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The St Louis Contrarian

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

How Does Economic Development Work

Back to one of my favorite topics, the amount of money wasted on economic development in the St. Louis Region. Millions of dollars are being spent on private and public organizations that focus on job growth. The controversy with the Blues and the Regional Chamber leader, Mr. Regan simply reflect the impotence of economic development organizations on whom we spend millions of dollars while are local economy lessens.

Years ago an economist friend of mine showed me that offering incentives in the way of tax abatement and other government services was a losing proposition. The costs of the benefits were more than the potential gains. What do cause businesses to locate in an area. I would guess they are the following:

1. A strong, able, and well educated workforce
2. Good roads, transportation, and airports
3. Good schools
4. Things to do
5. A culture accepting of diversity

You notice I did not mention tax structure which is the favorite bugaboo of the right. New York, California, and Massachusetts have the highest taxes, but great economies. In conclusion, be very skeptical of the claims of economic development organizations. Written by Paul Dribin

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St. Louis Economic Development Agencies

The embattled head of the Regional Chamber, Joe Regan receives more in the way of salary and perks than any of his comparable 25 colleagues. He receives $771,879 in total compensation. This information was conveyed by the St. Louis Business Journal. This despite the fact he had many unhappy employees and our local economy shrunk. I would like such a gig.

A bigger picture is that the St. Louis region has multiple economic development agencies and it is not clear what any of them accomplish. The St. Louis Regional Partnership has increased staffing and salaries significantly since it partnered with the city. This whole issue is the next scandal waiting to happen. Written by Paul Dribin

Ferguson Relived

I attended the Cardinals game Saturday night. Upon leaving out on the street a group of white protestors who are members of Black Lives Matter. They were obnoxious and confrontational, with obscene signs including some that called police murders. I am sympathetic with the general cause but this is not a way to win friends and influence people. Written by Paul Dribin

Homeownership Tax Deduction

I hate to ever agree with the Trump administration but here goes. They are in favor of limiting the homeownership tax deduction to $500,000 annually. This is a good start. This deduction mostly favors wealthier people. Furthermore research has shown it does not stimulate the purchase of housing but drives up the price. Another largely white upper middle class entitlement. Written by Paul Dribin

Hockey Public Funding

A fascinating fight is brewing in St Louis over public funding of the repairs to the Scottrade Center where the hockey Blues play. The Board of Aldermen passed an ordinance authorizing payment for the repairs in the form of 30 year bonds. A group led by Alderman Cara Spencer has filed suit and challenged the legality of the action because it violates terms of the Missouri Constitution. In addition to Ms. Spencer, another plaintiff is Jeanette Mott Oxford, former state representative, and Executive Director of Empower Missouri, a non profit advocacy agency for poor people. Ms. Oxford is a friend and colleague of mine and I can tell you she is very smart, determined, and fearless.

A major item of discussion concerns who owns the building. The popular perception is that the city owns it which is apparently not true. The city owns the land under it, and the Blues own the building.

Once again this is a matter of a cash starved city funding a sports venue for rich private parties. Furthermore most of the attendees at Blues game live outside the city. Ms. Spencer has recommended a regional sports authority that receives funding from the county as well as the city,

I love hockey and think Tom Stillman the owner of the Blues is a good guy. I also agree with Ms. Spencer and Oxford that public funds should not be used for this purpose. Written by Paul Dribin

Noises Off at Brooklyn Bridge Park

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Via NYC Parks Commissioner Mitchell Silver is this Fast Company article on the Secret Life of Parks. Diana Budd explores the work in Brooklyn Bridge Park that Michael Van Valkenburgh Associates (MVVA) has undertaken in making parks quieter, even when surrounded by traffic and other noise. “By sculpting the land, MVVA gives cities their very own mute button.” 
In the parks of three major cities heavily impacted by traffic noise- Brooklyn Bridge Park in New York, Maggie Daley Park in Chicago, and A Gathering Place for Tulsa,  MVVA  decided that having a conversation at normal tone was a measure.  “If you have to yell or get really close together to talk, it’s not park-like . . . You try to lower ambient noise level so people can start to hear the insects.”
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Last month I visited Brooklyn Bridge Park with NYC…

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Do We Have an Affordable Housing Crisis in St. Louis?

The answer to this question is how you structure the problem. The National Low Income Housing Coalition has done the most work of any organization on this issue on a national level. They pose the problem by taking the median rental rate in the community and factoring in the minimum wage income. Not surprisingly they concluded that virtually now where in the United States is housing affordable.

There are several problems with this approach. The minimum wage is not a good indication of a community's earning capacity. Many minimum wage workers are students, part time workers, and those new to the work force. Many live with parents or double or triple up. Also most minimum wage workers don't remain at that pay level for a long time, as they move up the ladder. The minimum wage was never intended to be a living wage, rather just a starter for low skilled workers. Many minimum wage workers also work 2 or more jobs.

A better gauge of housing affordability is the relationship between the median income and the median rent. This gives us kind of an average, not perfect, but much better. Let's look at some numbers as a point of comparison:

St. Louis Metro Area

Median Income- $52243 for a family of 4 in the City of St. Louis
Median Rent -2 bedroom- $1291
Therefore the monthly median income of $4354 can afford a monthly rent of $1306 at the 30% threshold. This represents 100.01% of the median rent.

One may conclude that on the whole rent is affordable in the St Louis area for the median household.

Boston
Median Income-$67846
Median rent-2 bedroom-$3166
Therefore the monthly income of $5654 can support a monthly rent of $1696 at the 30% threshold. This represents 54% of the median rent.

The Boston market on the whole is not affordable.

This approach seems to be useful in making comparisons among communities. It also does not relieve our community of our responsibility to provide affordable housing. After all, median income is a statistic. There are thousands of people in our metro area who cannot afford the median rent and do not have access to adequate rental housing.

Written by Paul Dribin

Another Good Guy-Carl Lang

Today I am writing about a great guy and great real estate attorney, Carl Lang. I have known and worked with Carl for many years. He and his son David are very prominent in doing affordable housing, market rate housing, and Low Income Housing Tax Credit projects. He is extremely knowledgeable and has a quality I really like, he does not over lawyer. He is now Managing Partner at Rosenbloom Goldenhirsh. Written by Paul Dribin

St. Louis Glitz-Build it and They Will Come

Here is a major beef I have with how things get done in St. Louis in the 21 years my family and I have lived here.

Instead of investing in neighborhoods, education, crime prevention, etc. St Louisians invest in glitzy and trendy project that may work elsewhere but are unsuitable for our community. Some examples include, Union Station, City Center, adding a runway at Lambert, football and soccer stadiums, a downtown convention hotel, metro link, and a trolley. There is a place for all of these things in some communities, but glitz put on top of a crime ridden city with crumbling infrastructure will not work. The problem is compounded by a build it and they will come attitude, meaning that data does not support the endeavor but it will be so cool that people from somewhere will come and use it after it is completed. (I;E THE LOOP trolley)

Written by Paul Dribin

St. Louis Named as Best City for Milliennials

His is good news and in my mind quite accurate. The housing is affordable, jobs for educated people are here, it is easy to get around, great cultural attractions, great restaurants. A lot to do. Tim Dribin needs to hear this. Written by Paul Dribin

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