Capability of elected officials, the pandemic's effect on the economy and the 2020 elections: DC edition

Four years ago, talking with my next door neighbor about the then Ward Council election, she said that she made her choices based on who has the background and skill set to be able to become mayor, to be prepared when and if circumstances change.

I was somewhat skeptical then, but now I understand her point. You want really capable and smart people in those positions, because you never know what can happen.

And that's the situation we're in today.

DC's Council is pretty progressive and quick to pass social justice oriented legislation and budget increases.  They weren't so much "tax" and spend, because the tax revenue stream was rising without increasing taxes.

But with shrinking revenues requiring shrunken budgets, DC's elected officials will need a different skill set.

And that's the point my neighbor was making in terms of who to vote for Council.

---

Washington Post columnist Colbert King makes a very good point today ("Because of covid-19, this election will play a critical role in D.C.’s future"), that who gets elected this year will really have to work, given the economic downturn that has resulted and will continue because of the pandemic.

DC is unique in the US, a city-state.

We don't have a state legislature and Congress restricts the ability to tax which hurts since about 70% of the jobs in the city are held by non-residents. But at the same time, the city these days is wealthy, because it controls its property, income, and sales tax revenue streams, which it doesn't have to share with a state.

Not that the city uses all of these monies wisely, especially as it relates to capital planning, see "Capital/civic asset planning, budgeting and management processes, 2015."

DC's economy is weighted to the federal government, lobbyists, law firms, and associations, and the federal presence has been shrinking with each succeeding Republican administration and Congress ("The FBI building as another example of "I told you so"," 2015). It's even worse under Trump, as his administration has moved units of the Departments of Interior and Agriculture out of the city entirely.

Diversifying the economy is tough because commercial space is pricey (see the Jane Jacobs dictum that successful cities need a "large stock of old buildings" with low rents to seed innovative ventures) and the city just doesn't have amazing engineering, business, and medical schools seeding new business ventures ("Naturally occurring innovation districts | Technology districts and the tech sector," 2014).

WRT schools, think of the way that Stanford University is connected to Silicon Valley, UCSD, Harvard, MIT, and UCSF to biotechnology, etc. ("Civic culture and organization as an element of community economic resilience," 2020).

But it's also a post-industrial economy, weighted to service jobs, tourism and the like. Tourism and entertainment (which includes eating out at restaurants) is going to be depressed for a minimum of a couple years and if a covid19 vaccine doesn't come about, potentially longer.

This is going to result in significant commercial property vacancies and a decrease in employment and business formation.

As a result, the local business community is looking for big tax breaks as a result of the loss in business activity which depresses the commercial real estate market, and real estate is DC's biggest local industry.

From the King column:

... unlike other state and local jurisdictions, and in contrast with previous challenges, today’s District government — unrepresented in the Senate and voteless in the House — might have to deal with much of the coronavirus aftermath on its own.

The problems are daunting.

District families and communities have been devastated. This crisis has wrecked the city’s economy. Hotels stand empty. Restaurants and bars are limited to pickup and delivery. Retail trade has ground to a halt. The economic pain ripples out through lost wages and business income, and millions in city tax revenue are out the window.

Chief Financial Officer Jeffrey S. DeWitt’s presentation on the re-estimate of revenues was grim. Current revenue estimates are off 7 percent, or $722 million, and are reduced by an estimated $723 million for next year. Mayor Muriel E. Bowser (D) acknowledged that the revised budget she will present on May 12 must reflect the savings required by this sobering reality.

Enter the D.C. Council and this year’s elections.

The council, through consensus, has responded to the crisis with impact-softening measures: rent-hike freezes, mortgage deferrals, consumer protections, hospital funding, expanded unemployment benefits, restrictions on debt collectors and the like. These are necessary but temporary reactions to the public health emergency, and low-hanging fruit.

The hard part — dealing with the economic crisis — lies ahead.

Bowser framed the issue succinctly: “The need is going to outpace what we can do locally.”

That is the issue confronting the council, four of whose 13 seats will be contested in the June primary.

I don't know exactly what to recommend. 

I'd start with this, but it's what I'd be recommending anyway, even without a coronavirus induced recession. But how realistic are my recommendations, really?

Basically I am calling for tons of spending, but long term investment in "infrastructure" and economic development that will pay off in increasing revenues. But how can this be paid for in a scenario of significantly reduced revenues?

Definitely I'd say no to a football stadium.  Especially given the reality that it's going to be a long time before tens of thousands of people will be watching sports events in stadiums and arenas.

1. The city needs to intensify population wise in order to capture more income, property, and sales tax revenue. This includes dealing with the opportunity cost of not building bigger now ("Revisiting the entry: (The opportunity cost of) "Defining density down" | building for today's demand, not future demand").

Although the pandemic will reduce the city's ability to grow and expectation that the city will achieve 1 million population by 2045 probably should be dialed back.

2. The city needs to be more judicious concerning "economic development" because some types of economic activity have positive multiplier effects, while others do not ("Urban planning and the difference between "economic development" and "building a local economy">," 2013; "Building a local economy vs. economic development, 2015).

3. The city needs to expand the transit system, especially the concept of a separated blue/silver line Metrorail, as a way to bring about greater intensity. Transit is the city's primary competitive advantage when it comes to attracting business and residents ("A "Transformational Projects Action Plan" for the Metrorail Blue Line," 2020).

Conceptual future transit map showing more lines and stations in DC.  Design by Paul J. Meissner.  Concept by Richard Layman and Paul Meissner.

... Warsaw's Metro system has been expanding lately--3 stations to the M2 line went live last September and 3 more stations this month. Ours could too.

4. But DC also needs to take a leading role in regional passenger rail development. Leveraging what Virginia is doing ("Virginia to build Long Bridge and acquire CSX right of way to expand passenger train service") and goading Maryland to step up ("A "Transformational Projects Action Plan" for a statewide passenger railroad program in Maryland," 2019).

5. The city has to figure out how to goose the higher education sector to be more productive in terms of generating spillover economic development.

6. The city should redevelop United Medical Center in a transformational manner which would build the base for an incredible economic development initiative in Wards 7 and 8, around redeveloping the St. Elizabeths campus as a graduate education and biotechnology park.

This series outlined such a program:

-- "Ordinary versus Extraordinary Planning around the rebuilding of the United Medical Center in Southeast Washington DC | Part One: Rearticulating the system of health and wellness care East of the River," 2017
-- "Part Two: Creating a graduate health and biotechnology research initiative on the St. Elizabeths campus," 2017
-- "Part three: the potential for donations around an expanded program," 2017
-- "Revisiting East of the River medical care: United Medical Center," 2017
-- "Update on DC's plans to build a new United Medical Center," 2018

which is even more necessary in the face of the need for expanded public health programs post-pandemic.

7. But the program for UMC should also include more capability to deal with pandemics, like the rebuild of Rush Medical Center in Chicago ("Rush Medical Center (Chicago) clues us into a gap in state and regional health care planning: planning for disaster and epidemic response," 2020).

8. And to revive the city's poorest wards, DC needs to develop a real "Marshall Plan" style initiative along lines I've outlined before ("An outline for integrated equity planning: concepts and programs," 2017).