Tag Archives: local government

When libertarians run a suburb

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What would happen if libertarians had the majority in a suburban government? A suburb of Minneapolis offers a case study:

It paid $13 million in cash when it needed a new public works building, taking the money from its savings accounts and shrinking the city’s reserves by nearly one-quarter.

Pay-as-you-go wisdom or long-term financial folly? However it eventually works out, the decision is just one example of how the Crystal City Council approaches civic issues a bit differently. The reason: A majority of its seven members are Libertarians or are sympathetic to the party’s philosophy of maximum personal freedom and minimum government…

In addition to paying cash for civic improvements, Crystal has undertaken a cleanup of the municipal code to get rid of ordinances considered outdated, unenforceable or just plain silly. And it has all but eliminated the city’s human rights commission. At the same time, in a seeming departure from Libertarian principles of thrift, the city has raised property taxes and water and sewer fees…

Critics said the tax increases are a direct result of the Libertarians’ financial mismanagement: Their use of cash to pay for infrastructure has depleted reserves and left the city unable to produce the kind of investment income that for years helped hold down taxes.

Two quick thoughts:

  1. As the article notes, local government members tend to be officially non partisan even if they align with particular political beliefs. So, is it to this group’s advantage to be something different – libertarians – even in a place where people don’t really want to talk about parties? On the flip side, is it worth seeing this as a test case for libertarianism in practice if local government is supposed to be non-partisan?
  2. The article suggests the new group has a new approach or outlook but also has made some decisions that may not fit libertarian ideals. This reminds me of the the claim many big-city mayors make: local governments simply have to get things done and can’t worry as much about abstract ideology. For example, you may not want to have to take on bonds to fund necessary infrastructure but if the alternative is terrible, you may not have the option.

One final mini-thought: cleaning up local ordinances that don’t make sense or are expired plus officially getting rid of a committee that has no members requires the tag of libertarianism? Any political party might find some advantage to getting rid of pieces of government that are non-functional but asking the established parties to get rid of anything might be too much to request these days…

Video gambling in Illinois trickles money into local coffers

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As video gambling has spread across Illinois, who is making money? A little is going to local governments:

Video gaming revenues, after payouts, are taxed at a flat 30 percent rate. Five-sixths of those tax proceeds go to the state and one-sixth to the local government. Remaining revenues — the other 70 percent — go to the establishments, like Lucky Jack’s, and the video terminal operators.In the year ended in September, almost $12.7 million was played at Lucky Jack’s in Waukegan, and $11.7 million was won by gamblers, according to Illinois Gaming Board statistics. That means the terminals netted just shy of $1 million. Of that, more than $246,000 went to the state and about $49,000 to Waukegan. The rest is split between Lucky Jack’s and Gold Rush Gaming, its terminal operator…

In Waukegan, a resolution passed in 2014 earmarked virtually all of its cut of gambling revenues for the underfunded pension plans of its police officers and firefighters. Were it not for video gambling, the resolution said, taxpayers might have to cover the shortfall.

Not every municipality, however, is looking at the terminals as a cash cow. Chicago, Naperville and Arlington Heights don’t allow them…

The cities with the most video gambling terminals are Springfield, Rockford and Decatur. The counties with the most machines are Cook, Lake and Winnebago counties, the commission report said.

In an era when many municipalities are looking for every cent they can, video gambling can provide some revenue. But, many communities likely consider a fraught deal: it may start a trickle of money but it also projects a particular image. One anecdote in the article suggested people pull up to a local establishment with video gambling and idle as they wait from some signal from inside that a spot at one of the machines is open. Is this what a wealthier community wants to be known for? Like tattoo parlors and bars, many places wouldn’t want to avoid the stigma of gambling establishments.

It would also be interesting to know whether these more local operations siphon money from casinos which could generate significant revenues for local governments. In other words, if every gas station or local eatery had video gambling, would there be enough money to go around? Do people simply go to the places that are most convenient to them or would they cluster in places with either better or more video gambling options?

The origins of Chicago’s residents-only parking

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An article on rethinking Chicago’s residential parking permits system reveals how it all started in the first place:

The first residents-only parking signs were put up in 1979 to protect North Side bungalow-belt homeowners who were tired of fighting Northeastern Illinois University students for spaces. Since then they’ve proliferated across the city, with 1,466 zones currently on the books. Aldermen often don’t want to say no to residents who ask for a parking zone, fearing the political backlash.

