The Limits of Local Action

PPI has launched a new blog, MovingUp USA on issues of poverty and social mobility. Over there Katie Campbell has a post on "States and Cities Take a Lead in Poverty Reduction" noting various things and then arguing that "Due to the skyrocketing federal deficit, which Jonathan Weisman of the Washington Post writes today will grow to a whopping $490 billion dollars this year, it looks like states and cities will have to continue to lead the way and find creative solutions to reduce poverty and boost social mobility regardless of who wins the White House this fall."

Since urban areas tend to contain both pockets of poor people and pockets of liberals, it's to some extent inevitable that city governments will wind up taking the lead on poverty issues. But for the sake of poor people, we shouldn't be content to leave it that way. On the local level, after all, the easiest and most effective way to eliminate poverty is just to make it too expensive for poor people to live there. Your typical low-poverty suburb hasn't discovered some miracle formula that turns all its citizens non-poor. Instead, land in the suburb is relatively expensive and its enacted regulations that prevent you from building small houses, from building dense apartment buildings, from crowding a lot of people into a single family home, etc. Basically, if you make it illegal to do anything that would make it possible for a poor person to rent a home in your town, you can ensure yourself a low poverty rate.

This could work in big cities, too. New York City could eliminate its existing public housing, enact regulations to make it even harder than it currently is to build new housing units, and end rent control and soon enough the number of poor people would plummet. But you wouldn't be actually helping anyone this way, you'd just be pushing them out. Conversely, a city that does maintain a reasonable level of services for poor people (and note that the ability to get around without a car is an important service for many poor Americans) will likely become something of a magnet for the impoverished. Even -- or in some ways especially -- if such a city establishes a track record of helping people get on their feet on move up the economic ladder, its actual poverty rate may not decline as new waves of poor people show up.

Which isn't to say that state and local government can't do good things. Often they do very good things. But ultimately the incentives facing a lot of local governments are bad, and the resources aren't distributed in the right way. National leadership is vital to making really sustainable progress, especially considering that the number of people in need of help goes up in downturns at just the time when state and local governments usually need to cut spending.

Photo by Flickr user padraic used under a Creative Commons license