The Sharing Economy and the Future of Cities – What’s Next?

This post was co-authored with Lauren Hirshon. Brooks Rainwater and Lauren Hirshon recently published the National League of Cities report “Cities, the Sharing Economy and What’s Next.”

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The sharing economy is impacting cities. Around the world, innovative sharing economy technologies and business models are redefining how city dwellers access resources and consume goods. City leaders welcome innovation in their cities – but as regulatory challenges continue to arise, many would like a better understanding of how best to approach the growing sharing economy.

Sharing Economy cover minThe National League of Cities report Cities, the Sharing Economy and What’s Next provides an analysis of what is currently happening within the sharing economy in American cities. In order to explore the multifaceted nature of this space, the report focuses on five key themes: innovation, economic development, equity, safety and implementation.

The sharing economy is impacting the delivery of goods and services across a wide range of industries. Jeremiah Owyang’s Collaborative Economy Honeycomb demonstrates how this space has grown to include 12 distinct areas from space and transportation to logistics, learning and more.

Uber, Lyft, SideCar and other Transportation Network Companies (TNC’s) have dramatically disrupted travel patterns in cities. For many, hailing a cab or calling for a ride has been replaced with the act of opening a mobile application, requesting a ride, and tracking a little car graphic as it makes its way across a map to your location.

On the homesharing front, Airbnb, HomeAway, VRBO and other companies are shaking up travel – specifically, the manner in which people make use of resources like apartments, homes, spare bedrooms or even castles.

Meanwhile, other platforms and concepts like TaskRabbit (a mobile marketplace to hire people to do jobs and tasks), SnapGoods (a site for lending and borrowing high-end household items), and Feastly (a marketplace for dining experiences) are taking off as well.

Why Sharing

Also described as collaborative consumption, the collaborative economy, or the peer-to-peer economy, the sharing economy is growing and changing the way people use and consume resources and services. But it is also disrupting local regulatory environments. With this major shift occurring in urban hubs, all eyes are on cities for global leadership.

True to their reputation as laboratories for experimentation, many cities are testing different approaches and developing unique, locally-driven solutions to new challenges. While there is no status quo – and the relative novelty of the issue still precludes long-term, tested best practices – city leaders are springing into action to consider how these platforms and services will impact major issues in cities.

Cities, the Sharing Economy and What’s Next deals most specifically with two facets of the sharing economy: transportation and space, or the areas generally referred to as ridesharing and homesharing. In our report we highlighted themes, insights and lessons learned that emerged from conversations with current and former city leaders from around the country who are developing new strategies and tactics to regulate this evolving sharing space.

While there are still many unanswered questions, we’re certainly working towards clarity on the important topics to consider in this research. Depending on community priorities, neighborhood compositions, available housing stock, tourism demands, existing transportation networks, major events and other issues, the cities we interviewed chose to take different approaches. Thus, a wide spectrum of solutions has emerged.

For example, when considering ridesharing safety issues, some cities like Dallas have opted to develop a new set of insurance requirements. The city of Dallas created a novel three-phase approach to ensure that TNCs had insurance coverage 24/7. Other cities have decided to revisit their policies for taxicab companies.

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Regarding the manner in which these services impact equity and access, some cities have created funds to support wheel-chair accessible transportation. Others have included clauses in ordinances explicitly stating that services cannot be denied to certain passengers. Many are looking for ways to capture new data to track areas like pick-up and drop-off locations.

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Across the interviews we conducted for our report, many city leaders expressed wanting access to more data from sharing economy companies. Unlike most traditional service providers, the business model of sharing economy companies is predicated on data and the ability to match end user customers to vehicles or available housing. The availability of this data – for cities to better understand equity and access issues, as well as for the purposes of developing enhanced transit systems – is a theme that warrants further exploration.

Cities are also taking a varied approach to addressing the new economic reality created by sharing economy businesses. In a number of cities such as Austin, Texas, Washington, D.C., Madison, Wisc., Portland, Ore., Chicago and San Francisco, homesharing companies have begun to include local hotel taxes in their rate structures – either voluntarily or as part of local regulations on homesharing.

Some cities have not yet reached agreement on these issues, and the onus is on hosts to pay appropriate taxes on their revenues. In Washington, D.C., the recent TNC legislation included a provision requiring TNCs to pay taxes equaling 1 percent of all revenues from trips originating from within the city; annual revenue totals are estimated to be in the millions. In Seattle, TNCs must pay a fee of 10 cents for each ride that originates in the city. Other cities, such as Dallas, decided not to touch the issue of revenue capture when drafting legislation.

Our report provides additional details on each of these issues, the strategies city officials are developing, and their reasoning behind their approach. While our report doesn’t provide all the answers, it is meant to be a primer for what is currently happening in this arena – and we hope it offers some sense of comfort that city leaders are not alone in grappling with substantial new regulatory challenges.

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We also hope our findings inspire city officials to ask the tough questions. The sharing economy is disruptive, and it’s moving quickly. It’s changing how we get around, where we stay, how we manage tasks, what we buy – and sometimes the changes occurring can be overwhelming for city officials.

However, the presentation of these new challenges offers city leaders the unique opportunity to not only think about present concerns but also to look to the future. City leaders should consider the new opportunities these platforms and services are creating to transform approaches and operating models so that cities can become even more agile, responsive and innovative themselves.

