DETROIT RECENTLY SUBMITTED ITS FINANCIAL RESTRUCTURING PLAN TO COURT AND APPROVED A PRIVATIZATION DEAL. HERE ARE SEVERAL OTHER PROPOSALS FOR TURNING THE CITY AROUND
Detroit submitted its long-discussed financial restructuring plan to federal court last week, but conflicting laws — and the magnitude of Detroit’s bankruptcy — could bring the plan before the Supreme Court, according to University of Pennsylvania Law professor David Skeel, speaking recently at the American Enterprise Institute.
The restructuring plan determined that employees will receive only one-third of their original claims for pension and health benefits, while secured bondholders will be paid in full. The question of how to pay creditors is complicated by an apparent contradiction in Michigan state law, Skeel said at the AEI panel. A federal statute enacted in 1939 enables cities to violate contracts during bankruptcy, but a 1963 state law, cited repeatedly by union advocates, states that public employees are entitled to their full pensions. Skeel said that the federal court is more likely to acknowledge the former law, because federal law trumps state law under the U.S. Constitution’s supremacy clause. He also noted that the 1963 provision is not truly secured even by Michigan’s constitution because the provision “was just a statement of intent” and a normal contractual obligation — meaning it is not immune from bankruptcy restructuring.
The other development last week was the city council’s approval of Detroit’s largest-ever privatization deal, for trash pick-up. Read More »
MAYOR MICK CORNETT’S CONSERVATIVE APPROACH REVIVES A MORIBUND OKLAHOMA CITY
It’s odd to think that either the Republican or Democratic party would overlook one of its rising local leaders. Generally, it seems that anytime a mayor or governor even trips into the national spotlight, he is immediately touted by party elders as the next big thing, whether or not he’s accomplished anything in office. But for ten years, one Republican has remained under the radar even while effectively leading a major city — normally hostile territory for the GOP. He is Oklahoma City mayor Mick Cornett.
Since 2004, Cornett has overseen the rise of Oklahoma’s capital from a backwater into a global metropolis. In March he will seek reelection to his fourth term, which would make him the city’s longest-serving mayor. So now is a good time to look back at his record and what it says about the national political picture. Read More »
BY OPPOSING DENSITY, SAN FRANCISCO’S SIERRA CLUB HINDERS ENVIRONMENTAL PROGRESS
Since 2006, developer Simon Snellgrove has fought to build a 12-story, mixed-use tower on a downtown lot near San Francisco Bay. The project cleared a major hurdle in 2012, when the city’s board of supervisors exempted it from an 84-foot-height limit, following extensive environmental review. But after a negative petition garnered 31,000 signatures, the project was put to the ballot in November’s election, and city voters rejected it by nearly two-to-one, forcing Snellgrove to go back to the drawing board. In many ways, the opposition to Snellgrove’s 8 Washington project represents everything that’s wrong with the anti-growth movement in U.S. cities today.
The very groups one might think would support a vertical and centrally located project such as 8 Washington opposed the plan ferociously. Affordability advocates called it a mere “luxury” condo, ignoring the $11 million the residence is expected to generate for the city’s affordable-housing fund. Neighborhood groups criticized the design by famed architects Skidmore, Owings & Merrill, which would have fit in with surrounding towers. Nearby residents opposed the added foot traffic, despite having long decried the downtown business district’s deserted nighttime atmosphere.
The strangest opposition, though, came from San Francisco’s Sierra Club chapter, which helped fund the “No Wall on the Waterfront” coalition, ultimately killing a project that the environmental group might reasonably have endorsed. Read More »
SEATTLE INAUGURATES A SOCIALIST COUNCILWOMAN
To old-timers who have lived through New York City’s recent history, the election of Democratic mayor Bill de Blasio must have seemed odd. Here was a city that, even into the 1990s, was getting national press for its crime, business flight, and general “rotting” amidst years of left-wing rule. It wasn’t until after the pro-market reforms of mayors Rudolph Giuliani and Michael Bloomberg that New York reclaimed its role as America’s glistening metropolis. Yet this November residents, in a bout of amnesia, elected someone whose talk of government expansion resembled that made back when the city was broke and burning.
One week later, similar results surfaced 3,000 miles to the west in Seattle. There Kshama Sawant, a community college economics professor and Socialist Alternative Party member, was elected to city council, narrowly beating longtime incumbent Richard Conlin. Yesterday she became Seattle’s first socialist to be sworn into office in over a century, marking a political evolution that has resembled New York’s, and that may foretell the direction of other U.S. cities. Read More »
HAS ATLANTA LEARNED ITS STADIUM LESSONS?
