Tag Archives: tax base

As a suburb, Ferguson is not that unusual

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The particular events in Ferguson, Missouri may have been particular but its social context is not that unusual:

Ferguson’s version of the story has several layers. Many of the aviation companies that were once a source of good jobs have shut down or moved away, leaving behind limited employment opportunities, especially for workers without a college degree. The tax base has shriveled, leaving the city dependent on fines and fees — including traffic tickets — for a disproportionate share of its funding. According to the city’s 2014 budget, Ferguson expected to take in $2.7 million in fines and fees in fiscal 2014 — 14 percent of the city’s revenue, up from 8 percent five years earlier.

The recession added to the challenges. Parts of the city were hit hard by the foreclosure crisis; of the 10 Missouri zip codes with the most seriously delinquent mortgages, four are at least partly in Ferguson and three others are in other North County communities. That has turned formerly owner-occupied homes into rentals, often with absentee investors as landlords. The number of Ferguson residents living in poverty has doubled since 2000; its poverty rate, at 24 percent, is one and a half times the national mark.

In all of that, Ferguson is typical of inner-ring suburbs around the country. It isn’t even a particularly extreme example. Ferguson’s schools are struggling, but unlike some surrounding districts, they retain their accreditation. Its foreclosure rate is high by Missouri standards, but is nowhere close to those in Florida, Nevada and Arizona, states that were at the center of the housing crisis. North County has lost much of its manufacturing base, but retains several large employers, including a multinational manufacturer, Emerson Electric Co., and a fast-growing prescription drug provider, Express Scripts.

Ferguson’s experience with poverty is especially typical. St. Louis’s suburbs now have more people living in poverty than St. Louis itself, a pattern repeated across the country. Concentrated poverty of the kind found in southeastern Ferguson is also becoming more common in the suburbs. According to researchers at the Brookings Institution, the number of suburban neighborhoods with poverty rates above 20 percent has more than doubled since 2000.

casselman.ferguson.0826-chart

A familiar story: deindustrialization and a loss of manufacturing jobs, a declining tax base, changing demographics, plenty of suburbanites living in poverty. And a pressing question: what can be done to reverse the fortunes of such communities? These sorts of inner-ring suburbs are not going to be the first choice of many gentrifiers and it can be difficult to switch economic emphases. One possible solution proposed by some is metropolitanization, sharing taxes more across communities in a metropolitan area. However, this requires buy-in from wealthier suburbs who often reject the notion that should provide help to less well-off suburbs.

It will be interesting to return to Ferguson in 5, 10, 20 years to see what has happened. While the shooting of Michael Brown led to a lot of attention, it won’t necessarily alter the course of the community.

Ironic but enjoyable living in cheaper inner-ring suburbs?

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James Lileks contrasts the criticism of 1950s suburbia and the current cool cheapness of such communities:

So it’s great when suburbs die! Except they’re not dying. A recent story in my local paper noted how the first-ring suburbs are great bargains for young people, which makes them cool again. So: Twenty-somethings in 1962 with two kids and a house full of Danish Modern furniture with push-button appliances and a Siamese ceramic cat on the mantle: the oppressive falsehood of the postwar American dream. Twenty-somethings with the same house in 2014, the same decor (they’re into mid-century design), and two pugs: the salvation of urban America, because the style section can do a piece that includes the phrases “lovingly restored” and “Josh works as a web designer for a nonprofit.”

Josh may go to the mall, but rest assured he’ll have the proper attitude: Here I am, ironically inhabiting the lifestyle of suburbanites, when I’m really the sort of guy who’s planning a Kickstarter campaign for my artisanal-shaving-cream company. We’re going to use fair-trade sustainable eucalyptus.

But he’ll go to the mall when the pugs are replaced by kids and they need something to do on a dreary February Tuesday, and everyone needs diversion. He’ll find himself in the food court, the tots fighting over a pretzel, the anodyne music leaking from speakers overhead, an Apple Store bag at his feet. Then one of the kids spies the ride that takes a quarter and lets you pretend you’re driving a car.

I have become my father, he thinks, and realizes that’s actually a good thing.

This hints at the gentrification possibilities of inner-ring suburbs: the homes are relatively cheap and the communities were once thriving suburbs, places that have good if not aging housing stocks. Plus, a number of them have more diverse populations as the cheaper housing allows for more lower-class residents as well as more immigrants and minorities. Their proximity to the big city can mean short commutes downtown even as one lives in a suburb.