The sharing economy will only continue to grow and evolve as cities serve as laboratories for these ever-changing technologies and business models. There is great promise in the rapid ascent of sharing economy services in our nation’s cities. The best thing that city policymakers can do is keep an open mind about how the new economy might be beneficial with the right regulatory framework in place – because sharing is here to stay.

About the Authors:

Brooks Rainwater bio photoBrooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter at @BrooksRainwater.

 

Lauren Hirshon 104x120

Lauren Hirshon is the Director of Consulting at the University of Pennsylvania’s Fels Institute of Government, and a public sector strategist, coach and innovator. Follow Lauren on Twitter at @LaurenHirshon.

Municipal Fiber and the Digital Divide: A Modest Proposal

This is a guest post by Angela Siefer and Bill Callahan.

fiber_optics_2With a little effort, city leaders could develop account-sharing models and policies that encourage smart, grassroots solutions to the affordable broadband problem at little or no public cost. (Getty Images)

The explosion of interest in community-owned fiber on the part of elected officials and technology leaders has created an opportunity that few have noticed: cities could leverage these investments to help lower the barriers to home Internet access that still keep low-income, less educated and older citizens out of the digital mainstream. This could be easily accomplished, at it would cost cities practically nothing.

Here’s how: cities could allow neighboring households and community groups to share that terrific bandwidth – and its cost – by using community-owned fiber to power grassroots Wi-Fi networks.

Almost all Internet Service Providers (ISPs) and community-owned fiber networks employ Terms of Service language that prohibits customers from extending their networks across property lines to share access with their neighbors. City-owned networks can expand the possibilities for affordable broadband access in disadvantaged neighborhoods simply by changing their Terms of Service to allow network sharing.

As demonstrated by the rise of Google Fiber, the advent of city-owned networks selling 100 megabit or gigabit Internet access for $75, $90 or $100 a month raises the competitive ante on broadband speed and price for traditional cable and telecommunications ISPs. This is great news for tech-savvy middle- and upper-income residents, as well as for data-dependent businesses and community anchor institutions like libraries and hospitals.

But in many city neighborhoods, we’re faced with the stubborn fact that large numbers of mostly low-income citizens still don’t have home Internet access at any speed.

The American Community Survey for 2013 reports data for 575 U.S. “places” with more than 15,000 households. 282 of these communities – nearly half – reported no fixed broadband connections (defined as any connection beyond dial-up or mobile) in at least 30 percent of their homes. 151 reported that at least one fourth of their households have no home Internet access of any kind – no dial-up, no mobile access; nothing. Not surprisingly, these Internet-free households are concentrated in low-income neighborhoods where residents are least able to afford the $30, $40 or $50 monthly cost of an Internet service subscription.

Of course, low-income households that can’t afford current DSL or cable Internet services have little to gain from the availability of fiber broadband service that costs twice as much.

But suppose that cost could be split among five, ten or twenty users?

One of the great value propositions of Big Bandwidth is its shareability. There’s not much a single household can do with a gigabit connection that couldn’t be accomplished with a tenth (100 mbps), a twentieth (50 mbps) or even a fortieth (25 mbps) of that capacity. But put that gigabit connection into an office, a call center or library where forty, fifty or more users share it, and its value becomes apparent. All the users sharing that gigabit start connecting to the Internet at speeds far greater than their “shares” (because of how network routers optimize and balance packet streams) – and at a total cost far below the equivalent number of single-user accounts.

The economic advantage of networked access sharing has been so obvious for so long that no business or organization would even think about buying individual Internet service accounts for employees working at the same location – and no ISPs would waste time trying to sell them. Since home broadband took root a decade ago, the same has become true of households; we provide for our family members’ need to connect simultaneously in different parts of our homes with routers, network cables and Wi-Fi – not by subscribing to multiple Internet service accounts.

ISPs are happy to encourage all this access sharing within their customers’ premises. But they draw the line – a hard, bright line written into their Terms of Service – when it comes to letting customers share their network with the neighbors. The reasons are commercial, not technical; ISPs make money on account charges, and they don’t want their customers to get ideas about avoiding them. It’s a profit-driven business model.

But municipal broadband networks don’t have to follow that model.

Over the past eight years, cheap, modular “open mesh” Wi-Fi devices have transformed the possibilities for community networking at the very local level – the apartment building, housing estate or city block. Any building owner or group of neighbors can acquire a few of these devices for less than a hundred dollars each, distribute them at 100-200 foot intervals around a target area, connect at least one of them to the Internet, and start distributing robust, secure Wi-Fi Internet throughout the area.

Open mesh networks are providing public or “house” Internet access in thousands of hotels, apartment complexes, campuses and campgrounds. These networks are also found in some public housing estates and high-rises, installed by local housing authorities who understand the importance of affordable Internet for tenants’ income and education prospects.

There’s no technical reason why block clubs and community organizations in lower-income neighborhoods can’t use this same cheap, off-the-shelf technology to create truly affordable local broadband access, by sharing connections and costs among neighboring households. But unlike the people running apartment buildings, campgrounds and hotels, community residents will almost always find that Terms of Service restrict them from sharing bandwidth with their neighbors, at any price.

Municipal broadband providers can solve this problem with the stroke of a pen, simply by allowing neighborhood account sharing in their Terms of Service.

With a little effort, city leaders could take the next step: Working with neighborhood leaders and digital inclusion advocates to develop account-sharing models and policies that encourage smart, grassroots solutions to the affordable broadband problem at little or no public cost.

