Mondays 81: Scott Bernstein on Poverty Reduction Strategies

This week we’re joined by Scott Bernstein, Founder and Director Emeritus of the Center for Neighborhood Technology.  Scott joins the show to chat with us about some of the ways cities and public agencies can work to reduce poverty.  A penny saved is a penny earned.  This is Mondays with Scott #1

Below is a full transcript of this episode:

Jeff Wood (0s): You’re listening to the talking headways podcast network.

Jeff Wood (36s): Happy Monday. This is Mondays at the overhead wire sponsored by our generous patron supporters. I’m Jeff Ward, your host, and joined by Scott Bernstein. That’s right. Scott is the founder of the center for neighborhood technology in Chicago and many other organizations and ideas, you know, well, the housing plus transportation affordability index, the surface transportation policy project, Scott was on president Clinton’s council for sustainable development. He was an original signer of the charter for the new urban ism. Co-founded the center for Tod and much, much more. I’d like to have Scott come back for a series of shows to talk about a ton of issues.

So I hope you all enjoyed this episode where we talk about poverty and strategies to reduce it in cities. So welcome to this episode of Mondays with Scott. All right, before we get to the show this week and every week, I want to thank our generous Patrion supporters. You all keep the show going by listening and supporting each month. This show and talking headway is really wouldn’t be here without you. So thank you so so much. And if you don’t support the show, but thought that perhaps you’d like to, you can support the show by going to patrion.com/the overhead wire. We’ve had people sign up each month during the pandemic, and we’re super appreciative of that as well.

$2 a month. We used some stickers and a handwritten note and $10 a month. We’ll get you the bus only scarf with dedicated lane designs. So if you want one of our bus only scarves, in addition to being a $10 a month supporter on Patrion, you can get the scarf by going to the overhead wire.com. Also, I want to mention that we did produce an audio book version of Raymond on wind’s 1909 classic town planning in practice. And if you want to get your hands on one, go to Raymond on wind.com. This book was fun to produce. And if you’re a history of planning fan it’s the very first one listed on the American planning association is 100 essential books of planning.

All right, let’s talk to Scott, Scott. I think the best way to start is to kind of introduce yourself and let folks know that are listening like who you are and where you come from and all those things.

Scott Bernstein (2m 21s): Hi, I’m Scott Bernstein. I’m the recently retired founder of the center for neighborhood technology in Chicago, which helps communities identify and capture the value of sustainable development inclusively and something I did for 42 years in practice that men coming up with metrics and methods are setting goals and helping people achieve plans and the financing that went with those plans to achieve those goals ranging from energy efficiency to better transportation choices, better development that used those transportation choices, productively as transit oriented development and other tangible and intangible investments.

In what we usually call the public realm. CNT was a co-founder of a community development movement of the Congress for new urbanism of smart growth America, the surface transportation policy project. And I currently serve as board president of the American council for an energy efficient economy, founding board member and treasurer of the shared use mobility center. And I’m sure I’m forgetting something. I get tired just going through all that.

Jeff Wood (3m 33s): That’s okay. You’ve done a lot of stuff and you continue to do a lot of stuff. How did you get into cities? Like what was the impetus for you being interested in thinking about all of these ways to improve urban issues, urban relationships?

Scott Bernstein (3m 44s): Sure. I was born in Chicago, Illinois on the South side of Chicago in Hyde park, which is today one of the more desirable successful TRDs in the country. But when we were living there, people were running away from Chicago as fast as they could. My parents were easily panicked peddled out of Hyde park. We landed in park for us, a place that was an experimental community in the early fifties, famous for being an effort to try and show that suburbs could be planned and work.

It was the kind of place where a guy who had organized, it felt quite snake would throw out the first ball. It’s a little league every year. And tell us if we kept our noses clean, went to school, got a degree we could get out of there too. So our parents were lucky. Somehow the narrative was that they’d gotten out of Chicago and we could just keep right on marching to South flight sales to, I guess when I was in college, I was fortunate to work with a group of people at Northwestern university, John McKnight and Stan Hallot, who believed that the problems with cities were that we weren’t willing to renew and reinvest in them.

And that we thought we were doing that as professionals, by urging people to get advanced degrees in urban affairs or in medical care or in education or in, even in community security and policing. But the more we invested in those institutions, the worst, the indicators of say morbidity and mortality or the reading scores or community’s feelings of security and wellbeing became. And so the question was maybe we should be inventing new kinds of institutions that were dedicated to putting the ability to make decisions and improve communities as close as possible to the people who had lived with them.

That got me interested in working with some community organizations and the poorest community on the West side of Chicago. And indeed, we were able to show that the biggest reasons for you. So the local emergency rooms, things like personal attacks and traffic crashes and even dog bites were a function of a system, sort of out of whack, out of control, oriented towards building livable places. And nobody ever looked at that day then did that kind of translation of crashes. You know, medical record might say broken tibia, broken bone, but it needed to say Twilight pedestrian, automobile collision at the corner of Madison and Pulaski when it was raining and the lights were off,

Speaker 3 (6m 18s): How’d you come up with those data points. If they didn’t exist. At the time

Scott Bernstein (6m 22s): I had work experience designing medical record system the year before, and when this community organization, the Christian action ministry, which later spawned a very large community organization, Bethel new life came to Northwestern and said, how can we make people healthier? Our question back was, well, what’s the problem we realized we had to be able to translate those records. We got permission from a friendly hospital administrator and I have to admit this would strictly illegal to go through a year’s worth of medical records.

