Becoming Regional: A Federal Role

by Harriet Tregoning

We are at an interesting juncture in U.S. metropolitan development. As metropolitan areas grow and become decentralized, severe metropolitan problems seem to thwart both national and local attempts at solution. National solutions are often too generic and ill-fitting to be effective. While efforts are underway in many federal agencies to devolve federal programs to the local level, it is unclear whether tools available to local municipal--or even county--government can address the often severe and self-perpetuating physical, social, economic and environmental problems of our metropolitan cities and suburbs. Local solutions are often too narrow, not taking into account cross jurisdictional impacts, or too reactive, rather than prospective. What we need may lie between--in strategies that attack local problems with the resources of the entire region.

REGIONAL EVOLUTION

The decentralization of our metropolitan areas has been one of the dominant social trends of the past half century. During the last 20 years alone, the total population of the large cities in the 39 largest metropolitan areas has increased by only about 1 million people, while the total suburban population in these same areas has increased by more than 30 million people. The United States is becoming a metropolitan nation where a majority of the population lives and works in large urbanized areas that include both historic central cities and inner and outer rings of suburban development.

With this suburbanization has come a decentralization of the economic base. People no longer live close to where their food is grown, or buy products made completely in their home community. Now goods are manufactured and assembled with raw materials and parts from all over the country and the world. The North American Free Trade Agreement and the General Agreement on Tariffs and Trade ensure that this trend will continue. At the same time, advances in telecommunications and other information technology have given businesses and individuals the flexibility to relocate outside the urban core areas. Indeed, over two-thirds of the employment growth (8 million of 11.8 million jobs) has occurred outside the city centers. More than half of all existing metropolitan jobs are located outside the central city.

According to many sources, including the Environmental and Energy Study Institute, federal policies have helped drive this pattern of spatial and economic decentralization. Federal public policies that support low density development include the underpricing of transportation. Even today the federal subsidy of highways is at 44% of total capital spending, and it has been higher in the past. That subsidy allowed cheap access to suburban and exurban development locations. Federal policies also keep gas prices lower than the true cost of driving, which includes pollution and congestion. Other implicated federal policies include the capital gains tax on home sales, tax-free employee parking subsidy, and mortgage underwriting criteria that favor single family detached homes, as well as the tax deduction for home mortgages, especially the deduction for second homes that are typically vacation residences far from central locations.

Whatever the cause, the new patterns of development have contributed to growing disparities between declining central cities and the rapidly expanding suburbs and exurbs. Infrastructure in our older urban areas--transit systems, housing stock, water and sewer facilities, among others--are in need of rehabilitation and maintenance, while the outlying communities struggle to keep up with demand for totally new infrastructure. The changes in our urban areas have resulted in greater social separation and segmentation. Low-income and minority populations in the inner cities lack transportation to reach jobs in the suburbs and are priced or zoned out of the suburban housing markets. The high concentrations of poverty in cities contributes to the weakening economic base.

Nearly all major regional problems facing our cities today transcend the jurisdictional boundaries of existing institutions. Air pollution spreads throughout an entire air basin, regardless of where in the region it is generated. Major congestion problems typically affect transportation mobility throughout a whole region. Furthermore, many of these major problems are intertwined. Poorly planned development can pollute the air and water as well as cause congestion. Severe traffic congestion can deter additional economic growth.

Individual cities and towns are battling fiercely for shrinking resources and development opportunities. Referring to this increasingly hostile combat, a local official in Kansas City captured the essential dilemma, "I know it Is wrong, but I'll stop when they stop." But slowly communities are beginning to recognize a need for change. Studies since the early 1990's have documented the interdependence between cities and suburbs and the importance of regional cooperation in achieving economic growth and prosperity. A study of the nation's three largest metropolitan areas--New York, Los Angeles and Chicago--concluded that suburbs do not constitute a self- sufficient outer city autonomous from the central city A majority of suburban companies in these regions remain dependent on their metropolitan area's central city for financial and professional services (Alex Schwartz, 1992).

While the competing interests and lack of coordination among cities and suburbs persist, public and private sector leaders and citizens are finding ways to cooperate regionally so that they can flourish locally and compete globally. All levels--private sector, local, state and federal governments--have sponsored successful experiments in regional cooperation. For example, local governments have created an array of regional authorities to deliver water, sewer, transit, solid waste, and other common services. Private businesses have created regional chambers of commerce.