At the same time, Lileks may just be downplaying the issues facing these inner-ring suburbs. They may have some potential for gentrification but unlike gentrifying urban neighborhoods, they don’t have the broader financial backing of a big city. In other words, their tax bases may not be very strong which limits what kind of local services and programs are possible. Additionally, there may not be the same cool factor in being in a suburb compared to a hip urban neighborhood. The suburb may be more dependent on cars, upping the cost of living there. The community may not have the quality of life amenities – good schools, safer streets – that wealthier suburbs are known for and that might attract wealthier residents.

h/t Instapundit

Sprawling American cities have less inequality

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A new report from the Brookings Institution suggests sprawling American cities have less inequality:

In a new report, All Cities Are Not Created Unequal, Berube compared levels of inequality in fifty large American cities. He found the gap between rich and poor is rising in large cities on the East and West Coasts, while cities in the South and West like Las Vegas, Mesa, and Fort Worth, are more equal, and retain more of what the middle class needs…

“They built a lot more housing over time that has managed to maintain a middle class, and they don’t have sectors of the economy, like finance and technology, that tend to be driving incomes at the upper end of the distribution,” Berube said. “They’ve got sectors like transportation, warehousing, and retail.”

Those are industries, Berube says, where you’re unlikely to strike it very rich, but where a middle-class income is still within reach.

This sounds very much like David Rusk’s argument in Cities Without Suburbs. He suggests what differentiates cities is their elasticity, a measure of how much land they have annexed during their history. Newer cities, particularly in the South and West, have been able to annex more land. This then gives them more residents who might otherwise move to the suburbs, boosting the city’s tax base and mix of residents.

Read the full Brookings report here.

Chicago looks at 63 ways to raise revenue

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Following up on a report this week that says American cities are facing falling revenues, a new report for the City of Chicago looks at 63 different ways to raise revenue. According to the powers that be, some of the ideas have merit while other are “non-starters”:

In a statement Tuesday afternoon, Emanuel — who must present his budget plan next month — said several of Ferguson’s ideas are “promising” and will be given serious consideration. But the mayor said “raising property taxes, income taxes or the sales taxes is off the table. And asking drivers on Lake Shore Drive to pay a toll is also a non-starter.”…

Ferguson’s report also suggests imposing a $5 London-style congestion fee on for driving in the downtown area during rush hours. The fee would be collected in an area bounded roughly from North Avenue south to the Stevenson Expressway, and from Halsted Street east to Lake Michigan, although it extends as far west as Ashland Avenue between Lake Street and the Eisenhower Expressway…

In addition, Ferguson also suggests creating a 1 percent Chicago city income tax, much as New York City imposes, for new revenues of $500 million per year. In suggesting the tax, Ferguson’s report points out that the State of Illinois increased its income tax to 5 percent last year, but froze the amount distributed to municipal governments, thus effectively reducing the percentage of the tax that cities receive…

Ferguson also suggests eliminating the city’s more than 160 Tax Increment Financing Districts, where property tax dollars for schools, parks, and other taxing districts are frozen for at least 23 years, so that all property tax increases afterward to go into a fund to improve struggling neighborhoods. Although TIF districts generate about $500 million a year, Ferguson says $100 million in new revenues could actually be generated by eliminating them and returning all property tax revenues to the city and other taxing bodies.

It would be interesting to see look at this document to see how many of the proposed options are already in place in other cities. Additionally, how many current revenue generating schemes in Chicago are used elsewhere? Why not learn from the “best practices” (or “necessary practices”) in place elsewhere?

A number of these ideas would generate significant conversations/controversies. There a number of people who have suggested congestion pricing for big cities but actually putting this into practice and selling it to the car-hungry American public is a difficult task. The smaller options, like changing the garbage system, would probably prove more popular or at least easier to implement but they probably wouldn’t have the kind of financial impact necessary to help the city fight a $635.7 million budget shortfall.

Mayor Rahm Emanuel may have impressed people so far but can he survive this upcoming budget battle?