And since I had the experience, I got stuck with actually running a team from everybody from postdocs to interns to figure it out. So we went through 22,300 medical records and did that translation and fascinating. We wanted to make sure we weren’t looking at a false read a particular year sample or what have you. So we got permission to hang out at the emergency room and talk to people while they were waiting to see a doctor and ask them what happened.

The one I remember from that one was the guy who I talked to for two hours. His first answer to that question was, you know, I got stabbed at Cabrini green, which now doesn’t exist, famous high rise, public housing. And there just aren’t enough cha security guards. And he kept repeating that. And the end of the interview, I remembered to ask him, so what do you do for a living? And he said, well, I’m a cha security guy. So I figured he ought to know. And then we wanted even more validating information.

We were fascinated with the finding that there were so many traffic crashes. So we got permission to get the printed hard, copy, some tronics printer printed records of where traffic crashes happen. And back then, this was in the early seventies. You filled out an incident report. There was a six part carbon copy. And one of those went to something called the metropolitan planning organization, which was then the Chicago area transportation study. And they geographically coded these to latitude and longitude and printed them out and very carefully folded them up.

And when we got there, nobody had ever looked at them full of dust. And so we had to translate those into something that could be understood by the mapping software at the time, which had to be entered by hand by key punch, into punch cards, finally got maps to print, and then we got intersections on it. And we said, we had lots of volunteers. And we sent them out to the high incident intersections and we didn’t have long to wait. We could see people being victimized by the traffic system, the group institutionalized this program.

We helped them raise money. The people they hired were given the title of health detectives and they were grassroots epidemiologists looking for the ecological connections where some community intervention could make a difference. And we did that with dog bites and we did that with community nutrition and each one of those resulted in a program that seemed to make people feel they were making a difference.

Jeff Wood (9m 33s): That sounds like a TV show, the health detectives.

Scott Bernstein (9m 37s): Yeah. That really, it felt like it honestly, I’m leaving the more graphic parts out of it.

Jeff Wood (9m 42s): That’s probably a good idea, but that kind of leads into our discussion today about data and thinking about poverty and some other things let’s chat a little bit about this poverty issue that’s happening in the United States. I think the first thing I want to understand is what poverty actually means, what it actually means. When you say people are in poverty, there’s probably different definitions,

Scott Bernstein (9m 60s): Right? Well like a lot of things in the U S it’s officially designated by a body. In this case, the definition rests with the Bureau of labor statistics and the census. Poverty’s a condition that is met when the cohort you’re part of which I’ll explain or in is low a certain target level. So the amount of money that you’re earning, if you’re an adult and you’re a single adult for you to be in poverty is lower than if you’re, let’s say a family married a couple or married with kids.

That’s another cohort or a single mom with kids or single mom with other adult learning in the household. It gets more complex. When you think about you count this for kids who were part of a household and people who are disabled and you end up with, I think we’re up to 42 separate cohorts of people. And there is a poverty line established for each of those. And it’s a adjusted every year. It goes back to studies done 19, 18 and 19.

And then again from 1934 to 1936, when the reigning idea was that you ought to be able to meet a certain standard of living. And you could measure that by the amount of goods and services that you were able to buy compared to needs. And it was priced at a time that doesn’t work anything like now, when this was started, transportation was a trivial cost. For example, at the beginning of the last century on only the wealthy owned individual means of transportation and streetcars cost of canonical nickel or a dime a ride, but wages were pretty low and until about 1920 or so the three expenses to beat were food, clothing, and shelter in that order.

So when the idea of coming up with the poverty line was created a woman economist who came up with it, her statistics seem to show that this poverty line ought to be roughly three times what it costs you to eat in your cohort. And so, in other words, another way of saying that would be that much. Like we talk about housing shouldn’t cost more than 30% of income today. Then the thought was that food shouldn’t cost more than 33% of income, no food today’s that around for most places, 14, 15% transportation just was hardly tracked in the original Bureau of labor statistics.

So anyway, they created these standards. They translated them into these index numbers. Of course, they were measuring the consumer price index to see how the prices of individual items per unit cost, but that doesn’t tell you how much people are actually spending. So they created a consumer expenditure survey, and that’s how all this got created. So we have these, these 42 poverty lines, even though every single press release I’ve ever read has the phrase in it, the poverty line, the line, right? And it goes down to very low, the highest it can be as for a household with a minimum of four, but it’s really five or more persons in it.

And I think it’s up to $26,500 per year. And it goes down from there another way that think of that. So you could have a household earning $30,000, but that might be comprised of two $15,000 incomes. And you’d have three people in poverty. Two out of the three people would be employed and old enough to work. So their contribution would be to the employment rate, not the unemployment rate, but in the aggregate, they can’t afford to pay the cost of living when he’s not made a quality standard of living.

