Why does a city not far from the middle of nowhere need to subsidize a golf course? Ontario, Oregon has about 11,000 people (and, according to Census Bureau estimates, the number is declining) on Interstate 84 near the Idaho border. Scott McKinney, the golf course manager, recently told the city council that he needs $221,500 in public funds to open the course in 2014.
That just about $20 per resident and nearly double what the city spent subsidizing the course in 2013. The course is generally open (weather permitting) from March 1 to November 15, so it just closed.
Ontario is the largest city in Malheur County, whose land area is greater than New Jersey‘s but which has only about 31,000 people. Ontario is on Interstate 84, so any golfers who drive through might want to play at the course. It’s an hour away from Boise and six hours from Portland.
Forbes has an article about a home builder who is reducing blight in Detroit by raising money to demolish homes and other abandoned structures. However, the article gives some clues about why those neighborhoods are blighted in the first place.
Abandoned home in Detroit.
As everyone knows, large swaths of Detroit are in a blighted condition, with close to 80,000 abandoned homes and other structures as the city has lost a quarter of its population in the last decade alone. In 2010, the city set a goal of trying to remove 10,000 homes in three years, but met only half this goal at a cost of $72 million, or close to $15,000 per home.
Portland has a history of piling on subsidies to support subsidies. Depending on who you talk to, it either subsidizes rail transit to support subsidized high-density developments or it subsidizes high-density developments to support subsidized rail transit.
Like so much of Portland’s government-funded infrastructure, the twin towers of Portland’s convention center have no structural function but exist–at who knows what cost–solely because they are pretty. Wikimedia commons photo by Cacophony.
Now it is about to decide to build a subsidized hotel in order to support a subsidized convention center. Advocates imply that the hotel will pay for itself, but the truth is that an $80 million subsidy to Hyatt will come mostly out of taxes paid by other hotels in the city. Hyatt will pay another $120 million, getting a $200 million hotel for 60 percent of the cost.
Having abolished tax-increment financing (TIF) as a drain on the state treasury, California looks set to bring it back again in the name of “sustainable communities.” Senate Bill 1, the “Sustainable Communities Investment Authority,” would allow cities to use TIF in order to make neighborhoods more “sustainable,” meaning filled with more high-density, mixed-use housing.
SB 1 is a necessary follow-up to 2008′s SB 375, the “Sustainable Communities and Climate Protection Act,” which required cities to plan for high-density, mixed-use transit-oriented developments (TODs) in transit corridors. The author of that law, Darrell Steinberg, no doubt assumed that cities would use TIF to subsidize TODs. Legislative abolishment of TIF in 2011 left cities with few tools to carry out SB 375.
SB 1 not only allows TIF in blighted areas, but effectively defines “blight” as “inefficient land-use patterns,” means, in essence, neighborhoods of single-family homes. While the old law required cities to actually prove an area was blighted before they could use TIF, SB 1 specifically states that any agency that wants to redevelop an “inefficient land-use pattern” “shall not be required to make a separate finding of blight or conduct a survey of blight within the project area.” In addition, anywhere within one mile of a planned high-speed rail station is also considered suitable for “sustainable” redevelopment.
Faithful Antiplanner ally Wendell Cox has recently written a series of papers on urban development that should be read by every city official concerned about the economic future of their city. First, for a blog about World Streets, Cox argues that those who are concerned about urban prosperity should focus on ends, such as eradicating poverty and spreading affluence, rather than means, such as increasing density.
Second, for Canada’s Frontier Centre, Cox argues that urban containment strategies do more harm than good. Again, he says (but with far more detail) “the focus should be on objectives, not means.”
Most recently, in an article in the Daily Beast co-authored by Joel Kotkin, Cox rates the nation’s most aspirational cities, meaning cities with a high quality of life and numerous economic opportunities. The best cities, they find, are those with “cultural amenities and attitudes of ‘progressive’ blue states but in a distinctly red-state environment of low costs, less regulation, and lower taxes.” The top five cities, they find, are Austin, New Orleans, Houston, Oklahoma City, and Raleigh.
Washington DC’s city council has “tentatively” passed an ordinance that would raise the minimum wage from $8.25 ($1 more than the federal minimum wage) to $12.50 per hour. But this ordinance only applies to “non-union shops that are at least 75,000 square feet and whose parent companies gross above $1 billion annually.” Guess what company fits that description.