Two quick thoughts:

  1. It is not surprising that such a program might spread. What was intended for one particular problem suddenly appeared appealing to all sorts of people and before you know it, permits were applied everywhere. This is a good example of the ease of creating such regulations – they spread really quickly – but the difficulty of putting the cat back into the bag when such regulations become normal and institutionalized.
  2. Chicago is often touted as a city of neighborhoods but what this means is that a lot of people are able to keep cars as the neighborhoods have plenty of lower density residences as well as single-family homes. The underlying issue here isn’t necessarily whether there are permits or not; rather, how do encourage people to have fewer cars? Is this even possible in a city that wants people to be able to own detached homes?

Getting a handle on the increasing complexity of large cities

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Richard Florida interviews the author of a new book on cities and complexity. Here is one of the more interesting questions:

What do you think is the best way to think about cities: as machines, ecosystems, living organisms, or something else?

The fascinating thing about cities is that different aspects of them allow us to think about them in many different ways. At the level of urban infrastructure, cities certainly have features of machines, with vast constructed networks involved in transporting people, water, electricity, and waste.

At the level of the economy, cities resemble complex ecosystems, with companies and individuals filling specific niches and all living and working in a symbiotic dance. And at the level of growth and change, cities also feel like living, breathing, constantly growing and changing organisms.

But ultimately, the fact that a city has features of both a machine, a societal ecosystem, as well as a living thing means that a city is truly its own category: a novel type of socio-technological system that humans have made, and is perhaps one of our more incredible inventions.

I like this response: we have a tendency to reduce complex social phenomena to understandable objects (like machines – think of how often the brain is compared to a computer) but this often isn’t possible. Understanding all of the social relationships involved – and this could include relationships between people as well as between people and objects or nature – should lead us to some humility of how much we can know and predict as well as a fascination regarding how it all works. (Or, perhaps this fascination just applies to people like sociologists)

If indeed cities are complex systems, this could lead to questions of whether that complexity has drawbacks in the long run that cannot be overcome. (Parenthetically, such questions could also apply to nation states.) At some point, complexity may produce diminishing returns as argued by anthropologist Joseph Tainter. This reminds me that Jane Jacobs suggested organizing cities in districts that weren’t too big or small so that they could attend to smaller matters while also allowing community involvement. Americans tend to like smaller local government but the combined resources and interactions between larger groups of people can lead to more unusual benefits.

Indianapolis’ Univgov only worked because schools were not included

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The Univgov created in Indianapolis in 1970 may have only gone forward because it didn’t unite all local governments; it intentionally left out school districts.

The celebrated unified government, or “Unigov,” law brought together about a dozen communities in Marion County into a single large city in 1970. The idea was to put a bigger, more powerful Indianapolis onto the national map, simplify city services, and grow the city’s tax base. Indianapolis was not the only city in the country to merge with its surrounding county at that time—but it was the only one to explicitly leave schools out of the deal…

The judge who ordered the busing, Samuel Dillin, stated bluntly that a merged city that left 11 separate school districts was racially motivated. At the time, a majority of the region’s African American and minority students lived in the city center while the surrounding school districts primarily enrolled white students.

“Unigov was not a perfect consolidation,” then-Mayor Richard Lugar said. He went on to be one of Indiana’s most legendary political leaders as a six-term U.S. Senator. “A good number of people really wanted to keep at least their particular school segregated.” Lugar said he knew the 162-page Unigov bill would die in the Indiana General Assembly if schools were included. But he still thinks the merger was worth it, despite the effects it has had on schools…

Unigov’s legacy for Indiana education is mixed at best, but neither Lugar nor Cierzniak think a future Marion County school district merger—one way some scholars say segregation can be reduced—is likely. Township districts have grown considerably, and the state legislature has heard district consolidation plans over the years that have repeatedly failed.

Uniting metropolitan governments is a difficult task, primarily for reasons like this: wealthier, whiter, often suburban residents do not often want to share their resources – particularly schools – with those who are not as wealthy and white. When the middle-class and above look for places to live, they often prioritize the school district and if it has a record of higher performance, will fight to keep others out. These wealthier residents want their tax dollars, especially those based on their better housing values, to go to their children and community. And the white-black divide is often the most difficult line to cross in such situations.

As another recent example, see the case of when Ferguson, Missouri students were given the chance to leave their unaccredited school district. Some parents in the new school district do not react well.

