As Congress continues to deliberate over the size and scope of the reconciliation bill and the timing of the infrastructure and innovation bills, it is clear that implementation of whatever passes will devolve down to networks of public, private, civic and community leaders and institutions in cities and metros across the country. The federal government is about to invest trillions of dollars through hundreds of programs across dozens of agencies. These programs will run through different distribution channels at different times and in accordance with different rules. Some funding will be allocated via block grants, others through competitions, still others through financial products and tax incentives.
The shift from relief and rescue to recovery and restructuring will necessitate a different level and kind of organizing in cities and metropolitan areas. The American Rescue Plan sent substantial resources directly to cities, counties and states. Many jurisdictions established Stimulus Command Centers (or their equivalents) inside general purpose governments, given the control of these entities over the allocation of flexible funds. President Biden’s stimulus plans require a new kind of local governance – perhaps even new local institutions and intermediaries — to achieve their audacious goals.
Over the past several months, the three of us have been working with New York University’s Wagner School of Public Service on issuing guidance for the city’s next mayor, most likely Eric Adams. The goal of the Wagner School’s NYC 2025 initiative is to gather insight from a range of thinkers on how New York City can become a stronger and more equitable city than it was before COVID-19, with a new mayor taking the reins in January.
To that end, the Wagner School released our paper last week (From City Hall to City Networks (nyu.edu)) calling on the new mayor to adopt a collaborative, networked approach to deployment of federal funds that brings in city leaders from the public, private and civic sectors.
To refresh, ARPA delivered a significant amount of funds directly to city governments. New York City received $5.9 billion alone in Coronavirus Fiscal Recovery Funds. This will not be the case with innovation, infrastructure, housing, human capital or other funds. The new funding will flow to a plethora of entities, city, county and state governments for sure but also public authorities, universities, hospitals, community organizations, non-profits and beyond. These other entities will bear the burden of designing and delivering the actual “products” of federal programs, whether it be an infrastructure reconfiguration, a revitalized energy grid, a new housing complex, an expanded broadband network or a reclaimed industrial site.
The volume and fragmentation of federal investment creates a new maxim for cities and metros: Transformation Belongs to the Organized. Building Back Better will not happen through the normal process of each organization doing its own thing, by itself, in isolation. The realities of multi-purpose and multi-use efforts (e.g., a successful innovation district or commercial corridor requires multiple kinds of investments delivered by separate entities) requires an unprecedented level of priority setting and collaboration.
Mayors will have a key role to play laying out a vision for how these funds can have a transformative impact and mobilize local stakeholders behind that vision. This has been done before. For better or for worse, the New York City of today reflects federal investments of the past. Mayors Fiorello LaGuardia, Robert Wagner, and Michael Bloomberg led New York through periods of vast transformation and recovery made possible by federal spending. Mayor LaGuardia led New York through the New Deal, Mayor Wagner (and Robert Moses) remade New York in the post-WWII years, and Mayor Bloomberg deployed over $30 billion in federal aid that came to the city after 9/11, the Great Recession, and Hurricane Sandy.
If President Biden’s agenda is enacted, the New York City of tomorrow will reflect how the city’s next mayor chose to influence the spending of those new funds. What projects did he champion? What initiatives did he prioritize? What coalitions did he build to ensure new transportation, broadband, housing, climate resiliency, education, or child care funds were used creatively and effectively to expand opportunity? The message is clear: the federal government invests from afar; cities design, deploy and deliver federal funds on the ground.
A Cross-Sector Recovery Network
A networked approach is necessary when federal funds are delivered to cities in highly fragmented ways and local authority is deeply fragmented. Different issues are tackled by different city departments, public authorities, and networks of private and non-profit organizations, even though they target interventions at overlapping populations and neighborhoods. These entities only have an eye for federal funds relevant to their area of expertise and lack awareness of funds going to other projects in the same neighborhood coming through other federal programs.
Our solution to this fragmentation in the face of new federal investments is the creation of a recovery network. Cities across the country, including New York, mobilized to deploy American Rescue Plan funds and win new competitive grant funds it supplied. Some local leaders established “Stimulus Command Centers” and others created structures to guide the deployment of ARPA funding. They will have to iterate and expand on those efforts should the Infrastructure Investment and Jobs Act (IIJA) or the Build Back Better Act pass.
