 Welcome, welcome. My name is Lily Weinberg, and welcome to episode 18 of Coast to Coast. As you all know, Coast to Coast looks at the future of cities during this really dynamic time. We've examined everything from public spaces. We've looked at race and equity in our communities, resiliency and mobility. On this last episode that we had was really important to me as a parent. We looked at how schools are leveraging green spaces during COVID-19 to create a safer environment for kids and really looking at the future of that. But what's really key for every discussion that we have is we wanna have you all, our audience, leave with clear, tangible takeaways as practitioners. So with that, I'm really excited about our conversation today. We'll examine how city leaders can quantify social impact, the social costs and benefits to prioritize impact in their cities. We'll look at how we can think through revenue generation measures while supporting a more inclusive and equitable budget. And practically speaking, we'll look at how do we do this with budget constraints? So I wanna welcome Gabe Klein. Hey Gabe, how's it going? Good, great to be here today. I'm so thrilled that you joined us today. For our audience, we all know Gabe, right? Gabe is the co-founder and president of CityFi and is really, you are uniquely situated to talk about this topic because you've managed large city budgets during the Great Recession. So in Chicago and DC, so you really know what it's like to have budget constraints and really know what it's like to have to prioritize specific decisions that looking at the social impact. So I'm excited to have this conversation and to get your insights. So with that, the way this is gonna work, Gabe, is we're gonna have 15 minutes for an interview and then we're gonna open it up to live questions from our audience. So for audience members, please put your questions in the Q&A box. For folks that are watching on Facebook or Twitter, it's hashtag night live. So with that, let's get started, Gabe. Okay, cool. So I would like to start the conversation with some context setting. So if you can tell us a bit about how you think about quantifying costs and benefits in cities. Yeah, so in some ways it's complicated and other ways it's very simple, right? When you make an investment in something, there are immediate short-term benefits that people see, that the constituents see. But really what's important is what are the long-term social costs and benefits? Meaning, let's look at like a 30-year timeframe versus what we do in the stock market or what we do in our startups, which is often 90 days, right? Or even in our budgets within cities, it's often year to year. Sure, you have like a seven-year or a 10-year infrastructure project list. But the fact is that when you build a road, right, the impacts are felt sometimes for generations, right? So it's easy to make decisions in government and to be honest in the corporate world based on politics, internal politics, politics with the public, or based on what seems like the right technology at the time, the sort of hot thing. But when you get down into it and you figure out what are the health impacts for people that live in the community where that street's going in? How does it give people, not just mobility, but upward mobility in that neighborhood? What's the air quality? All those questions. And so I think that what we try to do is give cities, give companies a framework to figure out how to tie back to their values versus starting at like tactics and resources, which is, as humans, it's tempting. Right, and so I wanna link to two articles that your firm has written about quantifying social impact and how to really think about that, the costs and benefits. And but one of the points that you make in the article is that this can be challenging to do, especially for the future-looking and really quantifying the social piece. And so you pulled out an example in Miami around transit and the various transit options. Can you talk me through that a bit? Yeah, yeah, we worked with Miami on a shared mobility plan last year. It actually should be coming out anytime now. And one of the things that we looked at were these eight smart corridors. And they've been wanting to build these for, I don't know, a couple of decades, right? And they've had problems explaining to different stakeholders. And I would say, particularly the business community, why is this investment the right thing to do? Why does it give high return? And originally it was gonna be light rail, then it was gonna be bus rapid transit. Personally, I'm agnostic on that. What I care about is how does it benefit the city at large and the communities that it operates in? And so how can we make better arguments to all these stakeholders by quantifying better investments in not only in the transit service itself, but all the ancillary improvements that would make the corridor better? So what happens when you put a bike lane in there, Jason? What happens when you add electric vehicle charging stations, either for the buses or for other types of people? What if you put a ride hail hub there? And so what we found is that the actual return on investment was approximately 24X over a 30-year time period just for the smart corridor investment, which is important to convince people this is the right thing to do. And to do that, we didn't just look at the internal fixed costs, but we looked at the long tail of like external variable costs like pollution and