Angela Siefer 150wAbout the Authors: Angela Siefer is a digital inclusion consultant and an adjunct fellow at the Pell Center at Salve Regina University. She envisions a world in which all members of society have the skills and the resources to use the Internet for the betterment of themselves and their communities.

bill callahan 150wBill Callahan is a Cleveland-based community organizer who has worked for the past twenty years on grassroots training and access strategies to close the digital divide. He currently serves as the director of Connect Your Community, a collaborative of community-based digital inclusion advocates in greater Cleveland and Detroit.

Three Approaches for Untangling the Knots of Local Business Regulations

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Oh, what a tangled knot cities can weave with local business regulations. Whether it’s the dizzying application paper trail at city hall, inexplicable permitting or licensing requirements, or an arbitrary approval timeline, this is a government problem that is ripe for a solution. Thankfully, a number of cities are creating a path forward on regulatory reform.

The scope of this problem, although difficult to fully quantify, is substantial for both business owners and local governments. In a recent Thumbtack Small Business Friendliness Survey, the top frustration reported by business owners is a complicated regulatory process. The time spent navigating the current broken system translates into lost income and delayed openings for new businesses.

Meanwhile, the economic health of cities suffers when local business owners and entrepreneurs cannot open their doors quickly, or even worse, decided to locate elsewhere that is more business-friendly. The US Chamber of Commerce Foundation’s Regulatory Climate Index recommends streamlining permitting and licensing as a necessary reform for encouraging entrepreneurship, job creation, and overall economic growth.

Cities are taking three approaches to untangling the knots of local business regulation.

Reviewing existing regulations, eliminating ones without a purpose. First, many cities are making sure their local business regulations are actually serving a purpose. Regulations can sometimes be superfluous (for example, an “open flame” permit to place votive candles on restaurant tables) or contradictory to county or state guidelines.

To help cities confront this issue, the Ash Center for Democratic Governance at Harvard Kennedy School launched a regulatory reform framework that provides guiding principles to understand the origin and purpose of a regulation and how to streamline permitting and licensing (side note: it also shares information on using predictive monitoring to prioritize inspections where they are needed most).

Mayor Rahm Emanuel appointed a new commissioner to modernize Chicago’s entire municipal code and eliminate unnecessary regulations, and also signed licensing reform legislation that reduced the number of business licenses by 60 percent. The Seattle Restaurant Reform Initiative program formed a team of city, county, and state representatives to tackle regulatory inefficiencies for the local restaurant industry. Kansas City’s Dead Letter Office website is crowdsourcing ideas for regulations that are impractical and no longer serving a valid purpose.

Improving interdepartmental coordination and customer service at city hall. Opening a business often requires paperwork from separate city offices, and these applications can get passed around to different departments like a game of pinball. No wonder the process is frustrating.

Cincinnati reduces this administrative headache, and more quickly process permitting and licensing requests, by using “jump teams” of key staff from across the necessary departments to support the application process from start to finish. Kansas City created the KCBizcare office to offer in-person support and encouragement for business owners navigating the regulatory process. The KCBizcare team serves as an advocate for business owners who are working with city departments, and helps monitor the progress of applications. The one-stop-shop Small Business Center in Chicago has an express lane that streamlines specific types of requests (for example, updating account information or printing a new license) and provides assistance in 15 minutes or less.

Making the regulatory process more transparent and easily accessible. Business permitting and licensing process works better when expectations are clearly communicated, information is easily accessible, and the application process is available online.

The San Francisco Business Portal is a comprehensive website with “starter kits” by industry on how to start a business in the city. New York City also has online “starter guides.” The Seattle Restaurant Success Initiative developed an infographic that serves as a roadmap for starting a restaurant.

Lastly, some cities are moving towards putting the actual permitting and licensing application process online. Boston, Kansas City, and Denver have all secured contracts to move from paper to an online interface. The ultimate goal is to enable business owners and entrepreneurs to apply for all permits and licenses quickly and efficiently, and track their approval status, through one streamlined city website.

By working on one or all of these reform approaches local governments can create a regulatory environment that allows small businesses and entrepreneurs to spring into action, instead of getting tangled along the way.

Robbins_small (2)About the author: Emily Robbins is the Senior Associate, Finance and Economic Development at NLC. Follow Emily on Twitter: @robbins617.

Climate Change Update: FOCUS 2015 and Preparing for COP-21 in Paris

This post was co-authored with Allison Paisner.

FOCUS 2015NLC Second Vice President Matt Zone (sixth from left) pauses for a photo with other elected officials at the FOCUS (Forum Of Communities for Urban Sustainability) 2015 event at the French Embassy in Washington, D.C. on March 6, 2015. The event was designed around a discussion of how cities and local governments can fight climate change and provide residents with a higher quality of life. (photo: FOCUS 2015)

This December, the UN Framework Convention on Climate Change (UNFCCC) will meet in Paris for COP-21 (the 21st session of the Conference of the Parties to the UNFCCC) in hopes of negotiating a new, international agreement on greenhouse gas emissions. Whether you are optimistic or doubtful about the prospects for a global accord among the various nations, it is clear that cities and towns will continue to be at the center of any effort to mitigate or adapt to the challenges posed by climate change.

That is why the French Embassy in Washington, D.C. recently hosted FOCUS-15: A Forum of Communities for Urban Sustainability. The mission was to spark thinking, create networks and establish bonds between local actors prior to the UN Conference of Parties in Paris this December. The event brought together French and American leaders from public, private and philanthropic sectors, including nearly a dozen representatives from the National League of Cities (NLC).

