What’s Fueling the Smart City Backlash?

smart cities

A new phase of pause and double-check assumptions seems to have gripped the three-decades-old global movement of overstressed urban centers transitioning to so-called smart cities with innovative, technology-led promises. The latest phase is marked by scattered, local-level resistance by residents to smart-city programs in big cities like Toronto and New York to small towns such as Ross, California — near San Francisco — with less than 2,500 residents.

Other cities have banned specific technologies such as facial recognition software, amid doubts over its accuracy or concerns over cities stealthily collecting such data on their citizens through video surveillance. In some cases, they see technology companies forming opaque partnerships with city-level agencies to profit from projects at their expense, using public resources such as land and development rights.

Fears over privacy intrusions in today’s digital age and unbridled development compromising the public interest have been heightened by the erosion of trust between residents, city administrations and private companies leading “smart” projects. With increased transparency, and stronger citizen engagement, the smart-city movement could regain lost credibility and continue its growth, according to experts who spoke with Knowledge@Wharton.

For the most part, residents are wary about how city governments and big technology companies involved in the projects will track and collect data about their daily activities while not compromising their privacy and security by selling data without their consent. In several cases, legislators in many U.S. states have enacted or are considering laws to ban or limit the erection of 5G cell towers because of health concerns.

Data privacy and security issues are more sensitive in some settings than others. “Smart cities mean different things to different people, but big data is intrinsic to these initiatives and thus privacy concerns arise,” notes Susan Wachter, Wharton professor of real estate and finance. “However, some initiatives such as coordinated traffic lights are high on efficiency and low on privacy issues — and they are no brainers. Others, such as tracking people — much as is done in private places such as malls — provoke a backlash because they undermine the anonymity privilege of public spaces.”

“There are many concerns around the world about surveillance and privacy — and rightly so,” says city planner Eugenie L. Birch, co-director with Wachter of the Penn Institute for Urban Research. She is also a professor of urban research and education and chair of the graduate group in city and regional planning at the University of Pennsylvania. “We need to work on how we manage the information about these things, and how we educate the youth and regular citizens. It has to be integrated into what is taught in schools right from the beginning.”

Trouble in Toronto

The Sidewalk Labs project in Toronto is an example of how perceived gaps in communication can potentially backfire. An “urban innovation” company in 2018 announced its plan to develop a 12-acre lot on the waterfront called Quayside as “a global hub for urban innovation.” The project was intended to create 3,900 direct jobs and a one-time construction impact of $1.6 billion for the Canadian economy.

The project was a textbook model of a smart city. It included digital technology deployments such as sensors to capture data to inform better decisions in housing and traffic policies, trash management and delivery of other city services; environmentally friendly public transit options including autonomous cars, biking and walking trails; high-speed public Wi-Fi; parks and recreation spaces, and more. It also promised a rigorous data privacy and governance regime and agreed not to sell citizen data without consent unless it was aggregated and anonymized.

Despite those proclamations, the Quayside project is now threatened because of what Sidewalk Labs had dreamed of beyond that but had kept under wraps. Residents and local leaders became suspicious after the Toronto Star in February reported that Sidewalk Labs had plans that extended beyond Quayside to a much larger area estimated at 350 acres. That bigger plan included opportunities to generate revenues from real estate development and advisory services, financing for a light-rail extension and underground infrastructure on that property.

Sidewalk Labs had perhaps not bargained for the extra glare of scrutiny and suspicion it would attract because of its lineage. The pushback against the Toronto project is understandable because Sidewalk Labs is associated with tech giant Alphabet, the parent company of Google, according to Pamela Robinson, director and associate professor at Ryerson University’s School of Urban and Regional Planning in Toronto. She is also a member of the digital strategy advisory panel for Waterfront Toronto.

“I think that because this is new, at the precinct scale using different technologies, and because you have an international technology corporation serving as the funder for a technology and urban development company, it’s not the same as any old business-as-usual urban development project,” Robinson notes. “It’s also because the world’s attention is on this project. I think more people are paying attention to 12 acres on Toronto’s waterfront than you would normally see on any other land development project. And with more people paying attention, more questions are being asked.”

“The resistance to the Sidewalk Labs project is indicative of a larger trend of people being more skeptical of privatization, and more skeptical of handing over significant amounts of money or resources to private companies to control governance of public life,” says Ben Green, a doctoral candidate in applied math at Harvard School of Engineering and Applied Sciences and author of the book, The Smart Enough City: Putting Technology in Its Place to Reclaim Our Urban Future.

