setter. In these roles, are mayors able to push forward these “national” or “state” issues at the local level?

The strongest power we have is to set the table. When you do that and bring the right people into the room, solutions can be found to our challenges. I liken how we approach education to how we approach emergency management, which is no one department has to do everything or no one person has to do everything but when you’re in a room and you have a situation within your community, you say, ‘Okay fire chief, can you bring resources to bear over here?’ You’ll ask your police obviously to have their deployment set and you also ask your parks department what role they can play. You ask your public works department, ‘I need 5 trucks to block off this intersection,’ – or whatever it is.

In education, I view what we’re doing as convening an emergency operation center for our children. So we have the Mayor’s Education Leadership Team (MELT) in St. Paul, which has the superintendent, county board members, school board members, city councilmembers, service providers and philanthropic partners to say, ‘Okay, what do we need to do, is this covered, who knows about this issue?’ When you bring people together and do it in a way to direct it toward finding solutions – you can find those solutions.

We’ve increasingly seen city leadership recognized on issues such as education and veteran homelessness in the media. But at the same time, we see stories about bankruptcy, urban poverty and violence dominating news headlines. In your experience as mayor and as an NLC officer, how are cities faring in the current political and economic environment?

I’ve been mayor for eight years, about to go into my third term. In a lot of ways I’ve presided over some of the worst times, certainly economically, over these last eight years, which have been very difficult for the country and for our cities. I’ve also been fortunate to be mayor at a time when people are really rediscovering cities and deciding you know what, ‘I don’t want to live in an isolated enclave somewhere, I want to live where there is access to transportation, I want to live where I can walk to a restaurant, I want to live where it’s a five-minute commute to work rather than a two-hour commute.’ The vibrancy that cities provide, all the options – what used to be considered annoying challenges are now exciting opportunities.

Even in the midst of one of our most troubled cities we see some real hope and opportunity.

So I think there are struggles no doubt – you see the fiscal condition of Detroit – but also if you go to Detroit you see the regrowth of the core of downtown. Even in the midst of one of our most troubled cities we see some real hope and opportunity. I think one of the real challenges we’re going to face though, is to make sure that hope and opportunity is for all. We have to make sure those opportunities are available and those pathways are open for all.

What steps can cities take to create those  opportunities to make their communities more vibrant?

What I think is interesting is that while cities are all different, there are some common threads that we can use to all learn from each other. We’ve started competing in a positive way to be the greenest city, or smartest city, or to be the most technically savvy, connected city. St. Paul was designated – our 55101 zip code – the center of the hipster universe. And I think that’s a good thing. So other cities are asking, ‘Why does St. Paul have the hippest zip code in the country – and why don’t we?’ Cities are competing for talent from across the globe – so how do we attract 20-somethings that are coming out of the best colleges and universities that have enormous sets of skills. How do we make sure we have a welcoming place for them?

I look at Denver, I look at Salt Lake City, I look at cities that are doing massive investments in transportation and think, we have got to move faster on this one because this is what people are looking for when making decisions on where to live. We still have some huge challenges but I think that the renewed energy and vitality of cities across the country is truly amazing and provides city leaders with great new opportunities to make their cities better.

As you look at the challenges and opportunities that face cities, in your year as NLC President, what are some of the things you would like to accomplish?

There are a few things.  First of all, just from the education piece – I came to the National League of Cities through the Institute for Youth, Education and Families – that’s how I did a real deep dive into the organization. They gave us technical assistance in building out an out-of-school time network we call “Sprockets” that provides continued learning opportunities for children during afterschool, weekends, and summer. Those are the technical skills and activities we can help cities develop at NLC. NLC is also working on a new partnership with the Department of Education to really look at some early learning and college readiness pathways for cities. That, I think, is really exciting. So I want to make sure we solidify NLC’s role in supporting cities in their education efforts.

Another important issue is resilient cities, given the already dramatic changes we’ve seen with severe weather events and the impacts of climate change. We saw all this in Northern Colorado, in Boulder and some of the other cities around Boulder that sustained some tremendous damage as a result of the heaviest rainfalls they’ve ever seen. If that was an isolated incident perhaps you’d say, ‘Well these things happen.’ But when you see these things happen time after time after time again – the Tornado in Joplin, Missouri that Mayor Melodee Colbert Kean faced in 2011, the effects of Hurricane Sandy – you can go across the country and see reports of these extreme weather circumstances happening if not every day, then every week.