Why would we want to promote more HOAs with a tax break?

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A new proposal in Congress would allow members of a HOA to deduct their association fees from their federal taxes:

Upward of 67 million people live in these communities — ranging from sprawling master-planned subdivisions down to individual condominium or cooperative developments. As of 2014, they contained nearly 27 million housing units. Their homeowners associations often provide the functional equivalents of municipal and county services, and residents nationwide pay roughly $70 billion a year in regular assessments to fund road paving and maintenance, snow removal, trash collection, storm water management, maintenance of recreational and park facilities, and much more.

The same residents also pay local property taxes to municipal, county or state governments. But unlike other homeowners, only their local property tax levies are deductible on federal tax filings. Their community association assessments that pay for government-type services are not.

Now a bipartisan group of congressional representatives thinks that’s inequitable and needs to be corrected. Under a new bill known as the HOME Act (H.R. 4696), millions of people who live in communities run by associations would get the right to deduct up to $5,000 a year of assessments on federal tax filings, with some important limitations…

The bill’s primary author is Rep. Anna G. Eshoo, D-Calif. Co-sponsors include Reps. Mike Thompson, D-Calif., and Barbara Comstock, R-Va.. Though the bill has little chance of moving through the House or Senate during this election year, it sends a message to the legislative committees now working on possible tax code changes for next year: Congress needs to acknowledge the role the country’s community associations play in providing municipal-type services. The way to do it is to allow deductions on a capped amount of the money residents are required to pay to support community services.

It will be fascinating to see what sort of formula is used to calculate these deductions as the fees paid to associations do not cover all sorts of municipal services used outside of the association.

At the same time, won’t this promote more HOAs, or at least make them more attractive? And do we really want more? They certainly are popular but they continue a trend that is not necessarily good for society: privatizing municipal goods and helping neighbors guarantee their property values. For the first, instead of paying a municipal government, a new layer of private government is enabled to take care of certain services. Americans tend not to like more and more layers of fees and government. However, this might be outweighed by the second factor: the HOAs help keep the neighbors in line without owners directly having to interact with other neighbors. Instead of possibly having to live next to the neighbor who paints their house purple and starts a garden in the front yard, the HOA polices this. In other words, this tax break might help more and more Americans work out civic life through private associations that they see as a necessary evil.

Given all of the HOAs, is there any analysis that shows they pay off financially in the long run either for the property owners or the municipalities?

Getting big companies to pay more for local infrastructure

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The mayor of Cupertino, California wants Apple to pay more for local roads and other services:

Many people in Cupertino, a 60,000-person town in the heart of Silicon Valley, are beginning to organize around their overburdened city. They claim the region is struggling with aging infrastructure and booming companies whose effective tax rate is often quite low. Frustrated by traffic and noise, some in Cupertino are trying to put a stop to more development, which they argue brings more congestion on the roads, parking and train system. But Chang says limiting new development would damage the regional economy and that the real solution should be higher taxes on the wealthy and companies such as Apple…

Convincing local politicians to battle Apple is hard, Chang said. He recently proposed that Apple – which is building a massive new campus its own employees nicknamed the Death Star, or more favorably, The Spaceship – should give $100m to improve city infrastructure. To move on the proposal, Chang only needed to get a single vote ‘yes’ among the three other eligible council members. He failed to get that vote…Meanwhile, the mayor of Cupertino plans to keep pushing Apple to contribute more to the town. Apple paid $9.2m in tax revenue to Cupertino in 2012to 2013, which was about 18% of the city’s general fund budget, according to an economic impact report. Coincidentally that was also exactly the same amount CEO Tim Cook was paid in 2014.

Chang is now working on proposals for a business employer tax that would make companies with more than 100 workers pay $1,000 per employee. Chang argues the employer tax is less regressive than the competing program: a higher sales tax.

Local politicians are often in a tough position in situations like this. Large companies provide prestige and jobs. Many communities would love to have white-collar offices that contribute property taxes and opportunities for local residents. These are such desirable facilities that states and communities race to the bottom in providing tax breaks. (See an example here as well as contrast this to a rural town rejecting a meat processing plant.) Yet, large companies may make heavy use of local services as well as be perceived as sending most of their profits out of the community. So, what do you do when your town needs to pay for roads or the police department or schools and the majority of residents don’t want to pay higher taxes?