And the poverty designation is supposed to be able to catch that.

Jeff Wood (13m 45s): Should this designation be rethought

Scott Bernstein (13m 48s): The last time it was rethought? Yeah, it was about 10, 12 years ago. Congress commissioned a study of something called the supplemental poverty measure that was intended to take a much closer and modern look at the cost of living. They did take our recommendation to include the cost of commuting. More explicitly is interesting. I got a call out of the blue after we commented on it for the federal register, very quiet woman who turned out to be the chief expenditure columnist for the Bureau of labor statistics.

And she thanked me personally for this and that all in and apologize. She said, we miss your entire body of research. It was very helpful later in our revisions for the housing and transportation affordability index. And when we worked with HUD and DOTD to convert that into something during the Obama administration called build location affordability

Jeff Wood (14m 42s): Early on, I think I remember seeing in the streetcar book that we put together, you know, I remember, I think seeing it expenditures maybe at the turn of the century were around 2% or something along those lines. You may, I imagine you have that number.

Scott Bernstein (14m 53s): Oh, if you pushed it, you could make it to fruition. I mean, Carrie McKerrow, which I think you had Carrie on your show recently, and I have written a paper on affordability, the history of an idea that sort of traces these things. I mean, you know, if I go back to the first consumer expenditure survey, the national 1891, the money spent on transportation was deemed to be statistically insignificant. Is there a chance we can get back to that point? Oh, absolutely. We just need to change our priorities.

You know, you could wonder like, think about those first couple of income, Quintiles households making six thousand eight hundred seventeen thousand eight hundred twenty seven thousand a year. Are they making it right? And the answer is now on a couple of different levels, first on a human level, on a quality of life. No. Secondly, can they afford to pay even the services that they’re living with? No. So the average expenditures for that bottom 10% are actually $26,000 a year, but they’re only earning $6,000 a year.

So they need to make up a gap of almost $20,000 a year. So how do we think people are passively making it? And the answer is they’re, they’re not,

Jeff Wood (16m 14s): Is that just like running up debt or are they borrowing from friends? Is it,

Scott Bernstein (16m 18s): It is living off your credit card. A lot of it is finding ways to share expenses, but a lot of it is hoping for in kind services, whether they’re probably supported or not to help you pay the cost of it or to discount transit pass. So maybe you find some way to get by or to directly subsidize the cost of a house. Interesting fact about these figures is that we’re the first and second and third income quintile after tax income is actually slightly higher than pre-tax income, but that’s because everybody in those income levels automatically qualifies.

If they file for an earned income tax credit, which is why people like that so much, it’s the closest thing you’ve got to force measure, or giving people money. Right, right. Help them file their taxes and they will get a check.

Jeff Wood (17m 9s): What are some of the things that we can do to get people out of poverty? I mean, you mentioned a number of things, housing, transportation, but there’s a number of other things as well that can add on to that.

Scott Bernstein (17m 18s): Yeah. Well, first of all, the principle is really simple. You, you’ve got basically three ways to bring these negative numbers to positive numbers. One is you can help them actually earn more income either. It goes into education on the job training workforce development, in order to help people qualify for jobs that would actually result in paying a living wage. That’s one thing you can do. One problem with that strategy is let’s say I give you an dollar an hour.

Let’s say you’re working 2000 hours a year. I mean, chances are you won’t get $2,000. And most jurisdictions I’m aware of well taxes. You don’t pay income taxes on that, but it’s a strategy. And at the moment, it’s the preferred strategy, by the way, ask anybody, what do we do to get people out of poverty, education and training. That’s what people equate with it. All right, let’s go to strategy. Number two, which is you can subsidize or paying kind of the cost of services. You can pay somebody rent for them.

You can buy them in dwelling. You could give them a car. You could give them a prepaid transit pass forever and so forth. And is that a good strategy? I mean, it’s okay and it’s necessary. And it’s going to take a while, even if we’re committed to poverty eradication and the fact that equity to get there, but there’s only going to be some people who need help and figuring out a way to do it. That not only helps people with their own impoverishment, but maybe it’s good for the economy too, would be preferable.

So that brings us to strategy number three, which would be investing to reduce the cost of living. Now, in this case, if I give you a package of services that actually reduce your cost of living by a dollar an hour, over 2000 hours. So you’re saving 2000 a year. First of all, I can’t tax you on that. There is no productivity tax. So on the third one, they actually get people not only a dollar or with several dollars an hour worth of savings.

When I said invest, it’s not just some soft services. I mean, if you want to help somebody, actually let’s say save a lot of money on their home, eating an electrical bill, telling people to turn down their thermostat and turn off the lights only go so far, right. Or change to LEDs, right? And you’re probably going to have to invest some money in making the home or the apartment or the building of the apartment more efficient. And then that’s going to take some investment. But on the other hand, it is investment and it’s very labor intensive investment.

You know, maybe every 50 or $60,000 invested is supporting, let’s say three medium wage and one higher wage job. And a whole bunch of them are people who will only need the equivalent of let’s say, and I’m the job training program or I a AA degree out of a community college. And maybe one person will need to be college trained. That’s based on analysis of programs, C and T and others. And so you’re creating jobs from that kind of activity.

