Now may be perfect timing to reform regulations

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Congress is regrouping to figure out a fourth stimulus bill. Several members have said it should focus on infrastructure. There’s only one problem: Regulatory hurdles can make it nearly impossible to actually build anything. Stephen Goldsmith argues that any significant infrastructure spending must be accompanied by regulatory reform. The professor at the Harvard Kennedy School, former deputy New York City mayor and former Indianapolis mayor  joined Federal Drive with Tom Temin for more discussion.

Interview transcript:

Tom Temin: Professor Goldsmith, good to have you on.

Stephen Goldsmith: Thank you very much. Nice to be here.

Tom Temin: Now, regulation occurs at so many levels – municipal, state, county and federal. I remember in New York City itself, a company wanted to install these self-cleaning kiosk, porta-potty devices. And there were so many regulatory hurdles just to putting something on a sidewalk in New York they gave up. That the kind of thing you’re talking about?

Stephen Goldsmith: Well with respect to infrastructure spending, in particular, if you’re trying to spend it during an economic downturn, the goal is not to put so many regulatory hurdles in the way that the spending comes after the downturn is over, right? So because we want to invest in cities, and invest in cities in a timely way. So what I’m really arguing is that we just need to do consolidated regulation, we need to determine what’s important for health and safety. And then expedite those reviews instead of having sequential reviews by different agencies, some local, some federal, some state. And many of their regulatory requirements have nothing to do with health and safety, but bureaucratic. So my argument is not that we should reduce the standards, but we should reduce the amount of regulation that’s for other reasons, and the delays in the approvals.

Tom Temin: Got it, because very often, some delays happen, not even because of government. I guess the poster child for that is the Keystone XL project, where external environmental groups have just held the thing up to the point where, you know, it may not even be a viable investment anymore.

Stephen Goldsmith: That’s true. At the local infrastructure or state infrastructure scale though, what you often have is a federal agency that is both reasonably professionally concerned about the outcome, but also very cautious for … purposes, will take a long time to review what a state will then review, which then the city has to review, right, because the money kind of goes downhill. Yet, there’s plenty of infrastructure work done by the city itself. I wish professional engineers managed that process. So we should consolidate the layers of review, we should figure out where the federal government really needs to be involved and then reduce this and expedite it to the extent possible. And I have many stories from both being mayor and deputy mayor where federal agencies want to review the things that we had plenty of our own capacity to decide how to design our bridges or, how to work through the wastewater issues as well.

Tom Temin: Because when I think of New York City, you know, anyone who’s visited there is just awed by the amount of infrastructure that is every square foot that you travel through. Compared to say an Indianapolis or a small city, there’s an issue with respect to the local capacity to understand what it is doing.

Stephen Goldsmith: Right. So if we thought about this week, one might say, look, the federal government’s gonna spend money. It has a legitimate right to demand performance, like, so if we’re going to give you money for housing, you need so many units of affordable habitable housing, right? If we’re going to give you money for a wastewater remediation, and we want you to demonstrate what you’re going to produce in a way that meets certain standards. It’s not the absence of standards I’m arguing for, it’s the multiple layers of review that take too long and they’re often handoffs at each of those levels. I mean, when I was the deputy mayor of New York restaurant licensing, building, permitting all those things so you know, kind of rolled up to me and just the struggle to consolidate the reviews of agencies even in the city was problematic enough. And that’s one of the reasons for example, and you know, the little memo I put together looking at housing recommended that one of [the Department of Housing and Urban Development]’s programs which is called the RAD program, is one that allows for kind – could allow for expedited new housing to be developed in cities without the elongated reviews.

Tom Temin: Yeah, the Rental Assistance Demonstration or RAD program. We’re speaking with Steve Goldsmith, former city mayor and now a professor at the Harvard Kennedy School. Looking at it from the federal government standpoint, where a lot of the regulations as you point out originate, how can the government itself, do you think, maybe speed up the process, because often you have multiple federal agencies, as well as multiple local agencies?