“The world’s attention is on this project. I think there are more people paying attention to 12 acres on Toronto’s waterfront than you would normally see on any other land development piece.”–Pamela Robinson

A Gathering Storm

At first glance, Sidewalk Labs and Waterfront Toronto, the government agency in charge of developing 800 acres along the city’s eastern seaboard, had adhered to the relevant processes for transparency and disclosure. Waterfront Toronto had in 2017 selected Sidewalk Labs to redevelop Quayside after a public bidding process, and Sidewalk Labs had engaged extensively with local leaders, held town halls and public roundtable meetings, and set up a residents’ panel and advisory boards of local experts to help shape the project.

The Toronto Star article stoked fears of big companies using their power and influence in ways that could hurt the public interest. On the day of the report, Amazon dropped its plans to build a second headquarters in Queens, N.Y., in the face of severe resistance from lawmakers, activists and union leaders who questioned the granting of $3 billion in government incentives to the company. The following day, the Washington Post broke a story about Google’s extensive use of shell companies and nondisclosure agreements to hide its identity as it expands data centers and offices across the U.S.

Some Toronto residents created #BlockSidewalk, a campaign to stop the Quayside project, and invited supporters across the world to sign an online petition. “The biggest issue with the Sidewalk Toronto deal is the threat it poses to democracy. This is about power and control writ large — corporate capture of governance,” tweeted Bianca Wylie, a co-founder and campaign organizer at #BlockSidewalk who is also an open government advocate. The campaign wants to “to stop the project, assess the lessons learned, address the policy issues and then consider a fresh start for the deal.”

A Facebook group called Young Urbanists League made up of nearly 6,000 Toronto residents is another forum that brainstorms urban issues such as the Quayside project. However, its members do not hold “a single view on smart cities, or Quayside in particular,” noted Rachel Lissner, who founded the group five years ago.

According to Sidewalk Labs CEO Dan Doctoroff, the brouhaha over the larger scope of the project is unwarranted because those terms were specified multiple times in the original request for proposal and other city reports. “Somehow there’s this perception that there has been a bait-and-switch,” he told CBC Radio’s Metro Morning show in February. But he described the larger plan as “just a concept” that had been leaked from a preliminary document.

Doctoroff also defended Sidewalk Labs’s right to earn revenues from its investments in property development or in financing a light rail extension as part of the project. “If we actually play a role in financing something that otherwise isn’t going to get done, we obviously have to get paid back,” he said on the radio show.

How the Plan Misfired

In June 2019, Sidewalk Labs released its Master Innovation and Development Plan for the Toronto project, hoping perhaps to silence its critics with full disclosure. It aimed to create an Innovative Design and Economic Acceleration (IDEA) District in two phases, including a 67-acre parcel called the River District, over 20 years and trigger private investment of $38 billion. The project promised some 93,000 jobs, including 44,000 full-time direct jobs, 34,000 housing units of which 40% would be at below-market rates, $4.3 billion in annual tax revenue, and $14.2 billion in annual GDP for Canada. Last year Google had announced plans to build its new Canadian headquarters in the River District at an investment of $570 million.

Instead of settling the controversies, the release of the master plan seemed to worsen them as skeptics had questions about many proposals in the 1,524-page document. Waterfront Toronto chairman Stephen Diamond distanced his agency from it saying it did not co-create the proposal although he said the agency was involved in research, generating ideas and public consultation. Diamond also said that the concept of the IDEA District was “premature” and that Sidewalk Labs’s plan to be the lead developer of Quayside was “not contemplated” in the original agreement with the company.

In order to provide more breathing room for both sides, Waterfront Toronto has extended its agreement with Sidewalk Labs for six months beyond the original date of October 31, 2019, to review the plan after public comment. However, it reserved the right to terminate the agreement on October 31 if the issues Diamond raised are not resolved by then.

Last week, Waterfront Toronto’s Digital Strategy Advisory Panel released a preliminary report, where it raised many concerns over the Sidewalk Labs project. It called the plan “frustratingly abstract,” and some of its proposed innovations as “irrelevant or unnecessary.”

Resistance to Technology Intrusions

The backlash against smart-city solutions is expanding to the use of facial recognition software and 5G cell towers. San Francisco in May banned the use of facial recognition software by police and other government agencies over fears of potential abuse. In June, Somerville, near Cambridge, Mass., also banned it, and a month later, Oakland, Calif., followed suit, citing concerns over bias. In fact, the California legislature is weighing a bill that proposes a limited, state-wide ban on the technology, according to a New York Times report. Cambridge and Brookline are two other cities in Massachusetts considering similar action.

Towns and cities in Northern California including Mill Valley, San Anselmo and Ross have issued ordinances to block 5G cell towers, citing health concerns, the Wall Street Journal reported. Residents in Portland, Ore., Whitefish, Mont., and legislators in four states including New Hampshire have proposed bills or are lobbying for similar restrictions, it added.