The left excuses this discrimination by calling it a “living wage” ordinance. But why is it that only employees of WalMart, and not employees of smaller retail shops, supermarkets, restaurants, or other businesses?
Ironically, over the last decade three successive Washington DC mayors worked hard to attract WalMart to build stores in inner-city neighborhoods. WalMart was reluctant to build in those areas due to crime, but finally agreed to open six stores in the district. “We’ve been praying for food in this neighborhood for about 40 years,” said the resident of one neighborhood where WalMart was planning to build.
On Tuesday, June 25, the Supreme Court issued a decision that helps protect people’s property rights from greedy municipalities. That decision ticked off Vermont Law School Professor John Echeverria, who considers it a blow to “sustainable development.” Like many recent property rights cases, the decision was made on a five-to-four vote.
In the case, a Florida property owner named Coy Koontz Sr. wanted to fill and develop 3.7 acres of wetlands. To mitigate the wetland fill, Koontz offered to put 11 acres of his property (about 75 percent of the total) under a conservation easement. But the St. Johns River Water Management District denied the permit, saying it wanted either 13.9 acres of Koontz’s land (leaving him less than an acre, or just 5 percent of the total) for development) or for Koontz to spend a bunch of his money helping the district restore wetlands elsewhere.
Koontz took this to court, citing the Supreme Court’s Nollan and Dolan decisions. In those cases, permits were granted on the condition that the property owners give some of their land to the public. The Supreme Court had held that this was an unconstitutional taking of private property.
A middle-class urban planner sees a working-class neighborhood and says, “I wouldn’t want to live there. That neighborhood must be blighted.” So the planner convinces the city to spend hundreds of millions of dollars revitalizing the neighborhood: clearing older buildings and replacing them with new high-density, mixed-use developments that the middle-class urban planner wouldn’t want to live in but thinks others should enjoy, often tying such neighborhoods together with a billion-dollar rail line.
Lo and behold, the plan “works” in the sense that housing in the area is now more expensive and suddenly the working-class families are priced out of the market. So the middle-class planner says, “What a terrible shame. We need to spend more money subsidizing affordable housing.” This makes the planner feel less guilty even though someone else’s money is used to subsidize the housing and the people getting the subsidized housing are most likely friends of the developer who just graduated from college and are therefore “low income” at the moment even though they can expect to be high income soon.
Then comes along a middle-class journalist who doesn’t understand the problem. The problem is not, as this article suggests, that rail transit has boosted property values (which it hasn’t, really–see this post to understand what is going on). The problem is that government should have kept out of the development business in the first place.
Another day; another city getting scammed by the streetcar mafia. In this case, it is Sacramento, a city that has built 37 miles of light-rail lines and seen transit’s share of commuting fall from 4.1 percent in 1980, before light rail, to 3.2 percent in 2010.
In 2006, Sacramento’s metropolitan transportation plan admitted that, despite past plans focusing on “luring drivers out of their autos,” the share of transit riders was decreasing; and despite building no new roads and seeing huge increases in congestion, the amount of auto driving had doubled since 1980 (see page 3). So naturally, the plan recommended more of the same.
Apparently, that still didn’t work, because now they want to try something new. Since light rail wasn’t fixing any problems, they want to build 18 miles of streetcar lines costing $816 million, or $45 million a mile. The plan calls for a $125-$135 million “starter line” of 2.55 miles that will also share 0.75 miles of rails with light rail, reducing the light-rail line’s capacity to move people, which isn’t an issue because so few people ride the light rail.
Our cities are in trouble. Most have huge unfunded pension and health-care obligations. Their infrastructure is old and so poorly maintained that it can’t power a football stadium for the full length of a game. Their schools have significantly lower high-school graduation rates than the suburbs, even after accounting for differences in incomes. Housing in many cities is unaffordable, roads are congested, and jobs are fleeing, even in supposedly urban industries such as high tech and finance.
Urban planner Richard Florida has a solution: President Obama should create a new federal Department of Cities. That’s right up there with rearranging the benches at Battery Park before Superstorm Sandy hits.
Like many planners, Florida believes problems can be solved from the top down. He is famous for urging cities to adopt policies that make housing unaffordable, forcing poor and moderate-income people out, thus increasing average incomes and making it look like the cities have attracted high-income “creative” people.