There’s a Much Smarter Way for Cities to Plan Their Futures

Yves here. Apologies for a limited number of original posts. I had a dentist visit yesterday plus I am fighting off this winter’s bug. I seem to be succeeding but I don’t want to take any chances.

In a bit of synchronicity, there were three interesting pieces on the issue how to create better cities and communities and I thought readers would enjoy reading them tout ensemble.

The big sour note in this otherwise fine piece is its invocation of that dreadful top 10%/Dem party hack pet word “smart”. It connotes that anyone who is not highly educated or otherwise well credentialed should be ignored. However, in fairness, author Panne is arguing for rethinking the “smart cities” push, so she didn’t originate this application of “smart”. I trust you will all be able to read past this unfortunate turn of phrase to the substance of this piece.

By Valerie Vande Panne, an independent journalist whose work has appeared in the Boston Globe Sunday Magazine, Columbia Journalism Review, The Guardian, Politico, and many other publications. Originally published at Alternet

U.S. cities, it seems, sometimes are setting themselves up for decay, with big tax giveaways, ever-rising prices and systems that put the bulk of the tax burden on the poor.

Often, when the discussion turns to improving a city, the catchphrase is “sustainable”—sounds good, right? But according to smart-city thought leader Talal Abu Ghazaleh, we’ve been looking at cities all wrong.

The city, he asserts, is a “living animal,” and rather than look at job creation or technology, it’s more important to concentrate on social impact.

“A smart city cannot be for the citizens if it doesn’t serve its human purposes. You can have the best technology, the best cleanliness, best roads, best everything, but if it doesn’t take into consideration my comfort as a human being, it is not smart,” he told NextCity, a nonprofit that reports on urban innovations. “Smartness is defined by its level of impact on the citizen and not on the level of the technology.”

Often cities look at growth rates or traditional economic indicators, Abu Ghazaleh explains. But what’s missing in those plans that make the numbers move is the human aspect. Abu Ghazaleh says a “social impact indicator” would give a more accurate indication of the “status of the state of affairs of the impact on society, just like we have the economic and financial indicators that are very visible, very much watched, and very much announced.”

At the same time, many cities, in favor of business models that can move those traditional indicators, have “discounted their local business community and local economic development,” says Olivia LaVecchia, research associate at the Institute for Local Self-Reliance (ISLR). “Some cities haven’t realized how important [local small businesses] are for an economically resilient city” and continue to put their eggs into the baskets of massive corporations, like GE or Amazon.

ISLR approaches cities more as nation-state communities, says Christopher Mitchell, director of community broadband networks at ISLR. They help cities “do their best with what [they] have.” A fundamental question they ask is, “Are resources staying in the community or are they leaving the community?”

Often, the harm a giant corporation or big-box store does to a community doesn’t seem to be measured using traditional indicators. Box stores will use what’s known as the “dark store tactic” to reduce or eliminate their tax responsibility, LaVecchia explains. Since the big-box chain-store business model is to build a purpose-built store that has no resale value, the store, they argue, should be compared with stores that are closed, so a brand new Lowe’s might be valued as closed and compared to other closed stores. With this tactic, big-box stores “are winning big slashes in what they owe in property tax, and in some cases cities have to refund back property tax,” LaVecchia says. Not only is the company not paying tax into the community, the company is extracting ever more resources from the community.

Yet many cities place priority on that type of private sector “growth.” Rather, the focus, Abu Ghazaleh argues, should be on “the impact on the citizen, on the society.”

We have “state-centric” data, such as unemployment data, inflation data, high school completion data, he says. Instead, cities should be looking at “people-centric” data that can show how a society is moving or progressing (or regressing).

For LaVecchia, it’s “about creating a generally supportive environment”—often with zoning policies that restrict franchises, chains and box stores, and facilitate small businesses and walkable communities. Zoning can also be used to bring back the night sky and generally create a happier environment for the community.

And states can also make interesting policies. In North Dakota, in order to own a pharmacy, “you have to be a pharmacist,” explains LaVecchia. “So CVS, Walgreens, can’t open there. It keeps control in the hands of locals, and it keeps it more competitive, gives more pharmacy access in rural areas, with competitive prices. Some evidence suggests a higher level of service. With smart policies you end up with a more competitive environment and benefits associated with that.”

