HDR, an engineering consulting firm that has been behind many of the nation’s streetcar plans, wants to build a new headquarters in Omaha. The firm is very familiar with tax-increment financing (TIF), since TIF played a role in funding many streetcar projects and developments around those projects. So, naturally, it asked the city of Omaha for nearly $21 million in TIF subsidies to support its new building.
The amount isn’t smaller because HDR had a pang in conscience. The original proposal was to build the headquarters in downtown Omaha, while the latest plan is to put it more than five miles away from downtown, where it would probably pay less property taxes. Since TIF effectively returns the property taxes back to the developer, lower taxes mean less TIF.
Buffalo’s Main Street is coming back to life thanks to one simple change: the city has opened it up to cars after three decades of being a pedestrian mall. As a pedestrian mall, “it was like a ghost town,” says one business owner. Now that it is open to cars, “the difference on the street is like night and day.”
The surprise is not that opening the street to cars has revitalized the downtown area. The real surprise is that it took the city so long to learn its lesson. Businesses started closing almost as soon as the street was closed. By 2002, everyone knew the street closure, which was supposed to renew the area, was a failure. Yet it took more than a decade after that to open it up again.
The Antiplanner gets into the background of this story in Best-Laid Plans. In 1959, Kalamazoo, Michigan became the first city to try to create a downtown pedestrian mall by closing streets to cars. Over the next three decades, cities across the United States and Canada emulated this example by creating more than 200 pedestrian malls. But far from revitalizing downtowns, nearly all of them hastened their demise.
Jacobs made two points, one of them right, and one of them wrong. Her correct point, which is celebrated by many libertarians, is in recognizing that urban planners don’t understand the cities they claim to be designing. The hubris of planners writing 50 year plans when they don’t even know what’s going to happen five years from now would be amusing if the consequences weren’t so expensive.
Jacobs wrong point, which is celebrated by many urban planners today, was in thinking that she did understand cities. She thought she understood her neighborhood, Greenwich Village, New York, but she didn’t understand it very well. She reduced her understanding to four simple “conditions” that she said all cities needed: mixed uses, short blocks, a mixture of old and new buildings, and density of residents and jobs. Her application of these oversimplified conditions to all “great cities” made her just as guilty of hubris as the planners she criticized.
The capital of Bulgaria and the nation’s largest city, Sofia has 1.2 million people packed at a density of 6,900 people per square mile, which is nearly as dense as the densest urban area in the United States. The actual density is probably much higher as the developed area of the city is surrounded by a wide greenbelt of undeveloped land within the city limits. Whatever the density, it is achieved through lots of mid-rise (four to six stories) and high-rise (more than six stories) housing, most of which was built during the soviet era. Before that time, the city was nearly all low-rise (one to three stories) with a few mid-rise buildings in the city center.
This former single-family home is cute enough that someone built a Lego model of it. But the land it is on is too valuable to use it as a house today.
Many pre-war single-family homes are scattered throughout the city, but most of the ones near the city center have been turned into businesses. According to former Sofia resident Sonia Hirt, 47 percent of Bulgarians live in single-family detached homes. But too many in Sofia live in soviet-era high rises.
However, he missed the mark in last Sunday’s show about special districts. “Special districts are small units of government with the power to take tax dollars to do one special thing,” he notes, adding that there are about 40,000 such districts in the country. Instead of weighing whether such districts were better or worse than other forms of government, such as cities and counties, he then proceeds to attack the idea of such districts using often specious reasoning.
Damascus, Oregon, was supposed to be a great experiment in urban planning. A rural community just outside of Portland’s original urban-growth boundary, in 2002 it became the largest addition ever to the land within that boundary. Yet it has had almost no new development since then, and it appears local opposition will lead to the disincorporation of the city, supposedly only the fourth city ever to dissolve in the history of Oregon.
The problem is that urban planners don’t understand how cities work. Here’s how a private developer creates a city. First, they buy land. Then they divide it into neighborhoods of commercial, residential, and other uses, then subdivide each neighborhood into lots. Then they put in infrastructure to support those neighborhoods. At some point along the way, they either incorporate a city or a service district to provide a mechanism for maintaining and expanding the infrastructure and create a process to allow the people who live there to democratically elect officials to oversee the government.
The latest issue of the University of California Transportation Center’s Access magazine has an article that asks, “Does Transit-Oriented Development Need the Transit?” Noting that previous studies found that people who live in TODs are less likely to own cars, the authors dare to ask if the observed changes in travel behavior had anything to do with having rail transit near the TOD.
Since you are reading this here, the answer, of course, is “no.” Instead, the biggest influence on travel behavior is the presence or absence of parking. (The paper didn’t mention the self-selection issue, which is that differences in travel behavior are largely accounted for by the fact that people who don’t want to drive are more likely to live in TODs than people who do.)
In any case, whatever benefits may come from TODs, the authors conclude, “may not depend much on rail access.” That’s good news, the authors claim, because rail lines are expensive to build, so the benefits of TODs could be attained without that expense.
In his reflections on the debate we had last week, Charles Marohn’s main comment is that he found my ideas “utterly impractical.” What were those ideas? Privatizing local streets. Privatizing utilities. Privatizing other common goods.
Just how impractical are these ideas? Most utilities in this country are, after all private. Many streets are private–I live on one. St. Louis has privatized some of its streets.
During the debate, Marohn called himself a libertarian, but his response reveals him to be a progressive. Progressives believe that commonly owned resources are a good thing because they value the tragedy of the commons. Without the tragedy, there is no need for government intervention. Without a need for government intervention, the role of progressives is greatly diminished.
Last week’s debate between the Antiplanner and Charles Marohn was supposed to be about urban planning, but it ended up being more about urban finance. Marohn had been hired by the city of Lafayette, Louisiana to help it decide where to fund its infrastructure. He and his organization, Strong Towns, advocates that cities use return on investment model to help make such decisions.
Marohn raised some legitimate questions about city finances. For example, in a typical subdivision, the developer builds roads and streets and then deeds them over to the city. The city collects property and sales taxes on the new development, which can be a windfall for many years. But then, after 25 years or so, the street needs to be repaved, and the cost of doing so may not be justified by the taxes collected from adjacent properties.
City officials regard tax-increment financing as free money, when actually they are stealing it from other taxing entities. Nowhere is this more visible than with a special kind of tax-increment financing involving sales taxes. In Missouri, Colorado, and other states, private shopping malls and other retail districts can effectively assess their own sales tax, just like a government agency, and keep the money. Their patrons end up paying the tax but probably don’t realize it because taxes aren’t included in advertised prices.
Under Missouri law, a community improvement district can assess its own sales tax with the approval of all voters in the district. If there are no voters residing in the district, then a majority of property owners get to decide whether to assess the sales tax. Since other people will pay the sales tax while the property owners get the benefit, it’s an easy question.
The inequity of this system was made clear when a group of property owners in Columbia, Missouri defined their district in a way that, they thought, excluded all voters. As it turned out, there was one voter, and when she examined the proposal, she realized that it “just didn’t seem to be as good as they were saying to me at first.” As a result, the district may not hold the election, at least until it can figure out a way to gerrymander the sole voter out of the district (or perhaps bribe her into supporting their scheme).