Stephen Goldsmith: Well, there have been discussions over the years about trying to consolidate the reviews, right? So if there were to be a fair amount of infrastructure spending, then some of that spending should fund a consolidated regulatory approval at the federal level so you don’t have to, you know, wander your way through multiple agencies. And I don’t mean any of this to be a criticism of federal officials. I’m just saying they’re reasonable people doing your job in a diligent way in multiple organizations with a massive amount of new spending can’t do that review fast enough to be meaningful. So we have to fund that review. That review has to be a review that is performance-based, like if you’re going to get money for housing, you have to do some of the units of housing as contrasted to each of the elements of what that housing should be. So that’s another way to think about it. And, you know, years ago, I was back when I was a youngish mayor, I testified before one of the housing subcommittees. And I got into this exchange with one of the members where I said, why don’t you just give us the same amount of HUD dollars you give us each year, no rules at all, and just tell me how many units of quality housing you want built? And I’ll build you more units for less money. Right? Because the process of compliance of unnecessary rules reduces the number of units. So, set out the performance, set out the standards, and then dispense the money and then audit the results. That’s the proposal I would make.

Tom Temin: And in some cases, the environmental impact statement It is a very time consuming process and causes a lot of anxiety and a lot of disagreement. But it would seem that in cases where you might be replacing an existing infrastructure, say a bridge crossing, like they did in Washington a few years back – a new Wilson Bridge – there was already a bridge. And so there would seem to be to the logical person, no net change in the impact on the environment. If you tear down one bridge and put up another one. Do you think that element can be somehow streamlined?

Stephen Goldsmith: Yeah, I think this is an enormously important point. We’ve kind of lost perspective in our ability to calibrate the reviews to the extent of the possible harm. So if one is redesigning a street that’s already in place, maybe even narrowing the street because many cities now think they have too much pavement, you know, rather than not enough, putting in bike lanes or pedestrian walkways or the like, then those reviews can definitely be expedited. So same as a city housing department. Atlanta is a good one that decided that if it triaged its approvals, right? So if you’re going to do a standard family home similar to attend others that you’ve done, that review is expedited but if it’s an extraordinary structure, then you assign more people to it to do it in a faster way. So the environmental reviews have often then use just to slow infrastructure. And I think your point is enormously important. Let’s help the cities rebuild. Let’s help them create jobs now. Let’s expedite the environmental reviews where we’re rebuilding or reconstructing, actually probably many cases minimizing the environmental impact, and then take the resources that would have been spent reviewing that, assign them to the more complex projects so we can expedite those as well.

Tom Temin: Because there’s a third element. I mentioned the outside environmental groups that often sue when the legal processes or the governmental processes are finished. And that is the courts which often remand things back to the government for starting over almost upon petitioned by some of these external groups. And that’s something that’s really out of government’s control, in a sense, isn’t it?

Stephen Goldsmith: Well, sure, but I think reasonable people here can come together and produce infrastructure at an accelerated rate complying with necessary health, safety and environmental rules that have an agreement, right? The goal is compliance, it’s not evasion. The goal is safety. It’s not build in an unsafe way. But then let’s organize a government that is able to identify the risks, direct resources to those risks in order to regulate them and let the other projects go forward. So I think if we have in some centralized way in Washington, should there be infrastructure money, some additional money that allows cities and states actually to set up units to expedite their own work, right, because, you know, a government that used to doing $200 million worth of work a year is not going to be able to effectively review a billion dollars in terms of plans and the like. So let’s have a little bit of infrastructure for the infrastructure, and then expedite the process. And I think we can get more things done more quickly and in good faith.

Tom Temin: And we should note your memo went to President Trump and also members of Congress. Any reaction so far in the last couple of weeks?

Stephen Goldsmith: We’ve got some inquiries from staff members and the like just looking at it. What I was trying to do in the memo is say, if we’re going to address infrastructure and cities, let’s do it in a way that prepares the cities for the future. Where are the areas where we could make the greatest difference? You know in 2008 recovery where dollars went to the cities, many of those dollars went to just kind of augment staffing, which was important at the time, but they didn’t actually build in new capacity in the city. So if we’re going to spend money, how do we think about broad man, how do we think about preventative maintenance of our bridges, not just building them but building them in a way with sensors that allows us to maintain them better? How do we find more efficient ways to clean water, right? And we’ve already talked about roads. And so I’m just arguing that the cities need infrastructure desperately, particularly the older ones. But let’s allocate those dollars with enough flexibility that they can build for the long term. And they can redesign for the present.

Tom Temin: Steve Goldsmith, a former city mayor is now a professor at the Harvard Kennedy School. Thanks so much for joining me.

Stephen Goldsmith: Thanks for having me.

Tom Temin: We’ll post this interview and a link to his memo to the president at www.federalnewsnetwork.com/FederalDrive. Here the Federal Drive on demand. Subscribe at Apple Podcasts or Podcastone. Stay up to date on your agency’s latest responses to coronavirus. Visit our special resources page at www.federalnewsnetwork.com.

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