For Abu Ghazaleh, smart isn’t about sustainability in cities. “I think what we need is terms like progress. We need progress goals with a timeframe. We need to have a timeline and not just wait for another 15 years. We have a very serious problem in the world, and that serious problem cannot be achieved by creating buzzwords that make everybody feel happy.”


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  1. Jean

    Pay as you go infrastructure costs for big developments are necessary. If a developer wants to build a shopping center, then they should put in escrow before breaking ground, all costs of sewers, traffic improvements, paving etc, with subsequent property taxes as more of a maintenance charge.

    No building permits should be issued without a proviso that stores cannot use this tax lowering tactic. Developer doesn’t like that? Go elsewhere. There is no constitutional right to make a profit on a fictitious business enterprise’s speculative investments.

    If a homeowner doesn’t pay their property taxes, what happens? The property is auctioned off by the sheriff to the highest bidder. Marquette should seize the Lowe’s store if they don’t pay what they were originally assessed. The town can then open their own cooperative big store, farmers market, reused building material recycling center and even a branch library on the site.

    Another destroyer of towns and city neighborhoods is the conversion of housing into offices. Where we live there are plenty of vacant second floor apartments that were originally built as living units then turned into hair salons, insurance offices etc. What complicates that is the ADA requirements for an elevator were it to become another business. Turn them back into living units and there’s no ADA requirement.

    1. Darius

      Even if the big box pays up front for the infrastructure, the town holds the bag for replacing it when it goes bad. Infrastructure is a public function. The government should provide it. Everyone, including developers and big boxes, should pay their fair share in taxes. The town should not build the infrastructure without hard data on return on investment. Meaning realistic estimates showing the expense will be recouped in the resulting tax receipts well within the life of the infrastructure. And a federal infrastructure program shouldn’t swoop in and fund it all. This just rewards terrible local decision-making, and still saddles the community with unsustainable long term liabilities.

  2. Skip Intro

    Why do cities pursue losing deals with box stores or big employers? The issue would, I imagine, be a lot less mysterious if we looked at financial benefits to those making the decisions in the cities in question. It would be rash to paint them all as corrupt, there are probably a couple who are truly just gullible. Giving cities agency and intentionality while ignoring this dynamic of individual corruption seems a touch obtuse.

    1. PlutoniumKun

      I’ve personal experience of this and I think that (certainly in the UK and Ireland), the key issue is gullibility, not outright corruption. It is surprisingly hard sometimes to persuade people that a brand shiny new shop with a few dozen employees is not ‘a sign of progress’ or ‘development’. I’ve gone through the stages of arguing with people, pointing out that, for example, the presence of a shop does not magically create more money for people to spend in the shop, it simply diverts from other shops, but its tough to break through the whole ‘but its common sense, isn’t it?’ mindset of many people.

      Ironically, sometimes the arguments for new retail outlets is actually derived from arguments against the previous generation of retail outlets. For example, there are numerous examples of towns fighting to get new shopping centres built in their town centres in order to regenerate the town – the justification is that the town is dying from the out-of-town centres built 10 or 20 years ago. The other article on NC today that mentions Liverpool is a good example – the City Council there have gone to major efforts to bring new retail developments to the docklands area, to attract people to the city centre who would normally go to the numerous out of town developments permitted around Liverpool over the past 3 or 4 decades. Its just patching up the damage. And then of course, in order to compete, these shopping centres have to have vast carparks, so you end up destroying the city fabric in order to protect the city economy.

      Just as one particular example of this, Birmingham (the UK one) is now, at vast expense, undergoing yet another city centre reconstruction, aimed at addressing all the terrible reconstruction efforts of the 1980’s, which in turn were aimed at trying to rectify the catastrophic redevelopments of the 1950’s. So the old market area around the Bull Ring, which was devastated in post war reconstruction has now gone through at least 2 entire generations of reconstruction, all to bring ‘business’ (i.e. shoppers) into the centre, all the while that huge out of town retail developments have been permitted right around the West Midlands, some actually supported by public money (such as the notorious Merry Hill development, developed by good mates of Mrs. Thatcher using generous tax incentives).

      1. Colonel Smithers

        Thank you, PK.

        The latest addition to the list is Oxford. The Westgate centre has been redeveloped by the Crown Estate (yes, HM) at a cost of over £400m. The new centre is less shiny and brutal and more airy than its 1970s predecessor and less out of keeping with the town centre’s character. Apart from local wealth and Chinese tourists, the prices there won’t attract local shoppers. The redevelopment has caused a lot of local resentment.