NLC Second Vice President Matt Zone and Henrietta Davis, both of whom were part of the NLC COP-15 delegation in Copenhagen, noted how much attitudes had improved in recognizing the role cities play in the process. Just six years ago, all of the attention was given to national governments, and local leaders were treated no differently than small, non-profit interest groups. Looking at COP-21 though, local leaders are closer to center stage.

Workshops centered on the pillars of urban sustainability: waste and water, energy, transportation and land use, resiliency, and urban policy and community empowerment. Because cities are engines of innovation where commitments to sustainability develop at the local level, the forum emphasized the need to for cities and regional authorities to coordinate policies and disseminate best practices as key actors. Communities also need to educate their residents and serve as facilitators for change by equipping citizens with the tools necessary to participate in the decision making process.

Green investments geared towards climate change mitigation, adaptation and resiliency involve high short-term costs – the results of which only translate in the long term. Policymakers need to understand this tradeoff and make fiscally and environmentally responsible decisions that balance the cost- and results-oriented spheres for the future of tomorrow.

Highlights from the FOCUS 2015 conference in Washington, D.C.

Other sustainability trends recognized in French and American cities over the two-day event included the need to accommodate population growth while limiting urban sprawl, transitioning away from a carbon-based transportation system, the inclusion of natural systems and green infrastructure as sustainable alternatives to depreciating built infrastructure, and working within the institutional framework for research and support of city innovation.

Partnerships between local & federal governments and the public & private sector are crucial stimulants to sustainable development, providing means for innovation, access to financial capital, and broadening the scale of influence.

Based on the dialogue between national and local actors throughout the conference, it is clear that the gradual transition to sustainable cities will involve healthy competition and inspire a race to the top.

More immediately, though, there is significant preparation and progress to be made prior to COP-21 this December. With limited authority as local and regional governments, cities need a “Paris deal;” sub-national actors need to bring clear objectives to the discussion, outline what is possible, and show their political support for an equitable and achievable agreement.

Whatever is decided in Paris will not be the end of the road, however. With luck – and the support of cities and towns – it will be only the beginning of a new and ambitious era in urban sustainability.

About the Authors:

Headshot1-CMartin Cooper Martin is the Program Director for the Sustainable Cities Institute at the NLC. Follow the program on twitter @sustcitiesinst.

 

Allison Paisner headshot Allison Paisner is an intern with the Sustainable Cities Institute at the National League of Cities. Follow the program on twitter @sustcitiesinst.

How Startups Solve Problems at the Intersection of Urbanization and Climate Change

This is a guest post by Stonly Baptiste.

startups postCould startups be the secret weapon to make cities smarter and combat climate change in the face of ever increasing urbanization? (Getty Images)

When you see the word ‘startups’ in the news, you see headlines like “Meet the Hottest Tech Startups,” “Snapchat Could Become One of the 3 Highest-Valued Startups in the World,” or “Why Startups Want This 28-Year-Old to Really Like Them.” But the most interesting startups may be the ones working on problems that can directly help cities.

The Problem: More People + More Energy Consumption = Climate Change

People are moving to cities at rates never before recorded. The urban population of the world has grown rapidly since 1950, from 746 million to 3.9 billion in 2014. This represents a shift from two out of 10 people to five out of 10 people living in cities. The motivations behind this migration vary, from the search for more employment opportunities and increased earning potential to better health care and improved living standards; social factors like better education opportunities also play a role. Whatever the cause, there is no denying the rapid rate of global urbanization.

So what does this mean in terms of climate change? Energy consumption is the biggest contributing factor to global climate change, and more people means more energy consumption. In fact, 75% of global energy consumption occurs in cities. That consumption is likely to increase as we experience the shift from 54% of the world’s population residing in urban areas in 2014  to 66% by 2050. The environment around us will simply not be able to support this kind of growth and the increased level of energy consumption. Managing climate change seems more and more like a city efficiency challenge.

The Challenge: Redesign Cities

“No challenge – no challenge – poses a greater threat to future generations than climate change.”
– President Barack Obama, State of the Union, Jan 20, 2015

The challenge is to create a fast, widely-adopted, effective and lasting impact on the future sustainability of cities; to redesign cities in response to climate change. Previously, the burden of these issues fell on the government. However, due to the increasing budget constraints of so many of the world’s economies, government can no longer afford to take on all of that responsibility.

The Solution: More Urbantech Startups

Technology has always helped shape urban and suburban environments. “Urbantech” describes the emerging technologies that are being used to solve problems at the intersection of urbanization and climate change, from reducing energy use and greenhouse gas emissions to reducing crime and increasing government efficiency.

Over the last 18 months at Urban.Us, we’ve analyzed hundreds of startups that are working on Urbantech problems. We wanted to understand what problems they are solving as well as their customer focus (consumers, businesses or governments). By creating the Urbantech radar, we were able to visualize companies according to their customers and problems they are trying to solve.

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The visualization reveals some interesting patterns about where founders and investors have chosen to focus – but it also shows where there is open space and opportunity.

The radar also provides strong evidence that the challenge of redesigning cities to positively impact climate change could very well lie in the hands of the consumer, therefore circumventing the government-first approach. By reaching mass consumer adoption, these startups are able to make cities sustainable through channels like the Apple Store, Home Depot and Amazon.