congestion. And it was really interesting because with a few additions of other ancillary services, you could get a three to six X kicker on top, bringing it up to like 33 times. And these were inexpensive improvements that could be made. I saw that, yeah. I mean, that's a powerful return on investment. So that's very powerful when you have those numbers. But, and we talked about this before the show. So yes, the numbers are really important to be able to quantify that. But then it's also, there's something about language and the choice and the way that you communicate this. Do you have any thoughts on that around choosing the right words when, you know, presenting these ideas and thoughts? Yeah, I mean, I think, which is why we often walk our clients through this waterfall, like let's start out with values and your vision, your mission. And then let's get down to your goals, right? And your strategies. And I think the problem is when you start too low in the food chain, you don't use the right language. And I think that the values and the vision and mission should stay the same. But you have to tailor the message to the audience that you're talking to. And if you're talking to the minister in the neighborhood versus the biggest corporate employer in the neighborhood versus the family in the neighborhood that'll be utilizing that service, they wanna hear different things. They want it to tie back to it being good for society, good for the community and good for them as stakeholders. But they react to different terminology. Like ROI is not going to be important necessarily to the minister or to the family. It may be, but to the corporation, it is. And then to the citizen as taxpayer, it is. And so we talked before this, like when we did a lot of the experiments here in DC and Chicago, we call them pilots, not experiments. And we let the community know that we wanted them to participate with us. And if they didn't like it, we'd take it out and they could help us improve it. And then you've got participatory government going on. And then you've got people feeling like they aren't just telling you what they want, they can actually play a role in the entire process. And I think that's a big difference. Absolutely. So tailoring it to the audience, that is a very basic principle, but is often missed. So thanks for the reminder on that. So I wanna pivot a little bit into this moment in time. So we started out talking about social impact and being able to measure that and making tough decisions with budgets. So this is incredibly relevant during COVID-19, which is really exasperated than equities in our communities. But it's also hard to think about, balancing the budget and really prioritizing equity during budget constraints. So can you talk a bit about how cities should be thinking about their budgeting during this really stressful time? Yeah, I mean, first of all, I feel for all of our city partners, city leaders, many of us live in towns or cities. And the operational responsibility that these folks have right now is incredibly challenging. And when you talk to them about like strategies for the next five or 10 years, a lot of them are saying, look, I'm just trying to hold things together for the next three months. And so I think emotionally it's taken a toll on people. But I do think from the standpoint of equity, resilience, environment, I mean, this is a very painful time. And thinking back to like the Kubler-Ross model for change management where basically, and you can Google that, but it shows that there is a lot of pain often before there's a lot of innovation. And I think what we're seeing is we've had to expose a lot of mistakes, a lot of bad decisions in the past, not only in this country, but globally. And while it's terrible and hard to live through, whether it's budget opportunities to spend our money differently and better where it has real impacts, whether it's baking equity into everything that we do versus sort of these one-shot band-aids, I think there is a real opportunity. We might not feel it right now because we're under the gun, but I'm starting to see a glimmer of hope in cities that wait a second, you know, life is gonna go on. We're gonna get through this. A lot of the revenues will come back, but we can't just do what we've been doing before. Right, and so I wanna link to your op-ed in the Washington Post, which was incredibly powerful around systemic racism. And so I think that one of the really important things that has occurred during the racial reckoning that's occurred in our country during COVID-19 is exactly that, the racial reckoning, that we're having this conversation and that we are talking about the major inequities in our cities. So I wanna tease this out a little bit more with you. So you've managed major city budgets during the recession. So how does this work practically? I mean, how can we be thinking about prioritizing equity when we have to have major cuts? Yeah, well, first of all, we have to admit that there's a problem, right? It's like having a drug addiction, right? Until you admit that there is a problem. Historically, it's very hard to fix it. I come from a long line of civil rights activists actually in my family. So for me growing up, I was always very cognizant of this. But I think for a lot of Americans in particular, this has been eye-opening this year. And a lot of people that are not callous people, these are good people, were literally just not aware because they were living in a bubble. And