The federal government has a critical role to play in the development of new approaches to regional and metropolitan problems. National goals­promoting--promoting economic prosperity, enhancing the environment, and improving safety, mobility and quality of life-- serve as the framework for federal actions.

FEDERAL INCENTIVES FOR REGIONALISM

The Intermodal Surface Transportation Efficiency Act (ISTEA) and the 1990 Clean Air Act Amendments are already a strong force for cross jurisdictional cooperation. The 1990 Amendments gave new priority to environmental objectives in the transportation sector by requiring that transportation activities conform to state air quality plans. The 1990 Amendments ensure the timely implementation of transportation control measures to improve air quality. To implement these requirements, ISTEA provides tools including flexible funding, better intermodal choices and connections, increased metropolitan-level decision making, expanded public participation, and improved planning.

This federal legislation provides substantial motivation for local jurisdictions to overcome significant technical, political, and institutional obstacles. Although their interests and agendas remain different, transportation and air quality agencies have begun working together and expanding beyond narrowly-defined functional responsibilities. This transportation-air quality connection is an example of how federal policies can support new structures of regional cooperation by offering consolidated planning and funding flexibility. ISTEA serves as a model for effective regional planning.

The federal government could take other steps to encourage regional cooperation. For instance, the Departments of Transportation and Housing and Urban Development (HUD) are coordinating a demonstration project to provide six cities with the opportunity to create a planning process that strategically links transportation with community and economic development and affordable housing. The Environmental Protection Agency's Project XL offers regulatory flexibility, in exchange for better environmental (which could also mean regional) performance.

The Department of Agriculture and HUD administer the community empowerment initiative. Designated empowerment zones and enterprise communities that develop a comprehensive plan for revitalizing their neighborhoods get rewards that include an array of tax incentives, enhanced government-wide coordination and technical assistance. This program has been proposed for expansion. To encourage regionalism, one option is that new designees could be required to demonstrate collaboration across jurisdictions.

Federal agencies could reinforce the interest in regional collaboration if they worked together to offer jurisdictions incentives to work together. For instance, a "lead" federal agency might convene several federal departments to coordinate among relevant federal programs and address a specific set of regional issues in a metropolitan area. In a hypothetical example of how this "lead agency" approach might work, we can imagine several jurisdictions in a region--for instance four county governments, a center city and three edge cities--developing a regional vision and set of goals for effective economic development, creation of greenways, and low cost mobility to facilitate the welfare to-work transition. HUD could serve as the lead agency in coordinating the federal response to the metropolitan-wide effort. The HUD-lead response might include the following: an agreement to allow integrated housing and transportation planning through the Metropolitan Planning Organization; a proposal to allow Brownfields and Economic Development Administration grant funding through a single application process; and HUD coordination of federal technical assistance to the metropolitan effort. Although some of these federal responses would require legislative changes, the framework of federal programs is already in place.

The federal government has a critical role to play in the development of new approaches to regional and metropolitan problems. Clearly, most federal agencies, including the Departments of Transportation, HUD, Commerce, and the Environmental Protection Agency have an abiding interest in the goals that regional cooperation can help promote. With innovative approaches, these departments will be able to help create regional mechanisms for addressing social, economic, and environmental problems at the metropolitan scale.

CONCLUSION

Many federal agencies have come to recognize that our national goals--achieving efficient transportation, safe and affordable housing, effective economic development and opportunity, and environmental quality--may ultimately be predicated on some degree of regional collaboration. Lacking the mechanisms of regional cooperation, policy makers at all levels have been reduced to addressing these goals in a piecemeal fashion. Such an approach only addresses the symptoms of our many metropolitan problems. We try to solve congestion with more freeways, dispose of air pollution with cleaner fuels and tail pipe emission controls and address fuel consumption with more efficient engines, rather than making our communities less reliant on cars. We address the flight of people and capital from the inner city with Community Reinvestment Act disclosure requirements and community development banks, rather than providing the fundamental tools to create and enhance regional economic growth. We deal with the housing affordability crisis by building solitary blocks of public housing rather than zoning for mixed use and mixed income communities and executing fair housing practices throughout a region.

This recognition seems to be driving us in new directions--toward partnerships with localities, toward policy solutions at a metropolitan scale, and toward a set of federal incentives and rewards for local efforts at regional cooperation.

Harriet Tregoning is the director of the Environmental Protection Agency's Urban and Economic Development Policy Division in the Office of Policy Planning and Evaluation. The author would like to acknowledge the contributions to this article from Linda Lawson of the Department of Transportation.