I don’t think any of us recognized or realized how quickly the impacts of climate change were going to start affecting our cities.

So we’re going to have to figure out two things: first of all, how do we help our cities meet some emission reduction targets? The Obama Administration has been helpful in providing some energy efficient block grants and some other tools that we have used to green our buildings to reduce our energy consumption – those things we’re going to have to continue. But we’re also starting to understand that cities are going to have to figure out: ‘Do we have capacity in our sewer systems to handle what used to be 500 year floods that are now happening every 7-10 years? Do we have capacity to respond to gigantic straight line winds, tornadoes, or any number of things?

When I first came into office, the grave concern we were looking at was a pandemic. That is still a real possibility and we are set up to respond to that, but I don’t think any of us recognized or realized how quickly the impacts of climate change were going to start affecting our cities. We, as the National League of Cities really have to be a leader in that conversation, both on the reduction and the response side of it.

You recently testified on the importance of federal investment in transportation, touching on how you’ve benefited from being mayor of a city where all partners “rolled up their sleeves and got to work on building the infrastructure of a strong city and region.”  What type of support do cities and their partners need from the federal government to make their communities better?

First of all, city leaders have to understand what the real threats to their community are – and the real threats are not the next town over or upstate or downstate. The threats that we face in terms of the future vitality of U.S. cities are cities across the globe that are growing rapidly, where they are attracting talent from across the world. The overwhelming evidence is that people coming out of college or universities right now are saying, ‘I’m going to pick where I want to live first and then what am I going to do.

And so whether you’re a city of 50,000 or a city of a couple million, you have to figure out what are you going to do to make your community attractive to folks who have a lot of options. Even before I was mayor, I looked at Austin, Texas and their success. They had a lot of pieces that we had in the cities of Minneapolis and St. Paul. But they also had a thriving cultural scene – there was a “there” there. Look at Nashville right now – Nashville is going gangbusters.

It’s not because they don’t have challenges. Mayor Dean and Councilmember Steine in Nashville are doing incredible work on the education front and they’ve been a model for a lot of the stuff we’re doing. But they have a city that is becoming a huge draw for people across the country, if not the globe. So my advice to cities is to identify the three or four things they’re going to do and do them well to position themselves in  a 21st century economy, then look to others to support that.

The problem is that too many people in Washington see cities as here with an open hand saying give us money, without a true understanding that as our cities go, so goes our country.

The reason I was testifying on the New Starts program, the reason why that was so important was because I’ve seen firsthand the impact of an investment in transportation in the cities of St. Paul and Minneapolis – we’re six months out before the Central Corridor light rail line carries its first fare-paying passenger, and yet we’ve already seen $1.2 billion worth of investment. We have 7,500 units of housing underway or in planning along that line. We’ve seen businesses along University Avenue, where the line runs, that have been there for years, now reinvesting in their businesses and cleaning them up and preparing for the influx of customers.

So an area that has been subject to disinvestment since the freeway went through in the mid-60s is now the epicenter of investment in the Twin Cities. And so if you have the partnership with the federal government to support some of those things, then our cities will be vibrant. The problem is that too many people in Washington see cities as here with an open hand saying give us money, without a true understanding that as our cities go so goes our country. And if they understood that then they would be more willing to invest in our communities.

It seems vital to have a feedback loop to the policymakers in Washington because the leaders in our cities understand their communities best – they understand the threats, the challenges, and the opportunities. As you mentioned, we have seen how previous infrastructure projects have led to disinvestment– but you’re doing it differently. Your city is getting community input and the federal government is supporting that process.

A couple things happened in the construction of the Central Corridor, what is now called the Green Line. We were able to change the dynamic from D.C. saying here is how you’re going to build your line, to DC saying what do you need to make the line successful? That was a fundamental shift. The community fought for three additional stops that would serve the most transit dependent members along the line. It wasn’t until former Transportation Secretary LaHood and the Obama Administration said, oh this doesn’t make sense – it makes sense from a Washington perspective – but I understand now how it doesn’t make sense from a St Paul perspective so let’s make a change there.

