Market Concentration, Political Discretion, and the American Housing Shortage: An Under-appreciated Barrier to Urban Housing Production

The debate over America’s housing shortage has traditionally focused on zoning regulations, neighborhood opposition, environmental review processes, and the rising costs of construction. These factors undoubtedly matter. In many metropolitan areas, restrictive land-use regulations and lengthy permitting procedures have made it difficult to build enough housing to meet growing demand.

Yet an important and often overlooked factor lies at the intersection of economics and politics: the interaction between market concentration among home builders and high levels of political discretion in development approvals.

Individually, both phenomena can affect housing production. When a small number of firms dominate a housing market, competition may decline and production may become less responsive to demand. Likewise, when local governments rely heavily on discretionary approvals rather than predictable by-right development rules, housing projects become more expensive, uncertain, and time-consuming to deliver.

When these two conditions exist simultaneously, however, they can reinforce one another in ways that significantly reduce housing production while protecting the market position and profitability of incumbent developers.

The result is a development environment in which housing scarcity becomes economically valuable. Rather than maximizing the number of homes built, the market rewards those firms capable of navigating political complexity and managing limited housing supply. Understanding this interaction is essential for cities seeking to increase housing production and improve affordability.

The modern homebuilding industry has become increasingly concentrated over the past several decades. Following the housing crash of 2008, thousands of small and medium-sized builders disappeared. Large national firms such as D.R. Horton, Lennar, PulteGroup, NVR, and Toll Brothers substantially increased their market share. Today, the ten largest homebuilders produce roughly one-fifth of all housing units built annually in the United States and an even larger share of new single-family homes.

Concentration by itself does not necessarily reduce housing production. Large builders possess significant advantages. They have access to capital, sophisticated management systems, purchasing power, and extensive land inventories. In regions where land is readily available and approvals are predictable, these firms can produce new housing in large scale. Metropolitan areas such as Houston, Dallas, Phoenix, and Charlotte continue to generate large numbers of new housing units despite substantial market share held by major builders.

Yet when concentration is combined with extensive political discretion, problems can emerge quickly. In many cities, housing projects cannot proceed simply because zoning allows them. Instead, development often requires multiple layers of discretionary approval, including rezonings, special permits, design reviews, environmental reviews, neighborhood consultations, and city council approvals. Each stage introduces uncertainty, delay, and cost.

Large firms are generally better equipped to navigate this environment. They can hire attorneys, planning consultants, architects, engineers, public affairs specialists, and lobbyists. They can tolerate years of delay while approvals are negotiated. Smaller firms often cannot. A local builder proposing a twenty-unit apartment building may find the approval process prohibitively expensive, while a national developer constructing hundreds of units can spread those costs across a much larger project.

Over time, this dynamic creates a powerful barrier to entry. Political complexity discourages smaller competitors, leaving a greater share of the market in the hands of firms capable of navigating the political approval system. As competition declines, the remaining firms gain greater control over housing production.

The effects extend beyond simple market concentration. Housing differs from most consumer goods because developers often control large inventories of land. In a competitive market, many firms respond independently to rising demand. When housing prices increase, numerous builders enter the market and expand production. But when a small number of firms control much of the available land and entitlement pipeline, production decisions become concentrated among relatively few actors.

These firms face a fundamental tradeoff. They can increase production aggressively, potentially reducing housing prices and profit margins, or they can maintain a more measured pace of construction that preserves scarcity and pricing power. Publicly traded builders increasingly emphasize metrics such as return on capital, profit margins, and inventory discipline. Their goal is not necessarily to maximize the number of homes built, but rather to maximize returns to shareholders.

The interaction between concentration and discretion can therefore create a self-reinforcing cycle. Political complexity limits competition. Reduced competition strengthens incumbent firms. Stronger incumbents face less pressure to maximize production. Limited production preserves housing scarcity. Scarcity supports higher prices and profits. Those profits, in turn, reinforce the advantages enjoyed by incumbent firms.

Several major American cities illustrate various aspects of this dynamic.

Los Angeles provides one of the clearest examples. The city combines intense housing demand with a highly discretionary development process. Large multifamily projects often require extensive environmental review, community outreach, political negotiation, and city council approvals. Council members traditionally wield substantial influence over projects within their districts, and developers frequently must secure political support before proceeding.

This environment favors large, sophisticated development firms. Smaller builders often struggle to navigate the complexity and uncertainty of the approval process. As a result, many significant housing projects are undertaken by a relatively small group of well-capitalized developers. Despite extraordinary demand for housing, Los Angeles has consistently produced fewer units than would be needed to stabilize affordability, contributing to some of the highest housing costs in the nation.

San Francisco represents an even more extreme case. For decades, the city combined strong housing demand with multiple layers of discretionary review, neighborhood appeals, environmental challenges, and political intervention. Development approvals often took years. While these procedures were frequently justified as mechanisms for community participation and design quality, they also raised the cost of entry into the development market.

Many smaller builders found it increasingly difficult to operate in such an environment. Larger firms with access to capital, legal expertise, and political savvy gained a competitive advantage. Ironically, policies intended to constrain large developers often had the effect of making development feasible primarily for those very firms. Meanwhile, housing production remained far below demand, contributing to some of the highest home prices and rents in the United States.

New York City illustrates a somewhat different variation of the same theme. The city’s Uniform Land Use Review Procedure, commonly known as ULURP, provides multiple opportunities for political intervention in major projects. Although New York has a larger and more diverse development industry than many cities, and the city is experimenting with newer fast-track processes, major rezonings and large-scale projects remain dominated by a relatively small number of major firms.

Companies such as Related, RXR, and Extell possess the financial and organizational capacity to navigate complex approval processes and undertake billion-dollar projects. Smaller developers often focus on as-of-right projects that avoid discretionary approvals. The result is a housing market in which large portions of potential development capacity remain tied to politically mediated processes that only a limited number of firms can effectively navigate.

Seattle has increasingly encountered similar challenges. Rapid economic growth has generated substantial demand for housing, but neighborhood review processes, design requirements, and entitlement complexity have increased the cost and uncertainty of development. While Seattle remains more productive than many coastal markets, a relatively small number of firms account for a significant share of multifamily construction. Smaller builders have found it increasingly difficult to compete as development costs and approval complexity have risen.

Boston and Washington, D.C., also demonstrate how political discretion can favor larger firms. Historically, Boston’s Article 80 review process gave city officials substantial influence over major developments. Washington’s Planned Unit Development process similarly requires extensive review and negotiation. In both cities, major projects are often concentrated among a relatively small group of experienced developers capable of managing lengthy entitlement processes.

The contrast with Houston is particularly revealing. Houston certainly has large builders and substantial market concentration in some sectors. Yet the city relies much less heavily on discretionary land-use approvals than many coastal cities. Development generally proceeds through more predictable administrative processes. As a result, housing supply has historically responded more rapidly to demand. While Houston faces its own challenges, it demonstrates that builder concentration alone does not necessarily produce severe housing shortages.

The key distinction is that in Houston, market concentration is not reinforced by extensive political barriers to entry. Developers can generally compete based on their ability to acquire land and build housing rather than their ability to navigate discretionary approval systems.

For policymakers, the implications are significant. Housing reform debates often focus exclusively on zoning, density limits, or neighborhood opposition. These issues are important, but they do not fully address the structural interaction between market concentration and political discretion.

Increasing housing production requires both reducing unnecessary discretion and expanding opportunities for new market entrants. Cities can pursue by-right zoning, simplify permitting, establish predictable approval timelines, reduce project-specific negotiations, and limit opportunities for political intervention in routine housing development. At the same time, they can support smaller developers through financing programs, technical assistance, and streamlined approvals.

The goal should not be to eliminate public oversight or democratic participation. Rather, it should be to create systems in which housing development is governed primarily by clear rules rather than discretionary negotiations. Predictable rules lower barriers to entry, encourage competition, and reduce the advantages enjoyed by incumbent firms.

America’s housing shortage is often described as a consequence of restrictive zoning or insufficient density. While these explanations contain substantial truth, they overlook a deeper institutional reality. In many cities, housing scarcity is reinforced by the interaction between concentrated development markets and politically discretionary approval systems. Together, these forces can limit competition, suppress production, and preserve high housing costs.

Recognizing this interaction does not diminish the importance of zoning reform, environmental review reform, or infrastructure investment. Instead, it expands the conversation. If cities hope to produce substantially more housing, they must consider not only what can be built, but also who is able to build it and how difficult the political process makes entry into the market. Only by addressing both competition and discretion can urban housing markets become more responsive to the needs of growing populations.

Bob Gleeson

The Illusion of Control in Urban Policymaking.

In nearly every American city, there is a neighborhood that, five years ago, someone would have warned you away from. Today you cannot get a table at its wine bar on a Friday night.

Few people planned this. No ribbon was cut. City Hall did not choose it. The transformation—if that is the word—arrived the way most consequential things arrive in cities: obliquely, through a thousand small decisions made by people who had no idea they were participating in something larger than themselves.

That story is now playing out in reverse across American downtowns. Office vacancy rates have climbed to nearly twenty percent nationally, and above thirty percent in San Francisco. The cause is a remote-work shift whose scale and persistence few planners fully anticipated. No return-to-office mandate has fully reversed it. The great post-pandemic “donut effect”—economists at Stanford and MIT coined the term to describe activity draining from city centers into suburbs—is reordering urban life in ways we are still sorting out.

Cities are scrambling: converting office towers to apartments, extending tax incentives, redesigning transit, betting on megaprojects. These interventions feel urgent and purposeful. But there is a question that urban policymakers rarely ask themselves plainly: do such interventions reliably produce the outcomes they intend, or do they mostly follow dynamics already underway?

Some years ago, I coauthored a paper in The Annals of Regional Science with urban planner Mukesh Kumar and physicist Miron Kaufman that helps explain this issue. Using historical data on firm locations in the Cleveland–Akron metropolitan area, we applied ideas from complexity science and statistical physics to understand why firms locate where they do. What we found complicates the logic of many urban economic development strategies: urban spatial patterns are not solely—or even primarily—the product of rational calculation or top-down policy. They are also the product of self-organization—the same phenomenon that produces honeycombs, traffic flows, and stock-market patterns. Cities, on this account, are not so much built as crystallized.

Self-organization is not magic. It is a precise idea from physics, increasingly used in the social sciences. In a self-organizing system, order emerges from local interactions among many agents, none of whom intends the overall pattern and none of whom could produce it alone. No individual ant builds the colony; the colony builds itself. No single trader moves the market; the market moves itself.

Standard economic geography explains clustering through agglomeration economies: firms benefit from proximity to firms in the same industry and their suppliers (localization economies) or from proximity to diverse businesses and workers (urbanization economies). That is true as far as it goes.

But what we found was that these economies are not simply “there” to be captured. They emerge from history, from accidents, from what other firms happen to do. A block becomes desirable not solely because of its fundamentals but because a few people acted, others followed, and the system tipped. Small initial advantages get amplified.

This is why one block in a formerly desolate neighborhood suddenly thrives while the identical block two streets away stays dormant. It is why downtown cores hollow out for decades and then—sometimes—abruptly come back. It self-organizes.

The standard answer lists tax incentives, anchor institutions, transit investments, and demographic change. Our paper found that while these may make a difference, they often struggle to explain the timing, location, or suddenness of change.

What self-organization adds is the insight that urban systems, like other complex systems, sit near thresholds. Small perturbations can trigger large cascades. And because cities are path-dependent—where they are going depends heavily on where they have been—history leaves deep grooves that policy cannot easily smooth, and sometimes inadvertently deepens.

Consider Cleveland. The Cleveland-Akron region spent decades as a laboratory for top-down renewal: highways that bisected Black neighborhoods, urban-renewal projects that cleared “blight” and replaced it with vacancy, enterprise zones and tax-increment financing layered one atop another. Some interventions produced real local effects. Hospitals and universities stabilized key districts. But taken together, they did not reverse the region’s broader decline. Cleveland’s population, roughly 900,000 in 1950, has since fallen by more than half.

What regeneration has occurred—the revival of Ohio City, Tremont, and the Waterloo District in North Collinwood, the slow animation of the Detroit-Shoreway corridor, the gradual densification around Euclid Avenue and toward University Circle—followed a different logic.

Artists and immigrants moved to cheap space. Small entrepreneurs followed. Institutions anchored activity. Amenities clustered around foot traffic. Eventually capital arrived to formalize—and sometimes displace—what communities had already built. Policy often showed up late, codifying gains that self-organization had already made.

This is not a story that city governments tell about themselves. The official narrative of urban revitalization is usually one of deliberate intervention: the strategic plan, the anchor investment. Sometimes that narrative is true.

More often it is a post-hoc account in which planners and policymakers claim credit for dynamics they did not originate and could not have controlled. That may sound harsh, but the reality is that policymakers face binding political constraints—short election cycles, budget pressures, community demands for visible action—that academics do not. Within their constraints, claiming credit for a successful tipping point may be less a failure of honesty than a necessary condition of political survival.

Still, the Amazon HQ2 episode is instructive. In 2017, American cities engaged in a bidding war of breathtaking scale—New York State offered three billion dollars in incentives—only for Amazon to cancel its Long Island City plans after community pushback that no one in city government had adequately anticipated.

A Harvard Kennedy School analysis published in 2024 suggests that tax incentives of this kind—the kind cities routinely deploy—influence firm location decisions only a fraction of the time. The exact number is disputed, but a fair reading of decades of research—from Timothy Bartik to the W.E. Upjohn Institute—is that incentives matter at the margins, but much less than commonly believed.

Most of what drives firm location is deeper: access to talent, quality of life, the accumulated history of who is already there. The rest is noise, or it is something else—something more like self-organization.

There is a version of this argument that slides toward fatalism, and it is worth resisting. Saying that cities self-organize is not the same as saying policy does not matter. The complexity literature is clear: in self-organizing systems, small interventions at the right moment can have outsized effects — including policies—while large interventions at the wrong moment can have little effect. The question is not whether to act, but how and when.

The conventional model treats urban policy as a control mechanism: identify a problem, design a solution, implement it, measure the outcome. The self-organization model suggests something different—that policy works best not as command and control, but as a way of shaping the conditions under which a system evolves on its own.

Zoning reform that reduces barriers to mixed use does not build a neighborhood; it removes an obstacle and lets the network of individuals who might build that neighborhood begin to do so. A well-placed transit stop does not guarantee revitalization; it shifts probabilities.

This is not a contradiction between emergence and planning. It is a distinction between two kinds of planning. One kind—the megaproject, the billion-dollar incentive package—assumes that a central authority can predict and control outcomes. The other kind—zoning reform, public-realm investment, protection of low-cost space—assumes that the best thing a city can do is clear the ground and get out of the way.

Both are acts of policy. One invites overconfidence and enormous expenditure on projects unlikely to work as advertised. The other demands humility, flexibility, and a tolerance for outcomes nobody specifically intended. The tension between them is real, and this essay does not resolve it because cities cannot resolve it: they must do both, but they rarely know which to favor when.

This distinction is particularly urgent as cities grapple with downtown vacancy. The instinct in city halls is to reach for familiar instruments: office-to-apartment conversions (sensible but slow), tax incentives (expensive and hit-or-miss), cultural anchors (the stadium gambit, with mixed results everywhere).

What self-organization suggests, less comfortably, is that the most powerful thing a city might do is make itself receptive to the reorganization already underway: clear zoning barriers to adaptive reuse, invest in public-realm quality, protect the low-cost spaces where creative clustering begins before capital arrives to price it out.

None of this should be mistaken for passivity, especially toward inequality. Self-organizing systems can crystallize around injustice just as readily as around vitality.

The pattern of disinvestment in American cities is not random; it reflects decades of racially discriminatory policy—redlining, highway placement, urban renewal—that shaped the initial conditions from which urban systems have been evolving ever since.

Opportunity Zones, the Trump-era program recently extended by Congress, are a case in point: designed to channel investment into distressed communities, they have often subsidized luxury development in neighborhoods already on the verge of gentrification, while leaving deeply disinvested areas untouched. The market self-organizes toward return.

Equity requires intervention. Without deliberate policy—progressive zoning, anti-displacement measures, targeted subsidies—self-organization will not produce justice on its own.

This is where the tension between emergence and control becomes genuinely productive. Cities are neither machines to be engineered nor ecosystems to be left alone. They are complex adaptive systems shaped by power, history, and millions of accumulated decisions.

The neighborhoods that came back did not come back because someone decided they would. They came back because conditions shifted, a few risk-tolerant actors moved in, and the system tipped. The policy question—one of the few that really matters—is whether we can learn to recognize and read those dynamics well enough to tip them toward revitalization and justice, rather than only toward profit.

The wine bar is already there. The question is who gets to walk through the door.

Bill Bowen

Taxing Land, Not Growth: Split-Rate Property Taxes to Encourage Infill Housing and Contain Sprawl in High-Growth U.S. Regions

Across the United States, high-growth metropolitan regions face a familiar dilemma. Strong job growth, population gains, and rising incomes create intense demand for housing, but local governments often fail to produce enough homes in the right places.

The result is a predictable pattern: constrained housing supply in urban cores pushes households outward, fueling suburban sprawl, increasing transportation costs, consuming farmland and open space, and undermining climate goals.

Conventional policy responses have focused primarily on zoning reform—upzoning neighborhoods, legalizing multifamily housing, and streamlining approvals. These reforms are essential, but they are often insufficient. A less-discussed but potentially powerful complementary tool is tax reform: specifically, the use of split-rate property taxation, in which land is taxed at a higher rate than buildings. This method is usually associated with older, stagnant regions. But it may have new uses in high-growth regions.

Under a conventional property tax system, both land and improvements are taxed at the same rate. This creates an unintuitive but important distortion: when a landowner adds housing or improves a building, their tax bill rises. By contrast, when a landowner leaves a valuable urban parcel underdeveloped—as a surface parking lot, a vacant lot, or a one-story building in a high-demand district—the tax penalty is relatively modest. In effect, conventional taxation can unintentionally reward land speculation and penalize development.

Split-rate taxation reverses this incentive. By taxing land more heavily than buildings, it raises the cost of holding underused urban land while reducing the tax burden on construction and redevelopment. Advocates argue that this encourages infill housing, promotes more efficient land use, and helps contain outward sprawl. Critics counter that the policy is administratively difficult, politically vulnerable, and unlikely to overcome deeper constraints such as zoning restrictions or neighborhood opposition.

The question is not whether split-rate taxation can solve the housing crisis on its own—it cannot—but whether it deserves a larger place in the policy toolkit for high-growth metros. The answer is yes.

While not a silver bullet, split-rate taxation is one of the few policies that directly aligns tax incentives with urban development goals. In fast-growing regions where land scarcity and speculation distort housing markets, it can play a meaningful role in increasing infill housing production and reducing pressure for sprawl.

The central logic of split-rate taxation is rooted in basic urban economics. In a growing metropolitan area, land near jobs, transit, and amenities becomes increasingly valuable because of its location, not because of anything the owner has done. Economists have long argued that taxing this “unearned increment” is both efficient and equitable. Unlike taxes on labor or capital investment, taxes on land do not discourage productive behavior because land cannot be moved or hidden. A landowner cannot reduce the tax by producing less land. Instead, the most rational response is to use the land more intensively or sell it to someone who will.

This matters enormously in high-growth regions. Consider cities like Austin, Phoenix, Nashville, Denver, and Charlotte. Each has experienced substantial population growth over the past two decades. Yet each also contains large quantities of underused urban land: surface parking lots near downtown, aging strip malls along transit corridors, oversized commercial parcels, and low-density residential neighborhoods near major employment centers. These parcels often remain underdeveloped not because development is illegal, but because owners can profitably hold them while waiting for land values to rise. Split-rate taxation changes that calculation.

A higher tax on land creates a carrying cost for speculation. Suddenly, the owner of a surface parking lot in central Denver or a vacant parcel near a light rail station in Phoenix faces a choice: build, sell, or pay more to continue waiting. Many will choose to develop or sell, bringing land into productive use sooner. This can accelerate housing production in locations where infrastructure already exists, reducing the pressure to convert peripheral farmland into subdivisions.

That connection between infill and sprawl is central. Sprawl is not simply the result of population growth; it is often the result of policy choices that make fringe development easier than urban redevelopment. Conventional tax systems contribute to this imbalance. Greenfield land on the metropolitan edge is often cheap and lightly taxed, while urban redevelopment is expensive, slow, and financially risky. Developers rationally choose the easier path. They build outward.

Split-rate taxation helps rebalance these incentives. It does not prohibit suburban development, nor should it. Rather, it makes central-city and inner-ring suburban parcels relatively more attractive by lowering the tax burden on new construction and raising the cost of land underutilization. This encourages developers to look inward before looking outward.

The policy has a real-world track record, though it remains underused in the United States. The most famous example is Pittsburgh, which for nearly a century taxed land at a significantly higher rate than buildings. By the late twentieth century, land was taxed at more than five times the rate applied to structures. Many economists believe this contributed to downtown reinvestment and infill development during the city’s late-twentieth-century recovery. While Pittsburgh ended the system in 2001, the repeal was driven largely by political backlash surrounding reassessment—not by a broad conclusion that the policy had failed.

