As 2022 comes to a close, I’ve been thinking about what the new (dis)order in Washington means for the role of cities and metropolitan areas and the political, business, philanthropic, university and community leaders who power them. The return of divided government at the federal level promises a new level of volatility and instability in our nation’s capital and, as in the past, de facto delegation of responsibility for getting stuff done to local doers and problem solvers, what Jeremy Nowak and I labeled the “New Localism.” My prediction: 2023 will, once again, be the Year of the Local.
On the surface, we have seen this movie before.
In 1994, I was Chief of Staff to HUD Secretary Henry Cisneros when the Gingrich Revolution took place and Republicans swept Congress for the first time in decades. That political earthquake launched a protracted battle over the course of major social policies with results that persist to this day.
Incredibly, positive change still occurred amid heightened partisan conflict and rancor. Under the clear-eyed leadership of Democrats like Cisneros and Republicans like Missouri Senator Kit Bond, divided government became a vehicle for innovative policy making around public housing and urban regeneration.
We should not expect 2023 and 2024 to be a repeat of 1995 and 1996. The Republican Party of Newt Gingrich and John Kasich or even John Boehner and Paul Ryan is qualitatively different from the one “led” by Kevin McCarthy (assuming he even assumes and keeps the Speakership). Partisan divisions over federal policy, buttressed 30 years ago by competing think tank solutions and idea salons, have been replaced (on one side anyway) with a lust for partisan destruction, at any price. The next two years will be about the exercise of power in its rawest form.
The consequences for the country will be profound, in ways that are predictable and unpredictable. The abuse of oversight responsibilities will distract thousands of federal government professionals, political appointees and civil servants alike, in a high stakes game of gotcha. Republican rule will be chilling on the executive branch, as House committees scour the country for this year’s version of Solyndra.
This is a 21st century form of trench warfare, offense and defense, with no positive results expected or even intended for communities.
The nation’s challenges, of course, will not diminish during this period. By contrast, our challenges will simply grow in scale and scope.
Cities, metros and their countries now confront a bewildering array of disruptive and destructive dynamics, some unleashed by the pandemic, some long standing in nature, some catalyzed by broader policy decisions, some precipitated by the Russian invasion of Ukraine.
Just look around us. Housing rents are spiking. Supply chains are disrupting. Remote work and homelessness are surging. And profound advances in technologies — the internet of things, robotics, artificial intelligence — are redefining the very nature of work and fundamentally altering the skills our workers need to succeed.
As I have noted before, we are living through a period that is better characterized by the disturbing moniker “The New Disorder” rather than the more soothing “The New Normal” that we often hear. If you feel uncomfortable and disoriented, you should. We are in new global territory that is uncharted and unmapped.
One thing is certain. With Washington distracted, problem solving will once again shift downwards to networks of leaders in cities and metropolitan areas, and those states which remain zones of reason.
Make no mistake: The “to-do” list for these pragmatic leaders is large.
First, local leaders will need to address the fundamental delivery crisis that has hampered the implementation of federal investments over the past two years. The reality of this moment – rarely discussed in any serious way or addressed in any structural manner – is that there is a fundamental disconnect between the abundance and complexity of federal capital (distributed via hundreds of separate programs) and the dearth of local capacity. The fact is that most communities were unprepared for the fire hose of funds coming from Washington and have done too little to get prepared since. And efforts by states, financial institutions, philanthropies, universities and others to boost capacity, codify solutions, routinize financial methods and spread and scale innovations are still timid and under-sized. That needs to change, fundamentally.
Second, and relatedly, local leaders should take full advantage of the economic restructuring that is possible given market dynamics and ample (if narrowly drawn) federal investments. We are witnessing in real time the re-shoring of manufacturing and production (partly due to the de-globalizing effects of a dangerous world), the wide-scale application of technological advances and the accelerated greening of the transportation, energy and the building sectors. The tantalizing prospect is that places will use this moment to strengthen their economies by leveraging newly valued competitive advantages (e.g., access to water in the Midwest) and boosting locally-owned small and medium sized enterprises through the large-scale procurement of goods and services. The end product could be a partial re-balancing of the nation’s economy spatially, with a shift away from the overconcentration of growth and private investment in super-star metros of the past three decades. Ironically, Washington descends into divided government and partisan gridlock at the very moment the US is in an exceptionally strong position globally and should be burnishing its position.
Finally, local leaders must fill, fully and creatively, the spaces that were not filled during the first two years of the Biden Administration. The federal investments we have witnessed these past few years have been over-indexed on infrastructure, innovation and climate and under-indexed on the super-sized challenges faced by most communities – the lack of affordable housing, the spike in crime and homelessness, the shortages in skilled health care and industrial workers and the profound changes in the role and function of downtowns and centers of office employment. Incredibly, some federal infrastructure investments are likely to make local housing challenges worse rather than better, particularly now that predatory investors, using advanced technologies, are buying single family homes at scale and gouging vulnerable renters in the process. With the federal government unlikely to act, the only way to protect homebuyers, prevent evictions, expand homeowners and regenerate neighborhoods is to have a burst of policy, practice and product innovation from the bottom up. The process of designing solutions, capitalizing projects and delivering tangible results efficiently and expeditiously will be locally-led.
The in-box of local leaders, in short, is over-flowing. What is needed is a new amped up version of New Localism. Leaders in individual cities and metros must be deliberate, intentional and purposeful if they are to leverage local assets (e.g., industrial strengths, locational attributes, publicly owned assets) to full affect. This will necessitate a new form of radical collaboration across sectors and artificial municipal and county borders. It will also require efforts that stretch across cities and metropolitan areas so that innovative products and practices originating in first mover communities can be rapidly scaled all over the country.
The past several decades have been a roller coaster ride at the federal level. This year’s election reinforced that (unfortunate) reality. The only constant has been the persistent work of local leaders committed to place and progress.
 We defined owners with “CORP”, “LLC”, “PARTNERS” or “GROUP” loosely as “investors”.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University. Elijah E. Davis, Avanti Krovi, Milena Dovali and Bryan Fike are Research Officers at the Nowak Lab.