American cities continue to face falling revenues

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A new report shows that American cities continue to face falling revenues, leading to changes in city budgets and governments:

Belt-tightening continued in cities across the United States in 2011, as fiscal crunches forced local governments to cut back. City revenue is projected to decline 2.3 percent by the end of 2011, according to a new report from the National League of Cities released Tuesday, marking the fifth straight year of declines.

One of the main factors contributing to the decline in revenue is a drop in property tax collections, which are projected to fall by 3.7 percent in 2011, the second straight year of declines. Last year’s drop of 2.0 percent was the first year-over-year decline in city property tax revenue in 15 years. To make up for the shortfalls, cities cut jobs, canceled infrastructure projects, cuts services such as libraries and parks and recreation programs and modified health care benefits for employees.

Hiring freezes were the most common personnel-related cuts made in 2011. Half of cities reported salary reductions or freezes and nearly one in three reported laying off employees or reducing health care benefits. Other actions included early retirements and furloughs.

Even in good times, cities are often concerned with boosting property and sales tax revenues. Commercial and residential development proposals are often scrutinized to see how much they might bring into local coffers versus how they might require in new services. But in times of economic crisis, municipalities and residents, worried about possible rises in property taxes, look even more closely at this issue. Additionally, it is more difficult to obtain federal or state monies when those governments have their own budget concerns.

The belt-tightening will continue unless the economy posts a remarkable reversal. In the meantime, cities big and small, from the size of Chicago and a looming $600 million budget shortfall to smaller suburbs, will continue to look for ways to maximize revenues. In many places, this will lead to some interesting conversations about whether the local government should dig itself out of the mess or whether the residents should help makeup some of the loss of revenues.

Looking for economic development in high-wire act

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A lot of communities are looking for ways to increase revenues in tough economic times. Not all of them can debate this option: whether to allow a high-wire act over Niagara Falls.

The pitch by international daredevil Nik Wallenda to traverse Niagara Falls on a tightrope has provoked some local angst over what the historic tourist attraction is all about these days.

On one side are those like the city’s mayor, Jim Diodati, who is in favour of bringing the seventh-generation member of the circus family the Great Wallendas to attempt the feat.

On the other, are officials from the Niagara Parks Commission, among others, who say death-defying deeds like this no longer fit the falls’ contemporary “brand” as a natural wonder.

Supporters of the high-wire act suggest such an act would help bring money into the city:

The area should embrace any opportunity that will increase the number of visitors, he said, because the tourism industry has been hit hard of late by the high Canadian dollar as well as such things as the new passport requirements for U.S. visitors and rising gasoline costs.

This sounds like a debate about character: is Niagara Falls about natural beauty or about daredevils and glamor? Niagara Falls is an entirely unique phenomenon within North America and the two sides want to utilize it to bring money into the city. I suspect we would not be having this debate if economic times were not tough but this decisions has the possibility of setting a particular course for a number of years.

If I had to guess about the outcome: this one act will be approved and officials will look at it closely to see if it could provide a foundation for long-term economic growth. Personally, I’m not sure how the Falls fit within a larger possible image as an entertainment center but I’m sure a rare high-wire act would attract attention.

Wheaton’s Ale Fest: a conservative image and helping the downtown

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Wheaton has been a politically and religiously conservative community from its early day. Therefore, Ale Fest, a festival that might be considered normal for other suburban communities, still draws attention:

And while an ale fest might not be news in other communities, it raises eyebrows in Wheaton, which has a large evangelical Christian population and prohibited the sale of alcoholic beverages from 1887 until 1985.

Wheaton Ale Fest, which will take place on Front Street from 1 to 5 p.m. on Saturday, will feature more than 100 styles of beers from craft brewers around the nation. The event, which is being hosted by the Wheaton Park District in conjunction with the Downtown Wheaton Association and the Wheaton Chamber of Commerce to bring more visitors to downtown Wheaton’s shops and restaurants, also will allow visitors to vote for their favorite Illinois craft beer…

Looking back, Wheaton Mayor Mike Gresk called the gradual loosening of alcohol restrictions – and the community’s acceptance of them – “typical of Wheaton,” which was not a community that wanted “to go into this too fast.”

“If you look at our history, this is quite a stunning change from what we did 30 years ago, but there are residents who have moved here since 1985 for whom the whole idea of the city’s past prohibition would be news,” Gresk said. “As a city, we’ve had a very gradual and measured response, and the city has eased itself and its population into this mindset. We police it very closely and watch to make sure there are no underage sales.”

