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The St Louis Contrarian

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

Archive for the category “new housing”

`Is There a Way St. Louis Can Grow Because our Cost of Living is Reasonable

I just read an article which states the obvious, high end workers will move to places such as San Francisco or Boston to take advantage of the higher paying jobs. Regular people, both professional and blue collar cannot make that move due to the extremely high cost of housing in those locations.

St. Louis needs to figure out a way to harness our pluses; an affordable cost of living and world class cultural attractions. I think that is a big deal. I would even suggest flying recent college graduates here for a weekend to show them our pluses. Pittsburgh is an example of a city I considered to be much like St. Louis that repositioned itself as a trendy place.

The big negative in St. Louis is the crime situation. Virtually everyone except civil rights activists feel it is the number one problem facing the city. Few people seem willing to acknowledge this issue. Written by Paul Dribin

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St. Louis Community Benefit Agreements

Next Stl has a very thorough and long article about Community Benefit Agreements. The purpose of this type of agreement is for communities to receive social benefits from development that takes place in their communities. These agreements would come into play for larger developments that are receiving city support. Here is the article:

CBA?

Simply put, a Community Benefit Agreement is a legally binding contract, entered into by the developer(s) of a property, or group of properties, and community groups and individual stakeholders in the community surrounding the development. The developer agrees to provide a range of direct benefits to the community in exchange for community organizational support for the project.

The crux of a CBA is that it ensures some direct benefits to the community and assigns a time and monetary-based method for obtaining them, rather than relying on the promise of (and in some cases the complete absence of) indirect, or trickle-down, benefits. It takes the immediacy of benefits from potentially being generational to a time period that is generally much more immediate, making those benefits more measurable, and potentially more impactful.

If we as a city enable and empower a community to benefit immediately from the presence of a new development, rather than 10-15 years down the road, we get the best of both worlds. Those living in the neighborhood now are enabled to benefit now, and if those benefits accrue in the form of higher wages, better education, increased housing affordability, or more transportation options, those benefits can be felt now, built upon, and passed down to future generations.

Some national examples of well-negotiated and well-executed CBAs are: the Kingsbridge Armory CBA in New York City, the Bayview-Hunters Point CBA in San Francisco, the Hill District CBA in Pittsburgh, and the Gates Cherokee CBA in Denver. Comprehensive guidance is available from organizations such as Good Jobs First and the California Partnership for Working Families to help guide other communities, as well as offer caution as processes move forward.

An article from the Boston Federal Reserve points out that CBAs have increasingly become commonplace, but offers caution about making sure that CBAs are not misconstrued as being “for” the community if they are not “of” the community:

Unfortunately, much of this discussion about CBAs has shifted focus away from the key participants: the coalitions of community groups representing low-income workers and residents, often in communities of color. It is important for these communities to know how CBAs can help protect and serve their interests around development planning and to understand the elements that make a CBA successful. The Kingsbridge National Ice Center case example below demonstrates that CBAs can and do benefit communities when the coalitions involved represent diverse community viewpoints and when such coalitions can be held accountable by the broader community itself.

CBAs are meant to help bridge the gap between how a development helps the developer and how it helps the community. It hopefully answers the question “For whom is this being built?” in a way that a majority of stakeholders can find agreement in.

What We Have

In the wake of the increased focus on locally controlled tax incentives in St. Louis City over the last 2 years, a coalition called Equitable STL has recently convened. It is a broad coalition of organizations and individuals, focused on areas such as racial equity, community betterment, fair housing, and transportation. Borrowing from nationwide best practices on CBAs, they say the following are 3 essential principles that every CBA and its negotiation process must have:

▪ COMMUNITY representation leading the negotiating process.

▪ CBAs should be negotiated by a coalition that effectively represents the interests of the impacted community through an inclusive and transparent negotiation process.

▪ BENEFITS that are mutually beneficial for the developer, the city, and the community.

▪ CBAs must include specific terms that provide mutual benefits to address community needs and invest in equitable development.

▪ AGREEMENTS that are legally binding and directly enforceable by the community.

▪ This includes a clearly defined monitoring process and means of community-based recourse if the developer violates the contract.

Areas which could potentially be covered by CBAs could include but are by no means limited to: affordable housing access, public transportation, community spaces, local public school support, small business support, and displacement prevention measures.

On June 1 of this year, a coalition of groups, including, St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA), Forward Through Ferguson, and Team TIF, held a learning session at LaSalle School on N. Jefferson. It was moderated by Sylvester Brown, Jr., of The Sweet Potato Project, and featured Rashida Tlaib, from the Sugar Law Center for Economic and Social Justice in Detroit, Michigan, as well as a panel discussion with local women involved in efforts to bring CBAs to St. Louis. The presentation from that event can be found here.

In short, St. Louis has a large group of people wanting to bring this process to their neighborhoods, and many internal and external organizations ready and willing to help. St. Louis has many examples of what has worked and what hasn’t in other communities, nationwide. St. Louis has a growing inventory of what we do have, which brings us to…

What We Don’t

Examining the current state of play in St. Louis City for CBAs, one glaring issue becomes apparent: they are entirely voluntary. Participation in any CBA right now in St. Louis is dependent exclusively on the will of individual aldermen, and the political capital available to allow them to stick with the process. Results vary, but generally, if people are not forced to do something, they will choose not to, elected official, developer, or otherwise.