You’re creating jobs by buying materials. You’re creating jobs because eventually the money that you’re helping people save. And remember in this discussion, we’re talking about the population in poverty. It’ll be a while before they have money to put into a savings account. So the money will get re spent in the economy. And that will give you what sometimes is called the multiplier effect. So they will be buying goods and services that they weren’t able to before. And that improves the economy.

So we started asking a question, would it be possible to come up with a standard method of identifying the population in poverty, in a place and based on the nature of the place and what’s there. And who’s trying to do what come up with a plan to reduce poverty by a targeted amount, in a place. And lo and behold, I got a call one day from somebody who said the mayor of Memphis was looking for a way to plan on how to reduce the crushing poverty rate in Memphis, which was 27%, 10 points higher than in most of the South down to 17% mayor Wharton at the time.

And I met a Memphis blueprint for prosperity, was created to do that. Now, unfortunately, marijuana one didn’t win his reelection. And the implementation of this plan has been on hold. Although elements of it appear in language in the recently adopted new Memphis comprehensive plan, Memphis 3.0, we worked with the Knight foundation to do sample poverty reduction plans for the cities in which they directly operate with people on the ground.

So that was Akron Carey, Indiana, Detroit, Philadelphia, Charlotte, North Carolina, Miami Dade County, Macon, Georgia long beach, California St. Paul, Minnesota, and San Jose, California too. So for each one of these, we would look at major cost centers of households like transportation

Speaker 4 (22m 29s): And energy

Scott Bernstein (22m 30s): And water utilities and food housing, medical care childcare is a big deal. We looked at what it would take to sort of boost the availability and the affordability of those services and aid budgets for what we called poverty reduction. So you would think of the dollar that could be earned from income. In the earlier example I gave you and the dollar, it could be saved from cost of living reduction as a poverty reduction benefit.

Certainly if you could do both increase income and cut costs, whatever progress you’d be making towards property reduction would be twice as fast as if you’d only done the first and not the second. So it turned out you would need to spend about $5,200 per capita in the poverty population per year for 10 years, to do that. Can you go about a couple hundred million dollars a year, but it was really a tiny fraction of the GDP of the Memphis region.

So that got people’s attention that it really wasn’t as expensive as you might think. If you were going into this cold without any of the analysis. Eventually last year we migrated the original tool, which was on all these spreadsheets and hard to follow onto a website. And people listening to this can go right now, real cost to a U O which stands for urban opportunity agenda that cnt.org and the data’s already loaded up with the algorithms for the cities, with the 100 largest poverty rates in the United States.

So we’ve got some cities I think, for every state. And it allows you to not only see what’s possible, but to concoct your own poverty reduction plan.

Speaker 3 (24m 18s): In an example like Memphis, you mentioned 5,200 per capita. What goes into that?

Scott Bernstein (24m 23s): So here’s a couple of interesting things about Memphis. Memphis has a public utility that sells gas, light, and water, and it brags about having the cheapest rates for electricity in the United States, which is I think true, but research shows that cheap rates who know consumption. So it’s not surprising to find out that for people in poverty, residents of Memphis have the highest electrical milk in the United States. So spending money on energy efficiency, whether it’s lighting or equipment would be a priority, their incidents, then JLW along with TVA, Tennessee Valley authority, which is who they buy electricity from as launched finally, an aggressive energy efficiency program with some targeting to the core.

Second one is transit. At one point, Memphis had a transit system that was the envy of the South, I think 136 miles of fixed guideway streetcar within the city limits. And some interim electrics, all that’s gone. I mean, the bus routes mimic the routes in the original street cars without any of the frequency or connectivity or hours of service they once had. And so many other cities have also struggled with the routing, right? And the frequency, the hours of service focusing on the routes, most likely to get people cause they go to where people actually live now instead of where they used to live becomes really important.

And we actually identified and designed a dozen or so bus routes to more distant job centers that were sort of missing from the map that are finally getting some attention. Now, most of those are way out of town. And interestingly, one of the bigger job centers, the Memphis medical district doesn’t have the kind of coordinated bus service you’d like to see. They’ve got, I think it’s 20,000 jobs in a really tight area. There’s hardly anybody living or some of these major medical centers.

So most of their workers drive in work, right?

Speaker 3 (26m 22s): And they provide parking probably that’s

Scott Bernstein (26m 24s): Right. The district may be the biggest parking lot in Memphis. You know, it doesn’t make a lot of sense the way some of these things have evolved. So transportation’s a big costs in Memphis too. Those are two really good examples, they’re energy and transportation.

Speaker 3 (26m 38s): So that transit example is really interesting because, you know, recently Yona free-market, the urban came out with

Jeff Wood (26m 44s): A calculation of what it would take to improve service for cities over a hundred thousand population. And he stated basically if the feds wanted to get involved, you’d spend $16 billion a year to get every city up to Chicago. The service levels basically, which I thought was really interesting. But now I’m talking to you for the last 20 minutes or so. I can see that as you know, you can sell it as a poverty reduction.

