Rendell's Urban Rx

America's cities are drowning in a sea of economic and social problems -- but Philadelphia Mayor Ed Rendell is tossing them a life preserver. Rendell's New Urban Agenda, announced last April at the National Press Club in Washington, is designed to let the federal government help cities help themselves. "The New Urban Agenda asks the federal government to become a partner in the effort to help America's cities compete for public and private sector jobs," Rendell writes in his policy paper on the agenda. "What cities need more than federal dollars is a change in federal policy." Combining tax credits, relief from unfunded federal mandates and incentives for urban investment are nothing new in ambitious urban planning. Other mayors and self-styled new democrats have also declared agendas for idealistic reform, but Rendell's stands apart, both in terms of its packaging and his own influence. Epitomizing the new ideal American mayor, Rendell has won nearly universal accolades for putting Philadelphia back on its feet, pulling the city out of a $230 million budget deficit in just three years. And no mayor has President Bill Clinton's ear like Rendell. Often testifying before Congress on urban issues, Rendell also is the mayoral point man for the Clinton administration on issues ranging from the Crime Bill to Americorps national service program. "He's the administration's favorite mayor," a spokesman for the U.S. Department of Housing and Urban Development said. Capitalizing on his friendship with the President, Rendell has taken his New Urban Agenda to Clinton, who has ordered a review of the initiative. And, in an unusual display of bipartisanship, Senator Arlen Specter (R-Pa.) has introduced legislation in the Senate based on Rendell's plan. And as the federal government debates Rendell's program, many urban experts believe the future of the American city hangs in the balance. "All of America's cities are on greased skids," University Public Policy and History Professor Theodore Hershberg is fond of saying. "What differentiates one from another is the angle of descent." Hershberg's metaphor describes a trend which the New Urban Agenda intends to reverse, not just in Philadelphia, but across the country. Philadelphia's own descent into the seamier side of American urbanization is well-chronicled. In the last 25 years, 263,000 jobs have left the city -- 110,000 in the last decade alone -- taking with them 30 percent of Philadelphia's tax base. And while Rendell's leadership may have put the brakes on Philadelphia's slide, economic and social problems persist. "Despite the remarkable progress that many cities and their people are making in the effort to help themselves out of trouble, there is no question that without help of the federal government, America's cities are in imminent danger of being overwhelmed by the economic and social problems they face," Rendell writes in introducing his plan. "For too long, America has turned its back on the cities, even though we as a nation are coming to the realization that the problems of the cities are shared by all Americans: those in the cities simply suffer first and longest." Three of the New Urban Agendas recommendations concern the Empowerment and Enterprise zones established by Clinton after he took office in 1992. The federal government provides incentives for businesses to move into the zones, which include some of the most economically depressed urban areas, hopefully resuscitating the surrounding community. The New Urban Agenda seeks to maximize the impact of these zones. It asks the federal government to require that a certain percentage of its own operating purchases be made from businesses in these zones. And, like all of the Agenda's proposals, the federal procurement proposal is designed to be revenue-neutral. "If we are going to see changes that are politically viable, they have to be based on no net new dollars," Hershberg said. Despite initial startup costs, the Agenda states that competition in and between Zones could be expected to drive down costs and eliminate any adverse impact on the federal budget. It also asks that the federal government require a percentage of foreign aid be purchased through the zones. The Agenda notes that the U.S. -- which will distribute $14.6 billion in foreign aid this fiscal year -- with few restrictions attached, while other countries require foreign aid be used to purchase products produced in their nation. But Hershberg, who generally approves of the mayor's plan, criticized the idea of requiring the federal government or foreign governments to purchase a set percentage of their goods from urban areas. "Of all [Rendell's] suggestions, the one we found least likely in terms of politics was expanding the Feds definition of the empowerment and enterprise zones in making government procurement," Hershberg, who asked his Urban Studies class to analyze the urban agenda, said. "If the goods and services were competitive, they ought to go with the cities, but you don't want to reward the cities if they are inefficient." The New Urban Agenda also suggests changing federal policy to "create a powerful presumption in favor of distressed and urban areas" whenever the U.S. government decides to build or relocate federal facilities. A 1978 executive order issued by former President Jimmy Carter is supposed to require the federal government to give a preference to cities in all such decisions. But the order contains a large loophole, allowing it be routinely circumvented by federal agencies claiming a move out of the city was in their best interests. The New Urban Agenda recommends that Clinton issue a new executive order to seal the loophole and help distressed urban areas. Agencies would only be able to dodge consideration of depressed urban areas if they could present "a compelling case" in favor of another location. The president would then have to approve this decision. In deciding whether to locate federal facilities in urban areas, the New Urban Agenda calls for creation of an "Urban Impact Study" -- similar to the currently existing Environmental Impact Study -- to look at the total range of costs and benefits involved. "The Urban Impact Statement simply asks of Washington: if you cannot help us, at least stop hurting us," the Agenda states. The initiative also demands that additional preference be given to depressed urban areas that have lost 500 or more defense