      2. Darius

        It’s all about magic bullets. Strong Towns and Granola Shotgun are all over this. The promise of growth over building wealth in the community.

  3. Henry Moon Pie

    Thanks, Yves. I love the author’s human-centric approach instead of playing around with Capitalism’s favorite numbers.

    This might be a good place to solicit NC readership’s views and advice on a local matter. I’ve been asked to attend a neighborhood meeting where we’ll be discussing the possibility of opening up our zoning to allow home-based businesses. My approach is informed by my experience in the former Yugoslavia where Tito’s Proudhonian impulses had produced neighborhoods where family-owned shops and services made for walkable, convenient and interesting residential streets filled with bakeries, butcher shops, convenience stores, doctors’ offices along with a few restaurants and cafe-bars. I had suggested a few years back that opening up our area’s zoning could help blunt gentrification since it would allow current residents to make a little cash if our close-to-downtown area becomes “trendy.”

    I’d love to hear the views of NC-ers, especially if they have experience with predominately residential neighorhoods where family-owned businesses were allowed.

    1. Anon

      Well, like everything else, what one initially contemplates (family-owned business) is too broad a concept to be implemented without conflict. An example would be my sister’s home (she operates a sole proprietor professional service business–no walk-in clients) in a residential neighborhood (California suburb) and her next door neighbor decided to operate a wood-woking shop out of his garage. Lots of noise (saws) and auto traffic (supply trucks) ensued,

      His family-owned business rapidly expanded into a environmental nuisance.

      1. Arizona Slim

        Or, as has happened to me, the home-based business is a front for illegal activity. You have to watch that too.

        1. Henry Moon Pie

          LOL. Our neighborhood already has a few of those, but zoning was never an issue for them anyway.

      2. Jonathan Holland Becnel

        This BS is coming to a head in Louisiana as well.

        New Orleans is voting on their ‘Plan For The 21ST Century’ which is a naked money grab in a lame duck session of the City Council on Legislation voted on in 2010.

        Yes, that 2010.

        Ive posted a call out to attend the Feb 22nd Council Meeting on Facebooks Louisiana Socialist Network page and will be a busy little bee inviting workers to Witness the exact Moment the Big Grift begins!

        SHOCK DOCTRINE in action, and it only took them 13 Years after Hurricanes Katrina n Rita.

  4. John Rose

    The argument that cities should pay attention to social values like the quality of mutual engagement can be countered by the example of Singapore which is prosperous, clean and autocratically ruled. Maybe the response is that only happens when big money decides on it and on where to make it happen.
    Still, jumping back to my beginning, it is an autonomous city-state and structure is a powerful determinant of success, in some areas, at least.

    1. Yves Smith Post author

      Lordie. Singapore also regularly has people throwing sofas out of high story windows because they can’t take the regimentation. Singapore canes people or did you forget that?

  5. ks

    “We have a very serious problem in the world, and that serious problem can not be achieved by creating buzzwords that make everybody feel happy. This will be my emphasis at this high level advisory board on social investment funds, and from what I heard in this morning session at the UN, everybody was talking about PPP.

    Public-Private-Partnerships — do governments really believe in that? No sir. We have to change the culture to achieve and to really practice PPPs. Governments and government officers think of the business community as a party you can call on as you wish and when you wish. We are not partners in the process of decision making. When we want to talk about partnerships, partnership is not only in implementation. You cannot come to me with a project and say I want you to be my partner. I should develop it with you if we are partners.”

    Do we really want the ‘business community’ to have more clout in design and infrastructure planning? They’re a huge part of the problem of uncontrolled development and demolitions in my city.

    1. Arizona Slim

      When I see that Triple-P, I think like this:


      That’s the sound of tinkle-down economics in action.

  6. Lorenzo

    That last quote did it for me. I was skeptical from the begging, I’ll admit, but unless I’m grossly underestimating my bias, Mr. Ghazaleh discrediting himself by saying ‘we need terms like progress’ and just two sentences later recognizing ‘(…) serious problem cannot be achieved by creating buzzwords that make everybody feel happy’.

    I also had issue with his proposal of a ‘social impact indicator’, which in my opinion would be very easily skewed to show whatever who’s in charge of running the numbers wants it to show. Apart from having the usual defects of being centrally planned and operated – as in, when is the indicator published, to whom are the results presented, maybe where is it measured, etc. I might suggest even, Yves, you were onto something when you explained the connotations of the pet word ‘smart’. Maybe he’s not too open about it, but Mr Ghazaleh does seem to be enforcing this connotation, in my opinion.

