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The past 5 weeks have been painful to observe and experience. The Trump Administration has, in rapid fire fashion, moved to pause and condition federal funding, reduce the federal workforce, impose tariffs on trading partners and defy judicial orders. On Tuesday, the House passed a budget resolution that would continue tax policies enacted in 2017 (at a cost of roughly $4 trillion over the next 10 years) while reducing federal spending by $2 trillion over the next decade, with Medicaid and Supplemental Nutrition Assistance Program (SNAP) being the primary targets.

For all its flaws and its failure to prevent the current housing crisis, federal housing policy has been relatively consistent and stable over the past 40 years. The Low-Income Housing Tax Credit program, established in 1986, has financed over 3 million affordable housing units. At any given time, in recent years, over 2 million households use Housing Choice Vouchers to afford their homes. Fannie Mae and Freddie Mac have underpinned the mortgage market for decades.

I found myself looking for cinematic guidance as the chaos of the past few weeks played out.

I ultimately found it in one of the most compelling scenes in the first Godfather film. With guidance from Don Vito Corleone, Michael Corleone is plotting his audacious move to consolidate power among the warring Mafia families. One of the consequences of the anticipated bloodletting is the demotion of Tom Hagen from the Corleone family’s consigliere to its lawyer in Las Vegas.  As Michael explains: “You’re not a wartime Consigliere, Tom. Things could get rough with the move we’re making.”

Housing has dominated state and local headlines, the federal campaign trail, and even this newsletter of late. But you wouldn’t know it if you were moving within private capital circles. Rather, the talk of the town in the public markets, amongst lenders, and at private equity conferences is data centers: housing for chips.

Opportunity Zones (OZs) have emerged as a significant tool in driving investment into underdeveloped areas, offering a compelling case for their continuation and expansion. Since their inception in 2017, OZs have attracted nearly $100 billion in private capital, according to the Economic Innovation Group (EIG).

These investments have catalyzed the creation of more than 500,000 jobs, demonstrating their efficacy as a tool for economic development. Notably, multifamily housing developments have accounted for a substantial portion of these projects, addressing the nation’s 7-million-person housing shortage. As of early 2024, a full 20% of multifamily units under construction were located in Opportunity Zones. By bridging financing gaps, OZs have enabled the construction of thousands of units that might not have been built otherwise.

As we have written before, the U.S. is witnessing a period of rapid re-industrialization.

Perhaps no industry is more prominent in the United States’ nascent industrial resurgence than semiconductor manufacturing. Semiconductors are ubiquitous, powering everything from consumer electronics to advanced industry. They are also central to national security, earning a place on the Department of Defense’s list of Critical Technology Areas.

As states, cities, metropolitan areas and rural communities wrestle with the implications of the 2024 elections, Opportunity Zones have emerged as a core pillar of what might come next in housing and economic development.

Opportunity Zones emerged as a little-known provision of the Tax Cuts and Jobs Act of 2017. Focused on attracting private investment to distressed communities, the incentive allows people or corporations to defer taxes on capital gains if they park those gains in qualified Opportunity Funds that target their investments to state-designated Opportunity Zones.  If investors stay in a Fund for 10 years, any additional gains from Fund investments are also exempt from taxes on the capital appreciation.

This article was originally published by the Financial Times on November 22, 2024

Over the past twenty years, I’ve had the chance to observe a remarkable experiment in urban governance reform: England’s efforts to devolve more power to local decisionmakers through metro mayors, creating, in essence, a new layer of government in England.

A version of this article first appeared in Governing Magazine on October 31, 2024

The accelerating pace of generative AI is driving a more physical economic revolution, one that goes deeper than digital chatbots enhancing worker productivity. This opens the door for transformation in cities that embrace its potential.

“Fasten your seatbelts, it’s going to be a bumpy night.” So famously said Bette Davis’ character in the classic 1950 movie All About Eve.  Replace “night” with “four years” and we just begin to have a sense of what Tuesday’s election means for the world and our nation.

The election of Donald Trump and the return of one-party rule to Congress has once again ushered in a period of volatility and uncertainty for US cities and metropolitan areas, the places that house the bulk of our population, generate the preponderance of our GDP and drive the accelerating pace of technological innovation.

As exemplified by Trump’s early Cabinet appointments, these globally significant places are about to experience an unprecedented set of shocks, some aired during the election, many not. To withstand what’s coming, and even take advantage of the disruption, cities and metropolitan areas, individually and collectively, will need to organize themselves in equally unprecedented ways.