The critical friend

The critical friend

Like most Americans in London, Bruce Katz has been to see a show – in his case, it was Billy Elliot. But in the daytime, while his compatriots are taking holiday snaps outside the Houses of Parliament, Katz is nearby, meeting government officials. In fact, Katz spends most of his time on his quarterly visits to London with “the government folks”, as he calls them.

Katz has become a regeneration guru to the government. Before that he was the chief of staff in the US department of housing and urban development in the first Clinton administration and has the ear of the ODPM and the Treasury. In April he hosted a visit of Whitehall civil servants to the USA to see the Hope VI project which, since 1992, has replaced large tracts of failed public housing with mixed-income communities. By then he had already impressed the ODPM with the idea, to the extent that it pledged to try out the approach on sites across the UK.

Government thinking on everything from estates regeneration to local government betrays Katz’s influence. Dermot Finch, director of Centre for Cities, a new UK think tank, describes the American’s role as that of “critical friend and unofficial adviser”. He adds: “By critical friend I mean that he doesn’t only champion the good. Bruce would be the first person to advise us not to copy the bad, such as America’s urban sprawl.”

It was a fact-finding mission by civil servants to the USA six years ago that first brought Katz into the government’s orbit. Since then he has spoken at the ODPM’s urban and sustainable community summits, and contributed to its State of the Cities work, which culminated in the report published in January. His relationship with the Treasury is said to have been cemented a year ago when he spoke about Hope VI at a Joseph Rowntree conference, sharing the platform with chancellor Gordon Brown.

Katz’s ideology has been honed at the Washington-based think tank the Brookings Institution, where he heads the metropolitan policy programme, producing research into demographic, market and governance trends. The word regeneration doesn’t feature in the areas of expertise listed in Katz’s official CV, but his skills catalogue its constituent parts, and explain why what he has to say resonates with the ODPM and the Treasury. The CV lists skills in housing, urban and regional politics and welfare reform, alongside the fiscal concerns of community reinvestment and economic development.

The Yale graduate has a definite air of academia about him, staring intensely through his spectacles; his blazer and white shirt noticeably lacking a tie. He sits pouring out words and ideas, a crossed leg flailing as if to hurry along the process. Irrespective of the jet lag that he says is starting to kick in after a day in London, when Katz gets talking cities he shows the qualities that make him, according to Finch, “the most insightful urban commentator in the USA”.

Here’s what he has to say …

Q&A

You advocate the use of incentives and tax breaks to encourage regeneration. How do they work?

In the USA there’s a fiscal circuitry that when markets surge and revenues surge, an area ends up with a surplus that can be used to mitigate the harmful effects of regeneration, like rising house prices. In the UK the circuit has broken and people may not notice when a market has changed.

On Hope VI, private sector developers are building for the market and their commercial success is based around attracting a range of incomes into the development. That’s accountability, and it works better than bureaucratic, interventionist means.

Regeneration is aboutthe larger policies onimmigration, trade,support for workingpeople – people missthe broader picture

The notion in the USA is: a dollar of public money for every 10 dollars of private money. In failing markets the input may not be that strong, but it could work in good markets.

The USA would never have the notion of a government delivering an urban renaissance. In the USA the government sets the climate for business performance and family achievement. It may deliver services but it can’t deliver a renaissance.

So what is the role of central government in regeneration?

Its role is to have a compact with workers, to set a broader frame on things like retirement policy. Central government has to get the big things right. In the USA how much our federal government needs to focus on place is open to question because we have states and they are very powerful in regeneration.

In the past 50 years the federal government has been very involved in housing and its intervention has been mostly harmful. It has created large areas of problematic public housing. The Hope VI programme is about undoing the mistakes of the 1950s. At the minimum the federal government should clean up its act. Beyond that, the government should do no harm.

In the USA we don’t regard regeneration policy as being labelled urban. Regeneration is about the larger policies on immigration, trade, support for working people. That’s difficult because there are so many constituencies, and people miss the broader picture.

So how do you join up that broader picture to regeneration on the ground?

Through the proliferation of ideas and by showing the interplay between the two. The USA has doubled the earned income tax credit programme [the USA’s version of the UK’s working family tax credit]. It is now larger than our housing programme. Most of the people receiving the credit live in cities, so that is probably the biggest housing programme in the USA right now.

We are expanding the notion of what urban policy is, but only after comprehensive analysis.

Where does local power fit in?

Local actors are closer to their problems and if given the opportunity to innovate, they will. Mayors are the folks who are getting things done at a time when in the USA central government has broken down. Mayors use innovative financing schemes – for example, the Washington mayor charges a tax and puts that into an affordable housing fund, then raises a bond. But there are a lot of other players apart from mayors.

Local actors are closer to the problems and if given the opportunity to innovate, they will

How is the Hope VI approach transferable to the UK?

Countries always need to be careful when they draw on lessons from other nations. The starting points are very different. In the USA deprivation and poverty are more substantial; there is still racial isolation. Our starting point is worse, so the level of demolition we carried out for Hope VI may not be required here. But the principles of mixed-income communities, close to school and employment are good.

You need to think about how to tailor it to your reality. In the UK there isn’t the consensus that areas of deprivation have a profound impact on poverty. In the USA we have found the correlation between deprivation, poverty and health.

It is more US principles than US methods that need to be considered.

How do you rate the UK’s track record on regeneration?

Your government attracts so many smart people and that’s one of its assets – in the USA the best people go off and make money. New Labour has made significant achievements in reducing child poverty and in steering the economic recovery and those are hugely important in cities.

What is hope vI?

Under the Hope VI programme, $5bn (£2.7bn) has been spent demolishing the USA’s worst public housing schemes, mainly in high-density blocks, and replacing them with economically integrated, lower density, better designed housing that is integrated into local neighbourhoods and city economies. New housing schemes have traditional kerb appeal, with details such as porches, and traditional street layouts. They are complemented by small parks and squares, civic buildings such as police stations and amenities such as day care centres. Housing is targeted at all income groups.

The new developments leverage funding from the public, private and philanthropic sectors. As well as providing housing, funding also goes into modernising schools and rebuilding amenities. Katz has cited the example of Murphy Park in St Louis, Missouri, where the developer raised $5m to modernise the school and lobbied for educational improvements to encourage people into the surrounding new housing development.

The programme is considered to be a success by many experts, with individual schemes showing reductions in crime and unemployment and increases in income levels, property values and investment. But some concerns have been raised about the programme, notably about the exclusion of problem families, as people wanting to live in the communities are screened.