Take Your Medicine. Now Develop!

Convincing a city that it needs a healthy dose of development is like asking a child to take their medicine. Although the child knows that they are sick, they just don't believe the medicine will make them better. This seems to be the attitude of local communities and their response to new development projects. The tendency is to reject and ignore the economic realities of the situation. No matter how much tax revenue may be generated (that the city needs), the community seems to care more about parking and traffic.

As employment and energy resources become increasingly scarce, we must understand that these macro pressures will create negative externalities on our local economies in the future. Issues such as bright flight migrations and increased energy prices will inevitably lead to a weaker tax base and longer periods of underdevelopment which provides fertile ground for crime and decreases in property value.

The most rational approach to combat these problems is for government to take its medicine and encourage development.

Old New York manufacturing cities such as the Bronx, New Rochelle, White Plains and Yonkers have taken considerable steps toward accepting this prescription by creating policies that encourage rapid development. Common items they targeted include:

1. cracking down on crime;
2. funding year round youth programs; and,
3. making capital improvements in hospitals and roads.

These cities made a determination that they wanted to enhance the quality of life for their constituents and committed the necessary resources to create a safe and healthy environment. They understood that for development economics to flourish, they had to collaborate with developers and allow project economics to drive the process. As a result, each municipality was able to strengthen their property and sales tax revenues and craft policies to adequately address budget needs and other citizen concerns. This type of political environment provides investors with the confidence necessary to invest more into the community.

It is important to note that none of these cities had a master plan prior to the development projects. Instead, the governing bodies allowed the developers to create sustainable economic activities that later provided a flexible blueprint for the city to derive its overall direction. Each municipality has been relatively successful as they have added over 2,000 permanent services jobs, created a diverse mix of housing options for the market, and secured an alternative source of funding for government operations by increasing the tax base. This enables local governments to effectively plan for the future. By combining commerce and political will, these cities were able to effect major economic, institutional and social transformations of the entire area in the shortest possible time.

Despite the benefits of development, the truth is that very few projects are approved and most are rejected for unfounded non-economic reasons. As macro-uncertainties continue to mount, governments should place greater emphasis on project economics rather than emotions. It is rare that new buildings are built in conformance with local zoning and building codes, and given space constraints (caused by overpopulation) in the metropolitan area the only direction for developments to go is...up.

As such, government should continue to lead the "Go Green" trend and encourage new building concepts to be more environmentally conscious. This includes having less parking requirements to encourage the use of mass transportation and other alternative modes such as bicycles, carpooling, Vespas or Zip Cars. Other green-like objectives consist of tying new tax revenues to school programs or wages for city workers. In the context of rising energy prices and overpopulation, Going Green makes sense from an economic and environmental standpoint. Further, if you are a sci-fi fan and watched Star Wars, Star Trek, Battle Star Galactica or the Fifth Element, then you have seen the future per se. The structures to come are monstrous but necessary given the projected changes in the environment, population and demand for natural resources.

We have a duty to develop and while the iron is hot, we must strike and strike rapidly. The institutional mechanisms are ready, willing and able to collaborate and craft a shared vision. Now we need state and local governments to convince constituents to take their medicine and develop. Otherwise, the gap between aspirations of not raising taxes and the reality of a weakening tax base will continue to widen with each passing year. It is for this reason that the public sector must assume a much broader and more determining role in development economics than it has in the past.

Comments

[JScott]

Oh and lets not forget 'fiscalization of planning'-promoting retail that provides sales taxes but not much in the way of high quality employment may vary with state tax policies(esp. as it applies to states like Calif. post prop. 13-google it folks)

[curiousasheck]

The overwhelming majority of people do not possess a psychotic thirst for power, nor do they have any desire for plotting and conniving to become economic commissars or kings.

Most Americans just want to provide decent lives and comfortable futures for themselves and their families.

[NABNYC]

City-based planning is part of the problem. But with separate city/county entities, and tax areas, it is hard to accomplish what is really needed, which is regional planning.

For example, I live in a community that pretty much will only approve single family residential housing development in the $800,000+ range. Very upscale. Which the other homeowners like. I know someone who tried for years to get approval to put in an apartment building, and it was denied on the most ridiculous grounds. But renters lower property values.

There are laws which make it illegal to prohibit someone from operating a senior living, or drug/alcohol, or mental health halfway-house facility in a residential neighborhood. So people with some extra money buy big homes, stack up the old people 12 deep, hire home healthcare workers at $7/hour (all from the Philippines, for whatever reasons), make a fortune. And if it's not so bad to have lots of Grannys next-door, the drug addicts are a lot less welcome.

Planning should start with housing and mandate affordable housing. My community has resisted affordable housing demands, despite being legally required to encourage it. Lawsuits have been filed to compel it, but even when successful the judges (Republican, conservative) refuse to award the plaintiffs' attorneys' fees. So no attorneys will take those cases anymore.

Commercial development which brings in minimum wage jobs is a disaster for local communities and should be avoided. But the fact is that the people who make the decision, for the most part, share the values of the upper class.

Community planning should be staffed by real people like students, teachers, factory workers, who really understand why we need bike trails, for example, or community-based schools. But instead the positions tend to be controlled by the conservative property-owning classes who only ask how much money they can make off of something, and do not care one bit if their community is destroyed in the process.

[wiseferret]

Development in a city is hard to achieve with people taxed out and being squeezed by stagnant wages and rising prices. It does not help to see city leaders making self-interested spending decisions. Walmart and other low wage franchise stores are not development, but that seems to be what's being shoved at communities.
Development is NOT always needed. Concentrating on improving and keeping local business is more beneficial to communities than adding to it. Green is great, but why not just apply it to what is already in town? Building more is not green.