Nearby Harrisburg is another often-cited case. Its split-rate tax has been associated with reduced vacancy and stronger downtown redevelopment. Other Pennsylvania municipalities—including Scranton and McKeesport—have also used variations of the policy. While the evidence is not perfectly clean, the overall pattern suggests that taxing land more heavily can encourage more efficient urban land use.

Still, critics are right to note that split-rate taxation is not enough by itself. If zoning prohibits apartments, taxing land more heavily will not create apartments. If permitting takes years, tax incentives will not overcome regulatory delay. If neighborhood opposition blocks multifamily housing, landowners may simply pay the higher tax and continue waiting. For this reason, split-rate taxation should be viewed as a complement to land-use reform, not a substitute for it.

Its greatest value emerges when paired with broader pro-housing policies. Imagine a fast-growing region like Atlanta or Dallas adopting a package that includes upzoning around transit, by-right approval for mid-rise apartments, reduced parking requirements, and a split-rate property tax. The zoning changes would create legal capacity for more housing. The permitting reforms would reduce delay. The split-rate tax would then provide the financial nudge that encourages landowners to use that capacity. Together, the policies would reinforce one another.

Split-rate taxation may be particularly valuable in inner-ring suburbs, where many high-growth metros face severe underutilization of strategically located land. Aging suburban office parks, obsolete shopping centers, and oversized parking lots often sit near highways or transit lines but remain stuck in outdated land-use patterns. A higher tax on land can encourage owners to redevelop these sites into mixed-use housing districts, absorbing growth without further outward expansion.

This is especially relevant in regions like Seattle and Portland, where strong environmental values have generated broad support for urban containment but have not always produced enough housing. Tax reform offers a way to reinforce those goals without imposing additional regulatory burdens.

The strongest argument against split-rate taxation is political rather than economic. Property tax changes are notoriously difficult to implement. Reassessments are controversial, and any policy that creates visible winners and losers invites backlash. Homeowners often distrust land-value assessments, particularly in neighborhoods where rising land values may not reflect rising household incomes. Politicians may therefore hesitate to embrace a policy that can be easily caricatured as a “tax increase.”

This challenge is real, but it is manageable. Successful implementation requires thoughtful design. Cities can phase in the higher land tax gradually over several years, giving landowners time to adjust. They can cap annual increases for owner-occupied homes while applying stronger rates to commercial or vacant parcels. They can pair higher land taxes with visible reductions in taxes on buildings, clearly demonstrating that productive investment is being rewarded rather than punished. Most importantly, they can communicate the policy’s purpose: not raising revenue but encouraging housing and reducing sprawl.

Modern assessment technology also makes implementation easier than it once was. Geographic information systems, digital parcel data, and improved mass appraisal methods have greatly improved the ability of local governments to distinguish land value from improvement value. Administrative difficulty is no longer the barrier it once was.

The policy may also align well with contemporary climate goals. Transportation is one of the largest sources of greenhouse gas emissions in the United States, and sprawl is a major contributor. By encouraging more housing near jobs and transit, split-rate taxation can reduce vehicle miles traveled and support lower-carbon urban growth. It therefore links housing policy and climate policy in a way few tools do.

Split-rate taxation can also improve fiscal efficiency. Sprawl is expensive. Extending roads, utilities, schools, and emergency services to peripheral developments imposes long-term costs on local governments. Even when impact fees are used, the revenues never cover the long-term costs of sustaining new infrastructure.

Infill housing uses infrastructure that already exists, generating new tax base without requiring the same level of new public investment. By encouraging denser urban development, split-rate taxation can improve municipal fiscal health while expanding housing supply.

For all these reasons, split-rate property taxation deserves renewed attention in America’s high-growth metros. It should not be seen as a replacement for zoning reform, nor as a universal solution. Some cities may find that vacancy taxes, targeted land-value surcharges, or other anti-speculation tools are more politically feasible. But the broader principle—that land should be taxed differently from buildings because it behaves differently economically—is sound and overdue for consideration.

The housing crisis in high-growth regions is often framed as a battle over density, neighborhood change, and local control. Those issues matter, but they can obscure a simpler truth: public policy still too often rewards holding valuable urban land idle while penalizing those who build homes. That is backwards. A tax system designed for a low-growth twentieth-century economy no longer fits the needs of twenty-first-century metropolitan America.

If the goal is to encourage more infill housing, reduce land speculation, and contain sprawl, split-rate taxation offers a rare opportunity to change incentives at their source. It asks landowners a straightforward question: if your land sits in a growing city and benefits from public infrastructure, should you pay more to leave it empty—or less to build housing on it?

For regions struggling to accommodate growth without endless outward expansion, that may be exactly the right question to ask.

Bob Gleeson

Editor’s Note: Bill Bowen and I receive feedback from subscribers regularly. Today’s post is from one of our subscribers, Joel H. Rathbone. Joel offers an alternative point of view about the issue of housing affordability. This is Joel’s second post on The Urban Lens. We both thank Joel for taking the time to submit this, and we encourage all subscribers to send us feedback!

Joel H. Rathbone is a retired attorney after 40 years of practice with various firms. His roles included managing Partner, CEO, CFO, COO, ISO, ITO, Software Designer, and Bankruptcy Trustee in Cleveland for 17 years. He was a partner with his Mother in 1986 and ended his career in 2000 as a partner with his daughter.

Another Look At The Housing Affordability Problem.

The Urban Lens recently has published a series of articles using the premise that the United States has had, and still does have, a dearth of housing for many years now. The premise claims the US housing market needs at least 7 million more houses to be built.

But what if that premise is false?

What if the increasing price of housing is not solely a supply issue?

What would that mean for the US economy?

The first question that requires answering was posed by Moneywise’s Becky Robertson in her article published May 1, 2026, where she suggests that creating housing supply may not solve the actual urban problem of a need for more “Affordable Housing,” not all types of housing.

“Affordable housing” is often defined in the U.S. by the “30% Rule.” That rule states that to be considered as such, the house and its utilities should not cost more than 30% of an average household’s median monthly income. The median household post tax income in 2024 according to the U.S. Census from that same year was $72,330, with median post tax income for Black households being substantially lower. The 30% Rule would allow the average household $1,808 per month for home costs and utilities. With utilities averaging $610 per month (RubyHome.com), that would leave $1,200 monthly to pay for cost of the home. Without a substantial down payment, the cost of a $160,000 home could not be achieved. That certainly limits the choices a home buyer might select.

According to The National Association of Home Builders, the average cost to build a home is $296,652, but with added cost of land, lot preparation, and other additional costs, the cost of the new home averages $485,128. Link:https://www.thezebra.com/resources/home/cost-of-new-construction/ for more details.

Over the last 6 years, the number of new housing starts has averaged less than 1.5 million. That means the capacity to make up an alleged shortage of 7 million to lower housing prices is not a practicality. With fewer trade workers coming into the industry and more of the skilled workers retiring, there are not enough resources to construct that many additional structures in a short enough period of time.

Adding apartments is also cost-prohibitive for Affordable Housing. The rent rates and boosted utility costs often exceed the 30% Rule. According to www.multifamily.loans, the minimum per unit cost for building an apartment building is $300,000 per unit, necessitating some high rental prices and utility rates that are controlled by third parties and are higher than a single-family home has to pay.

The Joint Center for Housing Studies of Harvard University released its annual report, The State of the Nation’s Housing 2025, on June 24, 2025. The report highlights that half of all renters in 2023 (a record 22.6 million) were housing cost-burdened, spending 30% or more of their household incomes on housing and utilities. Renters with annual incomes under $30,000 on average had only $250 left to spend on other necessities after paying for housing.

In the same Moneywise article, Becky Robinson suggests that if we are only worried about housing, rather than Affordable Housing, there is probably not much to worry about because as much as 31% of older homeowner houses will come on the market over the next few years and will drive housing prices down. However, she states that this will do nothing to alleviate the issue of Affordable Housing because the homes coming on the market will have values too high to qualify for Affordable Housing.

The 2024 US Census Report supports this potential glut of housing as it shows that the age groups 34 and under account for 40 million people less than the age groups 35 and up and further shows a decline in number for each selected age group under 35.

For many years, experts relied on Housing “Filtering” to provide lower cost housing. “Downward Filtering” is the process by which housing comes to serve different residences over time. In other words, as newer housing becomes available, the more upwardly mobile homeowners will move to the newer housing, and the prices on the older homes will decline, thus providing more housing at a more affordable level. Downward Filtering has been thought to be the most significant source of low-cost housing in the private market.

However, new studies are finding that Downward Filtering has stalled out. In fact, between 2015 and 2021, on average, substantial “Upward Filtering” has been occurring, especially in urban areas. Read the article at: https://bit.ly/3HV0Zgc.

Diccon Hyatt of Investopedia has suggested that having a lack of supply may not be the only cause for higher housing prices. He cites a Federal Reserve Bank of San Francisco study that suggest housing prices may be increasing as much because of increasing incomes as from lack of supply.

Read the original article on Investopedia at https://www.investopedia.com/if-rising-incomes-are-the-real-reason-homes-are-so-expensive-what-does-that-mean-for-buyers-11956546

Some have suggested that to improve Affordable Housing, cities should focus on rehabilitating existing older homes. However, the cost of rehabbing an existing home is as much of a cost problem as building a new home, costing anywhere from $80,000 to $300,000 with costs varying significantly based on location, home condition, and project scope (Source – Habitat for Humanity).

Others have suggested that the Affordable Housing issue can be solved by alternative construction methods, such as modular construction. However, according to Rocket Mortgage, a complete, turnkey 800 sq ft small home often costs between $64,000 and $128,000 for the module, not including site preparation. According to Angie’s List writer Scott Westerlund, currently, any modular home above 1,000 square feet will cost more than $100,000.

To conclude, the forthcoming glut of senior housing to be put on the market will most likely solve the problem of any current dearth of housing. But it will not likely solve the issue regarding a dearth of urban Affordable Housing and it does not appear that there are yet any feasible solutions for this issue.

Joel H. Rathbone

The Fragility of the Postwar Knowledge Compromise.

The Trump administration’s late-April dismissal of the National Science Board may ultimately prove significant not primarily because of the personnel involved, but because of what the action symbolizes. The controversy points toward growing strain within one of the central institutional compromises of modern America: the effort to keep scientific inquiry publicly accountable, yet sufficiently insulated from short-term political pressures to sustain long-term innovation, credibility, and adaptive capacity.

The implications of the dismissal for the continued prosperity and resilience of American urban areas are indirect, and often not immediately visible to the casual observer. Yet for those attentive to the institutional foundations of metropolitan life, they are anything but minor.

Beneath the surface of our contemporary urban systems lies a dense network of research universities, scientific agencies, and knowledge-producing institutions upon which economic dynamism, public health, infrastructure capacity, and long-term adaptability quietly depend.

The National Science Board governs and advises the National Science Foundation, one of the central pillars of federally supported American research. Board members normally serve staggered six-year terms designed to span presidential administrations and provide continuity and partial insulation from politics. The administration justified the dismissals partly on constitutional grounds, arguing that executive authority should remain accountable to elected leadership. Critics, meanwhile, viewed the move as part of a broader effort to bring scientific institutions under tighter political control.

The immediate dispute, however, matters less than the larger question it raises. In some respects, the controversy reflects a classic dilemma of the modern administrative state long familiar to students of public administration. That is, democratic societies require increasingly specialized institutions possessing expertise, continuity, and long planning horizons. Yet the more influential such institutions become, the more citizens and elected officials demand accountability and political responsiveness.

While this tension between expertise and democratic control is not new, what may be new is the degree to which fiscal strain, polarization, and declining institutional trust are destabilizing the postwar balance between them. Can advanced democratic societies in general, and the United States in particular, still sustain semi-autonomous knowledge institutions under conditions of polarization, distrust, and mounting fiscal strain?

For most of the postwar era, the United States operated under an implicit bargain. Democratic government would fund science, oversee broad priorities, and maintain public accountability. But within that framework, universities, scientific agencies, peer review systems, and research communities would retain substantial independence in methods, publication, and inquiry. The arrangement rested partly upon the recognition that scientific discovery is often unpredictable. Many transformative breakthroughs — semiconductors, biotechnology, the internet, GPS — emerged not because governments precisely foresaw their practical value, but because relatively decentralized systems allowed wide-ranging experimentation and curiosity-driven inquiry.

The compromise also reflected an understanding that knowledge production functions best under conditions of intellectual pluralism. Scientific progress depends heavily upon criticism, dissent, hypothesis testing, and error correction. Political systems, by contrast, often reward conformity, ideological discipline, and immediate practical results. The partial autonomy of scientific institutions evolved partly to protect long-term inquiry from short-term political incentives.

Today, however, the foundations supporting that compromise appear weaker than they once did.

Many citizens increasingly distrust expert institutions generally, including universities and scientific organizations. Some perceive ideological conformity within academic and professional communities. Others believe experts exercised excessive authority or displayed overconfidence during the COVID era and other recent controversies. At the same time, governments confronting nearly unimaginable levels of public debt naturally demand greater accountability and more measurable returns from publicly funded institutions. Research whose benefits may emerge only decades later can become politically difficult to defend when fiscal pressures intensify.

Under such conditions, demands for tighter political oversight become understandable. Publicly funded science affects national priorities, economic development, public health, defense, energy policy, and technological power. Citizens in democratic societies reasonably expect some degree of accountability over institutions supported by taxpayers and exercising substantial social influence.

Yet there are dangers at the opposite extreme as well. Scientific institutions that become widely perceived as direct instruments of partisan politics may gradually lose the credibility upon which both innovation and governance depend. If scientific conclusions are viewed primarily through political lenses, trust in expertise itself may erode further. That problem extends beyond universities or laboratories. It reaches into the functioning of metropolitan civilization.

Modern urban economies are not merely concentrations of people and infrastructure; they are concentrations of knowledge, specialization, trust, and institutional coordination. Their prosperity depends heavily upon research universities, medical centers, engineering systems, technological innovation, and long-term planning capacities that emerged from the postwar American research system. Metropolitan regions such as Boston, San Francisco, Seattle, and the Research Triangle grew partly around ecosystems sustained by federally funded research operating with substantial intellectual autonomy.

Cities also depend increasingly upon technically credible institutions to manage transportation systems, public health, water infrastructure, environmental risks, energy grids, telecommunications, and housing analysis. Dense urban systems require high levels of coordination among governments, professionals, investors, engineers, insurers, universities, and citizens. That coordination becomes more difficult if the institutions generating technical knowledge lose legitimacy across large segments of the population.

There is a deeper irony here. Heavily indebted societies may actually need long-term innovation capacity more, not less. Economic growth remains one of the few sustainable means by which advanced societies can manage large debt burdens without severe austerity or declining living standards. Much of that growth historically emerged from scientific and technological advances produced by institutions not fully subordinated to immediate political incentives.

The deeper challenge, then, may not simply concern science funding or constitutional theory. It may concern the broader erosion of social trust. The postwar compromise depended upon widespread belief that expertise possessed at least some legitimate social authority, that scientific institutions generally acted in good faith, and that long-term national investment justified partial insulation from day-to-day politics. That consensus now appears increasingly fragile.

The problem is not that democratic societies seek accountability from publicly funded institutions. Nor is the solution complete technocratic insulation from democratic pressures. The difficulty is that modern urban civilization may simultaneously require institutions capable of producing knowledge not wholly subordinated to short-term political incentives.

The NSF dispute thus becomes part of a much larger question: Can highly complex metropolitan democracies still sustain expert administrative systems that are simultaneously competent, trusted, pluralistic, financially defensible, and democratically legitimate? This is a classic public administration problem — but under twenty-first century conditions of polarization, debt, and epistemic fragmentation.

Whether American society can still sustain that balance today and in the near-term future may prove one of the central governance questions of the coming decades. The controversy surrounding the National Science Board is best understood not as an isolated administrative dispute, but as an early warning sign that the postwar relationship among democracy, expertise, science, and metropolitan prosperity may be entering a period of substantial renegotiation.

Bill Bowen

From Stagnation to Surge: How Legacy Metros Can Double or Triple Housing Construction.

Across the industrial Midwest and Northeast, “Legacy” metros, including Cleveland, Detroit, Pittsburgh, and Buffalo, face a housing challenge that differs fundamentally from that of fast-growing regions. These places are not defined by explosive population growth or overwhelming demand, but by a long period of industrial decline, population loss, and underinvestment.

The result is a housing market characterized by aging stock, widespread vacancy in some neighborhoods, and only pockets of strong demand. Yet within this challenge lies a significant opportunity. Because current levels of new housing construction are so low, these metros are uniquely positioned to achieve rapid gains. With the right strategies, it is entirely plausible for them to double or even triple their rate of housing production within a relatively short period of time.

The key to understanding this opportunity is recognizing that the primary constraint on housing construction in these regions is not land availability or even zoning, but financial feasibility. In many neighborhoods, the cost of building new housing exceeds the market value of the finished product. This “appraisal gap” discourages developers from undertaking new projects, even where demand exists. As a result, increasing housing production does not require a wholesale reinvention of urban policy. Instead, it requires systematically making more projects viable and ensuring they can move from concept to construction quickly and predictably.

Because the baseline level of construction is so modest, even a relatively small increase in viable projects can produce a dramatic change in overall output. In a city producing only a few thousand units annually, unlocking an additional one or two thousand units can effectively double production. This is a far more achievable task than in high-growth metros, where tens of thousands of units must be added each year to meaningfully shift supply. For legacy metros, the path forward is less about overcoming overwhelming demand and more about removing the specific barriers that prevent projects from moving forward to meet relatively small levels of demand.

The most immediate and powerful tool for doing so is closing the appraisal gap at scale. Many cities already provide some form of subsidy or gap financing, but these programs are typically too small and too fragmented to generate significant increases in production. To double or triple housing construction, these efforts must be expanded dramatically and made more predictable. Rather than treating subsidy as an exception reserved for a limited number of projects, cities should create programmatic systems that allow developers to reliably access funding when projects meet clear criteria. By focusing especially on projects that are close to financial feasibility—those that fall just short of viability—public investment can unlock a large number of units at relatively low cost per unit.

At the same time, reducing the cost of construction is essential to expanding the number of viable projects. Traditional site-built housing is often too expensive to support large-scale development in weaker markets. To address this, legacy metros have an opportunity to embrace more industrialized forms of construction, including modular and factory-built housing. These approaches can lower costs, shorten construction timelines, and reduce reliance on scarce labor. In a region like Northeast Ohio, the development of a modular housing production ecosystem could enable the steady delivery of new units at a scale that would be difficult to achieve through conventional methods alone.

Standardization can also play a critical role in accelerating production. By offering pre-approved building designs for common housing types—such as duplexes, townhouses, and small apartment buildings—cities can eliminate significant delays associated with design review and permitting. This is particularly important in places like Cleveland and Buffalo, where large numbers of vacant lots share similar dimensions and constraints. A more standardized, “plug-and-play” approach to infill development would allow builders to move quickly and efficiently from site acquisition to construction.

Land itself is not a scarce resource in legacy metros; indeed, the opposite is often true. Cities like Cleveland and Detroit possess extensive inventories of vacant and underutilized parcels. The challenge is not acquiring land. The challenge is activating it.

Land banks have made significant progress in assembling and stabilizing these properties, but to support a doubling or tripling of housing production, they must evolve into active partners in development. This means packaging land into development-ready portfolios, issuing large-scale requests for proposals, and working directly with builders to deliver housing at scale. Instead of releasing parcels one at a time, cities can create a steady pipeline of development opportunities that align with broader production goals.

At the same time, it is important to recognize that not all land is equally suitable for immediate development. Housing production should be concentrated in areas where demand is strongest or most likely to grow, such as neighborhoods near job centers, transit corridors, and major institutions.

In Cleveland, this includes areas connecting Downtown, University Circle, and Ohio City, where investment and demand are already beginning to coalesce. By focusing resources in these high-probability locations, cities can ensure that new housing is absorbed quickly by the market and contributes to broader neighborhood revitalization.

Increasing supply at this scale also requires strengthening demand. Legacy metros cannot rely solely on organic population growth; they must actively position themselves to attract new residents. Fortunately, they possess significant advantages, including affordability, cultural assets, and proximity to freshwater and other natural resources.

As remote work continues to expand and climate migration begins to reshape population patterns, these regions are increasingly competitive destinations. However, attracting new residents depends on the availability of modern, high-quality housing. Without sufficient new construction, these metros risk missing out on opportunities for population growth and economic revitalization.

Anchor institutions play a particularly important role in this process. In Pittsburgh, universities and healthcare systems have helped stabilize and grow housing demand in surrounding neighborhoods. Cleveland has similar assets, and expanding partnerships with these institutions—through employer-assisted housing programs and coordinated development strategies—can help generate a reliable base of demand for new construction. Aligning housing production with employment growth ensures that new units are not only built but occupied.