I’m guessing that Cupertino has little leverage, particularly if fellow officials and residents are unwilling to go against the big company. Yet, perhaps sustained pressure and some negative publicity might help; one Chicago suburb and its large hospital reached an agreement to help the community meet basic infrastructure needs.

Cut LA planning staff and expect more McMansions

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Critics suggest that cutting several city employees will lead to more McMansions in Los Angeles:

Garcetti’s 2016-2017 budget calls for cutting two staff jobs in the seven-member Neighborhood Conservation division.

The division helps prepare historical designations — or Historic Preservation Overlay Zones (HPOZs) — for neighborhoods with distinctive architectural or cultural features. An HPOZ designation can help a neighborhood from overdevelopment by setting strict building guidelines, such as requiring that homes have a similar exterior look.

HPOZ designations are in place in dozens of neighborhoods, including Hancock Park, Van Nuys and University Park.

The mayor’s proposed Planning Department budget — released last week as part of his overall $8.7 billion spending plan for next fiscal year — comes at a crucial time for the Neighborhood Conservation division, advocates say. The office is racing to finish HPOZ designations for six areas before a law outlining teardowns of homes in those neighborhoods expires.

Usually such jobs in local government draw little attention, particularly when the city employs over 45,000 people and Los Angeles County has more than 100,000 employees. Yet, a relatively small set of city employees can oversee relatively large or influential projects. And the battle over McMansions in Los Angeles is not over as this tidbit later in the article suggests:

The AIDS Healthcare Foundation is leading a March 2017 ballot measure initiative that would temporarily halt construction of so-called mega-projects in the city.

In Los Angeles, the competing forces of an expensive housing market plus property rights will be fighting the forces of historic preservation for a while yet.

What to do if “a McMansion is going up next door”

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If a McMansion is built next to existing houses, what can neighbors do?

“It’s built so much higher than my house, virtually every window looks out into my backyard,” she says. Desperate to protect her privacy, she planted Italian cypress trees as a natural barrier. She tried to reason with the builder, whose unsympathetic response was: “Shouldn’t everyone be able to build their dream home?”

What’s going on in Mountain View is an extreme version of a problem cropping up all over the country: Huge houses are being built on plots of land originally meant to accommodate smaller dwellings, sparking a heated debate over what’s best for the community. Some argue that owners of larger homes pay more taxes, which can benefit all. But if your home happens to have its air and light blocked by a behemoth next door, you would likely be very, very upset — and can most likely kiss the idea of cashing out on your home sale goodbye…

A similar drama is playing out in Arcadia, CA, where more than 30 homes larger than 5,000 square feet (some as large as 8,000 — 9,000) have been proposed in the 850-home community over the past six years. In response, a group of longtime residents formed Saving Arcadia, which is currently battling the municipal government and City Council. Its argument: Overly lenient rules for developers have led to the proliferation of McMansions on lots that were zoned back in the 1950s for smaller homes. Plus, these oversize dwellings overburden the city’s water, gas, electricity, and other utility services…

Another option is finding a creative solution. One example is building downward (if a property is set on a hill) in order to increase square footage while preserving neighboring views, which is increasingly happening in various areas near Newport Beach. So maybe there’s hope that we can all play nice after all?

A homeowner who doesn’t like the nearby McMansion has a number of options available to them – these are sorted roughly in order of severity:

  1. Talk to the neighbor and builder. Might they be willing to make changes? They don’t have to but perhaps they are also unaware of what neighbors think of their actions.
  2. Modify your own lot or house to avoid having to see the new dwelling (if this is possible given its new size). For example, buy some artificial plants.
  3. Fight for local regulations. Many communities (see examples like Austin and Los Angeles) have considered rules about teardowns in recent decades and try to balance the interests of property owners versus those of neighborhoods. A variety of tools can be used including design guidelines, lot to house size ratios, approval processes, and historic districts.
  4. Buy up the properties that may become McMansions. This requires money but then you can control the fate of the nearby properties. See examples here and here.
  5. Sue your neighbor. You have to have resources to fight this out and it is likely to sour relations for a long time. But, some neighbors choose this option. See an example here.
  6. Move away. This is what the resident in this particular article does. This may be a last resort option or one favorable to those who don’t like open conflict (which is often minimized in suburbia).

In many places, the teardown McMansion cannot be stopped, particularly if there are not existing guidelines which are likely based off earlier cases or if the neighbor is not independently wealthy. Still, the neighbor who does not like it can pursue a number of options and each is likely to affect their relationship with the teardown neighbor.