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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Urban Development and Privilege

Much has been written recently about the concept of white privilege. I  find the term somewhat offensive because it makes people defensive. Nevertheless, the concept is true

There are a couple areas of middle class privilege that contribute negatively to the well being of communities.   The first is the mortgage interest deductions. This deduction primarily helps higher income people, and artificially drives up the price of housing. Working class people who do not itemize are hurt. This by the way is the biggest housing subsidy. A tax credit targeted to working class people would be more effective

A second set of privileges cover zoning and planning laws in our communities. These laws tend to zone out smaller and more affordable housing and Multifamily housing. I am not talking about housing homeless people but teachers social workers, nurses etc.    

The results of these policies are unnecessary segregation , a lack of mobility, and urban decline.  Written by paul Dribin

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DeSales Community DevelopmentĀ 

Kudos to this organization. This organization led by TomPickel has been around since the mid seventies. They have accomplished major housing and redevelopment work in the Fox spark and Tower Grove East neighborhoods of St Louis. They have rehabbed houses provided property management and health services.   Written by Paul Dribin. 

Economic Development Organizations in St. Louis

I have hesitated to write about this topic but here goes. As locals know, the President of the Regional Chamber, Joe Reagan has been under fire in the community and with his staff. Anonymous letters have been leaked to the newspapers. It is far beyond my pay grade to comment on Mr. Reagan or his organization.

The bigger picture, which has always fascinated me, is what to these organizations do? I am not sure. Dick Fleming, Reagan’s predecessor, was always bragging about his accomplishments, but population and jobs actually went down under his tenure. Do Chambers of Commerce make any sense in a worldwide economy?

I have also heard that the St. Louis Economic Development Partnership; a collaboration of the city and county economic development agencies is a mess. The leader of this organization is Rodney Crim. My source tells me the only thing they have accomplished is increasing salaries and high level staff.

The St. Charles County Economic Development Council, led by Greg Prestemon largely because they provide a business incubator. Greg and his staff have been supportive of innovative business change in St. Charles County including Workforce Housing.

I will write more about this subject in the future. The studies of researchers for years have shown that government economic development efforts do little and may actually operate at a net loss. Factors such as an educated workforce, progressive attitudes toward minorities and gay/lesbian populations does more than tax or other incentives to bring business. Written by Paul Dribin

State tax credits

The post had a good article yesterday about the issues surrounding state tax credits.   Nothing new was really covered. The credits are too expensive but they are the only tool for doing affordable housing. The article correctly demonstrated that investors will not participate in programs with high levels of uncertainty.   It also shows that development in St. Louis is very difficult and requires government supports. 

Loop Trolley Again

This is the gang that can’t shoot straight. Now the opening of the trolley is delayed again because one of the three cars needs repairs and the parts are not available. There are also rumors of dissension within the ranks of the Loop community due to the number of businesses that have been lost during the construction and the lack of leadership from Joe Edwards.

Crime in St. Louis

The crime scene in St. Louis appears to be worse than ever. Shootings and assaults are reported every day and more of them are taking place in good neighborhoods. Aside from the devastation caused to people and communities, the crime has a negative impact on the economy of the area. More people are afraid to go out, and potential visitors are more likely not to come.

The activism surrounding police violence is absolutely on target. Readers must remember that the biggest cause of deaths among African American young men is violence from other African American men. Also police officers I have talked with, both white and black say they are not willing to aggressively go after crime due to the criticism they might receive.

In the end, there are simply too many people acting badly. Many of these folks are not trainable or employable. Mentoring efforts need to take place with at risk families from the time children are born to try to develop parenting techniques that minimize this type of behavior.

Possible Effects of Tax Reform in Missouri on Affordable Housing and Community Development

Governor Greitens has tasked a committee with looking at Missouri’s tax structure and making recommendations for change. Of particular interest to the committee and the state tax credit incentives. Here is a quick summary of recommendations as they effect housing related tax credits:

1. Low Income Housing Tax Credits- Missouri has a state affordable housing tax credits that supplements the federal credits. The credits once allocated can be used for 10 years and can be used for acquisition and new construction, or acquisition and rehabilitation. The committee recommended 1) A restructuring of the credit as a soft loan. These loans could be repaid, extended, or forgiven. 2)A $50 million annual cap which would cut funding by over 50%. 3)Creation of a tax credit clearing house to buy up existing credits. 4)The funding would be subject to annual appropriations.

Comment. Obviously utilizing a lower cap would limit the number of deals that can be supported. In addition,because the annual appropriations process is so crazy in Missouri, there would be no predictability about funding. Investors would either choose not to participate or significantly increase their fees.

2. Historic Preservation Tax Credits-These credits provide incentives to developers to maintain and rehabilitate historic buildings and neighborhoods. The recommendations are: 1)Combining the Historic Preservation Credits with the Brownfield credits. 2)The combined program would have a $50 million cap. Presently the Cap for the two programs is $150 million. 3)The funding would be subject to annual appropriations.

Comment-Once again the annual appropriations process provides for a high level of uncertainty. Lowering the Cap would also limit the number of deals.

Final Comment- These programs are critical to redevelopment and housing, particularly in St Louis. They have provided huge amounts of economic development to cities and built large numbers of affordable housing units. The trouble is they are very expensive. The development community needs to come up with alternative methods for doing community development that does not break the bank.

Chesterfield Mobile Home Park

I attended a meeting today of some good citizens who are attempting to find a solution to save the residents of a mobile home park in Chesterfield who could be facing eviction.

The park has been located in Chesterfield since before that community was incorporated. There are presently about 130 families living there, who may own or rent their mobile home and all rent their spaces. They pay $350 a month in rent.

A developer has come forth who has apparently reached agreement with the park owner to sell the property for the construction of apartments. The tenants who are on month to month leases are naturally worried.

We are working to oppose the zoning change necessary for this transaction and come up with an alternative development proposal which would leave the existing low income residents in place.

The Loop Trolley (Folly)

An article in the Post Dispatch today stated that the Loop Trolley in University may once again have its’ opening delayed. The cause this time is repairs that need to be made to one of the three cars that will rotate on the line.

This project has hurt dozens of businesses, significantly exceeded its’ budget, is behind schedule, and is of limited benefit. I predict traffic will be significantly backed up on Delmar. Sometimes I think we are absolutely out of our minds; spending huge sums of money on the next trendy fad that comes along.

Racial Homeownership Rate

The St. Louis Post Dispatch published an interesting article yesterday about the disparity in homeownership between African Americans and whites. The gap in St. Louis is about 29% with white people owning more homes. This gap increased as a result of the 2008 recession.

Nothing in this story is surprising to me. Homeownership rates are a sign of economic well being; unfortunately African Americans are not as solid economically as whites for the same reason there are other gaps. St. Louis saw a bigger disparity arise out of the recession. This is also not surprising because due to racism, segregation, and similar factors African Americans are forced to live a more marginal existence in St. Louis. More inner city neighborhoods, where blacks disproportionately buy are more likely to see a loss of value in a recession, and slower increases in good times.

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