Follow up of our article on January 4.

Excerpted from Ewald Engelen, Sukhdev Johal, Angelo Salento and Karel Williams:

“Here are two new directions and some recommendations for city policy:

1. Invest unshowily in improving the supply of foundational services in specific and locally relevant ways (instead of promoting the ostentation of iconic buildings and grand projects of regeneration which are the same everywhere for competitive cities).

Symbols are a constitutive element of the history of our cities. All major European cities have built self-images around symbols, mostly architectural symbols as with Haussmann’s Boulevards and the Eiffel tower which can together stand for Paris. The ideology of city competition has elevated the symbolic power of architecture to an extreme degree, but has damaged the symbolic heritage of our cities, filling their business and residential districts with “iconic buildings” by starchitects which reproduce the same styles in different places. The result is a developer-led spectacle of ambition and competition materialised with no sense of place and history.

More than 200 tower blocks of more than 20 storeys are presently in planning or under construction in London and three-quarters of them will be luxury flats; Manchester council has put millions into the Spinningfields office and financial district. How does the ordinary citizen benefit from such development? For citizens in present-day cities, the invisible and foundational economy is far more necessary and salient than highly visible, iconic additions to the cityscape which make money for developers and produce look alike cities that fit a generic template in the mind of city hall.

Rather than significant investments in the architecture of ostentation, we need investment and incremental innovations in what we usually take for granted: the infrastructure for sustainable transport, the treatment and distribution of drinking water, underground drainage systems, waste recycling, telecoms and broadband systems accessible to everyone everywhere, modest but energy efficient family housing in unremarkable districts with public spaces and services. And to see how all this can be done in a territorially responsible way by expanding local firm and workforce capability and improving quality of work.

The logic of this priority is that is that it requires us to engage with the specifics of infrastructural deficiencies in individual cities. Each city has a bundle of very specific needs, resources and opportunities: a different topography, a different history, different levels of income and inequality, a different provision of existing infrastructure. London is not Amsterdam, Milan is not Johannesburg.

Locally relevant improvements have to be defined without the one-size-fits-all assumptions of competition: dedicated bike lanes are not an issue in sprawling megacities or towns built on steep hills. In many low-income cities, access and pricing for basic utility services is an issue for edge-of-city informal settlements that lack utility infrastructure and/or require long-distance commuting; in a cold, high-income country with old housing stock, the priority might be short term measures that alleviated fuel poverty and longer term issues about financing necessary investments in secure, sustainable energy supply. In most cities, building or buying social housing and capillary transport improvement will be objectives which are interconnected physically and in terms of pricing decisions.

This kind of shift to specifics would not be intellectually or politically easy, because it requires priority setting and chain thinking about local connections and consequences; but the shift is attractive because it sidesteps the absurdities of the ranking game. If we are concerned with the foundational economy in one city, the measure of success is not primarily an external measure which involves ranking one city against others in meaningless cross section; the measure of success becomes primarily internal and temporal.

The question then becomes: to what extent is that city providing (reasonably priced or decommodified) material conditions of civilised life? For example, take five key domains of foundational security (housing, utility supply, food, health/social care and education) and then ask: to what extent are adequate and reasonably priced key services in each domain available to ordinary citizens and, specifically, how far down the income scale to median incomes or below does this provision extend? It should be clear that cities which rank high on global competitiveness often rank low on one or more basic foundational criteria, as London does on housing. Specifics and time are both crucial because the basic assumption is that policy is about cities doing do more and better in specific domains over time to improve the local offer of foundational goods and services.

2. Promote social innovation which meets basic social needs with a learning government in the leading role (instead of fixating on technical innovation which promises but no longer delivers diffused benefits from productivity and economic growth)

Technical innovation was the embodied aim of 20th-century industrial cities whose suburbs presupposed the motor car and electricity distribution systems; productivity gain and GDP growth were then measures of our national achievement, on the assumption that economic gains would be broadly distributed.
But this assumption is no longer valid in the high-income countries: as Thomas Piketty has demonstrated, the national macro-economic trends in high-income countries are to greater inequalities of wealth and income; as the UN concluded in its 2012-13 State of World Cities “cities generate wealth but it is not shared equitably”.