Another critical factor in scaling housing production is expanding the pool of active developers. In many legacy metros, the number of firms capable of undertaking new construction is limited, particularly at smaller scales. To address this, cities must support a broader ecosystem of builders, including small and mid-sized developers, community development organizations, and first-time entrepreneurs. Providing access to financing, technical assistance, and simplified regulatory processes can enable these actors to participate in the housing market. Because much of the available land is suited to small-scale infill development, empowering these smaller-scale builders is essential to achieving meaningful increases in production.

Speed and predictability in the development process are equally important. Even modest delays in permitting and approvals can render marginal projects infeasible. Cleveland has begun to modernize its development systems, but further progress is needed to ensure that projects can move forward quickly and with minimal uncertainty. Establishing clear timelines, allowing by-right development in appropriate areas, and consolidating review processes can significantly increase the number of projects that reach completion.

Taken together, these strategies suggest a plausible pathway for legacy cities like Cleveland to double or even triple their housing production within a relatively short timeframe. By closing the appraisal gap for a substantial number of additional units each year, reducing construction costs through modular and standardized approaches, deploying land at scale through an active land bank strategy, and concentrating development in high-demand corridors, the city could create a sustained pipeline of new housing. Expanding the developer base and streamlining approvals would further accelerate this process, while investments in demand—through economic development and population attraction—would ensure that new units are absorbed.

The broader lesson for legacy metros is that the tools needed to increase housing construction already exist. What has been missing is the scale and coordination required to deploy them effectively. Incremental approaches, while valuable, are unlikely to produce the magnitude of change needed to transform housing markets. Doubling or tripling production requires a shift in mindset—from managing decline to enabling growth, from isolated projects to systemic pipelines accessible to developers of all sizes, and from cautious experimentation to sustained implementation.

These regions stand at a moment of real possibility. After decades of stagnation, many are experiencing renewed interest and emerging demand. By aligning policy, investment, and development practices around the goal of larger-scale housing production, cities like Cleveland can convert this momentum into lasting growth. In doing so, they would not only address their housing challenges, but also lay the foundation for a more dynamic, inclusive, and resilient urban future.

Bob Gleeson

Governing in the Fog: Why Cities Should Stop Betting on Predictions.

Urban policymakers today are navigating a fog. It is born of economic, technological, social, and environmental uncertainty.

But much of the uncertainty they face is structural, not merely situational. A budget shortfall next quarter is situational. Not knowing whether downtown office districts will exist in five years is structural.

That distinction makes the fog harder to see and harder to manage. Many people shaping urban policy cannot trace the effects of structural uncertainty or know how to decide wisely in its presence. This essay is about learning to navigate anyway.

Structural uncertainty is harder to deal with for two reasons. First, it runs deep. Second, it often looks like something familiar. It invites policymakers to use tools designed for risk on problems that cannot be reliably forecast.

Urban policy is increasingly made in a world that defies reliable forecasting. The decisions cities face are not merely “risky.” In risky situations, you can assign probabilities based on past data. But structural uncertainty means the past is no longer a reliable guide. What worked before may not work again.

The problem is not housing demand fluctuations or business cycles. The problem is the permanence of remote work. It is AI-driven labor shifts. It is future migration patterns that no model can yet map.

This uncertainty has several sources.

· Technological: AI’s impact on labor markets. Remote work’s effect on commercial real estate.

· Economic: interest rate volatility. Fragile tax bases tied to downtown activity.

· Social: shifting preferences for urban, suburban, or hybrid living. Declining trust in institutions.

· Environmental: climate migration. Infrastructure stress from extreme weather.

· Finally, political and institutional uncertainty adds another layer. State–city power struggles. Legal battles over zoning, policing, and public health.

These forces do not simply add complexity. They interact. Second- and third-order effects become hard if not impossible to anticipate. Traditional planning models become less reliable.

The presence of structural uncertainty matters because it demands a different kind of governance. One built on flexibility, redundancy, and real-time learning. Not point forecasting—the practice of betting everything on a single number.

What follows maps that shift—and what it means for those leading cities through the fog.

How Decision-Making Breaks Down Under Uncertainty.

When uncertainty rises, judgment becomes more story-driven. Not more disciplined.

Research by Daniel Kahneman, Amos Tversky, and others shows this clearly. When people face ambiguity, they lean harder on mental shortcuts. These shortcuts—called heuristics—systematically distort judgment.

The result is not random error. It is predictable misjudgment. And it happens precisely when clear thinking is most needed.

These are not occasional errors. They are systematic tendencies. Under similar conditions, different decision-makers are likely to make similar mistakes.

These distortions do not only affect deliberate judgment. They also shape what decision-makers notice in the first place. What they pay attention to. What they take to be the relevant facts.

The upshot is this: policymakers tend to substitute tidy, coherent stories for accuracy.

They become overconfident. They place unwarranted faith in point forecasts—ridership projections, revenue estimates, housing demand curves—despite wide uncertainty.

This shows up as false precision. Models output exact figures like “12.7% growth” or “48,000 daily riders.” The numbers imply certainty. But the data inputs cannot support it.

At the same time, the narrative fallacy encourages tidy explanations. “Downtowns will rebound.” “Remote work is permanent.” These stories come from limited data. They lock policy into a single storyline too early.

These tendencies interact with government structures to produce systematic error. Consider three examples.

Office-to-residential conversion. Faced with high vacancy rates, many cities have embraced a simple story. Excess office space can be turned into housing. But structural constraints—floor plates, plumbing, light access—limit what is actually feasible. Future demand remains unclear. Early studies often overstate scale and speed, presented with false precision. Cities that commit too quickly risk subsidizing conversions that are slow, costly, and misaligned.

Transit planning. Many transit systems still face ridership levels below pre-pandemic norms. Yet their plans assume eventual recovery. This is overfitting to the past. Inertia and funding structures favor large commitments. Policy lag compounds the problem. By the time new lines are built, travel behavior may have shifted again. Systems risk being optimized for a world that no longer exists.

Policing and public safety. Here, narrative fallacy and incentive distortion are especially strong. Leaders gravitate toward clear explanations. Crime is surging due to reduced enforcement. Or crime is largely a perception problem. The evidence is often mixed. But policies follow the stories anyway, sometimes swinging sharply. Outcomes unfold slowly. Feedback is ambiguous. Course correction is difficult. The result is cycles of overcorrection, not steady adaptation.

Across all three examples, overfitting to the past compounds the problem. Zoning, transit, and fiscal projections still reflect pre-pandemic patterns. Even as behavior shifts.

Policy lag ensures that by the time a plan is implemented, the assumptions that justified it may no longer hold.

Incentive distortion reinforces all of this. Officials are rewarded for certainty and decisiveness. Not for flexibility or candor.

The result is premature commitment. Large, irreversible bets made on fragile assumptions.

Taken together, these biases produce predictable failure modes. Cities build infrastructure for yesterday’s demand. They lock in land-use patterns based on fading trends. They communicate certainty where adaptation would be wiser.

The challenge is not just better data or better models. It is recognizing how judgment becomes distorted under deep uncertainty. And designing processes that counteract that distortion.

Introducing Better Decision Frameworks.

If the problem is predictable failure under structural uncertainty, the solution is not more sophisticated math or sharper forecasts. It is changing how decisions are made.

Across many fields—from defense to venture capital—practical frameworks have emerged for navigating deep uncertainty. These frameworks are not mathematically elegant. They are not prediction-driven.

Instead, they emphasize flexibility. Optionality. Rapid learning.

Three frameworks are especially relevant for cities: scenario planning, real options, and adaptive management.

Scenario planning prepares for multiple plausible futures rather than betting on one. Instead of asking “What will happen?” it asks “What might happen?” A city might develop several transportation futures. A remote-heavy future. A downtown rebound future. A polycentric future. The goal is to identify early signals pointing toward each scenario. The goal is not prediction. It is resilience across possibilities.

Real options thinking stages commitments. Instead of making large, irreversible bets, cities make smaller sequential bets. Acquire land first. Pilot a bus route next. Then scale based on evidence. Each step preserves flexibility. The alternative is a single, high-stakes bet.

Adaptive management treats policy as an experiment. Make assumptions explicit. Test policies at small scale. Monitor outcomes. Adjust based on what you learn. The shift is psychological: from “we must be right” to “we must learn fast.”

Why These Frameworks Aren’t Widely Used.

The biggest obstacle to using these frameworks is not the presence of uncertainty. It is discomfort with admitting the uncertainty.

Politically, these approaches can appear indecisive. Leaders are rewarded for clear plans and visible action. Not for preserving flexibility or running experiments.

Institutionally, city governments are built for production, not learning. Budget cycles are annual. Capital plans span decades. Performance systems reward delivery over adaptation.

Psychologically, these frameworks run against human cognitive bias. Scenario planning resists tidy narratives. Real options delay visible wins. Adaptive management requires admitting error. Each demands a level of humility that is uncomfortable and risky.

Blending the Frameworks.

No single framework is enough.

Scenario planning can produce too many stories to act on. Real options can be hard to explain to the public. (”You mean we’re not building the train yet?”) Adaptive management requires monitoring systems that many cities lack.

But the alternative is worse. Large bets on fragile assumptions.

The practical path is to blend them. Use scenario planning to map uncertainty. Use real options to stage commitments. Use adaptive management to learn continuously.

The tools matter less than the shift in posture. From prediction to preparation. From certainty to flexibility. From forecasts to iterative adaptation.

Managing uncertainty begins with a difficult admission. Our interpretations—even our perceptions—are shaped by heuristics and biases. They are provisional, not definitive. What we take to be “the situation” is, in part, a constructed view of reality. Filtered through prior beliefs, expectations, and limited information.

The most reliable way forward is to treat both perception and interpretation as working hypotheses. Subject to testing. Subject to revision. Subject, when necessary, to abandonment. This is not indecision or weakness. It is pragmatic acceptance of reality.

You do not need to remember the names—scenario planning, real options, adaptive management. You just need to ask a few questions.

· What assumptions does this policy depend on?

· What if those assumptions are wrong?

· Is this reversible?

· Are we locking ourselves into a single future?

· What early signals would tell us to change course?

The goal is not to eliminate uncertainty. That is impossible. The goal is to avoid being blindly permanently trapped by it.

These questions will not dispel the fog. But they may help cities learn to navigate within it.

Bill Bowen

Sustaining the Boom: How America’s Fast-Growing Metros Can Keep Building Housing.

Housing construction in the United States is increasingly concentrated in a relatively small group of metropolitan areas that can be described as “Boom Builders”—places where demand is strong and housing production remains comparatively high. If the U.S. plans to overcome its decades-long deficit in new housing construction, Boom Builder metros will need to maintain their dynamic pace of growth. Cities such as Austin, Raleigh, Charlotte, Nashville, and Columbus exemplify this category.

These cities absorb population growth, generate jobs, and produce housing at levels that far exceed those of legacy industrial metros. Yet even in these high-performing regions, housing supply often struggles to keep pace with demand. The central challenge is no longer how to initiate growth, but how to sustain and scale housing production as these metros mature. These cities need to keep booming if we want to achieve national goals for new housing construction.

Understanding how to increase housing construction in Boom Builder metros requires recognizing that their constraints are fundamentally different from those of slower-growth cities. These metros are not limited primarily by lack of demand; rather, they are constrained by

· infrastructure capacity,

· land-use transitions,

· regulatory friction,

· construction economics, and

· governance fragmentation.

Addressing these constraints requires a coordinated strategy that evolves as the metro shifts from outward expansion to more complex forms of urban development. The experience of Columbus, in particular, provides a useful case study for how these strategies can be implemented in practice.

The Structural Challenge: Growth Outpacing Systems.

Boom Builder metros are defined by rapid population growth and economic expansion. In Austin, technology-driven job creation has fueled continuous in-migration. In Raleigh and Charlotte, a combination of finance, research, and corporate relocation has produced sustained housing demand. Nashville has experienced similar growth driven by healthcare, tourism, and logistics. Columbus, while slightly less explosive, has emerged as one of the Midwest’s strongest growth centers, supported by education, healthcare, and logistics, as well as major investments such as semiconductor manufacturing.

In the early stages of growth, these metros rely heavily on greenfield development—the construction of new subdivisions on inexpensive land at the metropolitan edge. This model allows for rapid increases in housing supply with relatively low regulatory and infrastructural complexity.

Over time, however, this model begins to break down. Land at the periphery becomes more expensive or politically contested, infrastructure struggles to keep pace, and longer commutes generate congestion and environmental costs. At the same time, demand increasingly shifts toward locations closer to employment centers and amenities, requiring more complex forms of development.

The result is a structural transition. Boom Builders must evolve from land-abundant expansion systems to infrastructure- and policy-constrained urban systems. If this transition is not managed effectively, housing construction slows, affordability declines, and the metro begins to resemble the “Mature Sun Belt” pattern of constrained supply.

Expanding Infrastructure as a Housing Strategy.

One of the most important—and often overlooked—drivers of housing production is infrastructure. Roads, water systems, sewer capacity, and schools determine whether land can be developed at scale. In many Boom Builder metros, infrastructure provision lags behind population growth, creating bottlenecks that limit housing construction.

Cities such as Charlotte have historically addressed this challenge by extending infrastructure corridors ahead of development, allowing private builders to rapidly convert land into housing. This proactive approach reduces uncertainty and accelerates permitting. In contrast, metros that rely on reactive infrastructure investment often experience delays, cost overruns, and fragmented development patterns.

For Columbus, infrastructure investment is particularly critical. The region’s growth is distributed across multiple counties, each with its own governance structures. Coordinated investment in transportation and utilities—especially along major corridors such as the northwest growth axis associated with semiconductor investment—can unlock thousands of acres for development. By treating infrastructure as a strategic enabler of housing supply, rather than a secondary consideration, Columbus can maintain its capacity for expansion while avoiding the inefficiencies of uncoordinated sprawl.

Transitioning to Infill and Higher-Density Development.

As Boom Builder metros mature, the most significant shift they must make is from horizontal expansion to vertical and infill development. This transition is both inevitable and politically challenging. While suburban growth is often broadly accepted, higher-density development in established areas can face opposition.

Cities like Austin have begun to address this challenge through aggressive zoning reforms, including the legalization of accessory dwelling units (ADUs), reductions in minimum lot sizes, and upzoning along transit corridors. These policies enable a gradual increase in density without requiring large-scale redevelopment projects. Similarly, Minneapolis—though not always classified as a Boom Builder—has demonstrated the impact of allowing duplexes and triplexes in traditionally single-family neighborhoods.

For Columbus, the opportunity lies in targeted upzoning along key corridors and in inner-ring suburbs. Areas such as the Short North, Franklinton, and the Scioto Peninsula already demonstrate the viability of higher-density development. Extending this approach to additional corridors—while pairing it with design standards and community engagement—can create a scalable model for infill growth.

Importantly, this strategy must include the legalization of “missing middle” housing types, such as fourplexes and townhouses, which provide a bridge between single-family homes and large apartment buildings.

Streamlining Permitting and Reducing Uncertainty.

Even in high-growth metros, the permitting process can become a major constraint on housing production. As cities grow, regulatory systems often become more complex, with multiple layers of review, community input, and discretionary decision-making. This complexity introduces uncertainty, increases costs, and discourages smaller developers.

Boom Builder metros that sustain high levels of construction tend to adopt rules-based systems, where projects that meet established criteria can proceed “by right” without extensive negotiation. This approach reduces timelines and allows developers to plan with greater confidence. In contrast, systems that rely heavily on variances and case-by-case approvals tend to slow production, even when demand is strong.

Columbus has made progress in this area by exploring permit streamlining and standardized approvals, but further reforms could significantly increase housing output. Establishing clear by-right development zones, particularly in designated growth corridors, would allow projects to move forward without prolonged political processes. Additionally, implementing time limits for approvals and expanding digital permitting systems could reduce administrative delays.

Addressing Construction Capacity and Costs.

Another critical constraint in Boom Builder metros is the capacity of the construction industry itself. Rapid growth can strain labor markets, drive up wages, and increase material costs. These pressures can make projects financially unviable, even in high-demand environments.

One response is to industrialize the construction process through modular and prefabricated building techniques. By shifting portions of construction into factory settings, developers can reduce labor requirements, shorten timelines, and improve cost predictability. While this approach is still emerging, cities like Columbus have begun to explore its potential as part of broader housing strategies.

In addition, expanding the construction workforce through training programs and apprenticeships is essential. Partnerships between local governments, community colleges, and industry groups can help build a pipeline of skilled labor. Without such efforts, even the most favorable zoning and permitting environments will struggle to produce sufficient housing.

Maintaining Financial Feasibility.

Housing construction ultimately depends on financial viability. Even in Boom Builder metros, projects can stall if costs exceed expected returns. Rising interest rates, increasing land prices, and regulatory costs can all undermine feasibility.

To address this, cities can adopt policies that reduce uncertainty and lower development costs. Standardized tax abatements, predictable fee structures, and targeted subsidies for workforce housing can help bridge financing gaps. Importantly, these tools should be applied systematically rather than negotiated on a project-by-project basis, as predictability is often more valuable than the size of the incentive itself.

Columbus has used tax abatements effectively in certain areas, but expanding and standardizing these programs could further stimulate housing production. By creating a consistent financial environment, the city can attract a broader range of developers and encourage smaller-scale projects that collectively add significant supply.

Regional Coordination and Governance.

Finally, increasing housing construction in Boom Builder metros requires regional coordination. Housing markets do not align neatly with municipal boundaries, yet land-use decisions are often made at the local level. This fragmentation can lead to uneven development, with some jurisdictions accommodating growth while others restrict it.

Metros such as Raleigh and Charlotte have benefited from relatively coordinated regional planning, which allows for more consistent housing production across jurisdictions. In contrast, fragmented regions may struggle to align infrastructure, zoning, and housing targets.

For Columbus, regional coordination is both a challenge and an opportunity. The metro’s growth spans multiple counties, each with its own policies and priorities. Establishing regional housing targets, aligning zoning practices, and coordinating infrastructure investments can ensure that growth is distributed efficiently and equitably. Without such coordination, the metro risks underbuilding in key areas while overburdening others.

Conclusion: Sustaining the Boom.

Boom Builder metros occupy a critical position in the U.S. housing system. They are among the few places capable of producing housing at scale, yet they are also vulnerable to the very success that drives their growth. As demand increases, so do the constraints that limit supply. The challenge is to adapt systems of infrastructure, land use, governance, and construction to sustain high levels of production over time.

The experience of Columbus illustrates both the opportunities and the challenges of this transition. With strong economic fundamentals and a growing population, the city has the potential to remain a leading housing producer in the Midwest. By investing in infrastructure, enabling infill development, streamlining permitting, expanding construction capacity, and coordinating regionally, Columbus can avoid the stagnation that has affected other metros and continue to grow in a sustainable and inclusive manner.

More broadly, the lessons from Columbus and its peer cities suggest that the future of housing in the United States will depend not on discovering new sources of demand, but on building systems capable of translating demand into supply. Boom Builder metros have already demonstrated that large-scale housing production is possible. The task now is to ensure that it remains so.

Bob Gleeson

Solving The U.S. Housing Crisis: Different Metros, Different Problems.

Most housing experts in the U.S. agree that over the past few decades the U.S. has constructed between 3 and 4 million fewer housing units than needed. Moving forward, the U.S needs to construct between 1.4 and 1.5 million new housing units annually to keep up with new demand, and at least several hundred thousand additional units to catch up with previous housing deficits.

Understanding new housing construction across U.S. metropolitan areas is often treated as a simple question of growth versus decline: fast-growing Sun Belt cities are assumed to build a lot, and older Rust Belt cities are assumed to build little. So, policies need to help build more housing in the Sun Belt and at least keep Rust Belt cities stable.

But this binary framing misses important structural differences that are increasingly shaping how American cities evolve. A more accurate and policy-relevant approach is to use a four-quadrant matrix defined by two dimensions: (1) housing stock age and (2) current housing construction intensity. This framework helps to reveal not only where new housing is being built, but it begins asking why it is or is not being built, and how different housing markets in different metro areas are likely to evolve over time.

The value of this framework is that it separates two often-confused variables: the historical age of a city’s housing stock and its current capacity or willingness to add new units. These variables interact in complex ways.

Some cities have very old housing but still manage moderate construction. Others have relatively new housing yet have stalled construction pipelines. Mapping metros across these two axes, identifies at least four distinct urban housing metro categories: Boom Builders, Mature Sun Belt metros, Legacy Stagnant metros, and Transition metros. Each category represents a different structural logic governing housing production. Solving the national housing crisis will need to increase production in each of these metro categories.

The Structure of the 4-Quadrant Model.

The first dimension, housing stock age, distinguishes cities with predominantly older built environments (pre-1970 or pre-1940 housing dominance) from those where most housing is post-1980 suburban expansion. The second dimension, current construction intensity, captures whether a metro is actively producing housing at high rates or experiencing low or declining production.

When combined, these dimensions generate four analytically distinct categories:

1. Boom Builders: mixed or older stock + high construction

2. Mature Sun Belt metros: newer stock + low or declining construction

3. Legacy Stagnant metros: older stock + low construction

4. Transition metros: mixed stock + moderate construction

Each category reflects a different stage in the urban housing lifecycle, shaped by land availability, demand growth, governance structures, and institutional investment patterns.