industry jobs in the past five years or which are scheduled to lose 500 or more defense jobs in the next half decade. "The playing field should be sharply tilted toward cities," Rendell argues in the Agenda. "The right hand of government too often fails to consider the impact of its decisions on the right hand of government." Rendell also urges the federal government to restore several powerful incentives for urban renewal eliminated in a 1986 tax code revision. And chief among these initiatives is the Historic Rehabilitation Tax Credit. "The tax incentives are very significant in their impact although these are in a sense negative expenditures," Hershberg said. "But they are politically more palatable than new spending programs." He added that Philadelphia, with its rich history, was able to take advantage of this rehabilitation tax credit more than most other American cities. The Urban Agenda also favors legislation -- now pending in Congress -- that would allow local communities to issue commercial industrial development bonds. These bonds provide tax-exempt status for projects where more than 10 percent of the bond proceeds are used for private business activities. And Rendell advocates several other tax code changes to help cities restore their failing infrastructure. Another key component of the New Urban Agenda calls for legislation, some of which is currently pending, that would make compliance with federal mandates voluntary until the government comes up with the money to pay for them. The number of such federal mandates has grown tremendously in the last 35 years from two in 1960 to 66 this year. One of these mandates, requiring curb cuts and ramps to be installed in all city intersections by 1995 as part of the Americans with Disabilities Act will cost the city $140 million to implement. This amount is three times the total city budget for street resurfacing and reconstruction. Regional cooperation is high on Rendell's Agenda too. In an increasingly global business environment, Philadelphia and the greater Delaware Valley has to compete not just with other American cities, but with Germany's Ruhrgebiete, Japan's Osaka region and the Lyon region of France. In order to accomplish this, greater regional coordination and flexibility in federal transportation funding is needed, according to Rendell. The New Urban Agenda proposes that the federal government lift restrictions on community-based housing development. Such a change would allow federally-supported Community Development Corporations to build larger projects and would allow more federal rent subsidies to go to low-income housing sites, rather than to individual tenants within these sites. Finally, Rendell's plan calls on Washington to stimulate environmental clean-up of city property. The Urban Agenda states that Congress should reform Superfund legislation, mandates and guidelines for the clean-up of environmentally hazardous sites. Under the plan, cities would be granted a "governmental exception," freeing them from responsibility for environmental damage at abandoned urban industrial sites acquired for redevelopment. This would encourage urban renewal. The Agenda also states that Superfund clean-up requirements be streamlined, eliminating unnecessary regulations and placing "a premium on reclaiming urban brownfields." Congress had planned to undertake Superfund reform during the past session. However, faced with protracted gridlock over issues ranging from health care to trade legislation, Congress adjourned for the year without any changes in the environmental law. With Clinton in the White House, Rendell sensed a political opportunity and originated the concept of a New Urban Agenda last winter, according to Mark Gaige, deputy mayor for intergovernmental relations. Rendell and Gaige assembled a task force which spent ten weeks writing the New Urban Agenda. "We didn't consult any models or paradigms," Gaige said. "We just sat around a table with the mayor at the lead and talked to various parts of the government and brainstormed." Gaige said Rendell has received only positive feedback to the plan so far, noting that the Clinton administration has undertaken a full review of the plan and the Council of Mayors has voiced its support. Hershberg said three areas which the New Urban Agenda fails to address include education, crime and the disparity between the city and suburbs. He said Rendell probably did not want to address these issues because they are politically controversial and not under the direct jurisdiction of the federal government. Other University urban studies experts agree and universally applaud Rendell for his efforts. "We are incredibly fortunate to have [Rendell] as the mayor of Philadelphia," Ira Harkavy, director of the University's center for community partnerships, said. "He has brought national attention to our city and created a sense of optimism with a 'can do' attitude" Harkavy said Rendell understands the necessity of cooperation in bringing about fundamental changes in urban America. "The key question for any mayor today is to reach out across different constituencies and engage the expansive resources of the city to solve the problems of the city," he added. Urban Studies Lecturer Edward Schwartz said the New Urban Agenda does not go far enough in addressing the complex problems facing urban America. "[The Agenda] is necessary and useful as a framework for economic assistance to the city, but it falls short of what will be needed to address the most serious problems that urban America and cities like Philadelphia face," Schwartz said. "The targeting of federal contracts is a practical way to create jobs, but we also have to fight harder for education and training programs that will make urban Americans more able to participate in the emerging work force." Gaige said Rendell hopes to hear back from the Clinton administration soon, but the fate of the Agenda remains uncertain. Kevin Feeley, Rendell's press secretary, said Specter's bill and several other pieces of legislation contained pieces of the New Urban Agenda, but because the Congressional term expired without any action on them, the proposals will have to be reintroduced next session. And if the bills are passed and the Clinton administration acts on Rendell's suggestions, then Rendell may win a place in history not just as the man who put the brakes on Philadelphia's decline, but the man who rescued the American City.