How to leverage existing resources to meet the current and future needs of cities
Crumbling streets and bridges. Poorly performing schools and inadequate social services. These are common complaints ...in cities, which too often struggle just to keep the lights on, much less make the long-term investments necessary for future generations.
It doesn't have to be this way. This book by two internationally recognized experts in public finance describes a new way of restoring economic vitality and financial stability to cities, using steps that already have been proven remarkably successful. The key is unlocking social, human, and economic wealth that cities already own but is out of sight-or "hidden." A focus on existing public wealth helps to shift attention and resources from short-term spending to longer-term investments that can vastly raise the quality of life for many generations of urban residents.
A crucial first step is to understand a city's balance sheet-too few cities comprehend how valuable a working tool this can be. With this in hand, taxpayers, politicians, and investors can better recognize the long-term consequences of political decisions and make choices that mobilize real returns rather than rely on more taxes, debt, or austerity.
Another hidden asset is real estate. Even poor cities own large swathes of poorly utilized land, or they control underperforming utilities and other commercial assets. Most cities could more than double their investments with smarter use of these commercial assets. Managing the city's assets smartly through the authors' proposed Urban Wealth Funds-at arm's-length from short-term political influence-will enable cities to ramp up much needed infrastructure investments.
UNLOCKING: Public Wealth Detter, Dag; Fölster, Stefan
Finance & Development,
03/2018, Letnik:
55, Številka:
1
Trade Publication Article
With better governance, many of these assets-such as outdated buildings, undeveloped land, brownfield spaces, and air rights-could generate value and a revenue stream to fund government budgets, ...lower taxes, or pay for vital infrastructure. According to our estimates, public commercial assets are on the same order of magnitude as annual world GDP, which the IMF put at $75 trillion in 2013, and comfortably higher than world public debt of $54 trillion. In the United Kingdom, the demand for better use of local government balance sheets is increasing, partly because of strong demand for public housing across the country. ...local councils in the United Kingdom are diving headlong into the commercial property market, borrowing at favorable government rates to purchase commercial real estate in pursuit of higher returns to fund gaps in their budgets after years of central government spending cuts. ...the UK government is now making moves to improve balance sheet management.
Why Some Cities Fail Detter, Dag; Folster, Stefan
The Public Wealth of Cities,
08/2017
Book Chapter
CITIES IN DECLINE have let their assets go to waste for de cades. True, Detroit, Michigan, and Athens, Greece, were both hit by external shocks, but this alone is not what felled them. Mostly cities ...in decline could not weather the shocks because of a history of poor asset management, often coupled with few social investments, a disregard for human assets, and mismanagement at many levels.¹
Many social historians of the city hype urbanization as one of the great, and mostly positive, global revolutions. In many developed countries cities contribute more than 90 percent to a country’s GDP, as ever
Reinventing City Democracy Detter, Dag; Folster, Stefan
The Public Wealth of Cities,
08/2017
Book Chapter
AROUND THE TURN OF THE MILLENNIUM a series of protests, among them the “Occupy” movement, erupted in many Western cities; protesters claimed community owner ship of public spaces and resistance to ...corporations, globalization, cars, and a diverse basket of other perceived threats. Under lying these protests was also a feeling that many cities do not live up to their task of enabling their inhabitants to carve out a high quality of life.
This protest movement fizzled out largely because it provided few solutions to how cities and countries can be governed better. This book formulates a recipe for success in
CONSIDER THE STORY OF LESTER. He sleeps rough, mostly under a bridgehead. During the days he walks the streets of Chicago, trying to pick up bottles, begging, sometimes stealing when there is an ...opportunity. When luck is with him, he scrounges enough to buy a bottle of booze or what ever drugs are available at the moment among his fellow homeless. Afterwards he is often picked up by the police and brought to a county hospital, which is good because those are the few times he receives a shower and clean clothes.
Through his various activities Lester, forty-four, cobbles together
MANY CITIES ARE MOVING in the right direction to improve transparency, with the local governments in New Zealand perhaps still being the most advanced, and Australia and U.K. close behind. Cities ...from Sweden to the Persian Gulf have used the holding company model for de cades, with varying results and effects to society. A few cities stand out as especially successful in setting up in dependent and professional holding companies and urban wealth funds to manage their commercial wealth to the benefit of the entire community. In this chapter we spotlight some specific cases that are instructive.
One of the
Turbo Cities Detter, Dag; Folster, Stefan
The Public Wealth of Cities,
08/2017
Book Chapter
HUNDREDS OF SCIENTISTS AND JOURNALISTS have written thousands of articles trying to identify what makes a successful city. Although it is easy to rank cities in differ ent dimensions, the sad truth ...seems to be that how cities became successful has largely eluded researchers. We have already argued that the time lags involved, and the confusing effects that previous asset investments can cause, makes it fiendishly difficult to tie specific actions to success in cities.
In this chapter we begin with a critical view of cities that have been widely hailed as successes, yet that in our view punch below
The Urban Wealth Fund Detter, Dag; Folster, Stefan
The Public Wealth of Cities,
08/2017
Book Chapter
EVEN POOR CITIES own large swaths of commercial assets. Most of these cities could be well served by more professional governance of these portfolios of assets. “Commercial assets” means mainly ...operational and real estate assets. The most visible part of the portfolio consist of operational assets including incorporated or non-incorporated activities such as electricity and water utilities, waste management, and transportation-related infrastructure such as ports, airports, and mass transit systems. Less visible, but almost always more impor tant from a value perspective, is the real estate portion. Real estate assets generally make up the lion’s share of the portfolio’s value.