Category A: Boom Builders.

Boom Builder metros are characterized by active housing production combined with either mixed-age or moderately old housing stock. These cities are typically experiencing strong population inflows, robust job growth, and expanding metropolitan footprints. They are the closest analog to what many observers imagine when they think of “growth cities,” but they are more nuanced than that label suggests.

Major examples include Austin, Raleigh, Charlotte, Nashville, and Columbus. These metros exhibit high levels of multifamily permitting, rapid subdivision expansion, and sustained in-migration.

However, what defines Boom Builders is not just growth, but elasticity. These metros still have the ability to expand outward or upward without hitting immediate physical or regulatory ceilings. Even older metros in this category, such as Columbus, retain significant undeveloped or underdeveloped land relative to demand. Their housing systems are fundamentally supply-responsive.

The key insight of this category is that high construction is not purely a function of policy friendliness; it is also driven by structural growth pressure. These cities are still in an expansionary phase of their urban lifecycle.

Category B: Mature Sun Belt Metros.

Mature Sun Belt metros are perhaps the most misunderstood category in U.S. housing analysis. These cities have relatively new housing stocks—often the result of rapid post-1980 or post-1990 suburban expansion—but have experienced a noticeable slowdown in new construction in recent years.

Representative metros include Las Vegas, Orlando, Tampa, San Diego, Denver, and Honolulu. These metros share a common developmental trajectory: rapid suburbanization and greenfield expansion during earlier growth phases, followed by a transition into an era now defined by constraints.

The constraints vary by region. In coastal California, constraints are primarily zoning and land scarcity. In Florida metros, constraints increasingly include insurance costs, climate risk, and infrastructure limitations. In desert metros like Las Vegas, water scarcity and fiscal limits play a larger role, along with growing climate risk.

The defining feature of this category is that housing stock age no longer predicts construction intensity. Despite having relatively new housing overall, many of these metros now build at modest or cyclical rates. They are no longer expansion frontiers; instead, they are mature systems managing affordability pressures and constrained supply pipelines.

This category highlights an important structural shift: newness of housing stock does not guarantee ongoing construction capacity. Once a metro has largely built out its suburban land base, its construction trajectory depends less on demand growth and more on institutional and environmental constraints.

Category C: Legacy Stagnant Metros.

Legacy Stagnant metros represent the classic image of older industrial cities in the United States. These cities have aging housing stock, often with significant pre-1940 or pre-1970 construction, combined with low levels of new housing production.

Key examples include Cleveland, Detroit, Buffalo, Pittsburgh, St. Louis, and Baltimore. The dominant narrative about these cities is that they fail to build housing because demand is weak. While this is partially true, it is incomplete.

The deeper issue is institutional and structural: fragmented governance, heavy reliance on discretionary approvals, and limited scalable development pipelines. Many projects depend on subsidies or complex negotiations, which limits the ability to produce housing at scale.

Importantly, Legacy Stagnant metros are not uniformly declining. Many contain strong institutional anchors—medical systems, universities, or downtown revitalization districts—but these are often insufficient to generate citywide housing production.

The key characteristic of this category is not simply low demand, but low conversion efficiency between demand and supply. Even when demand exists in specific neighborhoods or corridors, it does not translate into widespread construction.

Category D: Transition Metros.

Transition metros occupy a critical middle ground. These cities have mixed or moderately old housing stock and moderate levels of construction activity. They are neither high-growth expansion markets nor stagnant legacy systems. Instead, they are structurally flexible and highly sensitive to policy changes.

Representative metros include Cincinnati, Indianapolis, Kansas City, Milwaukee, and Minneapolis. These cities typically have a combination of older urban cores and expanding suburban rings.

Unlike Legacy Stagnant metros, Transition metros maintain more active development pipelines. Unlike Boom Builders, they are not driven by explosive population growth. Their construction levels are therefore determined more by policy choices and institutional coordination than by raw demand pressure.

Cincinnati is a particularly good example due to its emerging use of standardized housing approvals and “missing middle” housing policies. Indianapolis reflects a more market-driven version of the same dynamic, while Minneapolis demonstrates the role of institutional and transit-oriented development in sustaining moderate construction levels.

The defining feature of Transition metros is their high elasticity. They can move either upward into Boom Builder status or downward into stagnation depending on zoning, financing, and governance decisions. This makes them the most policy-sensitive cities in the entire system.

Why the Quadrant Model Matters.

The primary value of the four-quadrant analytical framework is that it replaces simplistic narratives with structural analysis. Instead of asking whether a city is “growing” or “declining,” it asks two more precise questions: what is the age composition of its housing stock, and how effectively is it converting demand into new units?

This matters because cities in different categories require entirely different policy interventions:

• Boom Builders need infrastructure scaling and long-term land-use planning.

• Mature Sun Belt metros need regulatory reform and densification strategies.

• Legacy Stagnant metros need financing tools, institutional coordination, and reduced project-level discretion.

• Transition metros need zoning reform and development pipeline standardization to avoid sliding into stagnation.

The model also clarifies why some cities surprise observers. A city with relatively new housing may still struggle to build (as in Mature Sun Belt metros), while a city with very old housing may still manage moderate production if governance systems are effective (as in Transition metros).

Conclusion.

The four-quadrant housing matrix provides a more accurate and actionable way to understand housing production across U.S. metropolitan areas. It reveals that housing construction is not determined solely by growth or age, but by the interaction of structural constraints, governance systems, and lifecycle stage.

By applying this framework, we can better understand why Columbus continues to expand rapidly while San Diego builds far less despite strong demand, and why cities like Cleveland, Pittsburgh, and Cincinnati occupy such pivotal positions in the national housing system.

Ultimately, the quadrant model reframes U.S. housing not as a single market, but as a set of interacting systems at different stages of maturity. Understanding these systems is essential for designing effective housing policy, anticipating future migration patterns, and identifying where the greatest opportunities for intervention exist.

Future posts will explore the dynamics of these metro categories in more detail and suggest recommendations that can help increase new housing construction nationwide.

Bob Gleeson

The Great Unraveling: How the Shift in World Order Will Reshape Daily Life for American Urban Citizens.

For eighty years, Americans have built their lives—raising families, building careers, navigating the rhythms of city life—against a backdrop of relative global stability that most took entirely for granted. That stability was not accidental. It was constructed deliberately and expensively through a web of international institutions, alliances, and norms that past generations of Americans championed, fought for, and underwrote in the aftermath of World War II. It was, in the most literal sense, an American project.

That American-led, rules-based order is now under serious strain. Whether it is ending, reconfiguring, or merely adjusting is debated, but the evidence suggests a measurable shift: the United States is moving from guarantor of a global system toward a more unilateral, selective, transactional posture. This essay examines what that shift is likely to mean for ordinary Americans living in cities, through four primary channels: prices, jobs, public finances, and financial conditions.

The Shift in Evidence

The 2025 National Security Strategy (NSS) marks a clear departure from the sustaining logic of the post-war order. While it does not formally renounce that order, it notably eliminates language about a “rules-based international order”—a phrase that appeared consistently in previous NSS documents dating back to the Clinton administration. In its place, the 2025 NSS emphasizes transactional relationships, selective global commitments, and the strategic use of economic and military leverage. It explicitly identifies China as a competitor with “the intent to reshape the international order” and elevates tools such as export controls, investment screening, and alliance restructuring. The absence of the “rules-based” formulation is not accidental; it signals a deliberate repositioning.

In early March, Singapore’s Foreign Minister, Dr. Vivian Balakrishnan, offered a candid external assessment. Speaking from the vantage point of a small, prosperous nation whose modern existence depended on the stability of the post-war order, he questioned whether the eighty-year period of unprecedented peace and worldwide economic expansion was ending, warning that it is now under serious strain. Equally striking was his account of the United States: the nation that had originally envisioned and underwritten the rules-based international system had, in his telling, progressively repositioned itself toward nationalism, unilateralism, and a more transactional—sometimes coercive—approach to the very order it once built.

The shift in the U.S. role—from primary guarantor to selective transactional actor—is increasingly visible in trade policy, security commitments, technology restrictions, diplomatic signaling, and the federal budget. The budget, in particular, serves as the primary transmission mechanism between global strategy and household outcomes. Decisions about tariffs, defense spending, foreign aid, and domestic investment directly influence prices, employment, and the level of services that state and local governments can provide.

How the Shift Reaches Households

The alliances being loosened, the institutions being defunded or sidelined, and the norms being weakened function as underlying supports for the global economy. When those supports shift, the effects travel through identifiable channels:

· Trade frictions and tariffs raise import prices directly. If the U.S. withdraws from trade coordination mechanisms (such as the World Trade Organization’s dispute resolution system), bilateral tariff wars become more likely, increasing costs for imported goods from electronics to clothing.

· Supply-chain disruptions increase business costs. When the U.S. prioritizes reshoring and decoupling from strategic competitors, companies must reconfigure supply chains, incurring transition costs that are ultimately passed to consumers.

· Energy market instability feeds directly into fuel and food prices. If the U.S. reduces security commitments in key shipping lanes (such as the South China Sea)—not to mention the possibility of repeating another unilateral disruptive action such as attacking Iran without first building a collaborative coalition or even consulting allies or trading partners other than Israel—geopolitical risk premiums rise, pushing up oil and natural gas prices.

· Financial uncertainty can push up interest rates. As the U.S. adopts more unilateral and unpredictable trade and security postures, global investors may demand higher yields on U.S. debt, raising borrowing costs for mortgages, car loans, and business financing.

These and similar changes reach American households in the price of groceries, the cost of borrowing, job stability, and the fiscal capacity of local governments.

Predictable Effects on Daily Life

The question is urgent but straightforward: as the world order reorganizes itself around new and in many cases less democratic power arrangements, what does that mean for the ordinary American? The answers are neither distant nor abstract.

Over the next several years to a decade, several measurable effects are likely to reach daily life in U.S. cities. These effects stem directly from the U.S. withdrawal from its role as leader of global collaboration and rules-based order guarantor: tariffs replace alliance coordination, reshoring replaces integrated supply chains, defense reallocation replaces forward commitments, and immigration restrictions replace openness as a normative posture.

Prices and Cost of Living

Tariffs, trade frictions, and supply-chain realignments will increase the cost of imported goods and industrial inputs, raising consumer prices for electronics, clothing, automobiles, and household goods.

Energy market disruptions resulting from disruptive U.S. actions and reduced U.S. security coordination may push up fuel and electricity costs, which in turn feed into food and transportation prices.

Changes in trade policy or shipping routes may increase logistics costs, further affecting retail prices and the availability of goods.

Employment, Wages, and Local Economies

Reshoring and investment in strategic industries (semiconductors, batteries, pharmaceuticals) will increase manufacturing, logistics, and port-related jobs in certain regions, particularly around Gulf Coast petrochemical hubs, Midwest auto corridors, and Sun Belt semiconductor fabs.

At the same time, trade shifts and changing global demand may reduce employment in sectors tied to export markets, including agriculture, commercial aerospace, and higher education dependent on foreign students.

Defense spending and procurement changes may reallocate jobs geographically, benefiting shipbuilding in Virginia and submarine manufacturing in Connecticut while reducing activity in regions dependent on overseas basing and foreign military sales.

Changes in immigration and visa policy could tighten labor supply in both high-skill sectors (technology, health care, research) and low-wage sectors (agriculture, hospitality, construction), influencing hiring and wage levels.

Public Finances and Local Services

Federal budget priorities—whether toward defense, deficit reduction, or domestic investment—will shape funding available for transit, housing, health care, and education. The 2025 NSS’s emphasis on border enforcement and military readiness suggests reallocation away from social programs.

Reductions in federal support for social programs (housing vouchers, community development block grants, Medicaid matching funds) will increase pressure on city budgets, particularly for homelessness services, public health, and emergency response.

Infrastructure funding decisions may accelerate or delay major urban projects. The NSS does not specify infrastructure priorities, but if funding shifts toward border infrastructure and away from transit, cities may see delayed rail and bus projects.

Financial Conditions and Household Stability

Increased federal borrowing to finance defense and domestic priorities, combined with economic uncertainty, may contribute to higher interest rates, raising the cost of mortgages, car loans, and business financing.

Market volatility tied to geopolitical risk—such as conflict over Taiwan, the South China Sea, or Ukraine—may affect retirement savings, pensions, and investment portfolios.

Localized economic shifts, such as new industrial investment in some regions and decline in others, will drive changes in housing demand, rents, and property values. Cities gaining manufacturing may see affordability crises; cities losing export industries may see shrinkage, falling property values, and reduced tax bases.

The timing and magnitude of these effects will depend on specific policies, congressional budgets, and private-sector responses. Their impact will be uneven across cities and social groups, but for American urban citizens, the change will be neither abstract nor far away.

Who Bears the Greatest Burden?

The cost of global realignment will predictably fall most heavily on those least able to pay it. This is not to say that middle-class and affluent urban citizens will feel no effects. They will feel inflation, employment shifts, and changes in public services. But many of them have savings to absorb price increases, credentials and networks to navigate labor market shifts, and political access to advocate for their interests. The disadvantaged—low-wage workers, renters, households with little liquid savings, people of color subject to systemic discrimination, and those reliant on public services—have none of these buffers.

When economic and geopolitical disruptions occur, their costs fall disproportionately on those with the least financial cushion and the fewest institutional supports. This pattern is historically consistent, from the 2008 financial crisis to the COVID-19 pandemic, and it will probably recur during the current global realignment.

What Ordinary Citizens Can Do

This diagnosis is not meant to induce fatalism. Ordinary citizens retain agency, even in the face of large structural changes.

Seek high-quality information. The shift in world order is complex and poorly covered by sensationalist media. Citizens can benefit from sources that adhere to sound journalistic standards—multiple sourcing, correction policies, separation of news and opinion, and expertise-based reporting. Reliable outlets include the Associated Press, Reuters, the Financial Times, The Wall Street Journal (news side), and The Economist. For specialized coverage, follow the International Crisis Group, the Council on Foreign Relations, and the Brookings Institution. Avoid sources that frame every development as either catastrophe or triumph; complexity is the signal of seriousness.

Vote with attention to foreign policy. Foreign policy is rarely a top-tier voting issue, but the effects described in this essay—prices, jobs, public services, financial stability—are household economic issues. Citizens can ask candidates: What is your position on tariffs and trade agreements? On defense spending and overseas commitments? On immigration and visa policy? On funding for international institutions? On the federal budget deficit? These questions connect global strategy to local outcomes.

Strengthen local resilience. Regardless of federal policy, communities can build buffers against disruption. Support local mutual aid networks, food banks, and housing assistance organizations. Participate in neighborhood associations and city budget hearings. Advocate for municipal rainy-day funds and emergency preparedness. These local institutions will be the first line of support when federal backstops weaken.

Diversify household economic exposure. To the extent possible, reduce dependence on volatile sectors and single employers. Build emergency savings. Develop transferable skills. If you rent, understand your rights and organize with tenants. If you work in a trade-exposed industry (manufacturing, agriculture, logistics), stay informed about policy changes and explore sector transitions.

Engage in civic life beyond elections. Attend school board and city council meetings. Write to members of Congress—not just about national issues but about how federal budget decisions affect local services. Support journalism by subscribing to local newspapers. An informed, organized, and engaged citizenry remains the most reliable check on policy that concentrates costs on the vulnerable.

None of these actions will reverse the global realignment on its own. But collectively, they can mitigate harm, preserve democratic accountability, and help to ensure that the costs of change do not fall entirely on those least able to bear them.

Bill Bowen

The Invisible Pipe: How a Waterway 7,500 Miles Away is Already Reshaping American Cities — And What Urban Policymakers Need to Understand About It.

Nobody in Whiting, Indiana voted on the Strait of Hormuz. Nobody in Philadelphia asked to have their refinery system isolated from domestic oil pipelines, structurally dependent on tankers threading a 21-mile waterway between Iran and the Arabian Peninsula. And nobody stocking the pharmacy shelves in Indianapolis made a decision that would one day tie the price of generic blood pressure medication to an Iranian drone program.

But here we are.

The closure of the Strait of Hormuz offers a masterclass in asymmetric vulnerability — not just militarily, but economically. Iran’s strategy relies on low-cost, mass-produced drones, some costing less than a luxury SUV. Their target is not a military installation but a 21-mile waterway through which 20 percent of the world’s oil flows. The result is a brutal arithmetic: a minimal input, applied to a critical global chokepoint, generates an immense and diffuse output of economic pain.

That arithmetic is just now starting to arrive on American shores — not as battlefield footage, but as the price of asphalt in Indiana, semiconductors in Silicon Valley, and generic drugs in a Philadelphia pharmacy. It is showing up in the chip shortage that will delay your city’s next fleet of connected transit buses. It is in the fertilizer price that will reach your farmers’ market by June. It is a slowly creeping crisis that arrives not with the sound of air raid sirens, but with the silent ticking of a cash register.

This is not primarily a war story, or even an energy story. It is a cities story. More specifically, it is a supply chain story — and supply chain stories always end in cities.

The Plumbing Nobody Sees.

Supply chains are the actual architecture of the modern economy — as real, as consequential, and as fragile as water mains or electrical grids. The discipline of input-output economics gives us a precise map of how every industry is simultaneously a customer of some industries and a supplier to others.^[1] Pull one thread and the whole fabric moves. You don’t see the supply chain — you see the menu. When it breaks, the menu shrinks and prices rise.

A Hormuz closure works exactly this way, but at global scale. The United States is not the primary victim of the current disruption — not by a long measure. Roughly 84 percent of the oil that normally flows through the Strait is destined for Asian markets. Japan depends on that passage for somewhere between 60 and 75 percent of its crude oil supply. South Korea, in the vicinity of 66 to 70 percent. The disruption lands first and hardest in East Asia and the Indian subcontinent.

But here is the insight that every urban policymaker needs to internalize: those are the countries that make things American cities buy. Their crisis becomes our supply shock — just with a lag, and through channels almost nobody is watching.

The American Cities Already in the Crosshairs.

There is a first tier of American cities where the exposure is direct and immediate — cities whose economic base is built around refining the specific type of oil that flows through Hormuz.

Crude oil is not a single commodity. It comes in grades — light and heavy, sweet and sour — and the distinction matters enormously. American shale production produces primarily light crude. But a large portion of the American refinery system was deliberately reconfigured over the past three decades to process heavy sour crude — the denser, sulfur-rich grades that flow from Saudi Arabia, Iraq, Kuwait, and Iran — because it traded at a discount and the margin on processing it was attractive. Those refineries cannot simply swap in domestic light crude. The equipment doesn’t work that way.

Port Arthur and Beaumont, Texas sit at the top of the vulnerability ranking. The Motiva refinery in Port Arthur — the largest in the United States at 730,000 barrels per day, historically a Saudi Aramco joint venture — was built to run Saudi heavy crude. Valero and ExxonMobil facilities in the same corridor add hundreds of thousands of barrels of additional heavy-crude-dependent capacity. These are not diversified industrial cities. They are company towns whose economic DNA is written in crude oil specifications, and the crude they need is now subject to a global bidding war.

The surprise on the list is Whiting, Indiana, in the Chicago metropolitan area. BP invested $3.8 billion to rebuild the Whiting refinery specifically to process Canadian heavy crude, a grade almost identical in character to the Gulf sour grades now in short supply globally. Whiting produces roughly seven percent of all asphalt in the United States, supplies jet fuel to O’Hare and Detroit Metropolitan airports, and supports more than 90,000 regional jobs. In a generic oil disruption, it is a mid-tier concern. In a specifically heavy crude disruption — which is what a Hormuz closure produces — it becomes one of the most exposed single industrial facilities in the country, because every alternative heavy crude supplier is now being bid up simultaneously by every heavy-crude-dependent refinery on the planet.

Baton Rouge and Lake Charles in Louisiana, Philadelphia on the East Coast, and the Los Angeles basin round out the direct-exposure tier, each for slightly different structural reasons involving refinery configuration, pipeline isolation, or dependence on waterborne imports.

Three Surprises Hiding in the Indirect Channels.

Beyond the refinery cities, the Hormuz disruption reaches every American metro through three channels that most urban observers haven’t anticipated.

Your pharmacy. India supplies approximately 40 percent of all generic prescription drugs sold in the United States. Indian pharmaceutical manufacturing is energy-intensive, and India routes roughly 60 percent of its crude oil imports through the Strait of Hormuz. When Indian energy costs spike — as they already have — the cost of manufacturing generic drugs rises, margins compress, and supply chains tighten. The generic blood pressure medication, the generic antibiotic, the generic diabetes drug: their prices are not set in your city. They are set, in part, by the energy cost structure of manufacturing facilities in Gujarat and Hyderabad that are right now scrambling for alternative fuel supplies. For the urban policymaker focused on public health, this transforms a distant naval conflict into a direct threat to healthcare affordability.

