Tag Archives: local government

Can a suburb enact a higher minimum wage if others nearby do not?

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Suburbs in Cook County have the ability to opt out of a county ordinance raising the minimum wage but they have to weigh how their decision compares to communities near them:

Home-rule municipalities can opt out of the ordinance that boosts the minimum wage from $8.25 to $10 an hour starting July 1, and dozens of them have done just that since the Cook County Board passed the ordinance in October. That has left neighboring towns in a precarious state, worrying that their businesses will suffer under higher payrolls.

Evanston appeared ready to address those concerns at an emergency meeting Friday morning, after nearby Wilmette decided to opt out of the minimum wage increase…

Skokie Chamber of Commerce Executive Director Howard Meyer said the group at first had no issue with the measure. Because Skokie borders Chicago, where a heightened minimum wage is already in effect, the chamber believed its members wouldn’t be at a competitive disadvantage.

But after more municipalities opted out and Skokie businesses expressed worries about the impact, the chamber spoke out against the minimum wage plan, as well as another county ordinance to mandate paid sick leave.

Suburbs often face this pressure: if we enact a new measure, will residents and businesses respond by leaving for other suburbs? This happens with tax breaks for businesses (I’ve argued this leads to a race to the bottom) as well as tax rates, city services, and other quality of life factors. Economists and others would suggest that residents and businesses vote with their feet: if this doesn’t happen immediately, the long-term effect could be bad for a suburb if the inflow stops.

The best solution to all of this is not to allow suburbs to have separate policies on something like this. Based on the article, it sounds like numerous suburbs are fearful. But, if they all had no choice, they wouldn’t have to compete with each other (though they then would have to compete with communities in other counties). I’m guessing the ability to opt out was important to getting this passed at the county level but it could be highly negative in the long run.

Perhaps then it would be best to enact a region-wide initiative where every community is affected. Of course, this goes against many of the principles of local control and government – we should be able to decide fiscal policies within our borders – and there is not a binding governmental body that oversees the hundreds of local governments in the Chicago region. This could only happen at the state level but then there are other actors beyond the Chicago region.

In the mean time, it will be difficult to put into practice a higher minimum wage within the region if each community can opt out and act upon their fears.

Losing sales and property tax revenue as stores close

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The difficulties facing retail stores also have an effect on local governments who rely on sales tax and property tax revenue:

Nationwide, sales taxes comprise nearly one-third of the taxes that state governments collect and about 12 percent of what local governments collect, according to Lucy Dadayan, a senior researcher at the Nelson A. Rockefeller Institute of Government, a New York-based research group. “The epic closures of the brick-and-mortar stores is troubling news for state and local government sales-tax collections,” she said. They’re already feeling the hit: States’ tax revenues grew just 1.9 percent between 2014 and 2015, after growing 5.8 percent in the previous four quarters, according to the Rockefeller Institute. Local-government sales-tax collections grew just 1.7 percent, after growing 7.5 percent in the previous four quarters. In Ohio, state tax revenues grew just 0.1 percent, when adjusted for inflation, between 2015 and 2016, according to Dadayan. When revenues don’t continue to grow, governments have to slow down spending and can’t readily invest in long-term projects…

Clark County is not alone. In the southeastern part of Ohio, near the border with West Virginia, Belmont County gets $17 million of its $22 million budget from sales-tax revenues, Mark Thomas, a county supervisor, told me. The county has lost a bevy of retailers of late, including Elder-Beerman, Hhgregg, MC Sports, and Radio Shack. A Kmart in St. Clairsville is expected to close soon, according to the company. The decline in sales tax isn’t the only thing that hurts revenues—abandoned malls mean less revenue from commercial property taxes too. Local governments also see lower income taxes and, when retail workers are unemployed, they spend less, creating a vicious cycle of less and less revenue. “That trickle-down effect is huge,” Thomas said…

States that have seen manufacturing companies depart are bearing much of the brunt of the retail closures, according to Dadayan’s research. She tabulated where Macys, Kmart, and Sears have announced in the past year that they are planning to close stores, and found that Pennsylvania will have the most of those total store closings, at 16. Ohio and Michigan have the second-highest number, at 15 each, alongside Florida. Other states that have bigger populations have much lower combined closings. California, for example, only has eight.