No one can predict what the future of cities will look like – but we can get a glimpse of what’s possible by looking at some of the fastest-growing startups currently reshaping the way people live and work in cities:

  • DASH, a hardware plugin tool that syncs to your mobile phone to turn any car into a smart car, unlocking enhanced performance, cost savings and social driving.
  • OneWheel, a one-wheeled electric skateboard to quickly and easily get you to and from mass transit.
  • Whill, an all-terrain wheelchair that makes hard-to-navigate obstacles like stairs a thing of the past for people with disabilities.
  • Radiator Labs, a radiator cover that converts old cast-iron radiators into precision heating machines with climate control, operational efficiency and safety comparable to any radiator, transforming steam heat into a comfortable and efficient solution.
  • Hammerhead, a handless device that enables cyclists to safely navigate streets.
  • Rachio, a smart sprinkler controller that automatically adjusts your watering schedule based on weather or seasonality to save on water consumption.
  • Zuli, a plug-and-play smart outlet that enables users to control appliances, dim lights, set schedules, and conserve energy from their mobile phones.
  • Lagoon, a smart water sensor that alerts you when there is a leak, tracks usage, and saves money on water bills.

These startups have found a way to impact climate change by leveraging consumers’ need to collect data, save money, and enjoy the user experience. The climate change aspect may not even be a factor for consumer adoption – but through new crowdfunding platforms, distribution channels and government procurement initiatives, these startups could change the future of our cities and the environment.

The Next Step: Local Government as the Coach vs. Quarterback

The way cities work with emerging technologies is entering a new paradigm in which the city is not always the customer but, more often, the regulator and promoter of the best ideas. We are excited to be hosting 100 of the most promising Urbantech startups at this year’s Smart City Startups event – and, thanks to the support and partnership of the National League of Cities, we will introduce local government officials from Tel Aviv, San Francisco, New York, Boston and elsewhere to the innovations these startups offer.

We have all seen the battle between Uber and regulators – and it’s likely that no local government made an attempt to discuss regulating Uber before the battle occurred. We’ve also seen the impact that Rachio is having on water consumption around the country – and in most cities, this shift is still under the radar. Recently, we’ve seen police departments fighting against some of the information shared on Waze.

Our goal is to enhance awareness and increase partnership between local governments and startups working to solve the same problems, so that the best solutions can be promoted and cities can begin to preemptively manage the impact of regulation. Urban.us and NLC are joined by Direct Energy, the Knight Foundation and others aligned with the goal of sharing experiences that cities are having as they work with startups to build new relationships that will forge the future of urbanization and climate change.

stonly_baptiste_headshotAbout the Author: Stonly Baptiste is the Co-Founder of Urban.Us, where he leads investment research, community management and platform development for the fund, which now works with 16 startups around the world solving urban challenges. Additionally, he is co-organizer of Smart City Startups, a multi-day, multi-track event based in Miami that recruits 100 of the the most promising startups from around the world who are working to solve challenges at the intersection of climate change and urbanization. Additional participants include officials focused on innovation and economic development from local governments in Tel Aviv, San Francisco, New York, Boston and more. Investors such as Vast Ventures and Fontinalis Partners, and global companies such as Direct Energy, EDF, and Canary Wharf join to further government efforts to work with startups and promote innovation in cities.

Carrots and Sticks: How Cities Are Taking a New Approach to Regulatory Compliance

This post is a response to the recent Governing article on regulatory compliance.

carrot stick(Getty Images)

There has been some recent buzz about the dangers of local regulatory compliance. Regulating businesses is necessary – you wouldn’t want to eat at an unsanitary restaurant, or take your car to an auto mechanic who wasn’t certified. However, some say that regulating businesses can be counterproductive, costly and raise equity concerns. Holding up examples of cities coming down hard against large swathes of businesses on relatively minor infractions can certainly make that case.

But these instances are the exception, not the rule.

Less Stick, More Carrot

While local governments would be wise to heed the warnings of fallout from “inspector zeal,” the regulatory reality is that most cities aren’t filling their coffers with health inspection fines. Ensuring that businesses operate in a healthy and safe way is clearly an important function of city government, but paying for inspectors can be expensive. And because cities are still facing fiscal challenges, many are approaching compliance with caution, carefully scoping out the financial, social and economic costs and benefits of their compliance approaches.

As a result, the regulatory environment emerging in most cities is guided by a clear articulation of the end game – to ensure safe, healthy communities and prosperous businesses. This means a more informed, sensible carrot-andstick approach: punitive “stick” measures when necessary, paired with a bushel of “carrots” in the form of compliance incentives and supports.

The “stick only” approach characterized by harsh, blanket enforcement is giving way to targeted compliance that leverages innovations in data and analytics, reforms bureaucratic red tape and makes it easier for businesses to comply in the first place.

Driving Innovation: The Impact of Analytics and Legislation 

New York City and others have enlisted the help of online review tools like Yelp to proactively identify health and safety concerns. A new Pew analysis noted that “[New York City’s] Department of Health and Mental Hygiene launched a nine-month pilot study in July 2012 that used data-mining software to screen and analyze about 294,000 Yelp reviews. It searched for keywords such as ‘sick’ or ‘food poisoning’ to find cases of foodborne illness that may not have been officially reported.”

Some cities – such as Boston, which has created a Problem Properties Taskforce – are even starting to use predictive analytics to better understand and pinpoint particular cases where compliance interventions can have the greatest impact.