“Smart cities means different things to different people, but big data is intrinsic to these initiatives and thus privacy concerns arise.”–Susan Wachter

Technologies such as machine-learning algorithms help police forces do “predictive policing” by analyzing where the next crimes could occur, but they “have a dark side,” Green writes in The Smart Enough City. “The information that guides their predictions is imbued with racial bias. Predictive policing software overestimates crime in minority neighborhoods and underestimates crime in white neighborhoods.” Even public Wi-Fi networks, such as those deployed in the LinkNYC program in New York City, where old payphones are being converted into digitally smart kiosks, could pose risks to citizens that use them, Green writes.

A Trust Deficit

The pushback in Toronto or the resistance to 5G cell towers are part of a global trend of “distrust of ‘elites,’ globalization and populist movements,” according to Richard Voith, president and principal of EConsult Solutions in Philadelphia, a policy consulting firm that works closely with Penn and other universities.

Voith sees the pushback as the outcome of two factors: “One is, we have an ascendancy of large global corporations that have been very successful, and where people made a lot of money, and there is a perception that they have an awful lot of ability to affect everyone’s lives,” he says. “Two, there has been a of big segmentation in what’s perceived as true or false in the world. People feel the need to oppose efforts where they don’t perceive themselves as being fully involved in, or have not had a seat at the table in making decisions.”

“As a city moves along its smart-city journey, it has to bring the public along,” says Dan Miles, chief economist at ESI ThoughtLab, which is part of EConsult Solutions. That need to participate was a key finding in a survey of 12 cities across the world his group conducted last year, he adds. They want to know “What’s going on? What are the benefits? How should we be doing this project?” and so forth, he notes.

Some of the resistance from citizens stems from a disproportionate distribution of economic gains, even if these are not directly related to smart-city projects. “For instance, more than half the jobs created in the last couple of years have gone to the top 20 metros, which are home to only a third of the American population,” says Seeta Hariharan, general manager and group head, digital software & solutions group at Tata Consultancy Services.

“We need to work on how we manage the information about these things and how we educate the youth and regular citizens. It has to be integrated into what is taught in schools right from the beginning.”–Eugenie L. Birch

Harnessing Technology Innovatively

Even “relatively unsophisticated technology” could help improve citizens’ lives, says Birch, who offers examples across the developing world. She points to Quito, Ecuador, where its former mayor, Mauricio Rodas Espinel, put together a safety program for women using public transport. “Women were getting on these buses and gentlemen were pinching their bottoms or whatever; they were not being very nice to them,” she says.

Espinel put together a helpline to which women could text SMS messages if they were being harassed, using an ordinary mobile phone — not necessarily a smartphone. Those messages go to the police and a transit authority desk, and the women could say if they wanted the culprit to be picked up at the next stop. They could also push a button that set off an alarm in the bus. The city spread awareness about the program through a public relations campaign.

The program helped the city not just improve the safety for women, but also target pedophiles and other forms of abuse. “They contributed to greater usage of their public transportation system, which is very important in terms of dealing with traffic congestion and greenhouse gas emissions,” says Birch.

The explosive growth in the use of mobile phones in the developing world has made way for Kenya’s successful MPesa facility for money transfers, encouraging others such as Vodafone to launch similar services in India. As in Quito’s case, other cities are able to use the mobile phone platform to provide a range of services that were previously not feasible. They include telemedicine in Kenya, and vending machines in slums and a personal identification system in India, Birch notes in a paper she wrote with Wachter and Voith.

Tales of a Few Cities

“The city that gets it right is the city that becomes truly hyperconnected, not just smart,” says Lou Celi, CEO of ESI ThoughtLab, pointing to a study his team is conducting on the subject. A hyperconnected city is one that uses “technology and modern solutions to connect, to transform and connect all parts of the city,” such as mobility, transportation, energy and water grids, business and government, he explains. A prime example of a hyperconnected city is Stockholm, which has found gains in being able to attract business investments and talent, he says. “It’s the way to meet not just economic goals and attract business, but it’s also a way to enrich the lives of citizens, and even promote things like equality and attract more citizens — there is this cumulative effect.”

Birch points to New York City as a model for civic engagement in smart-city endeavors. New York Mayor Bill de Blasio’s office offers citizens a comprehensive set of tools to help them navigate digital technology resources. Its chief technology officer, John Paul Farmer, who came on board in April, worked previously at Microsoft as its director of technology and civic innovation, running its civic urban tech practice.