The closures raise the question of what state and local governments will do if retail continues to evaporate. Already, many local governments are attempting to raise taxes to make up for budget shortfalls. Springfield asked voters to approve an income tax in November; the measure failed. The sales-tax rate at both the local and state levels has been creeping up in Ohio as governments try to raise taxes to make up for declines, according to Jon Honeck, the acting director of the Greater Ohio Policy Center, a local think tank. Ohio has also cut back on revenue-sharing between states and local governments since the election of Governor John Kasich in 2010, making it more difficult for local governments to make ends meet. “Some have just cut services, since the state is not going to help them out,” Honeck said.

Two quick thoughts:

  1. Communities have competed for decades over shopping malls and retail establishments. This competition could only increase though it may be less about the opening of new stories (everyone wants replacements for old establishments – for example, see the fate of Dominick’s grocery stores in the Chicago region) and more about retaining existing stores and asking companies to close stores elsewhere.
  2. It is interesting to see which areas are experiencing closures. Not all malls or stores are doing poorly but the successful ones are likely in wealthier areas that will do even better comparatively with the ongoing tax revenues. It is very difficult to convince businesses to locate in communities with less income.

What is the punishment for building a 30,000 square foot home without permission?

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A developer in Los Angeles is facing some consequences for building a large home:

Hadid and the city attorney’s office met in private Thursday morning, after which Hadid’s attorneys said their client is close to a guilty plea for violating the city building code by building a 30,000-square-foot spec home at 901 Strada Vecchia, the Courier reported.

The real estate mogul — best known from appearances on “The Real Housewives of Beverly Hills” and as the father of supermodel Gigi Hadid — will still face a mix of public service and fines, as well as a potential ban from building in L.A., according to the Courier.

Hadid’s attorneys argue that if sentencing could be delayed, he could bring the property into compliance so any potential criminal conviction would be erased…

The real estate mogul was charged in late 2015 with building a spec mansion without a permit, illegally using land, and failing to comply with orders from the L.A. Department of Building and Safety to halt construction. Angry neighbors called the project “starship enterprise.”

I’m not sure what you would do to someone who constructs such a home. Jail them?

I know the burden is on the owner here but I wonder why the city didn’t step in at some point during the process. Most locales have people checking permits and codes along the way. And if the home was so large and attracting the attention of neighbors, why wasn’t this stopped?

Finally, the headline for this story calls this home a McMansion. The architecture may lend itself to this; the included picture suggests the exterior is designed to impress and the neighbors certainly had an interesting moniker for the home. Yet, it is a home with 30,000 square feet. It would be one thing to quickly construct a 3,000 square foot home but 30,000 square feet is on a whole level up.

Explaining why suburban voters are seeing fewer contested local gov’t races

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Compared to previous years, suburban voters going to the polls together will have fewer choices:

Barely 30 percent of the hundreds of races being decided Tuesday are contested, according to a Daily Herald analysis. That’s down from about 45 percent of races that were contested in local elections eight years ago…

Experts believe there are many reasons fewer people are running for local offices, from the cost of campaigns to the incivility of social media. The effect is voters more frequently must settle for someone who is merely willing to serve rather than choosing the best candidates from among a field of contenders…

The exodus from local candidacy in part is a result of growing personal and professional demands for many people, making time to attend board meetings scarce, experts said.

The downside of public service also dissuades some potential candidates, they added.

Given all that we have heard in recent years about dissatisfaction among the electorate, it is interesting that this doesn’t appear to translate into wanting to get into politics to change things. Shouldn’t the Tea Party or Occupy Wall Street or Black Lives Matter or Trump supports have flooded local elections with an interest in changing government and society?

When you talk to local officials, they often tell of getting into politics to address practical local issues – these are not often ideologues with grand ambitions. (Thus, it is unusual when a local politician gets involved with national politics such as the recent story in the New York Times of the Bolingbrook mayor and Donald Trump.) Is it simply easier to be angry with government and the disavow any need to participate? (And don’t forget that voting in local elections is often quite low.)