Scott Bernstein (27m 8s): That’s my point. You don’t necessarily need to spend in some of these categories more than is already being spent or in other cases, the money really is being spent mostly by the victims of all of this, meaning the users, right? So if you can help capture the value of the savings, sort of the equivalent of the way we talk about capturing the real estate value of property, then you got yourself a real winner. So typical household in the United States as a plug figure, spending about $10,000 a year for transportation.

It’s more than that in the suburbs. And a whole lot of what’s called rural America. And it’s less in central cities, but that’s a big number. So if you want to find out, if people are willing to spend money on transportation, anybody who happens to be listening to this count the number of households in your region and multiply it times 10,000 and multiply that times 30, which is the typical planning period for a long range transportation plan. He got a really big number. I mean, in a big city like Chicago, I think it’s 40 billion a year, times 30 years is $1.2 trillion.

Jeff Wood (28m 20s): Yeah. That’s a lot of spending on transportation.

Scott Bernstein (28m 22s): So you can’t say that reason for not putting in the canonical half cent sales tax or whatever the capture mechanism is. Isn’t because people aren’t willing to spend. I mean, they’re sort of leading, as Thoreau said, lives of quiet desperation here, what else are they supposed to do if nobody’s offering transit or if the transit won’t take you where you’re gone, right? Or is designed only for the 15% of Metro trips that are journey to work and not to help you with the 85% of the trips you’re taking for other purposes.

So you can go down this then. I mean, I’ve told you how much antipoverty benefit there’d have to be. I didn’t do what Yona did his targeted experiment there and say, here’s where to get the money. I will tell you that nationally we’ve got a GDP of roughly was $21 trillion in 2019. So if I take the high end or the antipoverty benefit, we need to get people out of poverty. You don’t want to set the target as the poverty line because somebody can get away with saying, as long as I pay you a dollar over that poverty line, you’re out of poverty, right?

Which is ridiculous. So we sat at a 20% over the poverty line in each of those categories and then calculated it. So depending on the city, you’re talking about, you’re going to need an antipoverty benefit in the range of five to $7,000 per person in poverty per year. So if I take all economy of the United States and the total number of people in poverty, you’d have to spend about 1% of GDP per year, kept people out of poverty. And you may not even be any new money to do that.

You may simply decide to prioritize as a matter of national priority or bundle them together in better ways. There’s no favor to people in poverty. They have to go around to 10 different places to assemble the subsidies that are available to you.

Jeff Wood (30m 16s): It makes me think of things like, you know, Austin is thinking about expanding its freeway through 35. When really all they have to do is toll the existing road or something along those lines where you’re spending seven to $9 billion. And it’s probably going to be more, right. It usually ends up being more so $10 billion. Let’s say that money has to come from somewhere. If you add tolls, you save $10 billion, but you also gain money from tolling as well. So the money shifts that you could actually do, if you think about it, hard enough seem to allow us to actually make these investments.

Scott Bernstein (30m 47s): Yeah. And for places that think is really hard to imagine individuals making the choices to change their behavior or to take advantage of these sorts of things or to vote for them, it is hard. It’s not easy to run these campaigns for taxes, but you know, there may be some other routes to go to over half of adult Americans regularly seek financial counseling, which tends to tell you 50 simple ways to save money. And we’ve done an experiment some years ago called equity express in which we got a professional non-profit counselors trained to focus in on just five or six costs of living and opportunities to reduce it.

So we tried this out in Chicago, Oakland, Cleveland, and we use real programs that people were eligible for weatherization assistance or selling a car in, signing up for car sharing and transit together or real popular. One turned out to be how to get over the jitter. So cutting your landline and going with a cell phone. So in your standard advantage savings account program and individual development account program, they consider it progress. If you could increase savings by 1% per year of your available income in this equity express program, in which you were limited to picking six things that could reduce your cost of living.

We got the savings rate to between five and 6%. So the express part was if you’re saving at five times or more, the rate that you would be, if you’re saving for a goal, like the, get a down payment for a house, or I hate to admit it a car to go to work, you know, a medical savings account or money to start a business or an educational goal, it would happen faster. A faster might take you without that extra savings, 10 to 12 years to save money for the down payment that you could now pretty confidently accumulate in two years and not telling people not to try and get a job if they’re unemployed or more, if they are and so forth.

It’s just that by itself, if you’re trying to make economic progress, you can only go so far without the savings part of this. So if you look city by city at the recent two decade history of both unemployment rates and poverty rates, you can find plenty of examples of unemployment going down, which is the one everybody is sort of riveted back, but the poverty rates going up because they can’t pay the cost of living. Now, the bonus on all this is of course, because we did it. We had a steady eye towards things that would reduce the cost of living and be environmentally acceptable.

And most of the things we ended up recommending are also good for climate change. So here’s a case where you could achieve greenhouse gas reduction. You had lower the cost of living. Wow. You know, that’s golden in today’s political currency. Yeah.