There have long been two absolutes about sports stadiums, at least when built in America’s big cities. The first is the willingness of public officials to subsidize them, using hundreds of millions in taxpayer money to build monoliths that will supposedly spur jobs and redevelopment. The other is the substantial economic literature claiming that such benefits never materialize enough to justify the handout. In the last dozen years these notions have collided, as cities like Cincinnati, Detroit, and Miami have continued with the status quo, and funded new stadiums, while others, rather than bowing to billionaire owners, have watched their sports teams flee. The way Atlanta addressed its own stadium issues this year strengthened the dichotomy. Read More »
THE BART STRIKES SHOW WHY MORE OF AMERICA’S TRANSIT SHOULD BE CONTRACTED OUT
Bay Area Rapid Transit, the rail system that serves metro San Francisco, is running again, but only after a belligerent outburst by its workers that disrupted the Bay Area for months. This past July the agency’s unions, Amalgamated Transit Union and the SEIU, organized a five-day strike that affected 400,000 daily riders, from remote Contra Costa County commuters to Oakland residents forced to cram together on cross-bay ferries. California governor Jerry Brown helped restore services by declaring a 60-day cooling-off period between BART and the unions in August, but that produced another strike, four days long, in mid-October, costing hundreds of millions of dollars in productivity and forcing Bay Area cities to compile makeshift transport plans.
Right before this second strike, a story from the other side of the globe highlighted one way cities like San Francisco can avoid such problems. Read More »
THE FEDS TARGET A SCHOOL-CHOICE PROGRAM THAT IS HELPING MINORITY KIDS AND REDUCING SEGREGATION
Across the country, the school-choice movement’s future may depend on the outcome of a Justice Department lawsuit charging that the Louisiana Scholarship Program—which provides vouchers for poor children to leave failing public schools—increases racial segregation. The suit, which could inspire future litigation against state education reforms, has drawn sharp criticism from Governor Bobby Jindal, the program’s founder, and even prompted a letter to the Justice Department from House Speaker John Boehner.
Louisiana’s school-reform movement sprang up in 2005 after Hurricane Katrina devastated New Orleans. Read More »
FOR AFFORDABLE HOUSING AND REAL GROWTH, CITIES SHOULD NIX RENT CONTROL AND HARMFUL REGULATION
At a recent Atlantic Media panel on global urban issues, Amanda Burden, New York City’s planning director, discussed how challenging it has been to make housing affordable in that city.
“What we haven’t figured out,” she said, “is the question of gentrification.”
Her term referred to the displacement of New York’s poor residents by the professional class that is moving into Harlem, certain neighborhoods of Brooklyn, and elsewhere. This has increased rents, uprooting many households and sending people in search of cheaper neighborhoods, sometimes outside the city altogether. The term “gentrification” points to the class problem that increasingly consumes not only New York, but also much of urban America. Whether it’s the exodus of Mexican Americans from San Francisco or of African Americans from Washington, D.C., or the dilution of many cities’ Chinatowns, the pattern is always similar: Traditional ethnic or working-class areas become attractive to white progressives, who move in and overhaul the culture. This has earned “gentrification” notoriety as a symbol of capitalism’s destructiveness.
But what the term really represents is government’s failure to let capitalism function properly, based on changing consumer demand. Read More »
A five-minute tirade recently unleashed by a Newark resident against Mayor Cory Booker may not have surprised anyone had it remained a local TV news clip. “We are hurting here, this crime is killing us, blood runs on our streets,” the woman moaned to a reporter, responding to a late-summer murder spree. “The sham that has been portrayed about this city, that we’re getting better . . . that is a lie!”
But her accurate charge that murder in Newark “has gotten worse under Booker’s tenure” may have come as a shock to the national audience watching on YouTube. After all, the narrative told about the mayor by the media, even after two terms, has been a ceaselessly positive one of urban revival. Journalists have remained smitten with a man who seems so well-meaning and whose personal story—as a mixed-race, Yale-educated Rhodes Scholar who replaced corrupt longtime mayor Sharpe James—is so attractive. The result is that important questions have been ignored during Booker’s race for the U.S. Senate seat left open by the death in June of his fellow Democrat, Frank Lautenberg. Foremost is whether Booker has even been a good mayor. Read More »