Additionally, St. Louis does not have an updated development plan. Our most recent comprehensive plan is from 1947, and sits mostly ignored on a shelf down at City Hall. Moreover, we don’t have a plan for how to employ and govern the numerous tax incentives and write-offs which have come into play in the time between our last citywide plan and now. What we have instead is a patchwork of neighborhood and ward plans, some on paper and some not, and no clear citywide mechanism to institute or enforce them. Resources are spread incredibly unevenly in this city, and that includes the existing ability of some neighborhoods to navigate the complex  and uneven process that development in this city has become.

What St. Louis does and does not have in place for a successful CBA process is clear, next we will look at…

What We Should

Questions such as: what type, size, and value of development should be subject to a CBA negotiation, as well as who has authority to convene a negotiation, who is represented at the negotiating table, and how community feedback is gathered, etc. all need to be in scope in any ordinance setting up a CBA process for the City of St. Louis. These questions need to be answered to ensure that there are clear expectations, for both the community and the developer, concerning the process, no matter what ward in the city the development is proposed for.

Triggers are extremely important. Obviously, requiring every corner store or startup applying for a tax abatement to undergo a CBA negotiating process is not workable, nor is it advisable if we want to foster a business community in this city which incorporates organizations both large and small. Requiring a small start-up to engage in this process carries the potential to completely derail their business altogether before it even starts. The types of benefits sought by CBAs are generally best accomplished at scale, therefore the triggering thresholds for a project should correlate to that goal. Data-driven metrics allow for little wiggle-room in terms of being subject to a CBA negotiating process or not, and should be employed whenever and wherever possible

Process is key here, because with 28 different aldermen, and the resulting potential for 28 different processes for CBAs (including not having to enter into one as a term of the development), there lies the potential for chaos.

If a developer doesn’t like the terms offered by one alderman, they are currently free to pick up stakes and move their development across the street, negating any contractual direct benefits that could have done a measure of good in the surrounding community. This issue is not solved solely by instituting a statutory CBA process, but by instituting a CBA process as part of a broad set of tools the city could employ in a pursuit of more racially equitable development and economic outcomes.

More broad questions, such as where in the city one should be able to get a tax abatement, and at what rate and duration, are best accomplished as a city-wide policy change. Individual CBAs are not the best place to fight abuses of the tax incentive system as a whole, nor is doing so sustainable or healthy for a community. CBAs and incentive reform are issues on the same side of the economic development coin, and should be pursued simultaneously, as they both seek to answer the question referenced earlier, “for whom?”.

There is a stark difference between the financial stature of many of the large-scale developers seeking incentives, and the communities and neighborhoods in which they seek to build. Often, the language used when arguing for a tax incentive is that the project is “not viable” without the added boost. To the City’s credit, they have begun to ask the developers for their anticipated profit margins, both with and without the incentive. What is starting to be revealed is that the incentive is often not moving the needle from non-viability to viability, but rather from average profit margins, to upper-range or even above average profit margins for the market (these analyses are available for review upon request from SLDC, but are not publicly posted). Therefore, in addition to asking “for whom is this being built?”, perhaps the question of “who stands to profit, and at what cost?” should also be on the table.

Reform?

There are currently two competing aldermanic proposals under consideration concerning CBAs. The first, Board Bill 11, was filed by Board of Aldermen President Lewis Reed. The second, Board Bill 61, was filed by 15th Ward Alderwoman Megan Green. They have both been assigned to the Housing, Urban Development, and Zoning Committee, chaired by 17th Ward Alderman Joe Roddy, where they have sat since May 5th and June 9th, respectively.

Both bills aim to make more clear the process by which a CBA is negotiated. The level of detail in the bills varies greatly, as well as the who, what, and how of the process by which they would be employed. In both instances, more community input is needed to fine-tune and perfect the bills. Both bills appear to have languished in committee until one of them gains a critical mass of political support to move forward.

Ideally, they could be combined and strengthened, rather than move forward in tandem as competing proposals. Community Benefits Agreements are about the community, and the community would benefit the most from a serious effort at collaboration to produce the best bill possible for the whole city.

President Reed has held a series of town halls throughout the city to explain what his bill does. His bill does include a trigger in terms of development value ($1 million), and has minority and women owned business requirements for the construction of developments which fall under the governance of the ordinance. His bill has been criticized for preserving too much of the status quo, and not doing enough to truly include a broad-based community voice in the negotiations, insteading leaving the process of negotiating up the individual aldermen. The bill contains language noting that the CBA is to inform the community of the benefits resulting from any potential development. Ideally, the residents should be involved in the crafting of those benefits, not just informed of them after the fact.

Alderwoman Green’s bill includes similar triggers to President Reed’s, although there are tiers built into hers based on poverty rates in the development area and development size. It also contains data-driven metrics and triggering mechanisms for the institution of CBA agreements, which leave less room for loopholes. It contains guidance on convening bodies who would then help facilitate the CBA negotiations. It has, however, been criticized for being overly complex to the point that it may deter business.