Jeff Wood (33m 36s): And I mean, you mentioned cities. I mean, I guess the investment can be made at any level at the federal level state, local,

Scott Bernstein (33m 41s): All levels, federal state, central city town, rural village with two black, long main street. It’s just a way of thinking about how to deal with the economy. I remember we wrote a booklet 10 of us together called working neighborhoods, taking charge your local economy to sort of lay out the theory of this in 1986. It was really interesting how much pickup there was on the idea that you could take charge of your local economy too often, the economy is one of these black boxes you’re supposed to accept as is, and try and figure out how to intersect it sort of like an on-ramp and off-ramp on an expressway, but maybe you didn’t need the expressway or maybe express what it was exactly the wrong thing to invest in.

If you’re economically struggling as a household, you don’t want to invest in things that are going to wear out in a year, either. I mean, going back to Memphis, it floods a lot and you pay a predictable cost every so often in making up for the flooding that occurred. So that’s an impairment on your net worth in an accounting framework. So actually retrofitting your neighborhood or a green infrastructure or flood protection. And since we were talking before about how air conditioning bills, heat Island mitigation by tree canopy, restoration all has an economic value to it.

Right now, those things are co-benefits on somebody. Else’s ledger is my point. And if you’ll pardon the expression, I’m sort of a strict integration care when it comes to those call benefits, why would you leave any of them on the table if they’re all there? And yet the way we program for these things almost invariably does. So I want to get people out of poverty may cost to live in reduction and productivity is important as income certainly stay the course on income equity, but don’t count on it alone, figure out how to build some economic literacy at a collective level about this and make sure that you aren’t missing the opportunity to target these benefits in a way that would result in something like economic inclusion.

And you can start to flatten this curve too. So those are the principles.

Jeff Wood (35m 46s): My last question, or our last discussion, I guess, will be what this means during the pandemic. And, you know, are we calculating poverty correctly during the pandemic? Or are we missing people

Scott Bernstein (35m 56s): We’re missing, we’re missing them all over the place. So there were a couple of studies in the last couple of months trying to estimate how many more people were in poverty nationally, starting March 1st and going through October 1st, there was one study by a group of Columbia and it came up with 6 million. There was another one by the center on budget and priorities in DC. I mean, I don’t think 8 million comes quote, they’re doing that by projecting off a changes in unemployment numbers and then imputing actual income level, you know, for obvious reasons, that’s not a good way to do it.

It’s just the data that’s available. So my guess is that the numbers are higher and don’t get me wrong. I don’t think anybody’s in Nirvana. If they’re earning 20% over the poverty level, that’s the other problem. There is people really are squeezed hard and Damache has created all sorts of costs living perversities because housing isn’t being produced. For example, this Vico, the cost of housing is going up. How about that? Bailable incomes going down in the cost of housing is going up. It’s not supposed to do that, right?

Right. It happened during world war II. By the way, when the war finally broke out, it was clear. There was a shortage of critical materials. So executive order, number two, the war production boardwalk, a ban on the production of new homes and automobiles. And the savings rate went from, I think it was 5% to 22%. So when you read in histories that there was pent up demand, you’re not kidding. So that 22% was a signal to a bunch of America’s leading industry that looked like good news to them.

As long as you wrap the war up by 1945 or so, they figure you could get people to start spending money again. And so when you look up something called the national resources planning council, this was the source of everything evil that we’re living with today. The idea was to spread out those new towns, get people to buy amazing appliances, but overall, to spend money. In the meantime, during the war housing was nowhere to be found and expensive. So this leads to the story. I told him, Hanks books about DC during world war II, which we discussed.

And, you know, since then I’ve discovered that wherever there was a so-called war production or load center, they call them a city where a lot of work was going on. You will find the barriers to how sharing or lowered for the duration of the war. In fact, it turned out that I’m living in one in Evanston, just outside of Chicago. It was a rooming house during world war two. And today there’s 40 million adult Americans who are living in somebody else’s home and only half of them are family members. So if you want to talk about a least cost affordable strategy, there it is. It’s a no build strategy.

We’re long on oversized housing or short on the availability of housing. Overall, the people who are in the business of finding rooms to share, tell me that the cost to produce the bed or the unit of housing is the cost of running a screening program for would be tenants and the cost per successful placement and retention of applicants over the long-term is $3,000. That’s the low end of your housing cross-program

Jeff Wood (39m 7s): And that’s it. Whereas building a new unit might cost here $800,000. Yeah.

Scott Bernstein (39m 13s): Try a million in the Bay area is what I think you’re up to. If it’s an officially affordable unit, there is a GAO report on this one, a couple of years ago on the high-end South. How much was it costing to produce tax credit finance housing? And I think the Bay area was 700,000. At that point, Chicago was coming in at four to 500,000 New York city was between the two. The low end was around 200,000 in Phoenix since then it’s about 250,000 in Phoenix, which is still too much, right? The only way you can make it pencil is if you’ve got a housing subsidy for the tenant, by the way, you’re at the high end.

If automatically, if you say you’re going to build market rate housing and enforce a satisfied, the classes, whatever the market would bear for the market rate housing plus the ongoing costs to subsidize the rent and the operating expenses. So in between those two, you got all sorts of interesting things. Being tried to lower, the cost of housing, you can take the house as is, and you can retrofit it, try and drastically lower your cost, energy, your cost of water. You can figure out a way to prefab housing or to adapt something else it’s been free, fab like a container and make it in the housing.

