A successful city is pro- rich and pro-poor. It budgets for growth to serve all who live there.
Cities bring people together in what becomes very crowded space. They come together to make better connections: helping employees connect with employers and helping customers and clients to connect with the suppliers of important services. The physicians are helped to connect with their essential patients. Lawyers, accountants, consultants of great variety, can connect with their clients who rely on their skills and experience for which they willingly pay and make practice possible. Restaurateurs, with their chefs and waitrons, connect the many who they feed and amuse. And artists of all kinds connect with the audiences they may only find in the large city, to mutual delight.
Cities offer valuable choices to all their citizens, rich and poor and those in between, that are not available outside. We complement each other and we combine together to make as sure as we can that our crowded space can serve our purpose to connect. And so we establish and maintain a grid of one kind or another to deliver essential services – water, energy, roads and other forms of transport – more cost effectively than if we somehow had to do it for ourselves, off grid so to speak.
The essential purpose of local government is to maintain and improve the quality of the vital connections by providing the grid efficiently. Elected civic leaders should compete on this basis for the votes that elect them to office. Successful cities will attract migrants from outside to join in and share in the success. They manage the growth well enough to preserve the advantages of city life for all who choose to live there, including the poor who cannot or will not pay enough to be connected to the grid. Yet it is essential to keep them well connected, for the sake of the city and all including the well-off who live nearby. Making these connections possible is not charity – it is good sense.
And the South African city would surely do better if it were given fuller responsibility for policing, schooling and securing the bulk supplies of water and energy for their grids – that has proved not nearly secure or capable enough when provided by the central government or by proxy provincial governments.
City success will be revealed in the value attached to the buildings of the city, the houses, offices, factories and warehouses that make up the city. More accurately it is revealed in the value of the land under the buildings and the vacant land that can be put to more valuable uses over time. Development and re-development increase the supply of buildings, helping hold down land values and the rentals attached to them. They help keep more people flowing in rather than out of the city.
There is a virtuous civic circle to be sustained. The better the city delivers, the more its land will be worth and the more revenue it can collect to maintain and improve its connections and grid. And failure to deliver soon shows up in deteriorating property values and increasing financial strain, harming all, perhaps especially the poor.
Cape Town has been the success story of SA cities, judged by the flow of migrants to it (rich and poor) and by the growing value of real estate that is so supportive of its balance sheet and income. The city borrows very little and its net interest bill, after investment income, is very small compared to its revenue and expenditure.
Yet the city budget proposes to fund the significant capital expenditure needed to guarantee sufficient water with permanently higher tariffs. Lower tariffs would serve the city much better by helping to preserve on-grid demands. It would also generate enough extra revenue to pay the extra interest and repay the loans. This would be possible with more borrowing that in no way would threaten financial stability. Rather it will help by improving the growth potential of the city that depends upon its grid – especially so when competitively priced.