LA development guided by powerful people and relatively few voters

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Some critics have charged that development in Los Angeles is influenced too much by powerful people. Yet, when voters had an opportunity this week to vote on increased regulation of development (Measure S), relatively few people turned out:

In the end, it failed by an overwhelming margin, garnering only 70,000 votes in a city of almost 4 million people. It’s a reassuring sign…

It’s hard to read too much into an election in which hardly anyone voted.

While it was a primary election (where turnout is typically low), this measure would have affected development throughout the city. Does this suggest residents aren’t that interested in development?

Maybe the voters save their attention for local development issues and LA has plenty:

Some of the same people who pushed for the passage of Measure S sued the city over an update to Hollywood’s community plan. In Granada Hills, neighbors are fighting a 440-unit apartment complex. That project conforms to that neighborhood’s newly rewritten community plan, but some residents say it’s too big.

Development can be tricky in that many residents might be very aware of what is happening next door or on the same block (particularly if it affects their property values or their children) but not have much knowledge or concern about matters in other parts of the city. In a big city like Los Angeles, residents may not be very familiar with the daily happenings of other locations. And, this is Los Angeles, famously the poster child for decentralization.

In other words, talking about development in the abstract might be a difficult sell, even in locations like this where housing prices are high for all.

UPDATE 3/9/17 9:08 PM: Here are more exact figures on how many LA residents decided the fate of this sweeping development regulation:

The Los Angeles Times reported late on Tuesday that just 11.4 percent of the electorate participated in the election, despite the fact that the mayor, half the city council, and several heavyweight ballot measures were all up for debate. In Tuesday’s election, apathy won.

Read further for an argument on why measures like this that are so broad should not be on primary ballots.

Defining a McMansion, Trait #2: Relative size

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When I tell people that I have published about McMansions, the same question almost always arises: “What exactly is a McMansion?” My paper defining the McMansion answers this but in a series of posts here, I want to update the definition based on what I have seen in the last five years.

While McMansions are certainly larger than normal, in certain circumstances they can appear even larger than their square footage: when constructed next to smaller homes (often teardowns, sometimes infill properties) or when squeezed onto small lots (so that the homes seem to be bursting off the property). While I know the second case does happen quite a bit, most of the McMansion coverage of this trait in recent years focuses on teardown properties. Some patterns I’ve observed:

  1. The typical case involves someone from outside the neighborhood purchasing an older home (often a postwar house), demolishing it, and constructing a significantly larger home and/or a home that has a different architectural style than nearby homes. This one picture is a great illustration. Note that the new home does not necessarily have to be over 3,000 square feet or even include the worst McMansion architecture; it just has to be different from the existing homes.
  2. Media coverage of teardown McMansions is overwhelmingly negative. This is likely the issue only comes up neighbors upset over the construction of a teardown McMansion start looking for ways to stop the construction or limit future construction. On the flip side, it is hard to know how many teardown McMansions are constructed without much furor.
  3. It is hard to know exactly what motivates neighbors to complain so vociferously about teardown McMansions. Americans seem to want the ability to buy new homes in good neighborhoods (balancing modern features with valuable locations) but don’t like what it happens to them. The complaints often fall into two camps. First, those who live directly adjacent to a teardown may have a range of new issues to confront: people able to see in their windows, a hulking property next door, losing sunlight, the older home now looking dated or different. Second, the larger issue is often couched in terms of the character of the neighborhood. People feel that when they move to a particular place, that street or neighborhood should stay similar – after all, they liked its features enough that they moved there. A teardown McMansion threatens that.
  4. The fights between neighbors can be quite contentious, a rarity in many suburban communities where middle-class decorum suggests conflict avoidance is best. Lawuits occur (example and example), and some neighbors may even pool their resources to buy a nearby home and save it from being torn down. But, if the foundation of American life is owning a home, perhaps it is not surprising that such conflict arises when owners perceive their home to be under threat. See my six steps for responding to a nearby teardown McMansion.
  5. These conflicts often involve local officials. Numerous communities across the United States have guidelines for teardowns (see the example of Austin several years ago and Los Angeles more recently). Outside of historic preservation districts, these guidelines typically limit the size of the new home (through guidelines like a Floor Area Ratio) and/or provide guidance on particular architectural features.
  6. The teardown debates tend to put local officials in a strange position. Whose rights should they defend? Property owners? If so, do they want to allow long-time residents to have a voice in shaping their own neighborhoods or do they want individual owners to be able to sell their property at a good profit? Can they openly support builders and developers? I suspect most communities want to – growth, particularly high-end houses, is an important marker of vitality – but you don’t want to always run roughshod over your constituents. Teardowns are most common in neighborhoods and communities that are already well off – see recent evidence from the Chicago region – and this tends to pit already well-off community members versus well-off outsiders.