Despite efforts to target the worst offenders, compliance “crackdowns” can disproportionately affect lower-income and legacy businesses that don’t have the skills or time to navigate government regulations and can’t afford to pay for fees, tax increases or compliance upgrades to their business. For these reasons, San Francisco is currently considering Legacy Business Legislation to help businesses that have been in operation for over 30 years remain in compliance and in their original locationThese businesses would be eligible for certain types of assistance, including priority access to pre-inspections for ADA compliancy, pro bono legal advice on leases, and property tax rebates. The legislation will predominantly support small mom-and-pop restaurants and cafes, and smaller bars and retailers that cater to the LGBT community.

Regulatory Overhauls

Even more common than predictive analytics and legacy business legislation is simply regulatory reform. Take ChicagoBoston, Cleveland, Kansas City, Mo., and Seattle, for example. These cities are making it easier for businesses to comply by reducing the number of permits and licenses, improving approval times, making requirements and timelines more transparent, revisiting outdated and onerous laws, and creating accessible ways for businesses to interface with government and obtain information.

Improving the ease of doing business is not only the most impactful compliance carrot available to local governments, but it is also a top contributor to a business-friendly environment (often surpassing low taxes). By using carrots and sticks in an innovative approach to regulatory compliance, cities are creating a win-win scenario in which the community is protected and businesses are encouraged to contribute to a vibrant, healthy economy.

christy-mcfarland

About the Author: Christiana K. McFarland is NLC’s Research Director. Follow Christy on Twitter at @ckmcfarland.

How the City of New Orleans Ended Veteran Homelessness

President Obama & HUD Secretary Castro @ 2015 NLC Congressional City ConferenceAs part of his remarks last week at NLC’s Congressional City Conference in Washington, D.C., President Obama thanked city leaders for stepping forward and joining the Mayors Challenge to End Veteran Homelessness. Echoing the President, HUD Secretary Julián Castro thanked city officials for their partnership and leadership, citing the recent announcement by the city of New Orleans as the latest proof that the goal of ending veteran homelessness in 2015 is achievable. (photos: Jason Dixson)

Building on the success of Phoenix and Salt Lake City in ending chronic veteran homelessness, New Orleans Mayor Mitch Landrieu announced in January that the city had achieved the goal of the Mayors Challenge and reached functional zero on homelessness among all veterans.

In making the announcement, Mayor Landrieu said, “Six months ago on Independence Day, we came together to pay homage to our service members and veterans who courageously serve our great nation, and announced our goal to effectively end veteran homelessness in New Orleans by the end of 2014. I am honored and very pleased to report that we have housed 227 veterans, exceeding our goal of 193, thanks to the hard work of our committed partners. We owe our veterans our eternal gratitude for their service and sacrifice to this nation, and making sure they have a place to call home is a small but powerful way we can show our appreciation.”

To help disseminate some of the best practices from New Orleans, the city’s work has been highlighted during joint NLC/HUD regional forums in support of the Mayors Challenge. According to city officials, there were several key elements that led them to this historic accomplishment:

  • Leadership

Mayor Landrieu was one of the first mayors to join the Mayors Challenge. His support of the work was translated into daily engagement thanks to a dedicated staff person. The mayor’s focus resulted in specific challenges being identified and pursed relentlessly.

For example, in response to service gaps identified by community partners, the city committed HOME Investment Partnership resources to pay for rental assistance and to help with the development of permanent supportive housing. Mayor Landrieu’s leadership also served as a catalyst for other elements of success, such as:

  • Collaboration

Central to the success in New Orleans was the coordinated teamwork of all community partners. Joining the city in the effort were public and private partners from the local, state and federal levels.

Locally, the 63 partner agencies and service providers that are part of the Continuum of Care, including UNITY of Greater New Orleans, were critical allies. In addition, the New Orleans Redevelopment Authority, Housing Authority of New Orleans, Downtown Development District, and the New Orleans Interagency Council were key partners. These stakeholders joined forces with officials from federal partners at HUD, Veterans Affairs and the United States Interagency Council on Homelessness (USICH) as well as leaders from organizations such as Community Solutions, the National Alliance to End Homelessness, the National Coalition for Homeless Veterans and The Home Depot Foundation.

  • Access to affordable housing

Collectively, these partners enacted a local strategy to provide all veterans with access to permanent housing and supportive services. In the face of housing shortages faced by most major metropolitan areas, caused by rising rents and low vacancy rates, housing solutions in New Orleans have been further complicated by the on-going recovery from Hurricane Katrina’s devastation, which flooded 80 percent of the city.

One way the community identified housing for veterans was through direct landlord engagement. Mayor Landrieu sent a letter to all landlords currently contracting with the city and the housing authority. Landlords were invited to a forum to learn more about available housing resources as well as the coordinated collaborations that would partner with them in support of formerly homeless veterans.

In addition, the city’s partnership with the Housing Authority of New Orleans, the local VA, and UNITY of Greater New Orleans resulted in 200 Housing Choice vouchers being designated for veterans no longer in need of HUD-VASH vouchers or other permanent supportive housing programs. This allowed other VASH and supportive housing vouchers to be made available for other homeless veterans.

As the city entered the final stretch of their efforts, a critical number of housing units became available through the Sacred Heart apartment complex. “The Sacred Heart units set us up for success when we needed it most,” said Sam Joel, the Mayor’s Senior Policy Advisor during a recent HUD/NLC Mayors Challenge forum.