Alderwoman Green used the development proposed for 3172 Morgan Ford as a proof of concept that CBAs are something that can be done. The effort was successful in that it generated an agreement with the developer, resulting in a $60,000 (10% of the value of the tax abatement being sought) one-time payment, to be made to a local nonprofit to help finance down-payments for the production of 15-25 quality and permanently affordable housing units in the Tower Grove South neighborhood. Questions around process and representation in the negotiations were expressed during feedback sessions with the community, and both of those concerns could and should be addressed by a strong CBA ordinance.

What Next?

We have recently seen Equitable STL working to educate people on what the core tenants of CBAs are and are not, using other cities which have instituted CBA agreements successfully as a guidepost. Equitable STL had a presence at every mayoral town hall in September, and has, thus far, presented an educational CBA presentation to over a dozen neighborhood associations and other community organizations.

Additionally, commenters (and commissioners/board members) at TIF Commission and LCRA Board meetings have increasingly brought up the idea of requiring CBA funds from some of the larger developments that have moved through those bodies for approval. Most recently, at the TIF Commission hearing for the second phase of the City Foundry project, Gerry Connolly, a member of Team TIF, suggested that the TIF Commission should consider that option. Specifically a CBA for City Foundry could direct funds from the CID and TDD revenue to support development in neighborhoods outside the central corridor with high rates of poverty.

As St. Louis moves towards further exploration and implementation of a citywide ordinance governing CBAs, its leaders would do well to remember that they are for the benefit of the people who elected them. A rising tide lifts all boats, and CBAs are a critical step in making sure that the tide is as far-reaching and immediately impactful as possible. The Ferguson Commission Report contains a call to Broadly Apply a Racial Equity Framework. As the region, and specifically our city, are once again being forced to examine the broad racial disparities which exist in nearly every facet of daily life here, our leaders have an opportunity to take bold action to address those realities and find ways to alleviate them. I firmly believe that a CBA ordinance holds the potential to help do so.

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About Andrew Arkills

Andrew Arkills is a data analyst by day, and has served on the Tower Grove South Neighborhood Association Board, first as a member of the steering committee which founded the organization, as its first Treasurer and then as President. He is currently the immediate Past-President of that organization. He also volunteers his time and data/financial analysis skills with Team TIF. He served, in a limited role, as an advisor to the negotiating committee which recently produced a CBA agreement with the developers of the property at 3172 Morgan Ford, answering questions related to tax incentives for the group. He is a resident of the 10th Ward.

View all posts by Andrew Arkills →

Again Healthcare and Housing

Housing and healthcare are one and the same. I don’t need to restate the obvious; people with poor housing options tend to be less healthy, and people who are less healthy tend to live in substandard housing.

I am putting some ideas together to address this. Think of this scenario which often happens. A patient cannot be released from the hospital in a timely manner because they are homeless. The daily cost in the hospital is $3000. Wouldn’t it make sense for hospitals to subsidize the rent for these individuals and get supportive services for them? A second issue. Many readmissions to hospitals could be avoided if people lived in decent housing. As I said, I will be putting a project together to address this. Paul Dribin

Weird Things About City Development

Paul Krugman published an article in the New York Times which made sense. He argued that cities have not grown in a rational way because cities either allowed helter skelter development or engaged in NIMBY policies. Houston is an example of the former and San Francisco the latter. More publicity needs to be given to the discriminatory effects of exclusionary zoning in many communities.

Interesting St. Louis City seems to engage in both types of negative behavior. The city will give away the store to certain large developers but hound to death small developers with historic preservation requirements. A better balance is needed. Written by Paul Dribin

Vouchers and Housing Policy

Research clearly shows that poor people who move to a more affluent neighborhood do better in life. Unfortunately most affordable housing in St. Louis and elsewhere is constructed in lower income neighborhoods. HUD, under the Obama administration had tried to address this problem.

Up until now, Section 8 fair market rents were set for an entire metropolitan area. Therefore the rent structure in Wellston was the same as in Ladue. On an initial limited basis, HUD is changing the policy and determining fair market rent by zip code, therefore allowing higher rents in more affluent areas. Where tested, the concept has seemed to work.

To be sure, the policy has detractors. Housing authorities complain the policy is too bureaucratic. Housing practitioners are concerned that the policy if fully implemented would drain inner city neighborhoods of population and good tenants. These are both valid issues, but I believe the policy should be tried. The Trump administration unfortunately is eliminating the new rule that would implement it. Written by Paul Dribin

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

Tiny Houses

There has been much publicity lately about so called tiny houses which are generally about 250 square feet and can be purchased for about $50000. These houses are not for everyone but I think they are a great idea. They are energy efficient, and get people into the housing market who would not otherwise be eligible to participate. They may be perfect for single individuals or couples.

As of now community planning and zoning requirements to not allow for houses this small and they are being sited in mobile home parks or other unrestricted areas. I have never lived in a residence this small but people all over the world do. Our communities should give it a try. Written by Paul Dribin

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

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. 

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