Conservatives’ Urban Opportunity

By Andrew Evans and Michael Hendrix

Monday, August 03, 2015

Cities and Republicans have a troubled relationship. Republicans know they will lose the urban vote handily, so they rely on suburbs and rural areas to contest regional and statewide elections while typically losing elections within cities. Yet while only 4 percent of consistent conservatives say they prefer the city, urban America grows in economic, cultural, and electoral importance.

Data bear out this bleak picture for the GOP. Eighty percent of Americans live in cities with over 150,000 people while generating roughly 85 percent of the U.S. gross domestic product. Yet only 11 of the 67 American cities with more than a quarter million in population lean conservative. In the 2012 elections, President Barack Obama won 69 percent of the urban vote, driving victories down the Democratic ticket. And of the ten largest cities in the country, only one has a Republican mayor.

This electoral reality means that Republicans have little say over some of the most dynamic areas of the country. Cities are the engines of America’s economy and heart of its culture. Urban areas are thriving centers of productivity; a doubling of population density corresponds to a 10 percent increase in productivity. This productivity translates into opportunity, as San Francisco, which has both high productivity and high intergenerational mobility, demonstrates. Research indicates that every tech-industry job produces five more local jobs.

Democrats Are Hurting Cities

One-party rule in America’s cities wouldn’t be a big problem if our cities were healthy, but they are not. Cities are too often “closed,” both to new residents and new businesses, through their high costs and excessive regulation. Take housing, for instance. For 41 percent of households living in America’s ten highest-cost major metro areas, housing eats up over 30 percent of their annual income. In fact, a quarter of New York City households now devote over half of their paychecks to rent or mortgage payments.

Moreover, the cities’ institutions are often opaque to outsiders looking in, and these same institutions are too often guided by the liberal faith in central, technocratic rule. And many cities are on the verge of bankruptcy, if not already on the other side. Quite simply, progressives have failed the American city.

But cities do not have to remain under liberal rule, as we argue in the most recent issue of National Affairs. These problems all call out for the conservative solutions that Republicans at their best champion.

Target Stupid Regulations

Conservatives often fight for economic freedom, so city regulations form one obvious target for conservatives looking to influence cities. Regulations often have a noble purpose—think food or building safety—and in isolation each may not have a large impact. But when added up, regulations can clog a dynamic economy, just as pebbles can a stream.

Conservatives can attack regulations by looking to eliminate redundant ones and seeking to streamline the application processes for others. The time and money it takes for, say, an aspiring restaurant owner to get all the separate permits necessary to open an establishment, can make the difference between a new restaurant starting and another failed attempt.

Some areas, like a development outside of Boston, have tried implementing a one-stop permitting process, and this has an intuitive appeal. Cities should also set expiration dates for their regulations, as these “sunset” provisions would force the city leadership to re-examine old regulations. Bureaucratic inertia is the enemy of a dynamic economy.

Attack Housing Costs Head-On

While regulatory reform is one area where Republicans could contribute to urban life, housing reform, with an eye toward cost, is another. It’s no secret that cities are outrageously expensive, and some of the most productive and opportunity-rich cities are the most expensive—the Bay Area and New York only the most obvious examples.

The high cost of housing is a simple result of supply and demand, and it is a big reason why families—which regularly vote Republican—leave cities. Reforming housing regulations is one way to help, but simply removing the barriers and disincentives to development is another. Rent control, while helping a few people, prevents housing owners from realizing the full value of their properties. And property taxes, which increase with development, discourage new building.

Republicans should look for innovative ways to address these various problems that will both implement conservative principles and provide real benefits to urban dwellers. A land-value tax, while not new, is one possible idea; it assesses property taxes based not on the value of the property as a whole but based on the value of the land itself. Increasing the value of land is a function of development in the whole area, not simply on a single parcel, so a land-value tax eliminates the disincentive to develop.

School-choice programs have taken root most strongly in urban areas, and while they are a fundamentally conservative idea, they have found support from across the political spectrum (except with one important liberal constituency: teachers’ unions). Housing vouchers for the poor, as opposed to housing projects, are another idea conservatives should champion. And conservatives initially developed many of the most interesting transit policies we have today. The conservative movement is rife with innovative ideas for addressing the myriad problems cities face.

Three Urban Strategies for Conservatives

The likelihood that Republicans armed with innovative ideas could simply sweep into power in America’s largest and most powerful cities is low, to say the least. We see three strategies that conservatives could take as they consider engaging with urban America.

The first is to focus on running in important yet slightly smaller and quickly changing cities. Charlotte, North Carolina, is one example. The seventeenth-largest city in America and an important financial center, it grew almost 10 percent between 2010 and 2014, according to Census Bureau data. The nearby research triangle is experiencing a similar growth. Growing cities provide new voters that might be receptive to conservative ideas in a shifting environment. (Seeking to expand cities with suburban and exurban populations, which lean Right, will only help conservatives, too.)

The second is to focus on good governance rather than philosophical purity. Most American cities are unlikely to elect ideologues, and municipal electorates have shown themselves more concerned with the efficiency and effectiveness of local public services rather than their abstract size. Right-leaning candidates running as pragmatic administrators are more likely to get a hearing.

Former Gov. Rudy Giuliani’s record on crime in New York City demonstrates the effectiveness of this approach. Today, conservative mayors are proving adept at governing and growing their cities. Mike Cornett is the first mayor in Oklahoma City’s history to be elected four times over after reinventing the city’s downtown and guiding it through the Great Recession.

The third is to be prepared to step forward with both new ideas and confident leadership in times of crisis. If a crisis discredits a city’s political establishment—which will almost always be liberal, given the number of cities the Left controls—conservatives should be ready to seize that opening.

None of these strategies is possible, though, if conservatives and Republicans do not think seriously about city life and how best to apply conservative principles there. Some conservative individuals and groups, especially the Manhattan Institute, have invested much time and energy in this area, and the GOP has had success in cities in the past: As recently as the 1990s, Republicans led half of America’s 12 largest cities, including Los Angeles and New York.

Today, though, cities are not a mainstream conservative priority. We think they ought to be. Conservatives have much to give cities, and much to gain by focusing there. With patience, persistence, and a bit of fortune, conservatives can help lead the revival of America’s cities and make them the most vibrant and important in the world once again.