You know, in certain cases, adaptive reuse of post commercial or post industrial space works. You can convert rental housing to rent, to own housing with the intent to attorney, get into a co-op sitting on a land trust, and you can get by pretty cheap doing that. If you need to fix it up. Well, there’s something to be said for making a collective decision on how much rehab you’re going to do instead of having an arbitrary standard that says, everybody’s going to have market rate housing, they call that the sort of weak theory of equity, particularly in the Bay area.

Right, right, right. You shouldn’t even try and how somebody, unless you’re willing to spend a million dollars a household, give me a break. Right.

Jeff Wood (40m 59s): There’s so many more options that should be available.

Scott Bernstein (41m 2s): Right. And by the way, that 40 million adult figure comes from the census. And I suspect it’s low. Lot of people don’t like to report, they’re living in a question of legal situation, right? So there you have it. Now, the way that poverty happens is to set arbitrarily high standards for the cost of living and then make it illegal, to use common sense or lean approaches to actually reduce something that people would be satisfied with. That might be an interesting point or approach Mont between people on the and the left.

Jeff Wood (41m 34s): It would be interesting to see what folks would actually agree on. Although there might be some pushback.

Scott Bernstein (41m 40s): Oh, I’m sure there would be push back, blow blast, and clawback all happening at once really Darwinian world. Well, anyway, to finish the answer to the pandemic question, first of all, I don’t think that six to 8 million is the end of the story by a long shot. Number two, I think that based on the informal surveying I did, we don’t have cities that understand that resilience can sort of be, you know, learning to work around as a way of life, whether it’s about climate or total economical apps or, or public health pandemic, when you actually have to be ready.

Sarah Campbell, once coauthored a paper for TRB about the attributes of best practitioners and transportation systems, there were six of them, but the two that stuck in my mind forever were the ability to plan for anticipated or known events and the ability to be ready and plan for unanticipated. Also known as the shit happens, part of the job description. And I thought that was a really good insight.

I don’t think resilience has been thought about the right way. I think it would be interesting to do a better cataloguing of what people have tried, that my sword into a set of principles, I wrote a short piece on this for Joel Rogers, with the mayor’s innovation project. And we went back and forth on it over a couple of months based on what we knew about practices and cities. It’s now called seven easy pieces things every mayor should do. And I think if you think about the various kinds of special purpose offices that have been created since the early two thousands, the sustainability offices, innovation offices, the office of urban mechanics that were set up in Boston and Philadelphia and the handful of resilience offices that have survived.

These are worker on artists. And I think we could have a really interesting discussion about whether the right thing to do is to start with work around artists or to bite the bullet and change everybody’s job description. So that readiness is everybody’s job.

Jeff Wood (43m 52s): I mean, that seems to be the right way to go to me. I mean, if you want to tackle it head on, you should, it’s like the whole discussion about equity too. I mean, you can’t just have an office doing it. Everybody has to be focused on it. Yeah.

Scott Bernstein (44m 4s): There you go. Chief diversity inclusion and equity officer seems to be a growth engine.

Jeff Wood (44m 9s): Right? You also mentioned these task forces too. I mean the economic recovery,

Scott Bernstein (44m 14s): Only a handful of amazingly, I mean, try looking it up on the internet. There just aren’t that many, it always pays to have collective engagement around these things. And instead, look what we’ve got during the pandemic. I mean, everybody is treated to the spectacle, you know, even on your local NPR station every night, listening to governors, give you daily body counts and positivity rates and the social distancing orders mean you need to do it, but that can’t be the whole show.

Jeff Wood (44m 39s): Right. I think that’s been frustrating for a lot of folks, especially working in agencies. And I’ve heard this from folks too, is that, you know, that’s great to know all those things that you were talking about, but what is the plan going forward for? You know, how do you figure out how full your transit vehicles should be when only half of the population is vaccinated or something along those lines? That’s something, those types of things. Right,

Scott Bernstein (44m 60s): Right. And that’s a good one. Do you ever read a hundred years of solitude? No, I have not. By Gabriel Garcia Marquez, it happens in a central American village someplace. And part of the, the history of the place, which is what the a hundred years recounts is what happens when an American entrepreneur comes to town, plants of banana plantation and starts extracting the wealth of the region out of there. And people finally get angry at them and with a great flourish, she announces it. Wasn’t quite a press conference for these leaving by train and wishes the people well, and somebody asks him, Hey, Mr.

So-and-so, are you ever going to come back? And he looks up at this guy and he says, yes, when the rain stops, it hadn’t rained in a couple of years at that point, like 10 minutes later, it started raining and it didn’t stop for the next 30 years. So, you know, people seem to think you can turn these things on and off, or the government, some sort of magic machine, all you have to do is declare an emergency and you’ve got the powers to make things happen. And it’s terrible. It’s not a good way to do things. You’d need to sort of leverage people to do things together.