so what I tried to write about is I wanted to get people understand the historic aspect, particularly in our urban areas of redlining and of driving highways through people's neighborhoods, like Black Bottom in Detroit, and disenfranchising people, closing black businesses. So there's been a lot of discriminatory housing policies. There's been a lack of access to services. And that's also resulted in a lot of communities feeling like they had to become car dependent, which means that we're creating neighborhoods where you have to spend $800,000 a month just for your basic transportation, which is inequitable. Nevermind the impacts from poor air quality, right? And so I guess what I'm trying to say with this piece, and then in my response to you, is it's not enough just to spend the money differently. We have to address the policies that have baked in inequality versus equality into the system. And if you don't change the policy, if we just keep spending money on building big roads through people's neighborhoods versus investing in creating mobility networks that are safe and healthy, we will end up with the same problems over and over, even if our intentions are good. That's right. So there's a couple of things. So one is acknowledging and admitting that this is going on, but then two, it sounds like in order to have the systemic change, you really need to have a strategy first and a plan to be able to do that rather than just looking at the budget and the line items. And you have to have people at the table that are experiencing it, right? Whether it's community meetings or whether it's the agencies, like my DOT or the DC DOT that I ran, half of our executive team was African-American and then half was also female, right? And I didn't design it that way. I hired the best people for the job. And the best people represent the communities that we're serving, right? Cause, and I try to change the culture. Like it's don't feel like you have a monopoly because you're in government. Like you're there to service people just as if they're customers like you would in the private sector. Sometimes I say government should treat people like the private sector does and it gets misinterpreted. What I mean is we need to give people that level of service and respect. And I think it starts by having the right people at the table as well. That's right. So tell me a little bit about how cities can be thinking about revenue generation during this time. How do you see that as an opportunity? Yeah. Well, there's so many ways. I mean, for one thing, we've made a lot of decisions historically about where money's spent based on politics or based on the power of one person for those of us that have studied Robert Moses in New York City. And so I think, by the way, if you hear a kid screaming in the background, I apologize. Okay. A lot of us are- Ziggy, my dog was scratching on the door. So don't worry about it. Okay, okay, great. But look, I think there's an opportunity to draw a line on the stand, whether it's with local revenues, revenues that cities and regions are getting from states or federal money and say, we're gonna create a framework to invest this money around not just even human-centered design, which has been very important, let's say the last 15 years. We're gonna design around people, but embracing truly regenerative cities, a circular economy where we eliminate unnecessary waste, looking at how all people, animals, nature benefit from the decisions. And the reason that we're so focused on quantifying is because historically people have been like, ah, that sounds sort of hippie-dippy, right? Like, you know, like there's been this false equation in terms of like, you know, building roads and highways is real and building transit and other things, bike lanes are sort of fluffy. We wanna show that there's real fiscal long-term benefits and I would, as an example, say, I feel the same way about pre-K, even though it's not my area, but I know that if we make investments in Head Start, if we make investments in kids when they're young, if we give people free college education, we don't need to build jails like we do, right? And so it's the same thing on the infrastructure and transportation side and there are very low-cost investments that we can make that will change the way our communities feel, make them safer and even eliminate more traditional crime, not just traffic issues. Yeah, so tell me a bit more about your experience and any lessons learned from when you were in DC and Chicago during the recession and when you were working around prioritizing impact for transportation, how did you think that through during the budget crisis? Well, first of all, I didn't answer your last question fully. I mean, there are really pragmatic solutions that you can put in place. Like for instance, back in 2009, 2010, the parking meter system was terrible in Washington, DC. Half the meters didn't work. The science was confusing. Just putting in pay-by-phone or 10 years ago, change the quality of experience added about $18 million of revenue for the city immediately allowed us to invest in our neighborhoods. So there are services like that that are just win-win-win, right? These are new services. You're not really competing against something that was there before. But also I would say during that time, I also learned that stimulus, which was really crucial to getting our economy back on. I started actually the day after Obama was ushered in office and I found out our budget