Your car dealer’s empty lot. Japan and South Korea together supply a substantial share of US automobile imports, and both countries’ manufacturing sectors are in acute energy stress. But there is a second, less visible layer: the memory chips and logic chips that go into every modern vehicle, every laptop, every server in every data center come overwhelmingly from South Korean and Taiwanese fabrication facilities. Those facilities require massive and uninterrupted flows of ultra-high-purity helium for the thermal management of advanced chip fabrication. The single largest source of that helium was Qatar, whose LNG infrastructure has been severely disrupted. Helium has no substitute in semiconductor manufacturing.

This, by the way, arrives on top of an already deteriorating situation. Industry forecasts made before the Hormuz closure already projected global PC shipments falling more than 11 percent in 2026 and smartphone shipments down nearly 13 percent — declines driven by a pre-existing memory chip shortage. The helium disruption now threatens to deepen and prolong what the industry had hoped to weather. For American cities that have bet their economic development strategy on attracting tech employers, AI infrastructure, or advanced manufacturing, the Hormuz closure is not the origin of this crisis. It is the accelerant.

Your grocery bill. Roughly one-third of global seaborne fertilizer trade transits the Strait of Hormuz. Urea prices at the New Orleans hub — the benchmark for Midwest farmers — have surged more than 40 percent in a matter of weeks, and this will not stay on the farm. The corn and soybean farmers of Iowa, Illinois, Indiana, and Nebraska will absorb some of it in squeezed margins. The rest will move downstream through processors, distributors, and retailers, arriving on grocery shelves as higher prices for meat, grain, cooking oil, and processed food. Urban food policy planners who have been focused on food deserts and fresh food access are about to discover that the affordability problem has a new dimension — one originating 7,500 miles away.

The Uncomfortable Arithmetic.

The United States is, in a narrow sense, less exposed to a Hormuz closure than almost any other advanced economy. We are a net oil exporter, albeit of light crude. High oil prices produce a genuine revenue windfall for American producers and LNG exporters. The dollar strengthens as global capital seeks safe harbor. Secretary Rubio’s observation that a Hormuz disruption “would hurt other countries’ economies a lot worse than ours” is arithmetically correct. Japan, South Korea, and Germany are in genuinely worse positions — as, notably, is Iran itself, whose own trade, food imports, and budget depend on the strait remaining open.

But arithmetic is not the same as distribution. The gains from a Hormuz disruption are concentrated in a handful of energy-producing states. The losses are diffuse — spread across every household, every city, every supply chain in the country. The energy windfall flows to Texas oil producers and Louisiana LNG exporters. The semiconductor shortage, the pharmaceutical inflation, the fertilizer price spike, and the auto supply disruption flow everywhere else. Cities do not benefit from rising oil royalties. They absorb rising input costs, declining purchasing power, and the downstream effects of trading partner recessions.

American cities have spent the past decade building resilience frameworks around climate adaptation, housing affordability, pandemic preparedness, and transit decarbonization. Almost none have developed a supply chain audit: a systematic assessment of which local industries, employers, and household services are one global chokepoint away from a crisis. The Hormuz lesson is that urban economic health is not solely a function of local decisions. It is a function of global network topology — fragile, politically contingent infrastructure that can be severed by a drone swarm in an afternoon.

The invisible pipe runs through every city in America. We are only now learning, in real time, how breakable it is.

Bill Bowen

^[1] The analysis in this essay draws on the World Input-Output Database (WIOD), U.S. Energy Information Administration trade flow data, and current reporting as of March 2026. The AI, Claude was used to analyze it.

Reclaiming Global Urban Leadership: Why U.S. Cities Must Deepen Collaboration With the OECD.

American cities are entering a period of strategic loneliness. For most of the postwar era, local leaders could assume that the federal government would anchor the United States firmly within a dense web of alliances, multilateral institutions, and shared policy frameworks with other democracies. That scaffolding — never perfect but broadly stabilizing — allowed cities to focus primarily on domestic concerns while benefiting indirectly from global cooperation on trade, climate, migration, and innovation.

That assumption is no longer reliable. Periodic retrenchment in U.S. federal global engagement — whether driven by political cycles, fiscal constraints, or shifting geopolitical priorities — has created a widening gap between the global challenges cities face and the international coordination available to address them. Climate adaptation, workforce disruption, housing affordability, and technological change are not bounded by national borders. Yet cities increasingly find themselves without consistent federal mediation in global policy arenas.

The practical response is not to wait for Washington to re-engage. It is for cities themselves to step more assertively into international collaboration—particularly through structured, data-rich, and policy-oriented platforms like those offered by the Organization for Economic Co-operation and Development (OECD).

The OECD, founded in 1961, brings together 38 high-income democracies to promote policies that foster economic growth, trade, and social well-being. Headquartered in Paris, with a staff of more than 3,500 economists, policy experts, lawyers, political analysts, statisticians, digital professionals and support staff, the OECD produces data-driven research, benchmarks best practices, and facilitates peer learning among member governments on issues ranging from tax and education to regional development and climate resilience. The U.S. is a founding member of the organization and provides almost 20% of its core operating budget.

Expanding engagement with OECD initiatives is not symbolic diplomacy; it is a pragmatic strategy for maintaining policy alignment with peer democracies, accessing comparative data, and co-developing solutions at the scale where problems are actually experienced.

Cities as the New Front Line of Global Governance.

Urban areas already drive most of the economic output and population growth across OECD countries. The organization itself emphasizes that cities are central to managing “demographic and economic growth” and addressing challenges like congestion, inequality, and environmental sustainability. In other words, cities are not peripheral actors in global governance. Cities are where global trends materialize.

The OECD has increasingly adapted to this reality by creating city-focused platforms that bypass or complement national governments. Programs like the OECD Working Party on Urban Policy, the Champion Mayors initiative, and various urban policy toolkits provide a shared language for cities to compare performance, benchmark outcomes, and exchange practices.

For U.S. cities, deeper engagement in these platforms offers something that federal disengagement cannot easily replace: continuity. Even if national policies swing unpredictably between internationalism and isolationism, OECD frameworks persist, providing stable venues for collaboration with cities in Europe, Canada, Japan, and beyond.

Proven Models: U.S. Cities Already Engaged.

This is not a hypothetical pathway. Several U.S. cities have already demonstrated the value of OECD collaboration.

One clear example is participation in the OECD City Network on Jobs and Skills, which has included cities such as Boston, New Orleans, and San Diego. This network brings together roughly 15 cities across the United States and Europe to share strategies on workforce development, digital skills, and inclusion. Rather than relying on abstract national policies, these cities engage in peer-to-peer exchanges, workshops, and capacity-building exercises focused on real labor market challenges.

The significance of this model is easy to miss if viewed superficially. What these cities gain is not just “best practices,” but policy calibration. A workforce initiative in Boston can be compared directly with efforts in London or Berlin, allowing local leaders to test assumptions against international evidence rather than domestic political narratives.

Similarly, U.S. cities have participated in OECD efforts around smart cities and inclusive growth. These initiatives help local governments leverage digital technologies and artificial intelligence to improve service delivery, sustainability, and equity. In practice, this means cities can align their technology investments with globally recognized standards rather than reinventing frameworks independently.

Another important area is decentralized international cooperation. OECD research on city-to-city partnerships highlights how municipalities increasingly engage directly with global peers to advance the Sustainable Development Goals (SDGs). These partnerships have evolved beyond ceremonial “sister city” relationships into sophisticated exchanges involving data sharing, capacity building, and joint policy design.

For U.S. cities, these examples illustrate a broader point: engagement with OECD tools is not theoretical — it is already producing operational benefits in workforce policy, digital governance, and sustainability planning.

Why OECD Engagement Matters Now.

The urgency of expanding these collaborations stems from three overlapping dynamics.

First, global problems are accelerating faster than national coordination. Climate migration, for example, is likely to reshape U.S. metropolitan areas over the coming decades, especially in regions like the Great Lakes. Yet federal policy responses remain fragmented. OECD frameworks allow cities to learn from peers already dealing with similar pressures, from Southern Europe to parts of Canada.

Second, policy innovation is increasingly local. Many of the most effective responses to housing shortages, transit integration, and economic inclusion are emerging from cities rather than national governments. OECD platforms aggregate and validate these local innovations, turning isolated successes into transferable models.

Third, data matters more than ever. The OECD’s comparative datasets and benchmarking tools provide cities with a way to measure performance against international peers. This is not merely academic. It strengthens grant applications, informs capital planning, and supports evidence-based policymaking.

Without access to these tools, U.S. cities risk becoming inward-looking at precisely the moment when outward comparison is most valuable.

Expanding the Range of Engagement.

If the case for OECD collaboration is clear, the question becomes how cities should expand their involvement. The answer is not simply to join more programs, but to deepen and diversify participation across several dimensions.

1. Institutional Participation.

Cities should seek formal roles in OECD networks and working groups, particularly those focused on urban policy, climate resilience, and economic development. Participation should not be limited to occasional attendance but integrated into ongoing policy cycles, with dedicated staff responsible for engagement.

2. Data Integration.

OECD tools such as urban policy indicators and benchmarking frameworks should be embedded into local planning processes. This means using OECD metrics not just for reporting, but for shaping budgets, evaluating programs, and setting performance targets.

3. City-to-City Partnerships.

Building on OECD guidance, U.S. cities should expand structured partnerships with international peers. These partnerships should focus on specific policy domains, such as transit-oriented development or workforce training, rather than broad cultural exchange. The goal is to produce actionable outcomes, not symbolic relationships.

4. Regional Collaboration.

Metropolitan regions, not just central cities, should engage with OECD initiatives. Many urban challenges — housing, transportation, labor markets — operate at a regional scale. OECD programs on intermediary cities and regional development explicitly recognize the importance of these multi-jurisdictional dynamics.

5. Public-Private Alignment.

OECD collaborations often involve partnerships with foundations and private sector actors. U.S. cities should leverage these connections to align local economic development strategies with global investment trends, particularly in areas like green technology and digital infrastructure.

Overcoming Barriers.

Despite the clear benefits, several barriers have limited U.S. city engagement with OECD initiatives.

One is capacity. Smaller cities may lack the staff or expertise to participate fully in international networks. This can be addressed through regional consortia or state-level support, allowing multiple municipalities to share resources and representation.

Another barrier is political perception. International engagement can be framed — incorrectly — as peripheral or elitist. City leaders need to articulate the concrete benefits of OECD collaboration in terms that resonate locally: job creation, infrastructure investment, and improved public services.

A third challenge is fragmentation. Without federal coordination, cities may pursue international partnerships in an ad hoc manner. Here again, OECD frameworks can provide structure, ensuring that collaborations are strategic rather than opportunistic.

A Strategic Opportunity for U.S. Cities.

There is a deeper strategic argument for expanding OECD engagement. In an era of geopolitical uncertainty, subnational actors like cities and regions can play a stabilizing role in maintaining ties among democratic societies.

When U.S. cities collaborate with counterparts in Europe, Canada, or Japan through OECD platforms, they are not just exchanging policy ideas. They are reinforcing shared norms around governance, transparency, and inclusion. These relationships create a form of “distributed diplomacy” that is less vulnerable to national political swings.

This is not a substitute for federal foreign policy. But it is a meaningful complement, one that operates closer to the lived realities of citizens.

Conclusion: From Optional to Essential.

For decades, international collaboration at the city level was often treated as a secondary concern — valuable, but not essential. That era has ended.

The combination of globalized challenges and inconsistent federal engagement has elevated the importance of city-to-city cooperation. OECD initiatives offer a uniquely structured, data-driven, and peer-oriented platform for this collaboration.

The examples of Boston, New Orleans, and San Diego demonstrate that U.S. cities can already benefit from these networks. The task now is to scale that engagement—across more cities, more policy areas, and more sustained forms of participation.

If American cities want to remain competitive, resilient, and aligned with other democratic societies, they cannot afford to operate in isolation. Expanding collaboration with the OECD is not merely a diplomatic gesture. It is a practical investment in better governance, stronger economies, and a more connected urban future.

The choice facing city leaders is straightforward: adapt to a world where global cooperation is increasingly decentralized, or risk falling behind as other cities — across the OECD and beyond — move forward together.

Bob Gleeson

The Conditions That Make Cities Innovative — and How They Erode.

American cities have long served as the nation’s primary engines of innovation. By this, I mean the birthing of genuinely new phenomena—technologies, business models, cultural forms, or ways of organizing—rather than the mere refinement of what already exists. From industrial Boston to mid-century Detroit to modern San Francisco, dense urban environments generate breakthroughs at rates that sprawl rarely matches. By concentrating diverse people, capital, and institutions, cities accelerate the recombination of ideas.

Yet this engine is faltering under pressures more acute than any since the McCarthy era. Innovation is not an automatic byproduct of density; it emerges only when institutions make experimentation rational rather than reckless.

The urban advantage in durable, open-ended innovation depends on three reinforcing conditions: intellectual freedom with survivable risk, institutional credibility, and diversity that translates into productive exchange. When any erodes, the ecosystem weakens.

Why Density Matters—But Isn’t Enough.

Density reduces friction. When a chemist and an engineer share a train, or a researcher meets a venture capitalist for coffee, collaboration becomes cheap. Patent data bears this out: controlling for population, dense metros like Boston generate significantly more patents per capita than sprawling Phoenix. Deep labor markets enable specialization—Boston can support a CRISPR delivery expert; Tulsa cannot. Serendipity matters: chance encounters often predict collaboration better than formal structures.

But density alone is insufficient. Newark is dense and congested, yet not innovative—in part because its most ambitious residents can simply relocate to Manhattan. The question is what conditions allow density to generate breakthroughs rather than gridlock.

The Architecture That Works.

First, innovation requires intellectual freedom with survivable risk.

By “survivable,” I mean institutional cushioning, not personal grit. Bankruptcy laws that allow entrepreneurs to shed debt, networks that re-integrate failed founders, and venture capital that tolerates failure all matter. They matter because innovation requires pursuing ideas that will mostly fail, without knowing in advance which few will succeed. That is possible only where failure becomes instruction rather than exile.

In healthy innovation ecosystems, failure does not permanently exclude people from capital, employment, or reputation. Entrepreneurs can raise funds again. Researchers can pursue controversial questions without retaliation. Professionals who misjudge a market can re-enter their industry. When failure becomes terminal, rational actors avoid experimentation.

Consider Boston’s resilience: it survived the dot-com crash because dense venture networks normalized recovery. In thinner ecosystems, stigma and financial ruin push talent toward safe corporate paths, away from the risky experimentation that drives breakthroughs.

Cities have historically provided this protective complexity. Early twentieth-century New York’s competing universities, foundations, and publishers created niches for heterodox thinking. The Harlem Renaissance and Frankfurt School refugees flourished in institutional gaps. Even during McCarthyism, urban pluralism provided partial shelter. Cities do not guarantee freedom—but institutional multiplicity makes suppression harder.

When institutions fail to cushion downside risk, innovation appears reckless rather than generative, and public tolerance erodes.

Second, innovation stalls when institutions lose credibility.

Predictable rule of law, transparent IP regimes, and meritocratic norms make long-term investment rational. North Carolina’s Research Triangle emerged from deliberate institution-building—investments in universities, research parks, clear IP rules, and quality-of-life improvements that represented credible commitments.

Credibility collapses when contracts reward loyalty over competence, or regulation becomes arbitrary. Researchers who anticipate retaliation for inconvenient findings narrow their inquiries. The chilling effect rarely requires formal censorship; uncertainty alone suffices.

It is worth distinguishing what cities can and cannot control. IP regimes are federal. Immigration policy is mostly national. The rule of law is primarily a state and federal domain. What cities control—or can influence—includes zoning, local taxation, procurement, investment in public universities, regulatory predictability, and the signal their governance sends about whether long-term commitment is welcome. When local institutions become arbitrary or captured, they undermine credibility even if federal frameworks remain sound.

Third, diversity must produce genuine exchange, not merely coexistence.

Silicon Valley’s rise depended not only on Stanford but on openness to outsiders. Immigrants have founded more than half of its billion-dollar startups. Cognitive diversity generates insight—a Bangalore-trained engineer may see efficiencies invisible to a peer trained in abundance.

Research bears this out: immigrants comprise roughly 16 percent of U.S. inventors yet account for nearly a third of innovation output. A 2022 report found that immigrants founded more than half of American “unicorn” startups. When including companies founded by immigrants’ children, the figure rises to two-thirds. Nearly half of these immigrant-founded unicorns are based in the Bay Area.

This advantage dissipates when diverse populations occupy the same space without meaningful interaction. Segregation—residential, occupational, or social—prevents the cross-pollination that makes diversity valuable.

External Pressures and the National Context.

Cities are losing control of their innovative futures as federal policy shapes conditions for risk-taking. International student enrollment fell in 2025 for the first time in three years, with graduate programs declining 6 percent. Researchers now weigh Toronto or Singapore against U.S. policy volatility. This talent loss compounds quietly; by the time decline is measurable, a decade has passed.

When the Engine Stalls.

Innovation decays through legitimacy erosion. Institutional credibility enables experimentation; legitimacy determines whether societies continue to fund it.

The Rust Belt illustrates this. Between 1980 and 2010, automation and offshoring generated aggregate wealth while devastating industrial regions. Youngstown lost 60,000 manufacturing jobs; median income fell sharply. Adjustment assistance proved inadequate. Technological progress came to be seen as elite extraction—with real consequences for political support of innovation-friendly policies.

This erosion now touches governance. When research funding is administered by officials who are hostile to expertise, or immigration policy shifts unpredictably, foundations weaken. Detroit’s trajectory shows how quickly decline compounds. In 1960, Detroit was the wealthiest major American city and a national leader in innovation. By the 2000s, while it remained a powerhouse in automotive patents, its broader foundations had eroded. Auto contraction was the catalyst; institutional collapse was a substantial causal factor.

Cultural pressures can narrow inquiry as effectively as regulation. Researchers anticipating reputational penalties self-censor. In dense networks, the connectivity that enables collaboration can also enforce conformity.

A Comparative Perspective.

Centralized mobilization—the Manhattan Project, Apollo—can drive progress toward defined goals. But command structures rarely produce open-ended discovery. Breakthroughs emerge from distributed experimentation and feedback. Cities aggregate that evolutionary process. When political forces replace this logic with top-down direction, innovation slows.

Authoritarian systems demonstrate that constraint does not preclude innovation. China’s advances in EVs, batteries, AI, and infrastructure show that centralized direction, capital, and execution can produce formidable capacity. Mobilization can be powerful.

But mobilization differs from open-ended discovery. Command systems excel at scaling prioritized sectors; they are less suited to tolerating heterodox inquiry, decentralized risk-taking, and exploratory failure. The question is not whether constrained systems can innovate—they clearly can—but whether they can sustain broad, adaptive experimentation over decades without institutional pluralism and credible freedom.

What Cities Can Do.

Cities retain agency, though constrained. They can fund and otherwise support universities, welcome skilled immigrants, deepen labor markets, expand access to repeat capital, and normalize recovery from failure. Zoning for density without investing in transit, housing affordability, and institutional depth rarely works.

None of this, by the way, implies innovation is inherently virtuous. Financial engineering enabled both productive risk-sharing and the 2008 financial crisis. Cities may reasonably constrain innovations whose harms outweigh gains.

The objective is not maximal innovation but durable innovation: protecting freedom while preventing harm, fostering diversity that integrates, encouraging survivable risk, and distributing gains broadly enough to preserve legitimacy.

Conclusion.

Boston’s ascent and Detroit’s collapse unfolded within a lifetime. The difference was not density or talent but institutional durability—the capacity to make experimentation survivable and its benefits widely shared.

American cities now face a narrowing margin. Density without credibility produces congestion. Diversity without integration produces fragmentation. Dynamism without cushioning produces backlash.

The urban advantage is conditional. It must be built, defended, and renewed. If institutions fail to make experimentation survivable and gains widely shared, innovation will not merely slow—it will relocate, calcify, or turn against the cities that once generated it. The question facing American cities is not whether they can innovate, but whether they can sustain the conditions that make innovation possible over the long arc of generations.

Bill Bowen

Cities Can’t Pretend That Climate Change is a “Green New Scam.”

On February 12, 2026, President Trump and Lee Zeldin, Trump’s appointee as Director of the Environmental Protection Agency (EPA), announced that the U.S. government formally rejects several generations of scientific analyses that support two conclusions. The first is that climate change is real. The second is that climate change is directly attributable to human behaviors, especially human-caused emissions of greenhouse gases such as carbon dioxide and methane (among others).

By rejecting these previously accepted scientific conclusions, which Trump named the “Green New Scam” and EPA Director Zeldin labeled “stupid,” the President eliminated the legal basis on which any policy or program sponsored by the federal government can justify rules, regulations, or funding priorities designed to reduce or eliminate greenhouse gas emissions, encourage the expansion of renewal energy sources, and/or cope with the consequences of climate change.

Congressional committees in the House and the Senate, all chaired by elected Republicans, and Trump Administration cabinet secretaries and other executive branch executives are now engaged in rewriting laws, executive orders, and regulatory language to comprehensively remove all references to climate change. State governors are being pressured with political arguments as well as threats of federal funding cuts to likewise remove climate change policies and programs from state laws and public budgets.

