Revisiting impact fees (versus "community benefits") for cultural uses

There is a big debate amongst residents about real estate development, and the idea that any new development should provide "community benefits." Sadly, I never took any anthropology courses, but I think this concept is related to the idea of paying your way in to be part of a new community and has some basis in anthropological theory.

In "In lower income neighborhoods, are businesses supposed to be "community organizations" first?," (2012), I wrote:

Years ago, I had a conversation with Mari of In Shaw, where we discussed ANC and community involvement with regard to new businesses opening up in the community, and how the community groups were much more focused on what they could get from the businesses. Mari made a comment to the effect that they are businesses not social welfare organizations (I can't remember the specifics, we're talking about a 7 year old or older conversation).

This comes up all the time when you read in the local media about business presentations at various community meetings.

Note that this isn't a phenomenon exclusive to "poor" neighborhoods. Years ago I was at a meeting of CulturalTourismDC and at the meeting, a representative from a theater that had recently opened in Penn Quarter, announced how they were looking for donations from local businesses, inducements for patrons, etc. I countered, why not think about how this can be "mutually beneficial" instead of all one way?

The reality is that in lower income communities, community ties, social networks, and other relationships are much more important and vital to every day living, and so when you look at businesses entering the community from the standpoint, you can understand why people would look at businesses not so much as entities trying to survive and make a profit, but instead as merely another actor-participant, different sure, within the web of existing community ties, and their expectations that all members of the community contribute within the web of social networks. Contributions to the community are the price that a business entrant has to pay in order to be allowed to participate and be considered a co-equal actor within the community network.

Are impact fees-community benefits more akin to "entry fees"?  But now I think this kind of thinking and expectation isn't limited to lower income communities.

That's the basis for thinking about impact fees in more rigorous ways, which I've been meaning to write about in the context of a different piece about "community benefits," which are handed out to facilitate development, but often not in a structured and transparent fashion, but in a more semi-corrupt way ("D.C.'s Insidious Culture of Developer Influence Won't End With Campaign Finance Reform," Washington City Paper).

Community benefits versus impact fees: Community benefits come in return for benefits.  In most places a requirement for the provision of "community benefits" is only triggered when the property owner seeks extranormal benefits such as waiver of fees and taxes, free land, tax incentives, etc., or zoning relief such as more density, a change in zoning, waiver of requirements, etc. 

So community benefits are conditional payments, awarded in return for specific, monetizable benefits.

Impact fees are the price to pay to join an existing community.  On the other hand, in communities that charge impact fees, such fees are mandatory for every property whether or not the developer seeks extranormal benefits or zoning relief.

Impact fees on new development pay towards infrastructure investments, usually for schools and transportation, and sometimes for other civic facilities and functions.

I think we could think of them as comparable to "membership fees" to join a food co-operative (e.g., the Takoma Park Co-op) or a golf club.

But instead of going towards private benefits -- discounts on food purchases, access to an otherwise private facility -- development impact fees pay towards the provision of public goods.

In the DC metropolitan area, DC doesn't charge impact fees, while counties like Montgomery and Prince George's do. DC elected officials argue that by not charging impact fees, we encourage and incentivize development in the city.

-- "Development impact fees," 2014
-- "Times have changed with regard to funding infrastructure improvements that make land more valuable," 2011

Montgomery County charges a fee for schools and a fee for transportation, while in addition to those, Prince George's charges impact fees for public utilities and public safety.

It does add a lot to the cost of a dwelling unit, but it's reasonable to ask for new developments to pay towards the sunk costs of creating and maintaining existing infrastructure and required expansions to meet the needs of the new residents being added to the community by new development because it uses and/or adds to the "load" on the infrastructure.

In DC, because of base of developable land is so small, as properties are developed in certain ways other uses are crowded out.  That's where planning is required, to provide for such uses, to step in where "the market doesn't work," and to ensure that the range of amenities and facilities in a community has both breadth and depth.

