Cities Growing Faster Than Suburbs–Not!

A return to the cities and rejection of the suburbs is an article of faith among smart-growth planners, and their wishful thinking is often supported by breathless media reports. The latest news comes from 2011 Census estimates, which the Wall Street Journal reports as revealing that the “cities outpace suburbs in growth.” MSNBC reports that “cities grow more than suburbs [for the] first time in 100 years.”

What do the numbers actually say? Of the 51 largest metropolitan areas, the percentage growth of 26 center cities was higher than the percentage growth of their suburbs. Why 51? Maybe because if they only looked at the 50 largest areas, exactly half of their cities would have grown faster than the suburbs and then they couldn’t say “most.” The percentage growth of central cities in all 51 of the largest areas combined was also higher than of their suburbs, but not by much: 1.03 percent vs. 0.93 percent.

That’s percentage growth, and if that continued as a long-term trend, it might be meaningful. But in fact it was only one year, from 2010 to 2011 (and the 2011 numbers are only estimates). And since, in most cases, the central cities make up only a small portion of the metropolitan area, faster percentage growth doesn’t translate into a large numeric growth. For example, Atlanta grew by 2.4 percent while its suburbs grew by only 1.3 percent. But Atlanta’s 2.4-percent gain means 10,040 new residents, while the suburbs 1.3 percent gain means 62,869 new residents. In other words, Atlanta suburbs actually gained more than six times as many people as Atlanta itself.

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If They Only Had a Streetcar

Kansas City sold $295 million worth of TIF bonds to revitalize a part of the city known as the Power & Light District. The developer who benefitted from this money says “the development was successful as part of a broader effort to re-energize the city’s downtown.” Unfortunately, tax revenues are less than a third of what was projected, with the result that city taxpayers are having to make up the difference (as if city taxpayers wouldn’t be paying for it anyway).

The city naturally blames the problems on the recession. But recessions happen. Here’s the difference between private developments and government-subsidized developments: If the private developer guesses wrong, only the investors lose. If the government planners guess wrong, every taxpayer in the city or region loses.
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The Wall Street Journal article about this boondoggle doesn’t mention it, but Kansas City wants to spend another $100 million on a two-mile-long streetcar line connecting Power & Light with other parts of downtown Kansas City. No doubt that will fix the problem. While they are at it, how about an aerial tramway, maybe a new sports stadium or two? Just what the city taxpayers need: more places to sink their money.

Department of Irony

Officials from Aurora, Colorado are in a tizzy because someone conducted some focus groups to see what taxpayers thought of a $300 million subsidy to a proposed hotel. Such focus groups “violate the ethics code for economic development organizations in the region,” said Tom Clark, the executive vice-president of Denver’s Economic Development Corporation (EDC).

Apparently, it is perfectly ethical to steal money that taxpayers had allocated to schools, fire, and police and give it to a private developer, but it is unethical to ask those taxpayers how they fell about such theft. Colorado’s “taxpayer bill of rights” prevents governments from raising taxes by more than a certain percentage each year–but tax-increment financing, the main source of subsidies for the proposed hotel, is exempt from this law.

“You can’t work against your neighbor, and you can’t run around them,” Clark said. “If you do, you’re subject to permanent expulsion from the Metro Denver EDC.” Of course, it is always possible that some people don’t want to be a part of Clark’s cozy little club of thieves.

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Now, This Is Ridiculous

What’s the most ridiculous zoning rule or decision you’ve ever heard of? Here’s a candidate: Alexandria, Virginia (which wants a Portland-like streetcar) has told property owners in one neighborhood that replacement of rusty chain-link fences violates the city’s historic preservation ordinance.

“While many feel that [chain-link] fences have negative connotations, this material has played an important role in the development of mid-century vernacular housing and their cultural landscape,” the city’s historic preservation staff noted. “By eradicating this ‘simple fencing solution,’ the applicant would be removing an important contextual clue to the original occupants of this neighborhood.”

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Obamacare Pseudoscience

Last week, the Antiplanner noted in passing a study that found that making people live in “walkable neighborhood” won’t make them any healthier. Since then the Antiplanner has encountered another research paper that found that “the effects of density and block size on total walking and physical activity are modest to non-existent, if not contrapositive.” It seems that anyone who looks at the relationship between urban design and health, other than committed smart-growth advocates, finds that there is no relationship.

So it is disappointing, but not surprising, that President Obama’s recently released National Prevention Strategy–which resulted from the so-called Obamacare legislation–focuses on redesigning the built environment. The Active Living portion of the strategy calls for “community design and development that supports physical activity. Sidewalks, adequate lighting, and traffic slowing devices (e.g., modern roundabouts) improve the walkability of communities and promote physical activity. Increasing access to public transportation helps people maintain active lifestyles. People are also more likely to use active modes of transportation (e.g., walking, biking) for their daily activities when homes, workplaces, stores, schools, health care facilities, and other community services are located within close proximity and neighborhoods are perceived as safe.”
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Although the Strategy includes footnotes for each of these claims, they only reference other publications recommending changes in the built environment–some of which were written by advocacy groups such as the Surface Transportation Policy Project–and not actual research showing that this is a worthwhile or cost-effective strategy. The Antiplanner is not an expert on health care, but if the rest of Obama’s health care package is as “scientific” as this, it appears we have turned our entire medical system to Lysenkoists. Next time you see a doctor, don’t be surprised if he or she gives you a prescription based on the latest fad (or campaign contribution) rather than the latest research.