“Part of the reason why the smart city projects are so dangerous and inequitable is because they are highly profitable.”–Ben Green

Among the civic organizations active in New York City is BetaNYC, a nonprofit that has advocated for transparency in government laws, including the city’s laws on open data and access to city records. BetaNYC and the NYC Open Data Program also organize Open Data Week every March to raise awareness about public data. “This arena for conversation is needed not only for smart cities, but also for land use decisions, to bring people together so that they can understand each other’s motivations, and learn how to work to build consensus instead of division,” Birch notes.

Seattle learned the value of transparency and citizen engagement the hard way with a wireless mesh network it had installed in 2013 in its downtown areas. A public uproar over reports that the network had the potential to track and log every wireless device that moved through its system forced the Seattle police department to deactivate the network soon after it had been installed, pending the passage of a new privacy policy by its city council. In February 2018, Seattle began dismantling the mesh network it had installed on utility poles and dozens of surveillance cameras.

Several cities in Ohio have courted controversy in recent years with cameras they have installed on traffic lights. In July 2019, new restrictions took effect across the state on how those cameras could be deployed.

San Diego has seen more success with its smart LED street lighting project, which includes the installation of some 4,200 “intelligent sensors” on streetlights that generate data to help with easing congestion, parking, public safety and environmental monitoring, among other benefits. The City of San Diego put out detailed information on how the sensors would work, what information they would collect and how they would use the data, and the benefits that would accrue to the city and its residents. Even so, it faces considerable resistance from citizens.

Vancouver stands out as a model of citizen engagement, according to TCS’s Hariharan. An article in Smart Cities Dive magazine lists 10 ways where city officials go out of their way to secure public input for their programs. Among them: city officials take “City Hall to the community” by organizing meetings in schools and senior centers that are easier for residents to reach; and make such meetings fun activities with add-ons like farmers’ markets, bike tours and nature walks.

Ways to Bridge the Trust Gap

It is not entirely clear if, in order to be successful, smart-city projects should originate within city administrations or private companies. Robinson points to the contrast between the process employed in the recent Smart Cities Challenge competition in Canada and the Sidewalk Labs project.

“The difference between the Smart City Challenge and [the Sidewalk Labs] project in Toronto is that the former asked local governments to submit proposals for a whole series of different prizes, the biggest prize being $50 million,” Robinson notes. “The origin, or the start of that project, came from inside City Hall, working with members of the community. The model where a vendor brings a big, ambitious project to a city is very different than how the Smart City Challenge worked.”

Canada’s Smart City Challenge emphasized transparency up front. Applicants had to make their applications public and post on their municipal website before the jury began to adjudicate the proposals. “There is this open process by which any member of the public could read it so that if there were claims that were made about civic buy-in into the project, somebody could have flagged a concern,” notes Robinson. “To the best of my knowledge, none of those concerns was raised. That process was open, transparent and it moved quickly.”

“The basic needs of citizens have to be considered before a city starts to invest in its infrastructure.”–Seeta Hariharan

Takeaways for Smart-City Planners

There are takeaways from the Toronto episode for both urban planners within government and private companies, says Robinson. For one thing, cities need to boost their internal capacity to deal with the large and complex projects that smart-city endeavors tend to be. “On the inside of government, one of the most important things to do if a big vendor hasn’t come knocking on your door already is to get ready. Be organized in advance and try to sort out what community issues and priorities you have and then ask the question: How can or cannot technology and data help with these problems?” she explains. “Not all problems are going to be fixed with technological solutions. Communities will be better prepared if they’ve got their priority list set.”

Governments also need to build the in-house capacity to respond to the issues that smart-city proposals bring. “They are different than traditional land development deals,” says Robinson. “And so, what you need are strong people inside to build governance frameworks for a smart city.”

Private sector firms need to stop saying “government is broken and we’re here to fix it,” Robinson notes. “Wise tech firms will do their homework and pitch their product in a way that advances democratically articulated goals. If they focused more on meaningful partnerships there might be less friction.”

Private sector partners in smart-city projects also need to brace themselves for their assumptions to be challenged. “Anyone who seeks to be a smart city developer should be prepared for rigorous, thoughtful, active and creative responses, including resistance from all corners of the community,” she notes. “It’s everyone’s civic obligation, I think, to ask hard questions around something so new.”

“This is the start of a tipping point,” says Green, and cities might feel compelled to adopt a wait-and-watch approach before embarking on projects with the scale and complexity of that in Toronto. He believes new business models will emerge in the aftermath of the Toronto experience and the resistance to smart-city programs in other areas. “Part of the reason why the smart city projects are so dangerous and inequitable is because they are highly profitable.”

As new governance strategies evolve, “smart city companies will have to learn to adapt to that,” says Green. “That almost certainly will be less profitable for a smart-city company than it is right now. Pursuing stronger governance will lead to different types of public-private partnerships and different types of companies that have different business models, different ways of making money and surviving. That is both necessary and good.”

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