Yet cities remain on the front lines of climate risk, regardless of shifting politics of federal policy priorities. Even as the President, Congress, and some state governments eliminate climate change from federal and state programs, local governments cannot opt out of rising floodwaters, extreme heat, or storm damage that threaten residents, businesses, infrastructure, and tax bases.

Municipalities are often the first responders to disasters and the primary stewards of land use, building codes, and local infrastructure. These are domains where early action can dramatically reduce long‑term costs and human suffering. Moreover, city‑level choices about where and how to build will shape vulnerability for decades, outlasting any single federal or state-level political cycle.

In this context, local policy is not a substitute for national action but a necessary layer in the U.S federal system of protection and stewardship. Cities that proactively manage climate risks safeguard their fiscal stability, protect vulnerable populations, and preserve long‑term housing affordability for their communities.

Climate change is increasing local risks from flooding, extreme heat, storms, and wildfire, which will translate into higher insurance costs, more frequent repairs, and potential declines in property values over time.

Home buyers are among the most vulnerable actors that cities need to serve. Most city residential real estate buyers do not see these future costs clearly when they decide where to buy, which can leave households financially vulnerable and amplify the city’s fiscal and infrastructure risks.

For city leaders this is not just a consumer‑protection issue. It is also a fiscal and planning issue. Concentrated residential development in high‑risk areas can increase future costs for emergency response, infrastructure repair, and resilience projects, while undermining the tax base if values later decline. Local policy can reduce these risks for home buyers by ensuring that climate‑related costs are visible and integrated into market decisions today

So how can cities create specific policy tools centered on risk disclosure, land‑use and building standards, insurance and tax coordination, and targeted equity measures to help home buyers recognize and factor these future costs into their current decisions?

Cities can help home buyers make better long-term decisions by making climate‑related housing costs: more transparent to buyers, sellers, and lenders at the point of listing and sale; more accurately priced into regular carrying costs (insurance, taxes, fees); and more responsive to risk‑reducing actions (retrofits, location choices). These goals can be achieved through City ordinances & policies in five areas:^[i]

1. Strengthen local climate risk disclosure. Even where state law sets a baseline, the city can raise the standard for information buyers receive. Recommended steps:

· Require a local climate risk disclosure form for all residential property sales and, where feasible, for rental listings. This form would summarize whether the property lies in a mapped floodplain or high‑risk fire or heat zone. It could also reveal any known history of flood or wildfire damage (where records exist), and whether the property participates in any federal or local flood or insurance programs.

· Partner with regional or state agencies to develop risk maps published on the city’s website, allowing buyers to look up parcel‑level information on flood, heat, and other hazards.

· Encourage or require real estate agents operating in the city to link directly to these maps and city forms in listings, so buyers see climate risk information alongside price, taxes, and school data.

2. Adjust land‑use and building standards to reflect future conditions. Land‑use decisions made today lock in risk for decades. The city can reduce future costs and make them more visible by aligning zoning and building codes with expected climate conditions. Recommended steps:

· Update zoning and comprehensive plans to limit new development in high‑risk areas — especially repetitive loss zones — and direct growth toward safer locations (higher elevations, lower fire risk, better access to cooling infrastructure).

· Strengthen building codes in at‑risk zones to require resilience features such as higher minimum elevations, flood‑resistant materials, fire‑resistant roofing and siding, defensible space, and better passive cooling design.

· Consider overlay districts where additional resilience standards apply and are clearly communicated to buyers, so that the added construction costs and benefits are transparent.

3. Coordinate with insurers and lenders to clarify long‑run costs. While the city does not regulate insurance or mortgage markets directly, it can act as a convener and information hub. Recommended steps:

· Work with state insurance regulators and major insurers to develop local summaries of current and projected insurance conditions in high‑risk zones (premium trajectories, typical deductibles, and any indications of reduced availability).

· Use the city website and create buyer education materials showing how insurance costs could change over a 30‑year mortgage for properties in different risk categories. This can be framed as non‑binding education, not prediction.

· Partner with local lenders and housing counseling agencies to integrate climate risk discussions into pre‑purchase counseling, emphasizing how insurance shocks, property tax changes for resilience projects, or repeated damage can affect long‑term affordability.

4. Use tax and fee tools to align private and public costs. The city can adjust local tax and fee structures so that properties in high‑risk locations bear more of the costs they generate, while still protecting vulnerable households. Recommended steps:

· Explore modest resilience surcharges on property taxes or stormwater fees in clearly defined high‑risk districts, earmarked for local flood, drainage, or fire‑mitigation projects that directly benefit those areas. Prospective buyers would see higher annual costs linked directly to risk and adaptation.

· Pair any surcharges with means‑tested relief (e.g., credits or rebates) for low‑income homeowners to avoid regressive impacts while preserving the price signal for higher‑income buyers.

· Offer targeted tax abatements or permit fee reductions for new development or substantial rehabilitation in lower‑risk locations that meet stronger resilience and efficiency standards, making safer options more competitive.

5. Center equity and displacement concerns. Policies that better price climate risk can raise costs in vulnerable areas. Without safeguards, they may accelerate displacement or trap low‑income households in devaluing neighborhoods. Recommended steps:

· Identify socially vulnerable neighborhoods with high climate exposure using tools such as social vulnerability indices and local data on income, housing quality, and risk.

· For these neighborhoods, pair risk‑based measures with home retrofit grants or low‑interest loans for resilience upgrades (elevating utilities, improving roofs, shading, cooling). Also provide targeted relocation assistance for households that wish to move out of the highest‑risk areas, potentially leveraging state or federal buyout programs.

· Ensure robust community engagement so that residents help shape risk communication, priorities for resilience investments, and any relocation or buyout programs.

Implementation considerations for city governments include the following:

· Legal authority and pre‑emption. Staff should review state law to confirm the city’s authority to add local disclosure requirements, adjust building codes, and structure climate‑related fees or surcharges.

· Data and technical capacity. Implementing parcel‑level risk disclosure and realistic cost scenarios will require partnerships with state agencies, universities, or regional planning organizations that maintain hazard and climate projections.

· Administrative burden and compliance. To minimize burden on sellers and small landlords, the city can pre‑populate risk forms with public data and offer simple online tools for accessing maps and guidance.

· Communication strategy. The city should frame these actions as protecting long‑term affordability and stability for households and the local tax base, not as punitive measures.

Many of these options will take time for city governments to undertake. Yet cities do have options for immediate action. Early steps could include:

· Directing staff to draft an ordinance establishing a local climate risk disclosure form and integrating city hazard maps into the real estate process.

· Commissioning a brief assessment of climate‑related housing and insurance risk in the city, including exposure, current insurance trends, and social vulnerability hotspots.

· Requesting a proposal for targeted resilience standards in the building code for clearly defined high‑risk zones, plus incentives for safer areas.

· Initiating stakeholder consultations with residents, realtors, lenders, insurers, and housing advocates on the design of disclosure, fee, and equity programs.

Taken together, these actions would help ensure that city home buyers make housing decisions with a clearer understanding of the long‑term costs they may face as the climate changes, while also strengthening the city’s fiscal resilience and planning capacity.

Cities don’t have the luxury of pretending that climate change is not happening. Cities need to act now to protect their residents and businesses. Hopefully, the American voters will demand that national and state politics realigns public priorities with scientific knowledge over the next election cycle or two.

Bob Gleeson

^[i] This section summarizes recommendations taken from recent policy research published by the Brookings Institution, the Federal Reserve Bank of Chicago, the Lincoln Institute of Land Policy, the Congressional Budget Office, the Federal Housing Finance Agency, Resources for the Future, and the Consumer Financial Protection Bureau (which has recently been dismantled).

AI, Cultural Lag, and the Urban Path to Institutional Renewal.

In popular discussions about AI and governance, a dystopian narrative has emerged — popularized by thinkers like Yuval Noah Harari — framing AI as a civilizational rupture poised to overwhelm our democratic institutions. This macro-level story is compelling, but it obscures a more immediate truth.

Much of the anxiety surrounding AI stems less from its raw power than from its collision with a pre-existing condition: deep-seated institutional lag. This persistent delay in adapting laws, norms, and structures to technological change has been violently compressed by AI’s speed. Yet reflection upon the compression reveals the most viable path forward. That is, the lag is shortest, and therefore most correctable, where governance is most tangible: in our cities.

American cities, with their operational focus and capacity for experimentation, are uniquely positioned to reframe AI. When integrated with thoughtful institutional design, AI can function as a repair technology — a tool to address chronic dysfunctions, rebuild public legitimacy, and renew democratic institutions from the ground up. The central challenge is not to halt technological progress, but to renew our institutions’ capacity to learn and adapt at the pace technology now demands.

Cultural Lag Revisited: A Problem of Tempo.

The disorientation caused by AI can be understood not as a historical rupture, but as an accelerated recurrence of “cultural lag.” This concept, articulated a century ago by sociologist William Fielding Ogburn, describes the predictable delay as society’s non-material culture struggles to adjust to technological innovation.

AI intensifies this dynamic to an unprecedented degree. As a general-purpose technology, its effects diffuse instantly across disparate domains — each governed by distinct, slow-moving institutional traditions. Its speed of iteration dwarfs that of past infrastructural revolutions, compressing adjustment timelines from decades into months.

The critical misunderstanding in the dystopian narrative lies in diagnosing the threat as a failure of comprehension. Rather, the threat is that AI radically compresses decision cycles, creating a gap between the speed of action and the speed of establishing accountability. This is a matter of institutional metabolism — the rate at which institutions can absorb new capabilities, translate them into legitimate rules, and recalibrate responsibility. Our institutions are not confused about AI; they are outpaced by it.

The practical question, then, is not how to alter or slow AI to match institutional tempo, but how and where institutional tempo can be accelerated.

Cultural lag is shortest where feedback is fastest—where consequences are visible and authority is proximate. In the public sphere, that is the terrain of urban governance.

The Urban Advantage: Faster Metabolism and Tangible Feedback.

If sluggish institutional metabolism is the illness, the relevant question is where corrective pressure is strongest.

Cities are structurally exposed to feedback in ways national institutions are not. Municipal governments govern operational systems that cannot drift far from performance without visible consequence. Transit must run, permits must be processed, emergency services must respond. This exposure compresses the interval between error and correction.

Consider Chicago’s predictive policing experiment. Built on historical enforcement data and deployed with limited transparency, the system risked reinforcing existing policing patterns in heavily surveilled neighborhoods. Civil liberties organizations documented these concerns, communities objected, and after independent reviews showed limited public-safety benefit, the city discontinued the program.

For such reason, cities are better positioned to incorporate narrowly deployed AI tools — not as sovereign decision-makers, but as instruments that clarify tradeoffs, reduce friction, and render discretion more legible. The advantage is not virtue. It is proximity to consequence.

Decision-makers, implementers, and affected communities in urban areas exist in close physical and institutional proximity between action and outcome, shortening feedback cycles essential for learning. They can pilot, iterate, and abandon tools without systemic national risk.

If unmanaged, cultural lag erodes democratic legitimacy by widening the gap between expanded capability and accountable governance. When decision cycles accelerate but institutions cannot translate new capacities into visible rules, responsibility becomes opaque and trust decays. Shortening that gap restores legitimacy by re-synchronizing power with accountability.

AI as Prosthetic and System Integrator.

The dystopian narrative mis-locates the risk. The danger is not that humans will cede sovereignty to machines, but that algorithmic systems will be treated as neutral arbiters rather than as extensions of institutional power. In practice, successful municipal applications have been far more modest.

Consider Pittsburgh’s use of predictive analytics to optimize traffic signal timing. Or Los Angeles’s GeoHub, which integrates data across siloed departments to coordinate pothole repairs and permit inspections. These applications enhance operational responsiveness while remaining embedded within existing chains of accountability.

AI functions best in municipal governance as a dual-use instrument: an institutional prosthetic and a systemic integrator. As a prosthetic, it reduces friction in over-complex processes, surfaces patterns in fragmented data, and renders bureaucratic discretion more legible. As a systemic integrator, it addresses a persistent urban dysfunction: coordination failure. Agencies operate in silos; decisions in housing reverberate in transportation. Algorithmic tools can reveal interaction effects and forecast downstream pressures that fragmented bureaucracies struggle to perceive.

Critics rightly warn that these tools can also accelerate harm. In Automating Inequality, Virginia Eubanks demonstrated how data-driven systems in welfare and child services have embedded historical bias at machine speed. Such cases do not show that AI introduces injustice from nowhere; they show that institutions can encode old inequities into new technical systems when accountability structures remain unchanged.

This is cultural lag with a sharper edge: agencies adopt faster tools without adapting the norms that legitimate their use. Technology then amplifies institutional inertia rather than correcting it.

The realistic alternative to algorithmic augmentation is not neutral human judgment, but opaque and inconsistent discretion. Bureaucratic decision-making is rarely transparent, systematically audited, or evenly applied; its biases are simply less legible. Properly governed systems can constrain arbitrary power by standardizing review, surfacing patterns of unequal treatment, and making deviations visible. The goal is not to eliminate human judgment, but to discipline it — embedding it within clearer procedures and more inspectable outputs.

Whether the requisite discipline is politically achievable in highly unequal cities remains an open question. The urban advantage does not guarantee ethical AI governance. It creates the structural conditions—shorter feedback loops, visible consequences, compressed reform intervals—under which governance can adapt quickly enough to prevent technological acceleration from outpacing democratic accountability.

Tempo, Legitimacy, and the Temptation of Coercion.

When institutional tempo falters, societies do not remain neutral. They search for substitutes. If democratic institutions cannot metabolize technological change quickly enough to maintain visible accountability, pressure builds to shorten decision cycles by concentrating authority rather than reforming process. The appeal of executive discretion grow — not because citizens abandon democratic ideals, but because they experience procedural lag as disorder.

Historically, legitimacy has required demonstrable capacity. Institutions that cannot coordinate infrastructure or maintain public safety forfeit credibility. When technological acceleration widens the gap between capability and governance, citizens experience it as arbitrariness and drift. Under such conditions, demands for simplified chains of command can appear rational.

The danger is not that AI itself becomes sovereign. The danger is that its speed exposes institutional inertia so starkly that democratic procedure is blamed for dysfunction. If complex deliberation appears indistinguishable from paralysis, calls for streamlined authority acquire moral force. The justification is efficiency; the mechanism is coercion — arriving incrementally through expanded executive discretion, reduced transparency, and diminished avenues for contestation.

Here, the urban scale offers a crucial defense. Cities cannot easily insulate themselves from the consequences of coercion; when power is abused, it shows up in visible displacement, over-policing, or service breakdown. Proximity to consequence works in both directions—it exposes institutional failure, but it also exposes authoritarian overreach. The density of urban accountability structures—elected boards, community organizations, local press—creates friction that coercion must overcome.

The argument for accelerating institutional metabolism at the urban level is therefore not technocratic optimism. It is a defensive strategy. By compressing the interval between error and correction, cities can narrow the legitimacy gap before it becomes an argument for concentrating power. And by maintaining dense networks of accountability, they ensure that when errors occur, they are contested rather than concealed.

Adaptive institutions reduce the perceived need for coercive shortcuts. Where that alignment fails, the temptation to substitute authority for legitimacy intensifies. AI does not determine which path a society chooses. Institutional metabolism does. The urban question is whether cities can metabolize fast enough to keep the coercive temptation at bay.

Principles for Urban AI: A Practical Framework.

For the urban practitioner, philosophy not translated to practice is of scant value. The following design principles can steer AI toward adaptive democratic control:

· Pilot as Policy: Major AI systems must begin as time-bound pilots with pre-defined sunset clauses.

· Public Explanation Mandate: Vendors must provide plain-language explanation of how systems work, fail, and are governed.

· Outcome-Based Contracts: Tie payments to improved and observable public outcomes, not just processing speed.

· Auditability and Human Judgment: Require transparency and human oversight for consequential decisions.

· Local Data Sovereignty: Cities should retain ownership of data to avoid vendor lock-in.

· Community Challenge Mechanisms: Create accessible processes for affected communities to contest decisions and demand redress.

The ultimate question is whether institutions retain the sovereign capacity to say no — to revise, suspend, or abandon tools that fail the public. Cities, plugged directly into lived experience, are the best places to cultivate that judgment.

But successful models must also travel. This requires intermediary organizations that translate urban experiments into legislative templates, procurement standards, and training programs for other jurisdictions. The task is to build not just pilot projects, but pathways for diffusion — networks through which cities learn from each other’s failures and successes, accelerating institutional metabolism beyond any single municipality.

Conclusion: Rebuilding at the Human Scale.

AI does not destabilize governance because it is intelligent. It destabilizes institutions that cannot learn. The problem is not technological speed, but institutional rigidity.

The urban path forward is plausible because cities are most directly exposed to the consequences of cultural lag — and to the consequences of coercion. They govern the tangible world, where misalignment between rules and reality breaks things visibly. AI, deployed as a prosthetic and integrator, can help urban institutions learn faster, closing the legitimacy gap. And the dense accountability structures of city governance ensure that when they fail, the failure is seen and contested.

The task is not to slow technology for our institutions to catch up. It is the deliberate work of institutional redesign. The most robust response to AI’s ascendancy is to rebuild our governing cultures, starting at the most human scale, to be capable of learning, adapting, and sustaining trust at the pace the modern world requires. This is not a technological project. It is the essential democratic project of our time, and it will be won or lost in the streets, sidewalks, and city halls where governance meets life.

Bill Bowen

How The Big Beautiful Bill is Reshaping American Cities.

The Big Beautiful Bill (One Big Beautiful Bill Act) combines sizable tax cuts for the highest-income households with historic cuts in safety‑net programs and substantial shifts in climate, housing, and immigration policy. In aggregate the Bill advantages higher‑income households and strong regional economies while amplifying fiscal and social stress in many large, poor metros.

Major components of the Big Beautiful Bill.

At its core, the bill delivers a large package of individual and business tax changes while cutting Medicaid and SNAP, eliminating climate adjustment tools, and reshaping community‑development tools. Key tax pieces include:

· Raising the state and local tax (SALT) deduction cap from 10,000 dollars to around 40,000 dollars, with phase‑outs for higher‑income households.

· Reducing taxes for high-income households by cutting top tax rates and shrinking or eliminating taxes that previously hit them, such as the Alternative Minimum Tax.

· Preserving the tax exemption on municipal bonds and private‑activity bonds, a crucial benefit for local infrastructure finance.

· Creating or expanding preferences for business owners and investors (pass‑through income, Opportunity Zones, New Markets Tax Credits, estate‑tax exemption to about 15 million dollars per person).

· Allowing significant deductions or exclusions for overtime and some worker income, marketed as a wage boost for working‑ and middle‑class households.

On the spending side, the bill pairs these tax changes with deep cuts in funding for safety‑net programs that benefit low income households. It reduces federal SNAP funding by about 186 billion dollars through 2034 and cuts roughly 1 trillion dollars from Medicaid over a decade, while tightening work requirements and shifting more costs to states. It also rescinds unobligated Neighborhood Access and Equity transportation grants and various emissions‑reduction funds, accelerates the phase‑out of clean‑energy tax credits, and adds domestic‑content restrictions that constrain local access to remaining incentives.

At the same time, it makes permanent or strengthens certain community‑development tools — most notably Opportunity Zones and New Markets Tax Credits — while introducing new Qualified Rural Opportunity Funds that steer some investment toward smaller and rural places. Taken together, the bill is fiscally expansionary in the short term (i.e. it creates larger deficits) but redistributes resources upward and away from means‑tested supports and climate‑related local investment.

Likely impacts on US cities and metro regions.

1. Safety‑net cuts, health systems, and urban labor markets.

Because Medicaid and SNAP are large federal revenue streams into metropolitan economies, reductions are expected to hit city budgets and service ecosystems hard, especially where poverty is concentrated. Analyses project millions of people losing Medicaid coverage and millions more facing stricter work rules and time limits in SNAP, with new state cost‑sharing that encourages tighter eligibility and lower benefit levels. In big metros, this means:

· Higher uncompensated care loads at safety‑net hospitals and clinics, straining urban health systems and forcing local governments and hospital districts to backfill or cut services.

· Job losses in health care and social assistance, sectors that are disproportionately located in metropolitan areas and serve low‑income city residents; one national estimate suggests hundreds of thousands of jobs at risk over several years.

· Reduced grocery and retail spending in low‑income neighborhoods as SNAP dollars fall, which can destabilize marginal food retailers and deepen food insecurity in already vulnerable tracts.

For city governments, the practical result is a rising demand for local safety‑net responses — homeless services, public health outreach, emergency food, and policing of visible poverty — without commensurate federal funding.

2. Climate, energy, and infrastructure trajectories.

The bill’s climate and infrastructure provisions weaken federal support for many of the decarbonization, street‑safety, and reconnection projects that cities had been planning under prior legislation. It cancels substantial Neighborhood Access and Equity funding and other DOT/EPA grants oriented toward reconnecting divided neighborhoods, truck‑route mitigation, and local emissions reductions, while accelerating the wind‑down of clean‑energy and EV credits. Cities therefore face:

· A thinner pipeline of federally supported transit, complete‑streets, and highway removal/retrofit projects, likely slowing progress on safety and urban design reforms around major corridors.