    PS I’m a long time lurker but this is my first time joining the discussion! Hope I did OK.

    1. Jeremy Grimm

      I agree with your view of this post. For all the protest against “everybody-feel-happy” buzzwords this post seemed fond of creating new ones. From what I’ve seen of local politics in the U.S. it seems every bit as captured as the national politics. I view the encroachments of big box stores and distribution centers as evidence for the shift in the relative power of the local wealthy compared to that of the National wealthy. I’ll trade a bushel of “smarts” — “sustainability” and “people-centric” data for some enforcement of a few of our anti-monopoly laws and a ban on land developer involvement with local, county and state governments. [For a different look at the “Urban Development” of the “Great Society” years read “Who Really Rules?: New Haven and Community Power Re-examined” by G. William Domhoff.]

      1. JBird

        Too often all levels of government go for the quick, easily planned, fashionable, weaponized, immediately profitable redevelopment; think of all new poorly designed public housing, highways, and office buildings/high-rises that were built in the 1950s to 1970s that usually conveniently got rid of whole intact communities problem of problem peoples, or anyone not white and middle-class. Much redevelopment occurred despite often desperate resistance not only of the people losing businesses and homes, but also of other local residents and even some municipal governments. It’s amazing how many poor white, black, and even some latino neighborhoods were obliterated ostensibly because they were “blighted.”

        Anyways, it is possible to have successful redevelopment, but it is just easier and cheaper to throw everyone out and vomit up something shiny and pretty, with some well placed greasing if needed.

  7. KYrocky

    Urbanization had its genesis in security and economics. From harbors and bays to ports; from crossings of trade routes to villages; from fortified castles to cities surrounding the castle.

    Failing cities are typified by failures economically or in security, or both. Social values, while subjective, would be pretty low down the list.

    Any people proposing focusing on zoning regulations as an answer to city decay can only be used to living in a place with far fewer pressing economic problems among its populace than I am used to seeing. I have worked in land use for over 30 years, and the people most served by zoning regulations are the wealthy and well off. The people whom need not worry about social impact indicators.

    Failing cities do not necessarily “set themselves up for decay”. Outside forces, such as our Federal Government incentivizing outsourcing of jobs, has inflicted tremendous economic damage on our communities. Conservative philosophy demanding the lowering of taxes on the rich and limiting taxation from, in many cases, even keeping pace with base inflation, has inflicted tremendous damage on our cities and communities.

    Sustainability and smart growth practices are well and good, but they are practices that can only be applied through economic input, and their benefit on the social well being for the majority, the 67% of households that can’t manage a $1000 emergency, these practices are pretty low on the list of things that money could do.

    If you are looking for the greatest “social impact indicators”, it is the degree to which people feel secure economically, and safe in their community. Always has been, always will be.

  8. marcos

    This portion of the neoliberal project has as its goals to turn places into the same kind of interchangeable parts that capitalists have done with persons. When people and places are all interchangeable moving parts, then regional difference is smashed down, everywhere is the same, all people are the same, all in the service of eliminating frictions for capitalism.

    Am I in Sicily or in San Bernardino, I can’t tell anymore?

    1. Jeremy Grimm

      Your comment is insightful and new to me. In the U.S. you can visit a shopping mall in the Midwest and see the same shops and layout as a shopping mall on the East or West coast. The locales are as interchangeable as people are in their jobs. I never made that connection before. THANKS!

    2. Enquiring Mind

      Interchangeability, accessible just off the next exit in Edge City.
      That is the gateway to Edge Ville and Edge Burg, out by the new prison. Don’t blink or you’ll miss your turn.

  9. Adam Eran

    The big determinants of whether a city is “smart”: 1. Pedestrian-friendly mixed use (streets that accommodate pedestrians, and commerce, offices, residences mixed up together), and 2. Density. At least 11 -13 units per acre (thats a little more than duplexes). Mixed income development also means no ghettos for the poor.

    Both #1 & #2 are required for people to have little stores that are viable, and for viable transit. Transit *always* fails in sprawl (single use, autos only, low density). Among other things there aren’t enough transit riders within a walk to the stops, and as often as not, the walk is impossibly undignified, or just way too long. Sprawl also wastes enormous amounts of money and energy on single-occupant autos…and requires every driving-age adult own a car, the most regressive “tax” known to mankind.