was gonna be doubled that year. I mean, our federal budget, wonderful. But what we learned is that just funding projects to get the economy going, and there were some great projects that were built, but there were projects weren't necessarily current thinking about human-centered design. They were still sort of focused on spending money on roads. And so I think we need to be ready for a stimulus this year, well, in 2021. And we need to get ready by taking our capital projects that are 80, 90% design and go back and look at those and make sure they reflect this fully loaded social cost benefit. Make sure they reflect the current mayor's goals for all communities in the city, not just some. Let's make sure we're gonna benefit everybody. And even if we have the time now thinking ahead, let's even give people a chance to weigh in on some of the latest technologies or policy shifts that they'd like to see. So I think we know we're gonna have to move fast to show a lot up after a few years of disinvestment in our cities and let's be ready for it. That's definitely one lesson. That's a great one and it's very practical. Being ready and re-looking at those, at whatever you're ready to, is those projects that you're ready with and making sure that there's also an equity lens there too. So I think that that's really good advice. And so I just wanna end with one more question. You alluded to this, Gabe, and what crisis brings innovation, right? But future looking with this crisis that we're going on, what are some of the opportunities that you think could happen in our cities? What do you think? And are you seeing anything interesting? Yeah, yeah, that's a great question. And I mean, it's funny, some people will brand me a bit of a futurist. I don't necessarily like that term because I really believe in basic fundamental equity, great design, sustainability. But having said that, you can use enabling technologies to power these outcomes that we want. And we're doing some great work right now with the Knight Foundation and Four Cities, Miami, Pittsburgh, San Jose, and Detroit around autonomous vehicles. Like how do we create a feedback loop so that people, communities of color, for instance, have input into how these technologies play out in their communities? And then we get that feedback to companies that are formulating their business models and the technology companies that are building these tech stacks. So I think that's really interesting work. There's a lot of great work around data and how we create more open data for transparency for everybody, but also to create more businesses, more locally owned, more locally powered businesses. So I think there's a lot going on out there that's really, really positive. And I think, again, we're on the cusp of doing many more great things in 2021. Yeah, no, I think that that's true. And I'm optimistic that that will happen. So I wanna jump into some of the questions that we have from the audience. So the first one is around, there's a lot of unknown. So a lot is changing in our cities and there's an unknown about the future. So how can we even have a cost benefit determination about anything having to do with urban improvement right now with these unknowns? Do we need to wait for things to be better known? Well, that's an absolutely excellent question. This is basically what we do, right? Is we work in the urban change management space and we future proof, meaning we create on and off ramps for our city clients or companies based on where we see the trends going, but all based in the foundation of triple bottom line or quadruple bottom line, like people, planet, profit and progress, right? So if you create those values at the top and you say, I wanna create sustainable, equitable, wonderful transport systems, for instance, then that will guide your decision making, whether you're a Waymo or whether you are the city of Los Angeles. And when people are operating in that type of framework, then bringing public and private together to make decisions that are good for their business, but more importantly for society and for people becomes much, much easier. And so we find ourselves often bringing together really forward thinking companies that get it with city that need the services. So to this person's question, you can never know the future. And in some cases, you don't wanna drive the change. In some cases, there's so much happening externally, you just wanna be able to shape it in the direction that you're going. So also making a decision early on, are you gonna be the driver of this or are you gonna be the shaper or are you basically not interested is important. And then you can take control of something much more than you think. Once you understand all the elements, like for instance, if you're the government and you don't understand the private sectors, autonomous vehicle, business strategy, then how can you apply the levers to get them to do what you need them to do? And we get sometimes them to understand, hey, not only is the city a regulator because that's often how they're viewed, they may be a customer. They may need your services for long-term safety for first, last mile to the transit system. So there's a lot of like uncovering that has to be done, I think. And as soon as you recognize that you don't know the future, it becomes much more comfortable to navigate it if that makes sense. No, that makes absolute sense. So this goes to my next question from the audience and she's very pleased that you formerly