American cities are much more powerful than British ones – and that's not always a good thing

They have signs like this one from Texas, for a start. Image: Daniel Schwen/Wikimedia Commons.

The Lincoln Institute of Land Policy is a Massachusetts-based think tank which researches the use, taxation and regulation of – yep, you guessed it – land. Every year, it holds a two day “Journalists’ Forum”, at which it gathers a bunch of relevant hacks, and invites mayors, government officials, and other land-appreciative types to talk to them. It’s basically my Mecca.

I was lucky enough to attend this year’s conference in Washington DC last week. The event was primarily concerned with American cities, and it left me thinking two Big Thoughts.

One was that the issues American cities are facing would be incredibly familiar to their peers here in blighty. They include austerity, in the aftermath of the 2008 crash; power struggles with higher levels of government; and the question of how you create jobs, when the heavy manufacturing industry your town was built on has just collapsed and/or moved to China.

The other Big Thought the conference left me with is quite how different the range of responses from American cities has been. Not because they have different goals; simply because they have a vastly different range of powers at their disposal.

So, here are five wonkish ways in which urban politics is different across the pond.


Land is plentiful

Okay, let’s start with an easy one. The landmass of the US is, give or take, 40 times that of the UK.

As a result, unlike the UK, the US is not gripped by a constant state public panic about the idea it might have to build on some things it hasn’t built on before. It’s actually possible for cities to expand to accommodate the growing number of people who want to live in them.

This is a bit of a mixed bag. It’s led to sprawling car-based cities like Houston and Atlantic which, which great from a house price point of view, are pretty ghastly in terms of the environment or walkabilty. And it hasn’t saved the whole country from housing crisis, or the economic damage that comes with it: plentiful land in Utah can’t provide homes in San Francisco.

But it does at least mean that, while housing came up, not once in two-days, did anyone snap “Brownfield!” and then look smug about it. And for that I am grateful.

Cities can set their own boundaries (sometimes)

One of the causes of the problems in Detroit, Congressman Dan Kildee told the conference, was that the state of Michigan revoked it’s powers to set its own boundaries. In the mid-20th century, huge numbers of people moved from the city proper to a ring of affluent commuter suburbs, in a phenomenon known as “white flight”.

Once upon a time, the state’s rules on municipal annexation meant that the city was empowered to expand its boundary (“city limits”) to include those new suburbs. But after the 1970s, it wasn’t. As a result, it lost those rich residents, and the taxes that came with them.

There are two things to notice about this story. The first is that cities can set their own boundaries. Not always – it depends on the rules set by the individual state – but often. As a result, you get oddities like this Chicago, whose city limits extend west in a 200 foot-wide strip so that it could incorporate O’Hare Airport.

Funny shape, Chicago. Image: Wikimedia Commons.

Imagine how much easier devolution deals would be if Leeds could unilaterally annex, say, Wakefield.

The other thing you’ll notice about that Detroit story, is...

US cities have financial freedom

...cities can set their own taxes. Which would be pretty handy, if they wanted to, say, build a new road.

They can issue municipal bonds pretty easily too: Carl Weisbrod, New York City’s director of planning, told the conference that the city’s goal is to keep its debt service payments below 15 per cent of its operating budget. In a city the size of New York, that’s a lot of room for manoeuvre.

All of which gives American cities a fair degree of financial freedom to invest in themselves. Mick Cornett, the mayor of Oklahoma City, gave a well-worn presentation about how the city had reinvented itself after tax breaks failed to persuade United Airlines to relocate to the city in the 1970s. The problem, Cornett explained, was that the firm sent a few executives and their partners to spend a weekend in Oklahoma City checking out their potential new home, and all of them were so bored that they decided they didn’t want to move there. (The firm went to Indianapolis instead, which probably burned a bit.)

After that, the city spent several decades reinventing itself: refilling a dry ditch that had once been a river with water; rebuilding its schools; building a street car. Now, the city has gone from a “suburb of nothing” to a city that people move to – voluntarily! – from as far away as California.

Water taxis in Oklahoma City's Bricktown district. This used to be a ditch. Image: SoonerFever/Wikimedia Commons.

It’s difficult to imagine a UK city pulling off this sort of trick, simply because they don’t have the ability to invest in themselves. UK cities can issue bonds, but the rules are set by the Treasury, and the vast majority haven’t. And while councils will soon get to retain their own business rates, that’s a long way from being able to levy local taxes. Most British cities just aren’t that powerful.


Transparency is assumed

Okay, this risks being a bit navel gazing, and isn’t specific to cities at all, so feel free to scroll past it. But it’s an important point, so I’m sticking it anyway

There was an entire presentation, from a member of the federal government, about how journalists can get the most out of publicly available data. Not only is that stuff out there – the government expects people to use it and, in a roundabout way, wants to help them do it.

The British authorities are, charitably, rather less comfortable with this sort of attention. We have a Freedom of Information Law – but we’ve only had it for 16 years, officials tend to see it as a burden rather than a constitutional right, and the man whose government introduced it noisily wishes he hasn’t.

In the US, for all its flaws, everyone in US politics knows who they work for and that they might be being watched. That dynamic is, er, less obvious in Britain.

Okay, now back to your regular service.

None of this is an unalloyed good

We’re pretty noisy advocates of more power for Britain’s cities. We love cities. I mean, it’s right there in the site’s name.