    The rest follows. Maintenance for infrastructure is sustainable only in higher densities. See this story that accounts for the real costs.

    And let’s not forget that humans in smart cities can actually encounter each other in venues other than collector streets…so road rage is really a sprawl thing.

  10. The Rev Kev

    I like this post. Not long ago I saw an image of a US shopping mall surrounded by acre of parking lots. You see these everywhere, right? But someone put on that image how much that mega-mall paid in property taxes annually and it was about $6,000 which wouldn’t even come close to what the local community would be spending on maintaining the roads from the community going to this place.
    I have seen how a town can be screwed by ‘development’. Using no names as I do not want to be sued, I know of a town that let a developer bulldoze the city center and put a new mini-mall development in decades ago. This development, owned by some company in Asia, kept the rents sky high so few businesses could set up there. Many shops stayed empty here and I heard the theory floated that they wanted it this way to have it as a tax write-off back home.
    It held up further development badly and eventually a new mega-mall opened up nearby which is draining the main town of shops and businesses. The town eventually brought back this development but it was too late for this town. The place as far as planning is concerned is a mess.

  11. sd

    LA did a bunch of studies about downtown LA. Two areas in particular that they were looking at for development were Broadway and Vernon. At the time, Vernon was zoned for light manufacturing. Broadway was populated with discount stores with the upper floors use daily as warehouse space.

    The study came back with information the City Council did not want to hear. It turned out those discount stores on Broadway were the tax base of Los Angeles delivering a very large chunk of the revenue paid for city services.

    In looking at other cities, it was determined that longevity of healthy cities was based on a mixed economy. Cities that had lost their light manufacturing eventually saw a decrease and then an emptying out of the city.

    Needless to say, just a few years after the study came out, the most vocal opponents on the City Council of developing these areas were suddenly touting the need to gentrify both areas handing them over to developers with lots of tax incentives attached.

    Vernon is slowly being chipped away. Broadway is filling up with chains and box stores.

    As a side note, a recent article in Bloomberg pointed out that 30,000 apartments are coming on line in downtown LA over the next 3 years, 4,000 in the next quarter alone. All of it is luxury housing.

    A high level view of all of this is that absolutely no one is paying any attention to urban planning.

  12. Jamie

    Love these posts about cities. Several observations to make.

    1) Georgian type of land tax might fix the mega parking lots problem as well as some other zoning related problems. I don’t pretend to understand this type of tax at a deep level and it may be subject to any number of problems and criticisms I am not aware of, but it seems to me it would have a lot of beneficial effects over the current “structure value” tax regime, and I believe that the only reason most localities have the current system is because it “works” for wealthy land owners, speculators and rent extractors. A land value tax would freeze them out.

    2) About 2/3 of the budget for the large U.S. city where I live goes to paying pensions. If we had a universal federal old age pension plan, instead of employer based plans, my city would not be closing libraries and other public amenities or having an ongoing budget crisis. A lot of ink is spilled here about manipulating taxes codes, zoning, business regulations etc. to increase public revenue and create public infrastructure, but the major expense (and consequently the primary “product”) of my city is not civic services and public infrastructure, it is retired public service workers. This is, I believe, the elephant in the room that no one wants to talk about. The main reason for employer based pension plans seems to be in order to intensify class based worker rewards. Businesses use their plans to compete in the labor market and to reinforce inequalities in compensation. A universal public pension might blunt that tool, but it would potentially release municipalities from the burden of paying for retirement.

    3) I had an interesting discussion with a city planner at a party once. I asked what he thought of the ideas of Ian McHarg (Design with Nature author). The planner told me everyone in planning knows that McHarg is right, but no one knows how to implement any of his ideas. Too much vested interest in the system “as it is”.

    4) “Sustainability” has indeed become a buzzword. The ecological economists who brought the term to pubic consciousness are at odds with orthodox economists, but the orthodox economist more or less run things. One of the very first things the orthodox did was to transmute ‘ecological sustainability’ into ‘sustainable development’, an oxymoron. ‘Ecological sustainability’ entails the end of infinite growth economics and the recognition of limits, while ‘sustainable development’ implies growth (development) can be ‘sustained’ indefinitely. It is precisely the opposite of sustainability as understood by the ecologists.

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