The value of this investment isn’t just how quickly you can move people through an area – it’s how you can get people to invest in an area. That’s the critical piece.

The New Starts criteria that says were not going to just look at pure numbers and how fast you can move people from point A to point B, we’re going to ask how does this help green development, how does this help create economic opportunities, how does this help serve poor and disenfranchised communities. We still need a line that moves people from point A to point B and do it in an efficient time frame, but when you understand the value of this investment isn’t just how quickly you can move people through an area – it’s how you can get people to invest in an area. That’s the critical piece.

Bruce Katz has notably argued that we will increasingly see cities leading what he calls a “metropolitan revolution.” What are your thoughts on the future of cities? And what do you envision NLC’s role in helping to create that vision?

Bruce Katz and the folks at the Brookings Institution have done an amazing job of capturing in some ways and spearheading in others the kind of new look at cities – understanding that more than 75 percent of our nation’s economic output is coming out of cities, 80 percent of people are living in cities. That these global centers are not going through the federal government, but past the federal government to do direct city to city exchange.

It is a revolution and it’s a revolution mainly because it seems like we are going back to century old city states where the cities were the power. I don’t think that’s a great model in the sense that I hope Washington, D.C. will continue to make themselves relevant – but if they’re not going to make themselves relevant then cities aren’t going to stop moving forward.

This is one of the most interesting times in decades if not centuries for cities. What is happening here and understanding why cities existed in the first place, and why they matter, is really coming to the forefront as federal governments are becoming more and more stagnated. The creativity that occurs because three people are sitting at a coffee shop exchanging ideas, and how we exchange ideas with technology – there’s such an amazing revolution in terms of how people are reacting and exchanging ideas and creating things at a speed that we haven’t seen before. It’s an exciting time for cities. And I think NLC will be in the thick of it.

Dropout Reengagement Extends Reach in 2013, Pursues New Heights in 2014

At its second national meeting in 2012, the NLC Dropout Reengagement Network set out a number of ambitious goals for itself. These included extending the outreach of the Network further; creating a sense of urgency around the need for reengagement; continuing peer learning; informing federal policy; providing students a voice; and demonstrating impact through narrative and numbers. One year has passed, and the Network can point to accomplishments on all these fronts! But before I dive into that good news, consider this vignette from Boston – the city that hosted our first Network convening two short years ago.

April Mae Smith dropped out of Madison High School in May, 2012. April briefly enrolled in the Re-Engagement Center (REC) to earn enough credits to become a senior that fall. But her heart wasn’t in it and she quickly dropped out, moved to Rhode Island to live with her boyfriend, started doing drugs, became pregnant and ended up homeless. Fortunately this interlude was relatively brief, and by fall 2012, April was looking for a way to turn things around so she could provide a better life for herself and her child. “I decided I wanted to graduate before my son was born,” says April, now 19. When April returned to school, she again turned to the REC. She delivered her son this June and about the same time, earned her diploma from the Boston Adult Technical Academy. Now she is enrolling in nursing school with assistance from REC staff. She credits the program with helping her get back on track. “The REC staff always told me if I needed help, to just ask,” April says. “I learned a lot more there than what I would have learned in the classroom. When I graduated, I was one of the top students.”

With that shining story of personal progress in mind, the Network’s 2013 convening in Los Angeles now opens — extending participation and purpose beyond reengagement to and through college, thanks to co-sponsoring partnerships with the National Youth Employment Coalition (NYEC) and Zero Dropouts. Once again, the number of self-financed participants in the convening has doubled, such that what was a Network is now on the verge of becoming a movement.

This is not just a year of accomplishments; this is a year of clarifying nationwide results and impact. Network members reached agreement around a few common measures, and voluntarily submitted data compiled by NLC interns and Matt Mendoza of the Boston Private Industry Council (PIC). We learned that centers in 14 cities made initial outreach to more than half of those on dropout lists.  More than 10,000 young people received referrals to education options from a reengagement center or program, and for 6,000 of those youth, centers received confirmation of enrollment. Of those enrolled, 73 percent completed a full additional year of school or graduated.