Initially built in 1908 as a convent and school, the first of Sacred Heart apartments’ three development phases began accepting tenants in December 2014. When completed, the building will have 109 units, comprised of efficiencies and one-bedroom and two-bedroom apartments. 55 units will be prioritized for chronically homeless veterans, with the remaining 54 units being available for households earning less than 50 percent of the area’s median income. As development continues, the building also will have a sunroom, a computer lab, a courtyard area and an on-site parking lot.

The $7.6 million project was made possible by a partnership between The Home Depot Foundation, the City of New Orleans, the State of Louisiana, UNITY of Greater New Orleans, and the New Orleans Redevelopment Authority. Various local, state and federal affordable housing programs were used to finance the construction of the property, including $1.2 million from the Landrieu administration. The remaining gap in financing was provided by The Home Depot Foundation.

In addition to providing investment capital, the Foundation donated construction supplies, fixtures and other furnishings for the new units. Volunteers of the local Team Depot visited the site to deliver and assemble furniture such as tables, chairs and shelving to ensure the veterans’ new apartments were comfortable enough to call home.

Elisha's blog post - Team Depot at Sacred Heart in NOLAMembers of Team Depot assemble furniture for veterans as they move into units at the Sacred Hearts apartments in New Orleans. (photo courtesy of The Home Depot Foundation)

Maintaining Functional Zero

New Orleans joins Salt Lake City and Phoenix in proving that communities can solve an issue once thought to be intractable. New Orleans’ success demonstrates that, with persistent leadership, community collaboration and the determination to identify needed housing, cities can provide housing for all veterans and ensure that future episodes of homelessness are rare, brief and non-recurring.

As the first city to declare they have reached the goal of the Mayors Challenge to End Veteran Homelessness, New Orleans provides precedent for how a city can measure and discuss what it means to “end veteran homelessness.” Attaining this goal has come to be characterized as reaching “functional zero.”

New Orleans defines ending veteran homelessness as ensuring every homeless veteran who can be located is placed in permanent housing or in temporary housing with an identified permanent housing placement.

“Veteran homelessness is an important and challenging issue, and we are very proud of our accomplishment in New Orleans – but the work of ending veteran homelessness is never really done,” said Mayor Landrieu. “That’s why we have also created a new and sustainable rapid response model that combines all available local, state and federal resources with the work of our local active duty and former military personnel – utilizing veterans to help veterans. I hope our model here in New Orleans can be replicated nationwide so that we can end veteran homelessness in America once and for all.”

Veterans and others will always face periods of housing instability. But ensuring homelessness is not perennial is a dramatic change in how our country has addressed homelessness for more than 30 years. New Orleans’ accomplishment – and Mayor Landrieu’s understanding of what functional zero means for his city – provides guidance as other cities move closer to this goal.

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.

Big Ideas for Small Cities: 6 Mayors Discuss How to Get Creative on a Budget

Union City, Ga., Mayor Vince Williams at the Big Ideas for Small Cities EventUnion City, Ga., Mayor Vince Williams at the Congressional City Conference Big Ideas for Small Cities event on Sunday, March 8, 2015. (Jason Dixson)

In a large city, implementing a creative idea doesn’t necessarily mean choosing between innovation and laying off a police officer. Smaller cities, on the other hand, have a significant challenge when it comes to establishing new programs – a smaller budget. This afternoon, mayors from small cities gave examples of out-of-the-box ideas that didn’t break their bank. Here are six ideas they shared with Congressional City Conference delegates:

1. Build your brand around a cultural endeavor: Mayor Jud Ashman of Gaithersburg, Maryland encourages small city leaders to define their community to the larger world through culture. The Gaithersburg Book Festival attracts prominent and celebrity authors from all over the world, not to mention scores of attendees who eat, shop, and stay in the city of Gaithersburg, which normally has a population of 64,000. He shares three tips for putting on this kind of game-changing event in your city: get the whole community involved (including schools, libraries, and private partners), make sure it occurs at the right time, and choose the right event for the market.

2. Believe in your own city. Mayor Nancy Backus of Auburn, Washington says “Show everyone how much you believe in your city, and they’ll believe in you.” Through a very tough economic time, Backus and her council asked “What can we do to attract developers?” And answered their question by restraining development fees, securing grants, and starting a small business assistance program.

3. Put people on your team without putting them on the payroll. If you have the challenges of a big city without the resources, Mayor Christian Price of Maricopa, Arizona suggests finding people in your city who can help change the narrative. These are well-connected, outgoing citizens who can serve as “ambassadors.” They are given accolades and responsibility to debunk the idea that their city is less desirable than their neighbors. Mayor Price’s ambassador program has tremendously changed the story of Maricopa, through real citizens who love their community and want to share it.

4. Have vision for your community. Mayor Vince Williams of Union City, Georgia transformed a failing mall into a movie set, and brought 800-1200 jobs into his city in one year. After a lot of work and state lobbying, this endeavor brought incredible opportunities for young people, huge growth in small businesses, job training, tourism, and tax credits. Identify what challenges could transform into something beneficial for your whole community.

5. The three most important ways to improve your community are partnerships, partnerships, and partnerships. Mayor Garrett Nancolas of Caldwell, Idaho created the Caldwell Youth Master Plan using resources from NLC’s YEF Institute and collaboration with public and private partnerships. For example, the city now offers free swimming lessons for all 3rd graders with help from the bus companies, who bus kids free of charge to this important after-school program that directly correlates to a major improvement in reading scores. Crime has gone down and reading scores have gone up since Mayor Nancolas began collaborating to meet huge goals. Caldwell is now considered one of America’s 100 best communities for young people!

