Court Gould, Sustainable Pittsburgh
Remarks Southwestern Pennsylvania Commission
March 4, 2003 Annual Retreat
Panel on Community and Economic Development

Introduction

I very much appreciate the opportunity to offer my perspective and be a part of process to enhance regional cooperation and thus our economic competitiveness. Working together we can strengthen our region while recognizing both the individuality of our communities and also their interdependence by serving them regionally.

As a framework for the topic of Regionalism and Community & Economic Development ... I subscribe to regionalism being based on the concept that cities and counties must make decisions for the common good, either voluntarily, perhaps with state incentives, or under state mandate. The premise is the local government no longer matches the way people live. Particularly in a region such as ours where an ever-shrinking population lives in an ever-widening area. We live in one community, work in another, and shop in a third. Further, the premise is that local government lacks the authority, fiscal incentive or political will to respond to regional problems.

There are many drivers of the current increase in interest in regionalism; foremost of which is the challenging economic climate - nationally, statewide, and in our region. Certainly Pittsburgh's fiscal crisis is at the heart, but we need to question whether this is polarizing the debate or liberating us to openly consider the fate of the whole region. Regardless, I don't think the response to the City's problems has reached enough to regional solutions.

Nevertheless, the region is grappling with its relation to our core and to sub-cores and how best to deliver public services. From an efficiency and duplication standpoint, policy issues such as housing, land use, public transportation, sewer/water, ecosystem health, air quality, watersheds, sprawl, economic strategies, and maybe even public schooling call for regional approaches.

Regionalism Pays

There is increasing evidence that regions that function well are more competitive... that regionalism pays and is imperative in global economy.

According to Paul Lewis of Public Policy Institute of California, proliferation of local governments disperses power and authority over a clutter of elected and appointed officials and decreases ability to make collective decisions. His research demonstrates that in the long run, dispersed structures inhibit the long-term competitiveness of a metropolitan region and also that fragmentation leads to more sprawl. His and other work provide a substantial body of literature confirming that metropolitan economies are interdependent and the success or failure of one unit is linked to its neighbors, and that fragmented structures have been found to contribute to a pattern of dispersed development, more segregated communities and overall fiscal distress and muni decline.

Jerry Paytas of the Carnegie Mellon Center for Economic Development finds metropolitan fragmentation inhibits competitiveness of a metropolitan area with the critical issue being capacity; governments may be too small in land area or fiscal resources to promote develop or adapt to changing economic circumstances and that fragmentation permits greater variation in competitiveness, which more often than not lets regions sink to the bottom. His conclusion is that decentralizing regional governance exerts a statistically significant negative effect on metropolitan competitiveness.

Substantiating the interdependence between local economies, research by Bob Inman of the Wharton School at the University of Pennsylvania finds rising city poverty, rising city taxes, and a shrinking city econ affect the suburbs too. When central cities become poorer or the fiscal burden from each poor household increases, city residents lose, but importantly, so too do residents in the city's surrounding suburbs. The path from city poverty to suburban house values may be round about - from higher city poverty and city taxes to a weaker city, then regional, economy - but the impact is significant nonetheless.

In addition to research that supports regionalism as good for the economy, we consider the changing location selection criteria on which business executives make decisions of where to invest. The message is competitiveness happens at the regional level with companies looking for, as David Miller, GSPIA, University of Pittsburgh suggests, the best regional habitat in terms of workforce, research capacity, innovation networks, strong demographics and overall quality of life.

Global Perspective

While our region is thinking and practicing regionalism at some levels, it's sobering to overlay an international/global perspective. I recently had the privilege of participating in a German Marshall Fund of the U.S. (together with The Pittsburgh Foundation and Pittsburgh Regional Alliance) delegation from Pittsburgh and Cleveland that traveled to France and Italy to study economic development and governance. We all returned home with a new found appreciation of the scale at which regionalism is playing out in Europe as being far beyond what we are thinking here in Western Pennsylvania. In meeting with leaders from Turin, Italy and Lyon, France, cities with industrial pasts and reinvented futures similar to ours, we learned that in response to a wired, interdependent global economy, in which mobile capital, labor and quick communications and transportation allow people to choose where to live and work and where to produce goods and services, cities and their regions are now engaged in a battle to nurture their own unique advantages, and to make themselves a talent and innovation magnet in the world.

But the scale on which competitiveness takes place in the global economy stunned us. It takes more than just a smart city-region to compete successfully. As an executive with a global biotechnology firm told us, "Today it takes 20 million people to make a good fight in the world." This perspective suggests we should be working with neighbors such as Cleveland, Columbus, Akron, Buffalo, Charleston, Johnstown, Altoona, etc. to identify economic synergies and position the mega-region to the global market.

European cities such as Barcelona, Lyon, Turin, and Stuttgart are organizing their own regions for this fight and are addressing the core question: What are our cities' roles in the world? Their answer is they are building and marketing their particular economic specialties and competencies, programming governance and services on a reg. basis, and cultivating their unique quality of life and place necessary to attract and keep "talent". Progressive regions like these are developing broader cross-border strategic identity and positioning, linking major cities across arcs of develop, interlocking economic development strategies, and forging transportation and communications links such as building high speed rail through the Alps linking Paris, Lyon, Turin, to Milan and more.

I don't believe we've yet figured out how to create competitive advantage in this new global environment on par with the economic develop strategies for cities and metro regions around the world. Instead, the impact of globalization is compounding the struggles that our region already faces with respect to jobs, and home-town economies.