And the difference between this kind of crash. And let’s say world war two is that people were asked to do things. The rest of, you know, build victory gardens. They were asked to grow food. They were asked to provide services. They were asked to put everybody to work. You know, we don’t see any of that really going on right now. And the extent that it’s going on, we don’t know about it. It’s not part of the information that’s officially being tracked. You know, again, as far as I’m concerned is another way that poor people stay poor. Maybe they’re not paying taxes, but they’re certainly paying rent.

You’re certainly paying higher prices for goods and services for things that don’t make economic sense anymore. Have you ever read any of the literature about what’s called poverty traps? No, I haven’t. It’s a really interesting, so a poverty trap exists whenever you have a cultural norm or a regulation that forces you to spend money with you like it or not. I remember attending a session the Ford foundation paid for at Brookings and I was the ad guy out.

Everybody else was a cultural anthropologist station somewhere around the world, trying to figure out where are all these traps located in India, for example, there’s the practice of having big families. And it’s just sort of a cultural mandate. All family members chipping in to pay for the most elaborate weddings imaginable to celebrate it resulting in lots of poor people with third and fourth mortgages so that they can keep paying for the cost of weddings.

You know, I got invited because I’ve made the observation that forcing everybody to drives a little bit like that. Yeah. Or to live in places that are going to have high energy and water bills. So, you know, we shouldn’t be designing our communities to be poverty. Trump’s excellent example of how thinking of it only as a physical design exercise or an art exercise for those architects, even though they won’t admit they’re into style, they really are. And ignoring the actual cost of living is wrong.

Jeff Wood (48m 9s): It reminds me of that discussion about towing and impounding cars. When they ask you to pay a fee and you might not have that money, and then you don’t have a car to get to work either. And that’s that circular logic of getting stuck somewhere because of the rules that exist. And it’s frustrating to see how that happens over and over again. And like you said, you know, there’s multiple ways that can manifest

Scott Bernstein (48m 28s): Right. One fabric traps going on right now is people think is wonderful. You can finally push a button and have your grocery show up. You’re paying for it. Believe me, you’re paying for it. And it’s not pretty how much extra you’re paying for it. It’s a really bizarre shift that we’ve just gone through Jeff, where the traffic has returned. And yet it’s hard to recognize that a big part of it, whether it’s in trucks or cars is bringing goods and services to people rather than people, the goods and services,

Jeff Wood (48m 57s): Right. And the perverse incentives that creates too, because you’re creating these weird switches and where the money is going to

Scott Bernstein (49m 4s): Exactly and where the money isn’t going anymore. Isn’t available to the tax,

Jeff Wood (49m 10s): Right? Like central business districts, you know, there’s not a downtown crowd main street. Yeah. And so that money goes to Amazon and whoever,

Scott Bernstein (49m 18s): No, it’s not good. And there’s better ways of moving goods around, but there hasn’t been time to think about this the right way. One thing I didn’t say is that when I started thinking about the idea, Jeff of poverty reduction, as a goal, I made myself sit back and say, now why the hell is so easy to get large numbers of people excited about adopting a climate goal of reducing greenhouse gases. And it’s so hard to get people to adopt a goal of economic inclusion.

And I really don’t know the answer. I have theories there. I think economic illiteracy runs deep. There’s one reason people think it’s an impossibly high bar and maybe everybody is just racist. Who knows? Although I don’t really believe that a few months back I took the time to sign up for webinars were all sorts of leading activists were advertising their sessions about come find out about how to set goals for inclusion and making up for the sins of the past.

And I, you know, I ended up with a reputation cause I always managed to get a question in there. Does anybody here have recommendations on specific goals for what that inclusion looks like? And more often than not the answer was no. That part of the conversation hasn’t happened yet. I think we’re seeing a lot of conversations about what reparations might look like, but I don’t see us actually saying, well, if this is what the disparity curves look like, then the parody curve needs to look like this. How quickly do we need to do it? And what’s our options for how to do it.

Jeff Wood (50m 54s): I wonder if it’s because people aren’t abstract, a ton of carbon is abstract, right? It’s something you can target. You can target through, you know, businesses and things like that.

Scott Bernstein (51m 4s): Another one, you know, it was very difficult to get the idea across anything at the sub national level, other than a company could set goals for saving energy. And as part of the evidence, none of the original six pieces of federal authorizing, which is relation for more, it became the department of energy through a torturous path, gave many authority to deal with cities, none. And most of the energy that people were complaining about having to import were transportation, other than new technology, DOE wasn’t given any authority to deal with that.

That was DDOT DOTD, didn’t take any authority to do it. They left it up to EPA to say, VMT reduction could be an optional, voluntary activity to reduce emissions due to the public health problem. It was really hard to get people to adopt a goal, to save energy in buildings. And in fact, when the idea first came out, it was defined as adopting building performance standards. And that was actually called a socialist conspiracy. So, you know, there’s some value to labeling things a certain way, I guess, but I think it’s worth probing alone more deeply.

So if we can get people to adopt goals for climate protection and some large fraction of those actually deliver economic benefits to the poor, not just people who are in the middle class and above, and maybe we can get somewhere. I hope so. Hope Springs eternal. All we got ya.

Jeff Wood (52m 32s): Oh, it’s positive. All right. Thanks Scott. All

Scott Bernstein (52m 35s): Right. Hang in there, man.