6. Provide education for your business owners. After his city lost its successful and vibrant downtown due to big box shopping centers and online retailers, Mayor Stan Koci of Bedford, Ohio joined with his small town downtown retailers to revitalize the area through education. To reengage with the community identity of Bedford, he invested public dollars to fund free classes to give retailers the tools they need to grow with the times and prosper as small business owners.

Want more big ideas? This event kicks off NLC’s brand new, ever-growing database of City Practices. This is a resource for you to find examples of initiatives and projects in cities of all sizes across the country.

Mari Andrew bio photoAbout the author: Mari Andrew is the Senior Associate of Marketing at the National League of Cities. She works hard to help city leaders build better communities, and believes the world would be a better place if people wore more creative clothing.

Expanding on the President’s TechHire Initiative: How Innovation Districts Catalyze Jobs, Creativity & Growth

"Photo by Jason Dixson Photography. www.jasondixson.com"President Barack Obama, seen here speaking at NLC’s Congressional City Conference on Monday, March 9, revealed his new TechHire initiative to expand access to tech jobs in communities across the country. NLC has just released a new research brief on Innovation Districts that explores the President’s ideas in more depth, specifically reinforcing the important intersection where business, education, technology, and city leadership meet.

With President Obama’s announcement at the NLC Congressional Cities Conference of the new TechHire initiative, the White House will make available $100 million in grants to expand the number of Americans in well-paying tech jobs. The program will include city leaders, universities, community colleges, and the private sector with a special focus on underserved population, working together to expand tech jobs. At the same time as TechHire ramps up in the initial 21 cities, it is increasingly apparent that place in the 21st century economy matters more than ever. City leaders know that the tech sector of today is increasingly gravitating away from suburban office parks towards central cities and innovation districts.

Cities incubate creativity and serve as labs for innovative ideas and policies, and the place where this is happening more and more is in Innovation Districts. These districts are creative, energy-laden ecosystems that focus on building partnerships across sectors. Innovation Districts attract entrepreneurs, established companies, and leaders from all walks of life, providing them with the space and the place they need to create unexpected relationships and find transformative solutions.

From established environments, like the Boston Innovation District to the newly developing innovation district in Chattanooga, one of the founding TechHire cities, there is an increasing focus on catalyzing economic growth through “spatial clustering.” These districts share similarities with traditional economic clusters, but differ in key ways. Placemaking is central to innovation districts, and there is a focus on being sited in high-density areas with a cross-section of employees that want to share ideas instead of being cloistered apart from one another. These urban ecosystems foster collaboration and bump and spark interactions between workers that might just create the next big idea.

NLC’s Center for City Solutions and Applied Research (CSAR) has just released a new research brief on Innovation Districts that explores this concept in more depth, specifically reinforcing the important intersection where business, education, technology, and city leadership meet. Further work will be forthcoming in this space, including an in-depth look at the innovation district forming in Chattanooga, as well as work in partnership with other key players. Innovation districts can encourage experimentation and serve as a key strategy for cities as they further urban economic development and pave the way for new job opportunities through initiatives like TechHire.

Brooks Rainwater bio photoAbout the author: Brooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter at @BrooksRainwater.

What President Obama’s New TechHire Initiative Can Do For Cities

“It doesn’t matter whether you’re the mayor of a big city or a small town – you understand that the economy is dynamic now, and you can’t just stand still; you can’t rest on your laurels.”

– President Barack Obama

"Photo by Jason Dixson Photography. www.jasondixson.com"At NLC’s Congressional City Conference on Monday, President Obama addressed an enthusiastic crowd of over 2,000 mayors and councilmembers from small towns and large cities. The President used this opportunity to announce a brand new initiative, TechHire. Watch the video of his announcement. (Jason Dixson/jasondixson.com)

The President’s TechHire initiative is intended to create a pipeline of tech workers for the 21st century economy, and help local leaders connect tech training programs to available jobs. As the President noted, “right now, America has more job openings than at any point since 2001… Over half a million of those jobs are technology jobs.”

The 20 communities that the White House is holding up as models – the list includes cities such as St. Louis, Louisville and San Antonio alongside high-tech havens such as San Francisco – have demand for tech jobs that appears to outstrip supply. But in many communities, employers may be overlooking talented applicants because they don’t have four-year degrees. As the president observed, a college degree is not necessary for many positions in the tech field. “Folks can get the skills they need for these jobs in newer, streamlined, faster training programs,” he said. These 20 TechHire communities will help employers link up and find and hire potential employees based on their skills and not just their résumés.

Cities already engaged in efforts to boost their rate of postsecondary credential attainment, including training programs, such as those participating in the Lumina Foundation’s Community Partnerships for Attainment initiative and Kresge Foundation-supported partnerships, can take advantage of a new competitive grant program under TechHire. The Obama Administration is launching a $100 million competition for innovative ideas to train and employ people who are underrepresented in tech.

TechHire aims to reach women and people of color, who are still underrepresented in this sector, as well as veterans and lower-income workers, who might have the aptitude for tech jobs but lack the opportunity to access them.

Overall, as concerns about a “skills gap” continue to abound – even without clear evidence of how quickly employers would grow their workforces if more skilled potential employees presented themselves for hiring – the Obama Administration is taking a bold step forward to offer employers what they’ve been asking for – more qualified workers who can fill the demand for tech jobs.

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