have a background in the public sector and in particular, she asked, can you speak more about public and private investments or your entrepreneurial ideas toward community improvement in cities? And so with that, can we link to Gabe's book, Startup City, written in 2016, is that right? Yeah, yeah. Which you talk in depth about this. So for our audience members and Connie, you can read it there, but I would love to hear your answer to that. Well, I think that we have this sense and it's changing, but in part of it is due to government being recalcitrant and slow, and some of it is due to corporations exploiting natural resources and people, but we have to be careful sort of stereotyping everybody, right? And the fact is there are a lot of innovative, fast-moving governments and government agencies and there are companies that want to do good. And so when you can get them together, communicating, talking and building trust, and I would use actually, if you go to my Twitter feed, it's Gabe underscore Klein, there's some conversation about capital bike share which started 10 years ago this week in Washington DC. I can't believe it's been 10 years. That was a public-private partnership which evolved into another public-private partnership in Chicago and New York and other places. Now they're really spawned about 120 bike share systems, but you know what we did best in that and Chris Hamilton writes this great article about it is we matrix as a team. We trusted each other. We weren't competing with inter-organizations or between public and private or between jurisdiction. We set ground rules at the beginning. This is gonna be a regional system. We're going to create it by the people for the people but we're gonna market it. Like the marketing is gonna be so slick that the public is gonna, they won't be able to tell if it's run by the government or by the private sector. And it actually was operated by the private sector. And so I think that there are some great case studies and lessons out there. And I think that whether it's, like there's a continuum of public-private partnership from like full design, finance, build, operate, maintain large infrastructure projects to concessions of services, to permits of scooters, right? And they're great companies. Like Spin is a company I advise that is just like, decided from day one, they're not gonna do anything that's gonna upset cities. Like they're just not gonna do it. They're gonna work with them. And so that trust goes so far when a city decides that they're gonna give, you know, a exclusive contract to a company they wanna know they can trust people. I could talk about this topic for like an hour, but actually the book would be a great place to start for a young person that wants to join the government or maybe switch from government to the private sector advice first. Yeah, no, I think it is a great starting point and it's a fabulous read-in. And there's a question, there was a follow-up question, like do these ideas and quantifying social impact, you know, and all the things that we're talking about, does this work in smaller markets? We have a lot of practitioners in smaller cities. So there's a question on that. Absolutely, I grew up in a place called Charlottesville, Virginia, after a place called Yogaville is even smaller. But, you know, it's a town of 60,000 people with the students. Also with COVID happening, people are re sort of discovering these very small towns to mid-sized towns and college towns. And people want amenities. They want a certain level of service. They don't all want to live in New York City, right? People want quality of life. And so I think there's a huge opportunity right now for small towns, mid-sized towns. And you want to create the same livability that we've tried to create in Chicago and in DC and other cities and in some ways it comes more naturally. But you got to be careful of the car, having everything revolver on the car. And you also have to be careful of thinking that, you know, a more efficient digital solution will drive happiness. It's often design and policy. It's very intentional. Yeah, yeah. And I mean, that's feature looking there too. I mean, we don't know how this pandemic is going to impact the mobility of talent. And it certainly could be moving into some of these smaller and mid-sized markets that are lovely and livable and more affordable. But Gabe, with that, we are out of time. So I know, I know. I can keep talking to you for a while. I know. We could talk about this for a while, right? But with that, I just want to thank you for joining us. For our audience members, we are linking to all of the resources that we link to during this live recording on our website on Coast to Coast. So if you want to read more about what Gabe's op-eds and book, that is all linked there. And so thank you again, Gabe, and keep up the good work. And I know that you are helping cities across the country navigate this really unprecedented time. So thanks a lot. Thank you. Thanks to Knight Foundation for all the great work that you guys do and all the support. Thank you. Of course. And so next week, we are going to be talking about the future of universities and university towns and how that's been impacted during COVID. So it will be a really interesting conversation. I know, Gabe, you probably work with many of these markets, too. It's been hugely disrupted. And so with that, for our audience, see you next Tuesday at 1 PM Eastern. Take care. Bye. Bye. Thanks. Thanks.