Tax Repatriation-Financed Infrastructure Plan Still a Horrible Idea

John Delaney's terrible plan to pay for infrastructure by giving corporate giants a hundreds-of-billions-of-dollars tax break is rearing its ugly head once again, and I just wanted to remind everyone: this is a very, very bad idea, and would validate these companies' tax avoidance strategies entirely. It'll make the problem worse than it already is. It's no solution. Please, someone, kill it.

Quote: Why We Need More Growth In Cities

Roger Valdez from Smart Growth Seattle was at a community meeting yesterday, the topic of which (sadly) was downzoning one of the most booming and popular neighborhoods in Seattle, Capitol Hill. Via Facebook, he passed along this quote from a young person who sees the true value in new construction, and why places like Capitol Hill need to be epicenters for continued growth. It was so well said, and personal, that I wanted to share it here as well: 
"I also want to bring something else in that I think a lot of us are losing track of.

I think many of you feel that your values are slipping away, that the community is changing and that there is nothing you can do. But I actually see that happening in a different way.

I think that we need to stop and ask ourselves a question: why do you want to live in Capitol Hill? Why do people who are my age move here to Capitol Hill? Why do we move to Seattle when we could live in other cities – the weather is dreadful! So there are other things about here that are bringing us here. And the main thing that I think it is, what it all boils down to, is our spirit of inclusiveness.

That was my story. I moved here from my small town that I grew up in. I wouldn’t dare get caught dead walking down the street holding hands with another man. And Capitol Hill was the neighborhood that really called out to me – “that’s where I want to live!” And I think there a bunch of other people out there like me.

I just want to talk about the trade offs inherent in what we’re doing and what this process is . . . there are trade offs. There are multiple sides to what we’re doing here.

To restrict growth whether either because of fear of change of fear of losing our parking spot, really, I think, goes against our culture of inclusiveness, against what makes Seattle what it is, what makes Capitol Hill what it is.

By restricting growth we’re essentially telling people you can only live here if you have enough income to get a mortgage on a single family home or pay crazy high rents because there are just so many more people looking for apartments here than there are apartments in the market.

If inclusiveness is our competitive advantage as a city, which I believe it is, then we should be doing everything we can to accommodate growth here, in the right form, in both this neighborhood and other neighborhoods around Seattle with similar characteristics. We should be welcoming growth not pushing people away, not condemning them to live across the lake or places that are less awesome than this.

…that’s who we are as a city.

Keep my face in your mind. We’re the people who want to move into the apartments in neighborhoods like this, to make it a better place. We can all change together.

Thank you."

Is Bicycling More Emotionally Fraught Than Other Transportation Modes?

Critical Mass in Baltimore, from the Baltimore Sun.

This is more directed at my fellow urbanists and multi-modal advocates (not that anyone else reads this, of course!), but do you ever get the impression that people just connect more easily to articles and news about bicycling?

In my case, I write about land use and transportation, and while I've written specifically about bicycling in the past it's a pretty small minority of what I've done. I'm pro-bike, but I'm no more a bike advocate than I am a transit, pedestrian, or density advocate. Despite that, when friends who are less involved in the multi-modal movement send me links about urban issues, it's usually things like inflatable helmets or electric bike wheels. Almost exclusively. And when someone wants to be snarky, they always ask me "how's the bike?" never "how's the bus?" or "how's the sidewalk?" (Admittedly, those just don't seem to have the same ring to them.) I've also noticed that many bicycle advocates really love bikes—not just getting around by bike but the bikes themselves. In comparison, I think transit's great but I couldn't name a train or bus model to save my life.

And while some of my posts over the last year and a half have been fairly popular, nothing was shared so immediately and widely on Twitter and elsewhere as my article asserting that bicyclists still don't have their fair share of road space in New York City. Something about bicycling just seems to grab people's attention, and sometimes polarize, in a way that other transportation modes rarely replicate. This probably helps explain the success of the bike movement over the past decade or so, and the rapid expansion of bike share programs across the country and throughout the world.

Assuming this is a real phenomenon, I wonder where it comes from. I think part of it may be that many people have absolutely no experience bicycling—at least not as a transportation mode in their adult life—whereas everyone walks and most people seem to recognize the value of transit even if they don't use or need it personally. This may make it easier to develop an us-versus-them dynamic that, while not always productive, does encourage more loyalty to your own in-group. 

Even more, it might be that the experience of bicycling is often so emotionally thrilling, both in terms of excitement and fear—anyone who's commuted by bike on a semi-regular basis is well-acquainted with each, the balance between them mostly dependent on the safety of bike infrastructure in your neighborhood. Transit and walking are both fairly mundane in this regard, and I'd argue that driving is the second-most emotionally-charged transportation mode, so that could be why the battle lines seem to usually be drawn between bikes and cars, not cars and buses, bikes and pedestrians, etc.

I'd be curious to know if any readers have also felt this way, and if so, what you think might be behind it. And if any of this came across as critical of bike advocates it wasn't my intent. If anything, I'd like to know more about why bikes seem so much more emotionally charged in order to bring that same passion to transit and walking.