Gresk noted that while “some longtime residents might raise an eyebrow” at the notion of an ale fest, he believes the event is a great way to showcase Wheaton’s many businesses.

Two points come to mind:

1. Wheaton’s image is long-standing and has staying power. Even though liquor sales have been allowed for over 25 years, some people still think of Wheaton as dry. While not all suburbs have such a consistent character over time, Wheaton does. This could be good and bad: some people like consistency (what you see is what you will get) while others might want more to do and more to happen (compare downtown Wheaton to downtown Naperville).

2. The push to allow liquor sales in the mid 1980s and the reason for having Ale Fest today sound about the same: alcohol sales can help bring people into town and boost tax revenue. In the mid 1980s, the argument was made that restaurants would not be interested in locating in downtown Wheaton if they could sell liquor. Today, Mayor Gresk also says the festival is “basically good for our downtown.” The festival may not exactly fit with Wheaton’s image but many suburbs are looking for ways to improve their business climate, boost tax revenues, and bring more people into their downtown.

Vacant urban Borders stores and “no net loss”

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There are a variety of perspectives one can hold on the closing of bookstores like Borders. Monday, I noted how the loss of chain bookstores can affect a local economy and its tax base. On the same subject, another commentator suggests cities need to be concerned about replacing these “third places”:

“Third place” is a decades-old term championed by sociologist Ray Oldenburg for venues which bring people together in the tradition of the American colonial tavern or general store. The idea remains central to urbanist thinking, and describes those places, other than home or work, where we gather, debate and trade. “No net loss” is a term borrowed from the vocabulary of wetland conservation, and allows for replacement of lost assets with equivalent resources…

In response to the Borders news, some pundits, like Josh Stephens in Planetizen, have called for a better, non-Walmartian reinvention of the bookstore. In his view, big boxes — even when urban — destroy Mom-and-Pop purveyors. Amazon and Kindle aside, he makes a good case for a new, post-recessionary wave of independent urban bookstore start-ups. For those bookstores, I hope that he is right.

But as to third places — and I am going to assume that “big books” uses can play such a role — there is something bothersome about the final demise of Borders’ urban core locations. While perhaps an opportunity for the independent competitor, what of the potential loss of third place uses in high-value urban downtowns?

Will the prime square footage occupied by Borders have similar third place potential once reclaimed? Will replacement uses provide the equivalent fusion business purposes of books, coffee, lecture and song?

In most cities and suburbs, is there really an acceptable “third place” alternative? Coffee shops tend to be small (and standardized – see Starbucks) and bars/taverns can be seen as attracting a certain crowd. Independent bookstores may be something to hope for but are difficult to pull off.

If communities are simply concerned with their tax base, filling these Borders sites with retail or restaurant uses would likely be just fine. In this perspective, any empty space is bad. On the other hand, this commentator is suggesting that communities should encourage (and incentivize?) certain uses that will at least maintain and perhaps build upon the “third place” nature of bookstores.

On another track, the commentator suggests bookstores offer the “fusion business purposes of books, coffee, lecture and song.” These functions sound more like entertainment or “culture” than “sociality.” Certainly, people can get to know each other while drinking coffee or listening to musicians but the “third place” is about something larger: providing safe, familiar spaces between work and home where citizens can talk with old friends, meet new people, and talk about important issues including society and politics. Third places should be where citizens can develop “bridging ties” as they step outside the realms of home and work. Does this really happen in bookstores like Borders?

Wheaton sells Hubble site, plans for new grocery store

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For over a decade, the City of Wheaton has sought a developer for the Hubble Middle School site on the southeast edge of downtown Wheaton. The city now has an agreement with a developer who wants to build a new grocery store:

The effort to sell the old Hubble Middle School site ended Thursday when Wheaton Warrenville Unit District 200 revealed the terms of a recently announced sale to Chicago-based Bradford Equities LLC.

At a special meeting, school officials said they were thrilled to move on and look forward to seeing a grocery store at the highly visible northwest corner of Roosevelt and Naperville roads…

The sale also prohibits the developer from seeking or accepting tax increment finance help from the city, gives Bradford seven months to inspect the property and obtain permits, and most importantly to some people, asks Bradford to make a “good-faith effort” to work with the park district on 13 acres not suitable for development because they are on a flood plain…

Board President Rosemary Swanson said the resolution meets several goals the school district has had all along, including placing the site on the city and school district’s tax rolls.