Teardown McMansions are a subset of McMansions as a whole, often constructed in desirable neighborhoods and sometimes raising the ire of neighbors and concerned citizens. Balancing the rights of neighbors and property owners will likely continue to be a sticky issue for many local governments.

Referendums to annex suburbs to Naperville filed in court

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An annexation effort in several suburbs is official: papers were recently filed in court.

Petitions to put the annexation question before voters in Lisle, Warrenville, Woodridge and Naperville were filed Tuesday in DuPage County’s 18th Judicial Court and Will County’s 16th Judicial Court.

The referendum in each town would ask a basic yes or no question. In Woodridge, for example, it would ask voters “Shall the Village of Woodridge be annexed into the City of Naperville?”…

Officials in all four municipalities said the chances of actually merging the towns are remote and any such effort would be enormously complicated, adversely affect other taxing bodies such as park and library districts, and raise countless other issues…

Brummel, Chirico and Lisle Mayor Joe Broda said officials in their cities are studying the petitions and looking for potential flaws that would allow them to file an objection and try to scuttle efforts to put the question on the ballot. Brummel said the towns have until early next week to file such objections, although there’s some confusion as to the actual deadline.

This continues to be an interesting case. As I suggested before, the best reason I could see for this happening is for some ideologue to push the point that conservatives should put their money where their mouth is in wanting less government.

Some in Warrenville, Lisle want to annex to Naperville

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This would be a rarity: at least a few residents of two suburbs are interested in being annexed by the large suburb next door.

Apparently spurred by the recent emphasis on government consolidation in DuPage County, residents in Lisle and Warrenville are circulating petitions to place referendum questions on the April 4 ballot to measure support for proposals to annex their communities to Naperville. A similar petition has been rumored to be circulating in Woodridge.

Officials in all four towns said Friday they don’t know what’s behind the effort and stress that the complexities and likely resistance to such consolidations make them extremely unlikely…

“I would oppose that proposal 100 percent,” Broda said. “Each town has unique characteristics that make them special. Longtime Lisle residents wouldn’t even want to think about it. We want to keep the uniqueness of our communities.”…

Naperville is a fine community, he said, “but we have a strong identity of who we are and we have no desire to be part of Naperville.”

The general idea is intriguing if you want to put some conservative ideals into practice. Illinois, in particular, has many local taxing bodies – over 6,000 – and reducing the number of these could streamline operations and possibly lower taxes.

But, why would these particular suburbs want to be part of Naperville? What would they gain? The only thing I could really think of is prestige: for a few decades, Naperville has impressed both with its growth and its amenities. However, that growth has slowed (and won’t significantly increase unless Naperville makes some big decisions about allowing denser developments) and to some the amenities might be outweighed by the downsides of being large (think more traffic, lots of outsiders, etc.). Leaders of nearby suburbs are very aware of Naperville’s growth and, like in this article, are quick to note that they do not aspire to be Naperville and their communities have their own strengths.

Generally, I can’t imagine many existing suburban communities would want to merge with another suburb. The only two scenarios I could imagine: one suburb goes broke and/or one suburb is so small and their infrastructure costs so high that annexation makes sense to spread the cost.

Just to note: the time to become part of Naperville was decades ago. Warrenville finally incorporated in the 1967 after several failed votes in order to help protect itself from Naperville’s expansion. Naperville and Lisle also had conversations in the postwar decades about where each wanted to expand.