Stop Charging Me For Other People's Free Gas

I do my grocery shopping just a few blocks down the road from my apartment, at Ralph's. When I buy things from Ralph's, I get Ralph's Rewards points, which are redeemable for a discount on gasoline at Ralph's fuel stations and participating Shell locations. I don't own a car, however, so I don't typically consume much gas, and my Rewards points are pretty useless. That's kind of frustrating to me, since Ralph's (and any other grocery stores offering fuel discounts) probably isn't selling discounted gasoline out of the goodness of its heart.

The more likely scenario is that they're charging a marginally higher price on their goods in order to subsidize the losses/reduced profit from gas sales, and people like myself end up spending more on their groceries for exactly zero benefit. This obviously isn't a huge cost to me and other shoppers, but it's more than zero. And it's not going to subsidize education or toothpaste or a gym membership, it's going to subsidize gasoline—a commodity that, while essential, is objectively bad for the environment and public health and probably not something we should be encouraging people to over-consume.

The extent to which this fuel reward trend has passed the point of reason is well illustrated by this green-minded promotion found on Ralph's website:

Convert your non-biodegradable plastic bag directly into carbon dioxide and particulate matter!

Unfortunately, this seems to be good business for Ralph's and their parent company Kroger, because their stores with fuel stations apparently do considerably better than those without. So while I can't blame them for offering this perk, it's nonetheless a pretty perverse outcome from a societal perspective. Along with the free-with-validation parking garage and its parking attendant employees (the costs of which are also baked into the sale price of my cereal and bananas), this is just another example of drivers being subsidized by those who choose not to drive, or can't.

Deficit-Decreasing New Markets Tax Credit Under Threat

A former North Carolina textile converted into an office and research facility with the help of New Markets Tax Credit funds. Photo from WNC & Associates, Inc.

Imagine your government had a program that created jobs, helped develop economically depressed neighborhoods, and managed to earn money for the treasury year in and year out. That sounds like the type of program you'd want them to continue, especially in the middle of a weak recovery, doesn't it? Well, as Bill Bradley at Next City writes, we do have such a program: New Market Tax Credits, or NMTC for short. And after consistent success for the past 13 years, it's on Congress' chopping block for next year's budget. Because why not, right?

The NMTC program works by subsidizing development in areas where private capital is generally unavailable, and is estimated to have created 550,000 jobs and leveraged $60 billion in private capital since its inception in the year 2000. And it's accomplished this all while making the government additional revenue. (Bradley has a more detailed description of the program in his article.)

As the New Market Tax Credit Coalition notes, in 2010 the program cost the federal government $720 million in bypassed revenue, but projects built with NMTC funds generated $1.1 billion in federal taxes alone, to say nothing of state and local taxes or the inherent benefit of additional jobs. In other words, the government is getting $1.50 back for every $1 it chips in, and we're considering pulling back on these investments. The rational (i.e., profit maximizing) approach would be to increase funding to at least the level where an additional dollar of investment yields exactly a dollar of returns, and that's assuming we put zero value on state and local tax revenues, job creation, or the human costs of unemployment and under-investment. Instead of considering eliminating its funding, we should be spending far more on this program than we currently do.

Those who believe this tax credit is some form of corporate welfare misunderstand its purpose: the NMTC exists to fund projects that wouldn't go forward without government assistance, so eliminating it will only lead to reduced federal revenue and further disinvestment in distressed areas. My boss has a saying for these types of programs and the tax revenue they generate: 50% of something is better than 100% of nothing. Congress is setting us up to get 100% of nothing, and many of our nation's most neglected neighborhoods are going to pay the consequences.

The Part of Rent Increases That Really Is Rich People's Fault

(Since I'm planning to do most of my bigger, fancier, more original posts over at Planetizen, I'm gonna try to post a bit more commentary here. This'll kick things off nicely.)

Luxury London townhouses, from Luxist.com.

I tend to be pretty defensive of rich people and developers when it comes to urban growth, since I think they're often blamed for things they really have no control over — specifically, the idea that they're responsible for increasing housing prices. Not to say they don't play a role, but the biggest issue is demand for housing. You can't really blame rich people for wanting nice homes, or wanting to live in the city, and you really can't blame developers for wanting to build things where demand is hot, because if they don't build then prices rise even more.

So when I read this Moneybox article on Slate, it seemed like a good opportunity to show off my progressive liberal bona fides and stick it to rich people for being jerks. Yglesias describes the problem:

Low income people in a gentrifying neighborhood see both new luxury construction and rising rents and it's difficult to persuade them that even more construction is the answer. But that's because we've so firmly shut the door on the idea of adding housing supply in the neighborhood that are already the priciest ones in town. Once the focus of the conversation settles narrowly on a handful of transitional neighborhoods, it's almost too late to have a sensible conversation. But you have a twofold limitation on supply. On the one hand, the total number of new units is capped so people only want to build luxury. On the other hand, new construction in the fancy neighborhoods is absolutely prohibited. 
So you get an apparent invasion of luxury buildings into poor neighborhoods and even more vigorous efforts to restrict supply. We can do better than this.