Immediacy

Why is it so imperative we develop a broader regional vision of our role in the world? Simply, we risk becoming irrelevant in the global economy. Consider the signs of economic lethargy:

The recently released Brookings Institution report, "Back To Prosperity A Competitive Agenda for Renewing Pennsylvania" finds we rank low in demographics and economic performance and high on sprawl and abandonment. These twin patterns undermine competitiveness and fiscally wasteful. These patterns are not inevitable, as policies and our fragmentation facilitates sprawl and promote abandonment. Alarming data include:

- In the 1990s PA was 48th in population growth but 2nd in sprawl
- PA's population is older than any other state with exception of Florida
- PA lost more 25-40 year olds than any other state in last 10 years
- From 1992- 2002 PA was 47th in employment growth
- The transition to a service economy is in full swing as jobs and businesses move away. Walmart is now the top private employer in the Commonwealth and in 2000, 61% of workers averaged wages less than $27,000 vs. 50% nationally

In the technology vernacular they speak of the "killer application" for solving a need and I think several are emerging in response our region's poor economic performance, social ills, and continuing environmental woes. They are:

1.   Opportunity to create a regional land use, economic development, and transportation plan that are integrated to guide development to existing places and use public spending on economic development and infrastructure to realize that regional plan.

2.   A regional approach to programming regional objectives and public services in face of high fragmentation.

3.   Employing consistent criteria for evaluating capital improvement programs as in step with a regional vision and principles of Sustainable Development and Smart Growth.

Let's explore the linkages as our region's development patterns connect to many social, economic, and environmental conditions and indicators. Lack of regional governance and our high fragmentation may lead to the ability to do the irrational such as for decades not raising fees to deal with sewer issues and progressively fix what's in place such that today we've inherited a multi-billion dollar liability. Instead, fragmentation enables continuing proliferation of duplicative services and administration and probably not efficient coordination of shared services.

It fuels irrational infighting among communities for ratables and thus drives a growth at any cost mentality passing costs tough decisions onto the future which deteriorates community fabric today and for example, has led to the inappropriate use of TIF for greenfield development.

Lack of regionalism and our high fragmentation has lead to tax disparities which interfere with the free hand of the market, rather than serve as a reflection of it.

Fragmentation and individualized municipal planning may quietly foster exclusionary zoning favoring certain socio-economic buyer profiles. We know our region's sprawling development pattern polarizes us socially, economically, and racially and adds to inequities in schooling, contributing to a growing disparities gap.

(For example in the 1990's our region's cities lost over 58,000 white residents while the minority population increased over 11,000. By 2000, over 95% of the region's black and over 80% of the region's Hispanic residents lived region's older areas.)

- This fragmentation and individualized planning creates an unlevel playing field whereby resources flow more readily into areas that have clout to the disadvantage of older existing communities. Where infrastructure goes predicts growth and in the 1990s our outer townships grew 6.5% and older inner cities and boros collectively lost 4.6 % or 79,000 of residents. Where is the focused development strategy? A couple additional linkages: - An ever widening developed area and decreasing population densities makes it harder and harder to serve the region with public transportation thus impacting job access for the whole community and hurting our competitive advantage. And we know sprawl fuels congestion, loss of open space, and craves redundant expensive infrastructure that we ultimately all pay for.

Regionalism is not new to us; let's expand the opportunity

While we have many fine examples of regionalism happening, ours is modest compared to Europe; to the Twin Cities comprehensive planning authority granted to their 7-county Metro Council and their formal tax base sharing. However, perhaps we are on track for Louisville-style consolidation and merger in our core.

Short of a formal recommendation for structure, Sustainable Pittsburgh, as a constructive voice in the community has issued a framework for considering linkages of issues, for reviewing regional development trends, and offered a number of policy recommendations toward programming and acting regionally. The Citizens' Vision for Smart Growth, now endorsed by 65 organizations calls for:

- Even more comprehensive regional land use planning that designates "Growth Areas" to steer development to existing communities and reinforce existing infrastructure.
- Regional consideration of tax base/revenue sharing to foster growth in appropriate places.
- A public study (similar to and updating of the 1995 PEL study) consider merits and options for reform of the board structure of the Southwestern Pennsylvania Commission to foster multi-jurisdictional cooperation and investments representing region-wide needs and objectives... to ensure planning drives advocacy.
- Use of sustainability criteria to evaluate and prioritize investment and capital improvement and development projects.

Given our political and social fragmentation, territorial battles, eroding tax bases, sprawl, economic malaise, population decline, and neglected neighborhoods and infrastructure, Southwestern PA and American cities across the nation for that matter, are in dire need of a new strategic approach that will effectively address our struggles and help us find our place in the new global economy. Working together, Sustainable Pittsburgh and our Transportation for Livable Communities Project are here to be part of process to reverse our regions decline by strengthening our communities and bringing more resources to renew our competitiveness.

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References:

Resolving the Housing Crisis, January 06, 2003, Reprinted from the Contra Costa Times, By Lisa Vorderbrueggen http://www.calcog.org/resolving_the_housing_crisis.htm

Does Governance Matter? The Dynamics of Metropolitan Governance and Competitiveness by Jerry Paytas, Ph.D. Associate Director Carnegie Mellon Center for Economic Development, 2001 http://www.smartpolicy.org/pdf/governancematter.pdf

Should Philadelphia's Suburbs Help Their Central City?, Robert Inman, Second Quarter 2003, Business Review

Regional Economic Transformation In Today's Global Economy Midwestern Urban Leaders Visit Emerging Global Centers in Europe Lyon, France & Turin, Italy, January 22, 2004 http://www.sustainablepittsburgh.org/PublicDocs/RegionalEconomicTransformationinTodaysGlobalEconomy.pdf

Southwestern Pennsylvania Citizens' Vision for Smart Growth: Strengthening Communities and Regional Economy, August 2003 http://www.sustainablepittsburgh.org/NewFrontPage/Citizens_Vision.html

Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania, December 2003 www.brookings.edu/es/urban/publications/pa.htm