· Higher effective energy and transportation costs over time, especially in grids and regions that would otherwise have used strong federal incentives to bring down the cost of renewables and efficient buildings.

· Increased exposure to climate risks — heat, flooding, air pollution — because delayed mitigation and adaptation investments prolong legacy infrastructure and fossil‑fuel dependence, impacts that land hardest in dense metros and disadvantaged neighborhoods.

However, preservation of tax‑exempt municipal bonding and permanence for New Markets and Low‑Income Housing Tax Credits mean that well‑organized metros still have strong, if more traditional, tools for financing transit, water, and affordable housing. The burden for financing these types of projects is shifted toward local fiscal capacity and financial sophistication rather than federal grants.

3. Local revenues, inequality, and metropolitan development patterns.

On the revenue and distribution side, the bill’s SALT, estate‑tax, income and business‑tax provisions skew benefits toward higher‑income homeowners, investors, and business owners — concentrated in the affluent suburbs of high‑tax states and in prosperous metros more generally.

Raising the SALT cap to 40,000 dollars significantly reduces federal tax liabilities for upper‑middle and high‑income homeowners in places with high property and income taxes, while doing almost nothing for low‑income renters. Similarly, permanent estate‑tax relief and enhanced pass‑through and capital‑income benefits predominantly accrue to households at the top of the distribution, who tend to live in globally competitive metros and high‑amenity suburbs.

The macro‑effect is to increase after‑tax incomes at the top in these regions. This boosts demand for high‑end housing and services, while withdrawing federal support from low‑income residents in the same metros through Medicaid/SNAP cuts. That combination raises the risk of intensified inequality within most urban metros: rising rents and asset prices in thriving metros with weakening floors under the poorest residents.

The treatment of Opportunity Zones and New Markets Tax Credits also reshapes where subsidized private capital will flow. Making these programs permanent, adding better reporting, and allowing periodic re‑designation could help some struggling urban tracts attract more patient capital. Yet new Qualified Rural Opportunity Funds and incentives for areas below 50,000 population are explicitly designed to redirect some investment away from major cities toward small towns and rural counties. Over time, that can modestly strengthen smaller regional centers while leaving certain urban neighborhoods more dependent on their own market fundamentals and local policy innovation.

Cities and metros most likely to benefit.

The metros best positioned to benefit are those with high incomes, substantial SALT exposure, strong private‑sector dynamism, and relatively lower dependence on Medicaid and SNAP per capita.

Large, high‑tax coastal metros like New York City, San Francisco Bay Area, Los Angeles, Boston, and the high‑income suburbs around them stand to gain significantly from the higher SALT cap and expanded estate‑ and business‑tax preferences for wealthy households. These regions combine concentrations of high‑earning homeowners with deep capital markets and strong demand for tax‑advantaged investment vehicles.

Affluent tech and finance‑oriented metros and their suburbs (Seattle, Washington‑area suburbs, some Texas “AI triangle” metros) will see sizable boosts to after‑tax incomes at the top and to the profitability of closely held businesses and investment structures, which can support continued growth in advanced industries and luxury real estate.

Smaller and mid‑sized metros that already have pipeline projects suitable for New Markets Tax Credits or Opportunity Zones, and that can leverage new reporting requirements and rural‑oriented funds, may capture incremental investment in industrial parks, logistics facilities, and mixed‑use redevelopments. Regions with strong development capacity but lower baseline tax policies (for example, select Southern and Mountain‑West metros) may combine moderate safety‑net exposure with relatively large upside from business‑tax changes.

In these metros, the bill is likely to reinforce trajectories of growth at the top end — more capital for real estate, private equity, and closely held firms, higher valuations for high‑amenity neighborhoods, and continued demand for skilled labor — even as lower‑income residents within the same regions face more precarious access to health care and food assistance.

Cities and metros likely to lose the most.

By contrast, legacy industrial regions, deep‑poverty regions, and cities heavily reliant on Medicaid and SNAP dollars are positioned as net losers, especially if they also depended on federal climate and reconnection grants.

Rustbelt and post‑industrial metros with high poverty and aging populations —s uch as Detroit, Cleveland‑type cities, St. Louis‑type regions, and similar metros — rely heavily on Medicaid reimbursement for hospital systems and long‑term care, and on SNAP for neighborhood purchasing power. They have smaller concentrations of high‑end SALT beneficiaries and ultra‑wealthy households to capture the upside benefits from tax cuts.

Southern and Midwestern metros with weak fiscal capacity and high safety‑net use will feel state‑level pressure from new SNAP cost‑sharing and penalties. This will likely translate into more local budget squeezes, higher rates of homelessness, and more visible poverty in central cities.

Climate‑vulnerable metros that had banked on Neighborhood Access and Equity and IRA‑linked grants — such as the Gulf Coast, inland flood‑prone cities, and urban heat islands — lose important tools for elevating highways, cooling neighborhoods, and electrifying transport, which increases long‑run risk and costs for residents and local governments.

Within many large metros, the hardest‑hit neighborhoods will be those with high concentrations of Medicaid‑dependent residents, SNAP beneficiaries, and limited local tax base: inner‑city Black and Brown communities, aging inner‑ring suburbs, and rural‑urban fringe communities tied into metro labor markets. The bill also increases pressure on health‑care workers, social‑service providers, and public‑sector employees, sectors that anchor existing job growth in many older metros. Projected reductions in funding and employment in these sectors show up prominently in lists of “losers” from the legislation.

In Summary.

The Big Beautiful Bill sharpens existing metropolitan divides. Strong, high‑income metros with deep private capital and high‑tax homeowners gain from tax preferences and preserved financing tools, while legacy and high‑poverty metros—often the ones still grappling with deindustrialization, segregation, and climate risk—absorb most of the pain from safety‑net cuts and climate‑investment rollbacks.

Bob Gleeson

The Performance City: How American Urban Governance Is Moving Beyond Process.

Populism has succeeded by exposing a central vulnerability in modern governance: the widening chasm between procedural promises and tangible results. It channeled frustration with institutions whose elegant designs masked failures in practice. Now, as populist momentum fades, the question of what comes next is being settled not in Washington, but in America’s cities. There, a new standard for legitimacy is emerging—one defined not by process, but by performance.

For generations, the social contract in American cities was procedural. Authority was justified through rules, expertise, and the promise of fair process. Public trust was asked to sustain faith in a system whose delivery was slow and outcomes uncertain. This model, refined since the Progressive Era, has broken down.

The populist response to this breakdown has been to redefine legitimacy solely by partisan outcomes. This creates a destructive logic: courts that issue contrary rulings are deemed illegitimate, lost elections fraudulent, resistant civil servants enemies. The result is the erosion of every neutral arbiter. Power disputes can no longer be resolved procedurally, but only through escalation—a cycle that ultimately consumes the system it seeks to command.

Yet this is not the only possible response. A more sustainable path is emerging from the same conditions of low trust and high demand that fuel populism. Legitimacy is granted not to those who follow rules, but to those who visibly solve problems. The shift is operational, not ideological, and its consequences will be most acute at the local level.

Urban governments are the front line where legitimacy is rebuilt or lost. This is where state power is felt daily—through policing, zoning, fines, and permits. While national politics indulges in symbolic posturing, cities must collect garbage and fix potholes. They absorb broader dysfunction and serve as the primary testing ground for the coming post-populist future.

What populist success has revealed is not that governance involves power—this has always been manifested in the coercive nature of zoning, permits, and fines. Rather, it has revealed that the traditional method of legitimizing that power—trusted, neutral procedure—no longer functions. The veil of bureaucratic fairness has lifted, leaving the machinery of authority exposed. The task now is not to pretend power away, but to re-legitimate it through visible, bounded, and effective performance.

In this low-trust era, credibility is secured through demonstrable competence: concrete actions that are clearly authorized, consistently applied, and produce recognizable results. For city governments, authority is validated when residents can see the connection between rules and reality. Process now functions as the essential scaffold for this performance, not a substitute for it.

This new imperative manifests in at least three core areas:

Permitting and the Value of Predictability.

Residents frequently encounter city government through permits—to build, to open a business, to repair a home. In many cities, this process has become a symbol of arbitrary power: slow, opaque, and unpredictable. Endless reviews feel less like governance than unchecked obstruction.

Leading cities are reforming these systems by setting firm deadlines, reducing subjective approvals, and making timelines public. South Bend, Indiana, has implemented public “permit dashboards” tracking approval times. Houston has moved to “over-the-counter” approvals for routine residential projects.

The significance is psychological. Predictable permitting restores legitimacy because it demonstrates that rules are real, time-bound, and capable of producing a yes-or-no answer. It replaces arbitrary power with the security of a reliable transaction.

Policing and the Imperative of Bounded Authority.

Policing represents the most direct form of city power, and it is where legitimacy erodes fastest when outcomes diverge from promises. Recent decades focused on procedural reform: new policies, training, and oversight. Yet where response times lag or disorder persists, procedural manuals alone cannot sustain trust.

Cities are learning that policing legitimacy depends on making authority both effective and bounded. In some contexts, this requires stating clearly what will be enforced, applying rules consistently, and publishing performance metrics. The NYPD’s annual “Police Strategy” publication, which replaces opaque discretion with published intent, exemplifies this approach.

In others, where traditional enforcement undermines trust, legitimacy demands visible reallocation of resources—from coercion to community-based intervention. Denver’s STAR program, which dispatches mental health professionals instead of police to relevant 911 calls, represents this logic: visibly matching response to the problem’s nature.

The common thread is the move from opaque process to transparent, accountable performance.

Basic Services and the Foundation of Habitual Trust.

The most politically consequential acts of city government are often the least dramatic: collecting trash, clearing snow, filling potholes, running buses on time. When these function consistently, government authority fades into the background, and legitimacy becomes habitual—a quiet expectation that “the city works.” When they fail, distrust spreads rapidly, poisoning every other civic claim.

Forward-looking cities treat service reliability not as technical, but as core political governance. They track performance publicly, prioritize maintenance over ribbon-cuttings, and understand that in a low-trust environment, a predictable pickup schedule stabilizes the social contract more than any proclamation. This ethos drives New York’s “Citywide Performance Reporting” and 311 apps that let residents track pothole repairs—making mundane governance transparent and accountable.

Coercion, Limits, and the Post-Populist Settlement.

Together, these responses illuminate the question procedural governance long avoided but populism forced into the open: how much coercive power can be justified, and by what logic?

The current US populist movement derives energy from rejecting limits, treating coercion as justified so long as it targeted perceived enemies. This logic mobilizes grievance but is poorly suited to governance. Once power must be exercised routinely rather than rhetorically, the absence of clear boundaries becomes destabilizing.

Cities, because they must govern, are moving toward a different logic. The emerging urban response is not a rejection of power nor an embrace of unlimited authority, but a narrowing of its scope and sharpening of its purpose. Coercion is increasingly justified not by moral destiny, but by demonstrable necessity, explicit authorization, and visible restraint. The emphasis shifts from who wields power to how, where, and to what end.

This is how populist energy is metabolized rather than sustained. Its critique of institutional failure proves durable; its governing logic does not. What replaces it is a thinner, more disciplined conception of authority—one that earns legitimacy through performance and preserves it through limits.

American cities are not merely responding to a political moment. They are sketching the outlines of a post-populist settlement: power that remains visible, constrained, and accountable precisely because trust can no longer be assumed.

From Diagnosis to Action: A Post-Procedural Checklist.

For city leaders and civic reformers, the shift to performance-based legitimacy demands new practices:

· Make Process Predictable, Not Just Proper. For citizen-facing processes, establish and publicize maximum timelines. A visible “Permit Clock” does more for trust than a perfect internal manual. It replaces arbitrary waiting with the security of a bounded transaction.

· Define and Publicize the Boundaries of Coercion. Publish an annual “Enforcement Framework” for police, zoning, and code enforcement. State priorities, response goals, and circumstances triggering action. Pair this with visible investment in non-coercive alternatives like Denver’s STAR. This moves authority from opaque to visible—the foundation of legitimacy in a low-trust era.

· Treat Basic Service Reliability as a Core Political Function. Institute a public “City Performance Dashboard” tracking mundane metrics: trash pickup rates, pothole repair times, bus on-time performance. Tie budgets and leadership evaluations to these metrics. Consistent service creates habitual trust—the tangible experience that “the city works.”

· Justify Power Through Results, Not Values. Shift communications from explaining why a policy is morally right to explaining what it will concretely achieve, by when, and how citizens will see the difference. Shared values are scarce in a polarized climate; shared desire for functional outcomes can still be a common foundation.

The way for local public authorities to parry the excesses of populism is not to abandon rules, but to ensure every rule serves a visible result. This is the operational heart of the post-populist settlement: power justified by performance and constrained by transparency.

Bill Bowen

US Cities, Defense Production, and US NATO Membership.

A previous Urban Lens essay outlined the broad parameters of how the North Atlantic Treaty Organization (NATO) creates and sustains the global framework of stability in which every US city and metropolitan region functions.

Indeed, the unprecedented strategic stability that NATO has delivered since its founding in 1949 has become so foundational to American life – urban, suburban, and rural – that its influence usually goes unnoticed by those who benefit from it the most.

The previous essay provided a brief overview of how US membership in NATO has played an essential role in creating the conditions that maintain New York City’s primary position in global financial markets. This essay provides a different example; how NATO membership is a crucial influence on the scale and scope of defense production sectors in cities across the US.

How Large is the US Defense Production Industry.

Defense production jobs, and other jobs closely connected to defense production, account for somewhere between 7 and 8 percent of all US employment in manufacturing. Since the US had about 12.7 million manufacturing jobs near the end of 2025, that suggests that defense production accounts for between 900,000 and 1 million jobs. Since these jobs tend to pay higher than average wages compared to other manufacturing jobs, defense-related employment likely accounts for 10-12 percent of manufacturing wages.

In 2025, the defense production industry’s output was about $556 billion, most of which was purchased by the US government. Yet that number includes about $138.7 billion of defense exports. NATO nations accounted for about $22 billion of those exports. All together the sector achieved a trade surplus for the US economy of almost $74 billion.^[i]

NATO’s proportion of defense exports from the US are currently expected to increase substantially. Almost all member states have agreed to raise their defense spending to equal about 5 percent of each nation’s GDP. In most cases this will double their expenditures.

About one-third of defense-related jobs in the US are concentrated in a relatively small number of US cities and their surrounding metropolitan areas, many of them anchored by aerospace, shipbuilding, pharmaceuticals, and advanced electronics.

These cities and their surrounding regions would face serious long‑run risks if a weakening or end of the US role in NATO eroded export demand, alliance‑driven procurement, and the broader security architecture that justifies large defense budgets. While domestic needs would sustain portions of the industrial base, metros most plugged into transatlantic markets and systems would be exposed to plant closures, reduced R&D, and secondary effects on suppliers and local tax bases.

Metro areas most tied to defense production.

Recent work aggregating Department of Defense awards by metropolitan statistical area shows that defense manufacturing is highly concentrated: $340 billion in large contracts from fiscal years 2021–2024 went to just 41 MSAs and 39 vendors. Among these, Dallas–Fort Worth–Arlington, New York–Newark–Jersey City, and Seattle–Tacoma–Bellevue have emerged as the top three hubs, reflecting massive awards to firms like Lockheed Martin, Pfizer, and Boeing.^[ii]

Other analyses of the defense industrial base and “spatial geography” of contracts point to additional major metro centers:

· Southern California metros (Los Angeles, San Diego) with major aerospace, naval, and electronics production.

· Hampton Roads (Virginia Beach–Norfolk–Newport News) anchored in naval shipbuilding and operations.

· Washington, DC–Baltimore region, combining headquarters, R&D, cyber, and contracting activity.

· Huntsville (AL), Dayton (OH), St. Louis, and Phoenix, with missile, space, and aerospace systems.

· Gulf Coast metros such as New Orleans and other Louisiana regions with shipbuilding and logistics functions.

These metros do not just host prime contractors. They anchor dense supply chains of machine shops, component manufacturers, engineering firms, and IT companies that depend heavily on defense orders. Defense-related companies throughout the US have been experiencing significant job creation since 2022 and complementary expansion of civilian manufacturing as well.

How NATO sustains demand for defense metros.

NATO’s role in shaping demand for US defense goods is both direct and indirect. Directly, European allies are major purchasers of US aircraft, missiles, vehicles, munitions, and command‑and‑control systems, often through foreign military sales linked to alliance priorities. Indirectly, the existence of a stable alliance — and the expectation of US extended deterrence — supports national decisions to maintain high, technology‑intensive defense spending, which flows into contracts concentrated in these metros.

Key channels include:

· Export markets: Lawfare’s assessment of a hypothetical “United States without Europe” emphasizes that losing even part of the European defense market would hurt the US defense industrial base, with decreased orders cascading into job losses in the districts that house factories producing components and systems once purchased by Europeans.

· Scale and learning: NATO commitments encourage standardization and interoperability, pushing allies toward US‑made platforms and enabling production runs large enough to sustain specialized plants and skilled workforces.

· R&D and innovation: Alliance priorities—air and missile defense, ISR, cyber, and advanced munitions—justify sustained investment in R&D and industrial resilience initiatives, which federal strategies explicitly tie to regional clusters.

· Macroeconomic and trade stability: A Wilson Center analysis notes that US security commitments are associated with significantly higher trade flows; a cited RAND study estimates that a 50 percent cut in security commitments could reduce US trade by $450 billion and GDP by as much as $490 billion, shrinking the fiscal and economic space underpinning high defense outlays.

Thus, NATO helps anchor the demand assumptions on which metro‑level defense investments are made, from multibillion‑dollar aircraft lines in Fort Worth to shipyards in Hampton Roads.

Metro‑specific exposure to a weaker NATO.

The effects of a weakening or end of the US role in NATO would vary by metro depending on how export‑oriented, capital‑intensive, and specialized their defense activities are.

· Dallas–Fort Worth–Arlington. This region has been awarded more large contracts (27 awards of $500 million or more) than any other metro between FY 2021 and 2024, totaling over $71 billion, largely in aerospace platforms like the F‑35 and the Army’s Future Long‑Range Assault Aircraft. A diminished alliance could reduce European and partner demand for such platforms or accelerate diversification away from US systems, shrinking production runs and threatening high‑wage manufacturing, engineering, and supply‑chain jobs that have transformed the region into a global aerospace hub.

· Seattle–Tacoma–Bellevue. As a center of Boeing’s defense and space operations, the Seattle metro benefits from large contracts for military aircraft, tankers, and related systems that serve both US and allied air forces. If European states re‑orient procurement toward European or other non‑US suppliers in response to alliance fracture, Boeing’s defense order book could shrink, hitting specialized manufacturing employment and weakening spillovers into the broader regional aerospace ecosystem.

· New York–Newark–Jersey City. Beyond finance, this metro has emerged as a top defense manufacturing hub in part due to large contracts to firms such as Pfizer for vaccines and pharmaceuticals tied to national security and bio‑preparedness. A weaker NATO could reduce joint procurement and stockpiling initiatives, lowering long‑term demand for certain dual‑use products and reducing the “defense dividend” that currently complements the region’s civilian biotech and pharma sectors.

· Hampton Roads and other shipbuilding metros. Regions anchored by naval shipbuilding and maintenance — such as the Virginia Beach–Norfolk–Newport News area — depend on a fleet sized and equipped for alliance missions in the North Atlantic, Mediterranean, and Arctic. If the US shifts toward a more hemispheric or Indo‑Pacific‑focused strategy while reducing its NATO role, some Atlantic‑oriented force structure could be cut or reconfigured, threatening high‑skill shipyard jobs and associated manufacturing in these metros.

· Specialized inland metros (Huntsville, Dayton, St. Louis, Phoenix). The evolving geography of the defense industrial base shows that missile defense, space, and avionics work has clustered in places like Huntsville and Dayton, where entire regional economies are structured around federal labs, program offices, and prime contractors. Reduced alliance‑driven demand for integrated missile defense and space‑based capabilities, or a shift in collaborative projects toward non‑US partners, would undermine the rationale for some program expansions, slowing job growth and weakening local tax revenues.

In each case, the risk is not only lost sales to Europe, but also how altered strategic priorities and tighter fiscal conditions would ripple through Pentagon planning and industrial‑base policy.

Systemic impacts of ending the US role in NATO.

Completely ending the US role in NATO would amplify these metro‑level vulnerabilities by reshaping the entire strategic and economic context for defense production. Analysts warn that a fractured alliance could produce a more unstable Europe, embolden adversaries, and undermine confidence in US commitments globally, which would feed back into defense budgets and industrial strategies.

Likely systemic impacts include:

· Defense demand volatility rather than steady growth. In the near term, heightened insecurity could trigger an arms race or surge spending, but without a stable alliance framework this would likely be fragmented, with more emphasis on national or regional suppliers and less on standardized US‑made systems. Over time, losing a cohesive NATO market would make US demand more cyclical and domestically constrained, undermining the economies of scale that sustain high‑fixed‑cost plants in major metros.