In addition to recruiting the national meeting co-sponsors, we looked for strategic outreach and leveraging opportunities. This led to reengagement discussions at high policy levels in the U.S. Department of Education and with members of the rapidly growing Gateway to College National Network. Education Week chose reengagement as the topic for a special pull-out section, and the Annie E. Casey Foundation provided just-in-time support for publication of the new NLC Municipal Action Guide on reengagement, released this week and already drawing media interest.

The Network continues to grow from the ground up, thanks in large part to ample practice sharing. Chicago launched three reengagement centers. Washington State’s Open Doors initiative grew from 3 to 22 programs. Washington, DC commissioned a feasibility study, and plans to launch its center in April, 2014. The California Assembly formed a Select Committee on Addressing Out of School, Unemployed Youth, and in Congress, Rep. Jared Polis’ office completed drafting of the first ever federal reengagement bill – suitable to serve as an amendment to the reauthorization of the Elementary and Secondary Education Act.

As the Network and new partners gather in Los Angeles, opportunities abound to discuss where to go next. One focus area to carry over from last year and build upon: propelling former dropouts forward into options to gain postsecondary credentials. A perennial issue involves using the demand for reengagement to drive creation of many more high quality school completion options. And the “new GED” and GED alternatives waiting around the corner in 2014 surely pose challenges for the broader “ecosystem” of alternative education.

Yet the past three years show that this is a Network that constantly reaches for new heights. So with those heights in mind, I look forward to pursuing these questions:

• What shall the Network do to advance the federal policy ideas built into the draft Polis legislation?

• What other states could emulate Washington and spread reengagement programs via state policy and local determination? (Massachusetts, Oregon, California – are you in the house?)

• What city or district – or coalition of districts – in partnership with Community-Based Organizations, will reprogram resources to expand alternative schools rapidly?

• Who will follow Los Angeles’ inspiration with the Workforce Incentive Fund, to identify and use a federal funding source to expand reengagement locally?

• How will we sustain the census of reengagement programs, and continue to add precision to our counting of results?

* Are the more experienced members of the Network ready for an external evaluation of their effectiveness and impact?

• How will the 21 cities involved in the high-profile Opportunity Youth Incentive Fund tackle the need for reengagement capacity?

• What other philanthropies will join the CS Mott and Annie E. Casey Foundations to lend their support to advance reengagement nationwide?

Andrew Moore
About the Author: Andrew Moore is a Senior Fellow in NLC’s Institute for Youth, Education & Families.  Follow Andrew on Twitter @AndrewOMoore.

Fair Housing Act Case Settles…Again

Lisa Soronen is the Executive Director of the State and Local Legal Center and a regular contributor to CitiesSpeak.

For the second time in two years, the parties have settled a dispute before the Supreme Court over whether the 1968 Fair Housing Act (FHA) allows plaintiffs to bring disparate impact claims.  These claims are brought when actions are perceived to have a discriminatory effect on specific groups, either as an intended or unintended consequence. Local governments across the country have been subject to these claims.

The FHA makes it unlawful to refuse to sell or rent a property to any person because of race, color, religion, sex, familial status, or national origin.  The question presented in Mount Holly Gardens Citizens in Action v. Township of Mount Holly, which has now been removed from the Supreme Court’s December docket due to the settlement, was whether a policy or action that disproportionately affects a protected class of citizens but does not intentionally discriminate on the basis of race or other factors can give rise to an FHA claim.

In this case, residents sued the Township of Mount Holly, NJ over a plan to redevelop a low-income minority neighborhood on the basis that it violated the FHA, because the redevelopment would disproportionately impact the township’s minority population.

All of the federal circuit courts have ruled that disparate impact claims are recognized under the FHA, and this year the Department of Housing and Urban Development adopted final rules stating the same. The USA Today reports that the financial services industry has vowed to find another case to bring to the Supreme Court — one that won’t settle.

It is widely speculated that the current Supreme Court would hold that disparate impact claims cannot be brought under the FHA.

The International Municipal Lawyers Association filed a brief on behalf of the Township.