This story hints at some of the reasons Wheaton has paid so much attention to this site:

1. Wheaton is a built-out community so there are few opportunities to purchase and develop sizable portions of land.

2. The site has a very important location: it is at the busy intersection of Naperville and Roosevelt Roads. It is also an opportunity to expand Wheaton’s downtown to the south. While the downtown has traditionally been more on the northern side of the railroad tracks, the city has made an effort in recent years to expand to the south. This new development will expand the city’s gateway on Roosevelt Road which currently consists of a large welcome sign at Main Street.

3. A grocery store will help bring in tax dollars. This matters because Wheaton has few opportunities to add commercial property but more broadly, refers back to the city’s large amount of institutional/church property which don’t contribute tax dollars. This new project will broaden the city’s tax base.

4. The grocery store will offset the loss of the Jewel store which closed in early 2008. While the city wanted to save that store, Jewel decided it was too small (and old?) to maintain – and the chain has newer, more modern stores on both the north and south side of Wheaton. This new store fits with the city’s goals of adding residential units to the downtown as residents will now be able to walk to a grocery store.

5. Earlier suggestions for the Hubble site had included a hotel, residential units, and some stores. It sounds like the new development will be much more limited and some of the recreational functions of the property will be retained in parkland and gymnasiums.

6. The whole process has been slowed down by the economic crisis. Earlier requests for proposals generated a good deal of interest but it has taken a lot of time to get to this point.

In the end, it sounds like the final product will be less ambitious than some had hoped for but it will still help bring more tax dollars into the city and a grocery store will return to the downtown.

Lawsuit over “super-majority white neighborhoods” in Atlanta suburbs

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Atlanta is often held up as an example of Southern sprawl. The Atlanta Journal-Constitution reports on a new lawsuit filed against some recently created suburban communities north of Atlanta:

The Georgia Legislative Black Caucus filed a lawsuit Monday against the state of Georgia seeking to dissolve the city charters of Dunwoody, Sandy Springs, Johns Creek, Milton and Chattahoochee Hills…

The lawsuit, filed in a North Georgia U.S. District Court Monday, claims that the state circumvented the normal legislative process and set aside its own criteria when creating the “super-majority white ” cities within Fulton and DeKalb counties. The result, it argues, is to dilute minority votes in those areas, violating the Voting Rights Act of 1965 and the Fourteenth and Fifteenth Amendments to the Constitution…

Sandy Springs, created in 2005, is 65 percent white and 20 percent black. Milton, formed a year later, is 76.6 percent white and 9 percent black. Johns Creek, also formed that year, is 63.5 percent white and 9.2 percent black. Chattahoochee Hills, formed in 2007, is 68.6 percent white and 28 percent black, while Dunwoody, created in 2008, is 69.8 percent white and 12.6 percent black.

Emory University law professor Michael Kang said the case is unique because the Voting Rights Act focuses on redistricting, whereas this lawsuit challenges the legality of cities. Kang, who has not reviewed the case in its entirety, said the plaintiffs will likely have to show evidence of discriminatory purpose to have a strong claim. Kane said the case has interesting implications.

“If we look at this realistically, there is some white flight going on. The creation of these Sandy Springs-type cities enables white voters to get away from black voters,” he said. “It does strike me that the Voting Rights Act might have something to say about this, but it’s unknown what the courts will say about it.”

There is little doubt that there are exclusionary practices that take place in suburban communities, whether this is through zoning for particular uses (typically to avoid apartment buildings or lower-income housing – read about a recent debate over this in Winnetka, Illinois) or high real estate prices.

But the idea that incorporation itself is exclusionary is an interesting idea. Certainly, this is done along class lines: wealthier communities have incorporated in order to help protect their status and boundaries. Cities and suburbs have a long history of annexation in order to expand their own boundaries and their tax base (see this argument that Detroit should annex surrounding areas to help solve some of its problems). But was this done intentionally in regards to race (as opposed to just class or other issues) in these Atlanta suburbs? And what sort of evidence would a court find persuasive in this argument?