Most significantly, Flaherty redirected at least half of the city’s federal aid—primarily community development block grant money—into the neighborhoods. Flaherty also implemented a series of neighborhood-based programs: he installed new street lights as a crime reduction measure, provided low-interest home improvement loans in low-income areas, and reduced taxes through a balanced budget and surpluses in the city coffers. “I think the previous mayors had been ‘downtown-oriented,”’ Flaherty reflected. “Nothing wrong with that, but to be a bit too much ‘downtown-oriented’ was perhaps a mistake.”23 Pease agreed, saying that, by the time Flaherty took office, the city was “exhausted” by the redevelopment that had taken place over the previous two and a half decades.24 To ensure that Pittsburgh’s planning process focused on residential neighborhoods, Flaherty established a Community Planning Program in the City Planning Department in 1971, which institutionalized a citizen participation process through neighborhood-based advocacy planning.25 Pease disparaged the community planning boards that developed in response as “pseudo-city planning,” and the Allegheny Conference made little effort to cooperate with them.26
Flaherty’s focus on neighborhood planning did not, however, mean that he ignored large-scale projects, particularly those that would help remake industrial spaces for other kinds of uses. In fact, in the early 1970s, Flaherty’s Planning Department proposed many of the redevelopment projects that gained traction under his successor. Most prominently, planners sought ways to encourage the expansion of medical and educational complexes in Oakland and advocated using eminent domain to assemble land for industrial or commercial uses on the South Side, Herr’s Island, and in the Strip District, all sites that subsequently became centers of activity for Renaissance II.27 Flaherty and the city planners had not yet abandoned heavy manufacturing uses within the city limits, but projects already underway pointed to historic preservation as a mechanism for redeveloping remnants of the industrial era for uses compatible with visions for a postindustrial city. By shifting his focus away from Golden Triangle construction projects toward decentralized and neighborhood-based development, Flaherty laid the groundwork for Caliguiri’s more ambitious city-wide vision for a second Renaissance. Flaherty’s fiscal austerity also created the budget surplus that made it possible for Caliguiri to contemplate such an undertaking. As Flaherty’s city treasurer, Joe Cosetti, recalled, “the Caliguiri administration never would have been able to get off a dime had Pete not gotten rid of the load of patronage. If that same payroll was there when Caliguiri became mayor, he would have gone under.”28
Flaherty softened toward the Allegheny Conference in his second term. By 1976, the last year of Flaherty’s tenure, economic conditions in the city had deteriorated to the extent that he could no longer afford to sideline corporate leaders. That year, the Planning Department noted that the city government “in many ways feels helpless to alter the overriding national economic trends that negatively affect the City,” prefiguring the mantra of city, county, and state governments in the 1980s that they were impotent in the face of national economic problems and sectoral collapse. The Planning Department identified sustaining strong links between the city government and the corporate sector, maintaining a favorable tax climate, and supporting continued growth in the Golden Triangle and Oakland as the city’s key economic development concerns. The planners were likely reacting to recently released population data that suggested predictions based on the 1970 census had been inaccurate: the four-county region experienced 4 percent employment growth, but the city lost 9 percent of its jobs between 1960 and 1975, a figure the planners believed obscured “even more dramatic shifts by sector and geographic area.” In response, Flaherty established the Mayor’s Economic Development Committee, an advisory board he described as a coalition between business and government, to review and coordinate economic development efforts in the public and private sectors. The Economic Development Committee represented the first step toward reviving the public-private partnership that had been central to Pittsburgh’s postwar urban development.29
Flaherty’s second-term priorities were very much in line with the pro-growth agenda articulated under Lawrence and Barr. They heralded the emergence of policy instruments associated with devolution and privatization that took shape first under Nixon and accelerated as the Carter and Reagan administrations increasingly withdrew federal resources from the urban sphere.30 Pittsburgh’s urban development may have provided a model for Hamilton and other North American industrial centers, but it was Flaherty’s austerity policies and neighborhood planning initiatives that piqued the interest of U.S. officials in the late 1970s. Flaherty had been the first northern mayor to endorse Jimmy Carter in 1976, and he resigned his mayoral post to become a deputy attorney general in the Carter administration, a reward for his early and vigorous support. Flaherty’s fiscal populism in his years as mayor presaged Carter’s approach to solving the problems facing U.S. cities and pointed the way toward the centrist New Democrat platform that solidified in the 1980s. Faced with fiscal crises in the early 1970s, Flaherty and mayors like him across the political spectrum saw neighborhood groups’ demands for community control as an opportunity to shift some of the planning and service-provision functions of cash-strapped local governments to individuals and nonprofits. Carter drew heavily on these local experiments to develop and legitimate policies that privileged voluntarism and self-help over government programs and federal spending, and in the process laid the institutional foundation for Reagan’s neoliberal retrenchment.
With urban constituencies irate over nearly a decade of neglect from Washington, the formulation of a federal policy to aid socially and fiscally distressed cities had featured prominently in Carter’s campaign promises to mayors and civil rights groups. In March 1977, Carter convened a cabinet-level working group to review federal urban and regional development programs, consult with state and local government officials, and recommend administrative and legislative reforms.31 Carter also appointed a National Commission on Neighborhoods (NCN) in 1977 and sponsored a White House Conference on Balanced Growth and Economic Development (WH Conference) in 1978 to make recommendations about urban and economic development policy. Participants in both initiatives—individuals and groups from across the political spectrum and with a diversity of economic interests—pointed toward increased decentralization, privatization, and voluntarism as federal policy responses to urban decline.32
In 1978, Carter presented what he described as the nation’s first comprehensive urban policy to Congress in a report titled A New Partnership to Conserve America’s Communities.33 Carter’s much-anticipated national urban policy did not introduce major new federal programs or substantially increase funding levels for existing urban programs.34 He and his advisors had used the NCN and WH Conference recommendations as political cover to support local-level voluntarism over increased federal funding. The most tangible result of the national urban policy, four executive orders issued in 1978, directed federal agencies to locate facilities in urban areas, emphasize procurement set-asides in areas with high unemployment, consider the impact of programs on urban areas, and establish an interagency council to implement the urban policy.35 The legislative package attached to A New Partnership failed to gain traction because liberal Democrats were unhappy about limits to federal oversight, because of bipartisan political opposition to targeting aid to distressed cities, and because of concern over the financial implications of the proposed programs in a time of stagflation and tax revolts.36 Most important, with his focus more fully on foreign policy and the economy, Carter did not push Congress to support the proposed legislation.37