How about impact fees for cultural uses?  Cultural uses and space is an area not typically addressed through impact fees. But why not?

Last week's Washington City Paper has an article, "Artists' Collective," about the development of some temporary cultural space on a fallow lot which is slated for further development. It discusses the lack of cultural spaces in the city and Martin Ditto, principal of the company that owns the lot featured in the story, suggests that all new developments be required to provide cultural space. From the article:

There are potential remedies to the disappearing of cultural spaces. The website for the yet-to-be-released D.C. Cultural Plan lists “addressing rising real estate costs that affect artists’ abilities to find affordable space in the District” and “better leveraging of public land and infrastructure,” as key areas of focus. Ditto suggests a rule that anywhere from one to ten percent of new development space be earmarked for arts space.

How to use a cultural facilities impact fee.
While Martin Ditto's idea is interesting, I don't think that is the best way to go about "getting what we want."

1.  I do think we need more cultural space, but we shouldn't leave it up to the vagaries of property development to create the space.  This would likely result in lots of little underpowered spaces like at the Atlantic Plumbing multiunit apartments there is a 1,500 s.f. space for Washington Project for the Arts ("WPA Signs Lease on a New Home in U Street Corridor Cultural District," press release), and a surfeit of space in the districts experiencing the most development and no facilities in the districts with little development.

2.  Instead, it's better to have fewer, powered, well-located spaces. 

3.  And rather than expect developers to provide such spaces "on their own," and focused more on meeting their particular needs, let's plan and provide these spaces through the city, community development corporations, and other means.

4.  To fund it, how about impact fees to support cultural and civic infrastructure?

5.  Backed up by good cultural/neighborhood master plans.


Their use should be directed by various master plans covering needs at the city-wide, district/sector, and neighborhood scales ("Whose space...," 2012;  "Arts, culture districts, and revitalization," 2009; and "Ground up (guerrilla) art #2: community halls and music (among other things," 2011).

6.  With a high-powered implementing organization functioning at the city-wide scale, with sub-organizations focused on individual neighborhoods. 

To make this work and to build capacity, having a city-wide cultural nonprofit backing up neighborhood efforts would be best, functioning not like Cultural Development Corporation DC ("When BTMFBA isn't enough: keeping civic assets public through cy pres review," 2016), but more comparable to:

• the Playhouse Square Foundation in Cleveland ("Real estate value capture and the arts," 2010; "Playhouse Square plans 34-story apartment tower in downtown Cleveland's theater district," Cleveland Plain Dealer)
• SEMAEST in Paris ("BTMFBA: the best way to ward off artist or retail displacement is to buy the building," 2016)
• the Pittsburgh Cultural Trust ("Pittsburgh Cultural Trust maintains diverse real estate portfolio to support arts," Pittsburg Post-Gazette; "How the Arts Drove Pittsburgh's Revitalization," The Atlantic)
  

Examples of fundable projects in DC neighborhoods Examples of projects that either happened or didn't, I can see such impact fees on H Street going towards the Atlas Performing Arts Center, a new community library, the Fringe Theater Group, and new uses.

In Takoma, it could have paid towards acquiring the Takoma Theater (which was instead purchased by a for profits developer who ripped out the cinema/theater function) and towards the Electric Maid community arts space.

In Dupont Circle, it could help pay for redevelopment of the Dupont Underground space ("Dupont Underground looking for donors to build on initial success, Washington Post).

In Southwest DC, it could help pay towards the creation of new combined library-cultural center and the development of an organization like Brooklyn's BRIC, which recently opened the multifaceted BRIC House  ("BRIC Arts | Media House opens in Brooklyn," Theatre Projects) and a television studio in the Coney Island branch of the Brooklyn Public Library.

In Downtown/Penn Quarter it could have funded keeping the Goethe Institut there, when it faced a rent increase.

Etc.