This really is an underrated problem, and something that really bothers me about politics, and particularly progressive politics that are supposedly concerned with the welfare of the less fortunate. Basically, we build up neighborhoods to the point where they get a critical level of rich-person immigration, and those rich-person immigrants then flex their political muscle to limit zoning and ensure that their neighborhoods can't change any further. It's a lack of this political power that often leads to the development of transitional neighborhoods, which I would argue is generally for the better, but ultimately we need better education rather than a mayor-knows-best approach if we're going to make real progress.

That "get mine and get out," or rather "get mine and keep everyone else out" approach reminds me of an article I recently read in LAist which perfectly describes how many people seem to think about gentrification in "their neighborhoods":

When people complain about gentrification, what they’re often saying is, “bring things back to the way they were when I first moved here.” There’s something a bit selfish about that, isn’t there?

Unfortunately the wealthy, unlike the poor, often have the resources to actually make that happen. It's a serious problem we need to address if we hope to have any credibility in the communities we'd deign to rezone and redevelop. "You guys are too poor and disorganized to fight it" isn't good enough.

Cities, and Unions, Are Bargaining Away Other People's Futures

Boeing employees strike in September, 2008, photo from the Seattle Times.

Reflecting on the recent contract negotiations between Boeing and the Machinists union in my hometown of Everett, Washington, I couldn't help but draw a parallel between the state of labor negotiations and the way we approach urban growth, particularly in big, dense cities. In both cases, it's the current stakeholders who make the decisions—current employees at Boeing, current residents of cities—and for each, concessions are being made on behalf of future stakeholders in order to preserve the privileges of the negotiating parties.

For a while now, many negotiations between labor and business have been characterized by the adoption of tiered employment, a system in which new employees are hired at lower wages (and/or worse benefits) than current employees; General Motors did this several years ago.

Boeing went the route of eliminating pensions for its new engineers, and hoped to do one better with the much larger Machinists union this week, no longer offering pensions for new machinists, and ending pension contributions for current ones. Just last week Boeing employees voted overwhelmingly to reject the contract, but the fight isn't over until a deal is signed. If Boeing gives in and allows current employees to keep their pensions, those workers will have a decision to make: sacrifice the benefits of future employees to preserve their own, or risk their jobs to fight for the rights and privileges of people they've never met.

Residents protest development in West New York,photo from Hudson Reporter.

When I look at how we approach the growth of our cities, I see similar divisions in place. As with concessions to two-tiered employment systems, much of the urban development discourse is framed purely from a perspective of what current residents will lose, or perceive themselves as losing: new developments and new residents will take my parking, take my views, take the space at my favorite restaurant or bar. They'll change the character of my neighborhood, raise my rent, introduce "sketchy" people, increase traffic congestion. These aren't all unreasonable concerns, but they're undeniably one-sided.

What's missing entirely from this discussion is any consideration for the needs of future residents: people who would like to live in a city but can't afford to because of the limited supply of housing, or parking regulations that drive up rents. People who are forced to live on the outskirts, dependent on a car even if they would prefer not to be, and whose career prospects may be limited by their distance from the most productive job centers. It's a missing perspective that, in some ways, makes this even worse than the Boeing situation, where the structure of labor contracts forces employees to at least consider the harm done to future workers. In cities, not only are future residents unheard and unrepresented, most people fail to even consider how they might be impacted. This, despite the fact that many of us were newcomers ourselves in the not too distant past.

LA Man Wants Cheaper Parking, Economics Be Damned

The Los Angeles Daily News has an article profiling the guy who helped shut down red light cameras in LA, and apparently his next target is parking meters. He's got some valid complaints, like how the parking duration is sometimes insufficient for any adjacent uses, but otherwise he doesn't seem to have any coherent plan other than an Eyman-esque "I don't like paying for parking and so I'm going to appeal to people's greed to force the rates lower."

This choice quote from a local sums up the type of person he's appealing to:

“I think it’s extortion,” said DiPadova, 34, of Hollywood, who supports radical parking meter reform. “It’s an unjust tax. It’s one that, because people don’t get involved in local politics, local lawmakers see it as an additional revenue stream. 
“It’s a travesty,” he added. “In a city where you’re forced to drive, there’s no reason you should be punished for small mistakes.”

Putting aside the total fallacy that you can't get around in LA without driving and that paying less than you would at a private garage is a "tax," if this guy's successful a lot of neighborhoods are going to end up in the toilet. Sorry, I know parking meters aren't fun to deal with, but they serve a purpose beyond revenue—if you undercharge for parking there's never any available, which means no one wants to visit your neighborhood. And that revenue can play a major role in making your city a more pleasant place to be (Old Pasadena's success as a neighborhood was largely attributed to parking reform). If you don't like it you can use private parking garages; cities have no obligation to provide public space so you can store your car at a discount.