When urban non-profits represent residents better than local government

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A sociologist suggests the role of non-profit organizations has changed in urban areas:

To Levine, the incident illustrates something he’s been tracking over four years of monitoring the interactions between neighborhood nonprofits, city leaders, and private organizations in Boston. Based on his observations, he argues in the journal American Sociological Review, the role of nonprofits in disadvantaged city neighborhood has been changing. They’re no longer just extensions of the state or representatives of a few interest groups. They’re “legitimate representatives of poor urban neighborhoods,” and in many cases, “supersede” elected officials…

What’s happening now is that these organizations are directly negotiating for resources from public and private sector entities that hold the proverbial purse strings. Community organizations are now authoritative voices at the table, and often regarded by both private companies and bureaucrats as more invested and deeply knowledgable representatives of the neighborhoods. In Boston, “district-based elected officials, by contrast, attended ribbon cuttings and groundbreakings but were largely absent from substantive discussions of redevelopment planning,” Levine writes.

The phenomenon is particular to low-income communities for a reason: These communities have very specific needs for services. But also, these are the places where voices of residents can be easily unheard by politicians. Think about neighborhoods in Detroit left to fend for themselves for basic needs in the city’s worst days. It’s community organizations that are transforming them into livable spaces. In Flint, where residents’ concerns about poisonous water were essentially ignored for the longest time, it’s nonprofits that are stepping in to address the damage done. “There’s a political vacancy in these poor neighborhoods that these organizations can fill.”…

Obviously, this phenomenon has a lot of positives. For one, it’s a “victory for the motivation of the war on poverty,” Levine says. Empowered community organizations present a stronger front against displacement, environmental racism, and transit inequity. They can be more consistent than elected officials, because they don’t suffer from political turnover. But the good stuff only happens if these organizations know what the entire neighborhood actually needs. Sometimes they don’t. And in those cases, it’s not possible to vote them out or hold them accountable. If a nonprofit dissolves, it’s hard to pick up the pieces quickly, because the infrastructure for a new organization has to be rebuilt from scratch.

I’ve recently heard or read several critiques of national and local urban policy in the United States that suggest much of what has been tried has been ineffective. At the same time, this doesn’t necessarily mean that government needs to be completely eliminated from the equation. At times, only a larger government body can access certain resources or leverage certain opportunities. But, this new analysis suggests perhaps the best conduit between government (with the resources) and the people is a non-profit. Perhaps government can’t do everything, particularly in responding to local needs when politicians need to answer both to local voters as well as politicians and leaders above them.

Of course, we want to know whether the role of non-profits leads to better outcomes. National and local governments have been fighting a war on poverty and/or trying to address the issues present in poor urban decades for roughly half a century now.

Suburbs ask grocery chain to fill vacant stores rather than leaving them empty

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The leaders of eleven suburbs held a press conference yesterday intended to prompt Albertsons to allow former Dominick’s sites to be used:

The damaging effects of keeping these spaces vacant is very difficult for a lot of these communities,” Naperville Mayor Steve Chirico said. “We need to do a better job working together and putting the community first, and right now the communities are not being put first. We’re asking for their help. We need to see some participation.”…

However, leases on 15 vacant Dominick’s continue to be paid for by Albertsons. On Thursday, municipal officials said they want the practice of extending those leases to cease.

“When you’re leasing a space that doesn’t have a tenant and you’re renewing that lease for five years purposely so you can control whatever goes in there, that’s where we’re having an issue,” Bartlett Village President Kevin Wallace said.

Romeoville Mayor John Noak said there is interest in the vacant spaces and willingness from suburban leaders to work with Albertsons to get them filled, but the company is not cooperating.

Two quick thoughts:

  1. It is interesting to see under what circumstances suburban leaders are willing to cooperate. Common economic matters could be at the top of this list.
  2. The worst outcome for many suburbs would be that the abandoned properties are not maintained and whoever owns it is doing nothing or the bare minimum. Such buildings are not just empty; they are an eyesore and many suburbanites would say it reflects poorly on their community. This isn’t exactly the case here: Albertson’s has the leases, is paying for the property, and the sites themselves aren’t in terrible shape – they are just empty. But, large grocery stores often occupy prime retail space at busy intersections and it makes sense that communities would eventually want to see the space put back into the retail market both for appearances and sales tax dollars.

See earlier posts on this subject here and here.