We recommend that New York City’s new mayor take a similar approach if elected and establish a cross sector recovery network. The locus of this effort could be housed within or outside City Hall, depending on staffing and implementation strategy.
- Establish a recovery network. Bring together a diverse set of local leaders across sectors — business leaders, community and civic leaders, the current appointed leadership of public authorities — who are receiving, or likely to receive federal funding.
- Engage the grassroots in priority setting. While the direct recipients of funds will control the purse strings, identifying creative and effective solutions, and setting priorities for spending that will bring about transformation, should be done through a process that allows for input and continual feedback from grassroots and community leaders.
- Appoint key executives to manage the network. To have legitimacy and be effective, the network must be led by respected and experienced executives from across sectors. These leaders should ultimately be tasked with creating a recovery playbook with projects aligned with federal funding sources.
- Convene key private lenders, community banks, impact investors, and business leaders to create new financial products for small businesses. This pandemic demonstrated the immense importance of working capital for small business owners, especially Black, Asian, and Hispanic business owners who lack the access to capital enjoyed by their white peers. New financial products will require private sector leadership and innovation, like Empire State Development’s New York Forward Loan Fund.
- Establish strong working partnerships with state leaders. The ascension of Kathy Hochul to the New York governorship opens the door to a new era of cooperative governance.
- Convene key philanthropies. The philanthropic world — awash in money from a banner year for their endowments — is eager to engage in an inclusive recovery but has not yet figured out the best way to do so. New York is home to a number of the nation’s largest philanthropies. The mayor-elect should convene leading philanthropic grant-makers around an inclusive strategic plan.
- Set a clear vision for what success looks like. The network should identify and champion targeted infrastructure projects, and focus on three to five local initiatives that can capitalize on human capital and innovation funds in its early stages.
The Bridge from the American Rescue Plan to Infrastructure, Innovation, and Beyond
Opportunities remain for the next mayor to influence how remaining American Rescue Plan funds are spent. The Rescue Plan steered over $22 billion to New York City. Nearly half of ARPA funds have spend-by dates far in the future, ranging from 2023 to 2030. These long term ARPA funds include funding for K-12 public schools, supplemental housing funds, the State Small Business Credit Initiative, supplying growth capital to small businesses, the Economic Development Administration’s Investing in America’s Communities grant challenges, capital project funds for broadband expansion, and new Childcare Stabilization Funds, among others. These programs present opportunities for infrastructure upgrades, small business development, economic and workforce development projects, and innovations in the care economy, acting as a prelude to other proposed Biden investments.
While Mayor Bill de Blasio allocated the city’s $5.9 billion in State and Local Fiscal Recovery Funds in the city’s FY 2022 “Recovery Budget,” $961 million is set aside for the next three fiscal years, and the city’s plan for the funds will be reviewed and refreshed each year.
Mayor De Blasio initiated several efforts that a new mayor can leverage during the recovery phase. He created Sector Advisory Councils composed of industry leaders to liaise with City Hall and provide practical guidance. The city also released a Long-Term Recovery plan with an emphasis on small business recovery and public health.
Here is the good news. The early signs from Eric Adams, the presumptive mayor-elect, demonstrate an interest in learning from a diverse set of leaders and an eagerness to build cross-cutting alliances. He’s stated his desire to partner with the business community and tapped Sheena Wright, the former president and CEO of the United Way of New York City, to head his transition team. Adams’s campaign issued a series of memos outlining policy goals on issues spanning new climate infrastructure, transportation, innovation and sector growth, and small business development. However, more work is needed to connect institutions and ideas to potential new sources of federal funding and build coalitions that can drive these priorities. It is daunting, to be sure, but change will only happen if local leaders organize to meet this moment.
The nation is now focused, as it should be, on the rebuilding legislation now before Congress. That focus should and must shift quickly to the places where the delivery of national ambitions will predominantly take place, our cities and metropolitan areas. Bridging the divide between moderate and progressive Democrats will now give way to building coalitions across diverse disciplines, stakeholders and jurisdictions. Make no mistake: the success of Build Back Better will ultimately depend on local agency, courage and execution.