Food Deserts Don’t Make You Fat

Among the wacky ideas held by many urban planners is the notion that “food deserts”–that is, areas of cities without supermarkets–contribute to obesity. According to this theory, people who lack access to supermarkets eat many unhealthy meals at fast food restaurants. This reasoning is used to justify subsidies to supermarkets–often financed through TIF–in those areas.

However, the Los Angeles Times reports that a new study from the University of North Carolina Nutrition Transition program finds that merely putting a supermarket in the middle of a food desert won’t change people’s eating habits.

The Antiplanner checked the home page for Barry Popkin, the author of the UNC study. He’s found that the entire world is getting fat, not just those “auto-dependent” Americans. The average body-mass index (BMI for an American six-year-old is 22.2; the average for a six-year-old in China–which has one-sixth as many cars per capita as the United States–is 24.8. So much for the idea that rebuilding America to look more like Europe or Asia will cure us of our obesity. Continue reading

A Different Kind of TIF

The Antiplanner’s visit to Lafayette, Louisiana was highly educational. Among other sights, I saw River Ranch, a very successful New Urban development that (according to local tax activists) was built without any tax subsidies. Although I personally would not want to live there, the development commands high prices even in the recession.

River Ranch Rowhouses start at $375,000 for 2,000 square feet, but owners are asking nearly $600,000 for the 2,800-square-foot corner model shown here. Single-family detached homes for sale include a 2,500-square-foot house for $550,000 and a 4,300-square-foot house for $725,000. Most single-family homes appear to be on fairly small lots. Given Lafayette’s median family incomes of less than $50,000, these homes are hardly affordable, but the development proved to be very successful.

I also learned that Louisiana tax-increment financing (TIF) is quite different than in most other parts of the country. In 1988, the state authorized cities to use property taxes, sales taxes, or hotel occupancy taxes for TIF. But property tax TIFs are limited to that portion of property taxes that are not already obligated to some specific purpose–and most property taxes are so obligated, so most if not all Louisiana TIFs rely on sales and hotel taxes instead.

Also, most, though not all, sales-tax TIFs are in the form of an additional sales tax on top of the existing tax (which is 4 percent for the state and a variable amount, generally around 4 percent, for local governments). TIFs that are on top of, rather than out of, the existing tax do not take money from schools, fire, and other urban services, which eliminates many of the objections to TIFs. (At least some other states that use sales tax TIFs, such as Colorado, also add the tax on top of, rather than out of, the existing tax.)

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California Almost Eliminates TIF Agencies

As a part of the annual budget package, the California legislature approved a bill that would have required city and county redevelopment agencies to either shut down or start making large payments to local school districts. However, Governor Jerry Brown vetoed the budget package, saying it doesn’t go far enough in closing the state’s budget gap.

Brown called for completely eliminating redevelopment agencies as soon as he took office in January. The agencies are primarily funded by tax-increment financing (TIF), which uses property taxes on new development to subsidize that development. California redevelopment agencies currently collect $5.5 billion in property taxes a year. Because some of that money is dedicated to repaying bonds, eliminating the agencies would immediately save the state $2.5 billion, later increasing to $5.5 billion as the bonds are paid off.

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Halting TIF’s Rapid Growth

Tax-increment financing (TIF) costs taxpayers around $10 billion per year and is growing as fast as 10 percent per year, according to a new report, “Crony Capitalism and Social Engineering,” published by the Cato Institute. Though originally created to help renew “blighted” neighborhoods, TIF today is used primarily as an economic development tool for areas that are often far from blighted.

The report argues that TIF does not actually generate economic development. At best, it moves development that would have taken place somewhere else in a community to the TIF district. That means it generates no net tax revenues, so the TIF district effectively takes taxes from schools and other tax entities. At worst, TIF actually slows economic development, both by putting a larger burden on taxpayers and by discouraging other developers from making investments unless they are also supported by TIF.

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Memphis Blues

The Antiplanner has never visited Memphis, so when I was watching a video of the flooding in Memphis, I was surprised to see a huge pyramid. “Looks like a government boondoggle to me,” I said.

Flickr photo by Exothermic.

Sure enough. The Pyramid Arena opened in 1991 after being built at a cost of $65 million which was “publicly financed” by the city of Memphis and Shelby County. It is supposedly the sixth-largest pyramid in the world. Significantly, four of the five larger pyramids (all in Egypt) were also government boondoggles, the only exception being the Luxor Hotel in Las Vegas. “Though it was a controversial architectural undertaking at the time,” says one web site, “most Memphians have come to accept, if not appreciate, the Pyramid.”

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