But there is another side to all this political and fiscal freedom. American cities can invest in themselves - but as a result, American cities are expected to invest in themselves.

The result is sometimes a downward spiral. The finances of cities like Detroit or Flint collapsed in part because, once the problems began, the cities lacked the resources to arrest the decline – and neither state nor federal government were coming to save them.

Britain’s cities are weak; Britain’s cities benefit from fiscal redistribution. There’s an extent to which these things are two sides of the same coin.

Jonn Elledge edits CityMetric and tweets too much.

For more of this stuff, follow us on Twitter or Facebook

 
 
 
 

Is Britain’s housing crisis a myth?

Council housing in Lambeth, south London. Image: Getty.

I’ve been banging on about the need for Britain to build more houses for so long that I can no longer remember how or when it started. But at some point over the last few years, the need to build more homes has become My Thing. People ask me to speak at housing events, or @ me into arguments they’re having on Twitter on a Sunday morning in the hope I’ll help them out. You can even buy a me-inspired “Build More Bloody Houses” t-shirt.

It’s thus with trepidation about the damage I’m about to do to my #personal #brand that I ask:

Does Britain actually have enough houses? Is it possible I’ve been wrong all this time?

This question has been niggling away at me for some time. As far back as 2015, certain right-wing economists were publishing blogs claiming that the housing crisis was actually a myth. Generally the people who wrote those have taken similarly reality-resistant positions on all sorts of other things, so I wasn’t too worried.

But then, similar arguments started to appear from more credible sources. And today, the Financial Times published an excellent essay on the subject under the headline: “Hammond’s housebuilding budget fix will not repair market”.

All these articles draw on the data to make similar arguments: that the number of new homes built has consistently been larger than the number of new households; that focusing on new home numbers alone is misleading, and we should look at net supply; and that the real villain of the piece is the financialisation of housing, in which the old and rich have poured capital into housing for investment reasons, thus bidding up prices.

In other words, the data seems to suggest we don’t need to build vast numbers of houses at all. Have I been living a lie?

Well, the people who’ve been making this argument are by and large very clever economists trawling through the data, whereas I, by contrast, am a jumped-up internet troll with a blog. And I’m not dismissing the argument that the housing crisis is not entirely about supply of homes, but also about supply of money: it feels pretty clear to me that financialisation is a big factor in getting us into this mess.

Nonetheless, for three reasons, I stand by my belief that there is housing crisis, that it is in large part one of supply, and consequently that building more houses is still a big part of the solution.

Firstly I’m not sold on some of the data – or rather, on the interpretation of it. “There is no housing crisis!” takes tend to go big on household formation figures, and the fact they’ve consistently run behind dwelling numbers. Well, they would, wouldn’t they? By definition you can’t form a household if you don’t have a house.

So “a household” is not a useful measure. It doesn’t tell you if everyone can afford their own space, or whether they are being forced to bunk up with friends or family. In the latter situation, there is still a housing crisis, whatever the household formation figures say. And there is plenty of anecdotal evidence to suggest that’s the one we’re living in.

In the same way I’m not quite convinced that average rents is a useful number. Sure, it’s reassuring – and surprising – to know they have grown slower than general prices (although not in London). But all that figure tells you is the price being paid: it doesn’t tell you what is being purchased for that payment. A world in which renters each have their own property may have higher rents than one in which everyone gets one room in an over-crowded shared flat. It’s still the latter which better fits the label “housing crisis”.

Secondly, I’m entirely prepared to believe we’ve been building enough homes in this country to meet housing demand in the aggregate: there are parts of the country where housing is still strikingly affordable.

But that’s no use, because we don’t live in an aggregate UK: we live and work in specific places. Housing demand from one city can be met by building in another, because commuting is a thing – but that’s not always great for quality of life, and more to the point there are limits on how far we can realistically take it. It’s little comfort that Barnsley is building more than enough homes, when the shortage is most acute in Oxford.

So: perhaps there is no national housing crisis. That doesn’t mean there is not a housing crisis, in the sense that large numbers of people cannot access affordable housing in a place convenient for their place of work. National targets are not always helpful.


Thirdly, at risk of going all “anecdote trumps data”, the argument that there is no housing crisis – that, even if young people are priced out of buying by low interest rates, we have enough homes, and rents are reasonable – just doesn’t seem to fit with the lived experience reported by basically every millennial I’ve ever met. Witness the gentrification of previously unfashionable areas, or the gradual takeover of council estates by private renters in their 20s. 

A growing share of the population aren’t just whining about being priced out of ownership: they actively feel that housing costs are crushing them. Perhaps that’s because rents have risen relative to wages; perhaps it’s because there’s something that the data isn’t capturing. But either way, that, to me, sounds like a housing crisis.

To come back to our original question – will building more houses make this better?

Well, it depends where. National targets met by building vast numbers of homes in cities that don’t need them probably won’t make a dent in the places where the crisis is felt. But I still struggle to see how building more homes in, say, Oxford wouldn’t improve the lot of those at the sharp end there: either bringing rents down, or meaning you get more for your money.

There is a housing crisis. It is not a myth. Building more houses may not be sufficient to solve it – but that doesn’t meant it isn’t necessary.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

Want more of this stuff? Follow CityMetric on Twitter or Facebook