GDP growth has no rationale when the benefits are captured by the top 5% of the population, which in our cities means urban ecologies of residential segregation by income. We believe the emphasis needs to be shifted towards social innovation that promotes a civilised, inclusive city which performs fair outcomes in all its decisions. A city committed to making access to foundational goods and services more widely available to citizens; and does so, without restricting the privileges of citizenship to a narrow group, as in Gulf State urbanism.

The social problems we now need to solve in many cities are those such as adult care in an era of weakening family ties and ageing populations. To our knowledge, no world city has model arrangements for care of the elderly; their care is a challenge to our ingenuity and, like the quality of public school meals, a litmus test of our civilisation.
All of this requires financial innovation for social purposes which means not higher taxes but new forms of taxes to provide an adequate revenue base.
The competitive city is associated with the race-to-the-bottom, post-1979 incentive strategy of cutting tax rates (and allowing all kinds of general exemptions, especially in corporate tax) in the hope of attracting and retaining big business. Instead, the discourse should be about responsibility when business which draws private benefits from city expenditure (on everything from education to law and order) so that business should, in return, pay its fair share of the social costs; and the valuable businesses are those which are rooted in place and accept their social obligations.

But the answer at this point is not higher tax rates but new forms of taxes which tap the capital gains and incomes created by urbanism. Because taxation is a social technology where innovation in forms of taxation has come to a halt after a heroic century of achievements from 1850-1950 which gave us social insurance, sales tax and income tax deductions for weekly paid workers. The problem of our own time are not about financial innovation but about innovation applied for private purposes regardless of social consequences, as with sub-prime mortgages and other forms of long chain finance.

The argument must be about how to connect social obligation and fiscal innovation. There is then no escaping the point that the grounded city needs some kind of land value tax, for reasons which were familiar to radical Edwardians before 1914 but have subsequently been forgotten. Urbanism generates increases in the price of land and property: for the individual land owner, property renter and homeowner, these increases are an unearned increment arising from social development and the investments of others, especially public bodies which provide infrastructure. As the city creates the unearned increment, it is only sensible that the municipality should, through tax, take some of the value of the increment.

The precondition for mass welfare in the grounded city is a re-invented tax base intelligently spent on public goods and services which directly benefit the mass of the population. One implication is that there are limits to single-city policy because there are places, like Detroit or Liverpool, which have been set problems which cannot be solved from limited local sources. Cities do not, of course, have a full control of all the levers.
Another implication is that intelligent use of the levers depends on rebuilding proper expertise, especially within the tradition of town planning, globally represented by figures such as the late Sir Peter Hall. But this does not imply the idea that urban government is in some general sense for planned cities and against the market, only that the state and planning must take responsibility for some fundamental basics of city organisation.
This implies a shift from seeing the private sector as a source of enterprise and dynamism to seeing the public and third sectors as a source of initiative, experiment and legitimacy.

The grounded city is neither an insoluble city problem in the 1970s sense, nor a city black box in the 2000s sense delivering pleasant surprises. The grounded city is instead a site of diverse experiments and learning which could and should be publicly led.

Drawing on thinking from science and technology studies, government is about experimenting; experimenting is about learning; learning is about building on successes but also about making mistakes; and learning is also about recognising these as mistakes, and moving on.

We think these experiments have to be led by the public sector because only city and city region government has the tax revenue base, local knowledge and democratic legitimacy to require and sensibly lead large scale change. Public sector outsourcing so far, in sectors like rail operation in the UK, reveals a private sector which is risk averse, reluctant to commit investment and unlikely to experiment in socially desirable ways; while private sector capital is hardly necessary if governments at various levels can borrow and do so more cheaply than the private sector. Against this background, a new social contract is required, enforced as we have argued elsewhere by a social process of licensing which enforces corporate responsibility according to local and sectoral circumstances.

The point of fragility in all this is not the coherence and integrity of our vision of the grounded city; the question is about whether it is possible to put together a coalition of city government and civil society to get things done. We live in an era of post-democracy which has removed many of the pressures on city governments world-wide to act radically. Hence the lazy default pursuit of competitive success will continue for a little longer, though not without challenge by a new ideal.”