· Industrial competition from a rearming Europe. A US withdrawal might push European states to invest heavily in their own defense industries, developing their own platforms and tightening “buy European” rules to achieve strategic autonomy. This would turn some NATO‑era partners into direct competitors in global arms markets, further eroding export prospects for US metro‑based producers.

· Fiscal trade‑offs and domestic spending pressures. Lawfare’s assessment suggests that while allies might increase their own budgets, the US defense industrial base would suffer from losing European orders at the same time broader economic consequences of alliance rupture depress GDP and federal revenues. In a lower‑growth, higher‑risk environment, political pressure to cut or flatten defense spending could intensify, jeopardizing long‑term contracts and modernization programs that metros now bank on as anchors for redevelopment and industrial transition strategies.

· Local economic and planning challenges. Regional planning organizations and economic development districts that have oriented housing, transportation, and workforce investments around stable or growing defense installations would suddenly face higher risks from potential base‑closures and downsizing. Reports on the “defense dividend” emphasize that metros have been using defense growth to revitalize downtowns, fund training, and support clean‑energy and technology clusters. A reversal would force difficult adjustments in land use, labor markets, and municipal finance.

Strategic choices for defense‑dependent metros.

Because the US role in NATO shapes both the volume and geography of defense demand, any weakening of that role raises questions about how heavily metros should lean on defense as an economic pillar. Drexel‑linked research argues that cities can use current defense spending to move “up the value chain of production,” becoming hubs of supply‑chain firms and innovation that also serve civilian markets.

For the most exposed metros, key strategic responses would include:

· Aggressively translating defense R&D capabilities into dual‑use and commercial applications, especially in aerospace, autonomy, cyber, and advanced materials.

· Deepening workforce and supplier diversification so that local firms can pivot across federal, allied, and purely civilian contracts as geopolitical conditions change.

· Strengthening regional planning mechanisms that integrate military‑installation planning with broader economic‑development strategies, reducing vulnerability to any single federal or alliance‑driven program.

Ultimately, the metros that benefit most from defense production today do so within a strategic order built around US leadership in NATO and the broader transatlantic system. Weakening or ending that role would not eliminate defense work overnight, but it would undermine export markets, economies of scale, and fiscal stability in ways that fall disproportionately on these highly specialized urban and regional economies.

Bob Gleeson

^[i] Data summarized by the Aerospace Industries Association and S&P Global Market Intelligence.

^[ii] See the work conducted by the Nowak Metro Finance Lab at Drexel University.

NATO and the Competitiveness of American Cities.

American cities are globally competitive because they sit at the intersection of deep human capital, powerful innovation systems, dense producer‑service networks, and the security and openness underwritten by US national security alliances. No alliance is more central than the North Atlantic Treaty Organization (NATO). Unraveling the US relationship with the 31 other nations of NATO would erode several of those foundations at once. Disrupting the NATO alliance system will not produce immediate collapse. Yet over time it will weaken trade, investment, talent flows, and geopolitical stability in ways that directly threaten the global position of US metropolitan regions.

What makes American cities globally competitive?

American cities concentrate a set of assets that global rankings consistently associate with “world city” status: capital, talent, ideas, and connectivity. New York, Los Angeles, San Francisco, Chicago, Boston, Washington, and many others score highly on global city indices because they host advanced producer services, innovation clusters, and major financial and cultural institutions that link them tightly into world markets.

Key factors include:

· Advanced producer‑service hubs. US cities host dense concentrations of high‑value service firms in finance, law, consulting, accounting, advertising, and technology that serve multinational corporations globally. Twenty years of Brookings Institution research on the “world city network,” for example, shows that the ways cities plug into global advanced producer‑service networks strongly shapes their growth prospects and the number of high‑wage jobs they generate.

· Innovation and R&D systems. The United States is a leading locus of technological innovation, with major digital and advanced technology companies clustered in metros such as the Bay Area, Seattle, Austin, and Boston. Federal innovation policy, including large place‑based investments like regional technology hubs under the CHIPS and Science Act, explicitly aims to leverage urban clusters as engines of national competitiveness.

· Human capital and immigration. Immigration plays a pivotal role in US innovation. Foreign‑born workers have founded a large share of high‑growth firms, and immigrants account for substantial fractions of STEM workers and AI entrepreneurs. Research summarized by the Bipartisan Policy Center finds that increases in the immigrant share of the population are associated with proportionally greater job creation, particularly in metropolitan areas.^[i]

· Diverse, resilient service economies. Services account for more than 70 percent of US GDP, with cities acting as nodes for healthcare, education, finance, entertainment, and IT that serve both domestic and global markets. High‑value producer services provide “knowledge products” to multinational firms and are central to the competitive position of global cities.

· Institutional and macro‑economic stability. US cities benefit from the broader macro‑economic role of the United States and its reputation as a safe haven for investment, which is reinforced by its security alliances and rule‑of‑law institutions. Stable expectations about US commitments, including its role in NATO, support long‑term investment decisions by firms that base operations in American metros.

How NATO and alliances support American urban competitiveness.

While NATO is formally a national security alliance, it creates economic conditions that indirectly but powerfully bolster the competitiveness of US cities. The alliance underpins an unprecedented system of political stability, predictable security commitments, and dense transatlantic ties that structure trade, capital flows, and corporate strategies connecting US metros with partners in each of NATO’s 32 member nations.

Several specific factors matter for cities:

· Security as an economic public good. NATO has long functioned as a “security blanket,” conferring safe‑haven status on member economies and encouraging trade and investment among them. Empirical work cited by the Wilson Center notes that US security commitments are associated with significantly higher bilateral trade.^[ii] One RAND study estimated that a 50 percent cut in such commitments could reduce trade by about 450 billion dollars and lower US GDP by up to 490 billion dollars.^[iii]

· Trade and export markets for urban industries. US exports to new NATO member states grew from around 900 million dollars in 1989 to 9.4 billion dollars by 2016, reflecting how alliance expansion opened markets that US firms -- often headquartered in major metros -- serve. Advanced producer‑service firms in cities like New York, Chicago, and Washington provide finance, legal services, and consulting to European clients under a stable alliance framework that lowers perceived risk.

· Allied innovation and supply chains. Transatlantic cooperation in defense, aerospace, digital infrastructure, and life sciences relies on integrated supply chains and joint R&D, much of it concentrated in metropolitan innovation clusters. NATO’s collective spending commitments, including recent pledges for allies to begin spending near 5 percent of GDP on defense, generate demand for advanced technologies and services in which US urban firms are key suppliers.

· Migration and talent circulation. Military, diplomatic, and academic linkages among NATO members support flows of students, researchers, and professionals, reinforcing the talent base of American universities and firms. Policy discussions around “migration infrastructure” increasingly highlight that effective systems for attracting and integrating foreign talent are a major competitive advantage for cities and nations.

Threats to global competitiveness if the US–NATO alliance ends.

Ending the US alliance with NATO countries would bring a structural shock to the security architecture that has framed US and European economic integration since 1949. The direct consequences would be geopolitical, but the second‑order effects would land in the traded sectors, innovation ecosystems, and talent markets that sustain American cities’ global roles.

Major threats would include:

· Reduced trade and investment flows. If US security commitments to Europe were sharply reduced or ended, evidence suggests substantial downside risk for trade. RAND, for example, estimates a $450‑billion annual trade loss under a 50 percent cut in NATO commitments. A full decoupling from NATO allies could be even more damaging. Lower trade volumes and heightened risk premiums would directly affect export‑oriented firms headquartered in US metros, including finance, producer services, advanced manufacturing, and cultural industries.

· Erosion of safe‑haven status and higher capital costs. NATO contributes to investor perceptions of the US and allied economies as relatively low‑risk environments. Weakening or dissolving the alliance would introduce unprecedented uncertainty about future conflicts, sanctions, and alignments. Increased geopolitical risk could raise borrowing costs, depress foreign direct investment, and shift some global financial activity to other hubs perceived as more stable, undermining positions of cities like New York and Chicago.

· Fragmentation of innovation systems. Many advanced technology sectors in which US cities excel—defense, aerospace, cybersecurity, telecommunications—are deeply intertwined with European partners through co‑production, joint ventures, and shared standards shaped in part through NATO. A fractured alliance could push Europe to re‑orient defense and technology collaborations away from US firms, eroding economies of scale and knowledge spillovers that currently benefit American urban clusters.

· Constraints on talent flows and migration. If transatlantic relations turn adversarial or purely transactional, visa regimes, mutual recognition of qualifications, and academic exchange programs could tighten or become politicized, reducing the inflow of skilled workers and students to US cities. Given that immigrants and foreign‑born scientists have been central to the growth of US tech hubs and start‑up formation, restrictions or frictions in allied talent channels would directly weaken urban innovation capacity.

· Heightened geopolitical volatility around cities. A weakened NATO could lead to a more militarized and unstable Europe, with possibilities ranging from a nuclear‑armed Germany to increased Russian adventurism and widespread anxiety in Central and Eastern Europe. Such instability would reverberate through global energy markets, commodity prices, and supply chains, generating shocks that disproportionately affect globally exposed metropolitan economies.

Long‑term structural risks for American cities.

Beyond immediate trade and security effects, the end of the US–NATO alliance would reshape the long‑term strategic environment in which US cities compete. Over a decade or more, these shifts could change investment trajectories, firm location decisions, and the hierarchy of global cities.

Key structural risks include:

· Relative decline of US hubs versus other global hubs. Kearney’s and Oxford Economics’ global city indices show that positions in the rankings are sensitive to changes in connectivity, business environment, and political stability.^[iv] If the transatlantic system fragments, some European and Asian cities may deepen ties with alternative security and economic blocs, while US cities would face reduced access and/or more contested influence in key markets.

· Regional imbalances within the US. Reports on regional competitiveness within the US emphasize that metropolitan clusters are the “regional foundations” of US economic performance. Yet metropolitan clusters depend on external markets and global flows of capital, talent, and ideas. Trade‑exposed and producer‑service‑heavy metros would bear the brunt of any rupture in the NATO alliance, potentially widening disparities between globally oriented coastal cities and more domestically focused regions.

· Policy responses and fiscal burdens. An end to NATO obligations would not eliminate security needs. Instead, the United States might face either higher unilateral defense burdens or strategic over‑stretch in managing multiple theaters without NATO allies. Increased defense spending and crisis management could crowd out federal investments in infrastructure, education, and innovation that underpin urban competitiveness, especially if coupled with slower growth from reduced trade.

Illustration: New York and the transatlantic system.

New York City provides the most obvious example of how deeply a single US metro is woven into the NATO alliance‑based order. But the same deep interconnections exist in virtually every US metro region.

New York’s financial markets sit at the center of global capital flows. The city’s law and consulting firms structure cross‑border deals. Its media, design, and cultural industries shape global narratives that circulate freely among allied countries. A substantial share of the clients served by New York–based financial and professional service firms are European (and Canadian) corporations and institutions operating in a context shaped by NATO‑enabled stability.

If the alliance ended and Europe’s security environment deteriorated, those clients would face higher risk and potentially shift strategies, regulations, and financial centers in ways that could substantially reduce deal flow through New York.

In parallel, any cooling of transatlantic migration and education channels would diminish the influx of European students, professionals, and entrepreneurs who contribute to the city’s human capital and start‑up ecosystems.

In that sense, the global competitiveness of American cities rests not only on their internal assets -- innovation capacity, human capital, and producer‑service density -- but also on the external security and alliance architecture that keeps markets open, risks bounded, and talent circulating. A collapse of the US–NATO alliance would chip away at that architecture, exposing American metros to new vulnerabilities and undermining their long‑standing status as pre‑eminent global cities.

Bob Gleeson

^[i] Bipartisan Policy Center, “The Importance of Immigration for US Competitiveness,” July 11, 2023.

^[ii] Wilson Center, “Criticism of NATO Ignores the Economic Benefit to the US,” March 29, 2024.

^[iii] RAND, Engle, et. al., “Estimating the Value of Overseas Security Commitments,” September, 2018.

^[iv] Kearney, “Global Cities Report 2025: Accelerating through Volatility,” and Oxford Economics, “Global Cities Index, 2025.”

The Unspoken City: What We Lose When We Stop Refusing.

Walk past the Minneapolis Central Library on Portland Avenue, and you will see them: cars idling daily in the bus lane, directly beneath a “No Stopping” sign.

This is not a momentary lapse. It is a persistent, open secret involving city employees and others who know enforcement is a fiction. The lane is critical for bus reliability, yet the rule is a dead letter. It is a quiet lesson: the law exists, but the shared expectation that it applies equally—especially to those within the system—has vanished.

This scene is a microcosm of a pervasive urban erosion. Debates over policing, housing, and equity feel existential, like zero-sum battles. Conventional explanations—underfunding, bad policy, national political spillover—are real but insufficient. They don’t explain why the fabric of daily cooperation is unraveling.

Effective urban governance arguably depends on something deeper than laws, budgets, or clever policy. It relies on a shared, thin moral practice of restraint—what might be called “negation.” This is not about religious doctrine, moral perfection, or altruism. It is about the unglamorous, often invisible expectation that people and institutions will honor a moral common space by refraining from certain actions, even when those actions would be legal, advantageous, or difficult to detect.

This space contains the often-unspoken assumptions of moral order, such as that people will generally tell the truth, power asymmetries will not be routinely or ruthlessly exploited, contracts and agreements will be honored without constant enforcement, and disagreement will not collapse into domination.

Negation: The City’s Invisible Machinery.

Negation is the shared expectation that individuals and institutions will choose not to act in certain ways, even when they can. It is the unwritten “we don’t do that here.” It is not about loving your neighbor, but about not taking the last parking spot by blocking the driveway, even if you could probably get away with it.

These are not new human challenges—versions of such restraints appear in humanity’s oldest moral codes.^[i] It is the city inspector who opts for a warning instead of maximizing a fine for a minor error, or the developer who forgoes a zoning loophole that would violate a block’s unspoken compact.

In a dense, anonymous environment of constant friction among strangers with vast power asymmetries, cities cannot run on trust alone. We do not, and cannot, fully trust the millions of people we encounter. Instead, cities run on the predictable restraint of others. We navigate the sidewalk, the queue, and the shared wall because we operate on a baseline assumption that most people, most of the time, will obey a set of negative commandments: don’t shove, don’t cheat, don’t exploit the letter of the law to gut its spirit. This infrastructure of refusal makes complex coexistence possible. It is the civic version of a negative covenant.

Why Law Alone Is a Hollow Shell.

Law presupposes negation; it cannot substitute for it. Laws are blunt and enforcement is inevitably selective, creating a fatal gap: one can be in perfect legal compliance while acting in socially destructive ways.

When negation decays, we witness procedural hollowing. The law becomes a weaponized tool. We see “rule-lawyering”—exploiting technicalities to stall a housing project for years. We see liability avoidance trumping common sense. We see formal compliance paired with substantive harm: a developer following every zoning code line to erect a building that tramples the neighborhood’s intent, or a community group using historic rules not to preserve heritage, but to block housing.

Zoning codes assume developers won’t seek maximum profit in every case. Negotiation of land use agreements rely upon the good faith of the parties to a transaction. Policing relies on officers using discretion with goodwill. When that thin layer of restraint vanishes, the system remains legally “correct” while functionally broken. The idle cars in the bus lane are unpunished. The unlivable, yet code-compliant, apartment is legal. That is the problem.

The Collapse of Negation: A Psychological Sequence.

The erosion of negation follows a recognizable sequence—a rational, stepwise withdrawal from shared restraint where each stage feels locally adaptive.

The cycle typically begins with grievance-based moral exemptions, when restraint is recast as naïveté or complicity. “Why should we play by the rules when the system is rigged?” Rule-breaking is justified as a moral necessity. The shared “we don’t do that” fractures into “they shouldn’t do that, but we can because our cause is just.” This feels not like corruption, but like righteous realism.

As moral exemptions spread, legalism without conscience sets in, and the norm shifts to “if it’s allowed, it’s fine.” This is hyper-proceduralism devoid of conscience. Systems are gamed with technical precision, celebrating cleverness over cooperation. This feels not unethical, but like smart pragmatism.

In the resulting instability, every issue becomes an emergency, and outcome-driven ethics ascends. The ends justify any means. Truth becomes tactical. Those who appeal to fair process are punished as obstacles. The climate shifts from “how should we act?” to “what must we win?” This feels not ruthless, but like necessary urgency.

Next, the vacuum of moral restraint is filled by raw power. Informal authorities—strongmen, fixers, enforcers—step into governance gaps. Official enforcement becomes nakedly selective. For the ordinary resident, life feels arbitrary and insecure.

Exhausted by chaos, the public’s demand for order surges. Authoritarianism and widespread coercion arrive not on a wave of fanaticism, but on a tide of profound fatigue. The call is not for a return to subtle restraint, but for visible, forceful control.

The Minneapolis Stress Test.

In Minneapolis, this sequence plays out from the mundane to the existential. The unenforced bus lane is an early symptom. A more severe test exists in the volatile space between local sanctuary policies and federal immigration enforcement.

Here, the carefully maintained practice of negation—where local police have refrained from acting as federal immigration agents to preserve community trust—has been shattered. What operates in its place is a negation-less model of governance.

ICE agents operate under no obligation to the local “we don’t do that here.” Their authority is one of pure procedural power, divorced from the city’s social fabric. This dynamic provides a chilling answer to what fills negation’s vacuum: not benign chaos, but a harder, colder authority that answers the fatigue of some with the targeted fear of others.

Why American Cities Are the Perfect Storm.

American cities are structurally primed for this erosion. They combine a hyper-legalism—the outsourcing of morality to law and litigation—with a professional-managerial retreat from the public square. Contemporary accelerants pour fuel on this tinder: social media moralizes every conflict; constant “emergency framing” justifies suspending normal restraints; and a loss of elite credibility evaporates the public’s commitment to negation.

Ultimately, the most profound vulnerability lies in the ideological alternatives waiting to fill the vacuum. When the thin morality of negation collapses, the demand for a thicker, more commanding morality grows.

From nationalist-authoritarian models to movements like Christian Nationalism, the offer is a full-spectrum replacement for failed secular restraint. The choice for an exhausted polity may not be between pluralistic negation and a liberal paradise, but between hollowed-out proceduralism and a moral restoration that promises, at least, to make the uncertainty stop.

Rebuilding Refusal: From Grand Crusades to Small Covenants.

Rebuilding negation requires rejecting the false binary of moral collapse or coercive control. It cannot be restored by grand moral crusades. It is a social practice, not a government program. But it might be preserved through specific, modest actions that model symmetrical restraint.

Partial renewal requires three foundations:

Symmetrical Enforcement, Especially Upward: City Hall gives the message that the restraint we ask of you on the sidewalk begins with the restraint we demand of ourselves. The “we don’t do that here” applies here, first: we refuse to continue the hidden, corrupt bargain of impunity for the powerful in exchange for a fiction of order. Restraint begins with power. Without this foundational credibility, all other calls for civic responsibility, shared sacrifice, or mutual restraint are just hollow words, and the vicious cycle of negation’s collapse will continue unabated.

Institutional Friction: Designing cooling-off mechanisms—mandatory deliberation periods, community mediation before litigation—to counter the impulsive, emergency-driven politics that kill restraint.

Narrow, Behavioral Norms: Championing specific, negative covenants over grand value statements. “On this block, we don’t put trash out before 7 PM” is more powerful than “we believe in community.”

The work is necessarily local and granular. National cultural negation may be fractured, but it can persist in pockets. The limit is clear: negation cannot be engineered top-down. It can only be protected where it persists, modeled by leaders, and defended in daily life.

Conclusion: The Things We Choose Not to Do.

Cities fail not necessarily when they run out of money or ideas, but when they run out of restraint. The great tragedy of negation is that it is invisible when it works. We have been living off its inherited capital, and that capital is now depleted.

The path forward is less about what we demand of others and more about the covenants of what we ourselves will refuse. Urban governance in the 21st century requires fewer moral crusades and more mutual, unspoken agreements to hold back.

The most pressing question facing our cities is not what grand new value we will champion, but what small, old refusal we are still willing to honor—the refusal to idle in the bus lane, to weaponize a loophole, or to empower a coercion that promises order at the cost of the city itself. Even when—especially when—no one is watching. The cars on Portland Avenue are more than a traffic problem. They are a referendum on whether we still fully live in a city, or merely occupy one.

Bill Bowen

^[i] One possible formulation of a set of practical guiding negations for personal use in daily life may be fashioned after those found in chapter 125 of the Egyptian Book of the Dead, dating to 1550–1070 BCE:

• I do not knowingly distort the truth for advantage.

• I do not manipulate language to obscure responsibility or evade accountability.

• I do not exploit power asymmetries to coerce consent or silence dissent.

• I do not use institutional rules selectively to favor myself or my allies.

• I do not undermine shared norms for private gain.

• I do not treat disagreement as enmity, nor difference as threat.

• I do not reduce persons to instruments, symbols, or obstacles.

• I do not excuse my own violations by pointing to the violations of others.

• I do not demand of institutions what I refuse to practice myself.

• I do not pursue victory at the cost of trust, legitimacy, or social repair.

• I do not abandon restraint merely because enforcement is weak or absent.

• I do not forget that my conduct contributes to the moral