Pittsburgh developer backs down on opposition to ticket fee for concerts, to be used for area improvements

In my writings on stadiums and arenas ("Framework of characteristics that support successful community development in association with the development of professional sports facilities"), I was intrigued by how a community organization in the Hill District of Pittsburgh had proposed a surtax on parking at NHL hockey games, to support community improvements, as a way of mitigating the negative effects resulting from an arena in their community.

It was never approved, but I put that in the framework, as something that should be pursued everywhere.

The Hill District was "abandoned" by the Pittsburgh Penguins for a site in Downtown, but they still own and are redeveloping the property.  One of the elements will be a concert venue, and Hill District groups proposed a ticket fee for community improvements, which the developer opposed, as I wrote about in October:

-- "Parking fees/admissions fees for arenas, stadiums, concert facilities to fund neighborhood improvements: Fee proposal for Live Nation Pittsburgh opposed by developer"

Now, they've agreed to it, according to the Pittsburgh Post-Gazette, "Penguins propose $2 ticket surcharge for music venue events at former Civic Arena site."  From the article:

In addition to the letter touting the ticket surcharge and other investments related to the arena redevelopment, the package included a 101-page response to concerns that had been raised by an executive management committee that makes sure that Penguins live up to the promises and commitments they made to the community as part of the $1 billion arena redevelopment. ...

Before Tuesday, the Hill Community Development Corporation had been pushing for the $2 ticket fee as well as a $2 surcharge on each vehicle parked in the garage as a way to help fund infrastructure improvements and development activities in the neighborhood.

Buccini Pollin and the Penguins have flatly refused to impose a parking surcharge, stating it could put the garage at a “competitive disadvantage” particularly given that many such facilities are still struggling to attract customers in the age of COVID-19.

But in its letter Tuesday to the commission and others, including Mayor Ed Gainey, the team and its developer said they “are prepared to deliver an exciting new recurring revenue stream” in the form of the $2 ticket surcharge.

The letter stated that the money would be deposited into the same Hill District reinvestment fund that was the conduit for nearly $7.2 million in anticipated tax revenues advanced by First National Bank as part of the construction of a new 26-story office tower to be anchored by FNB. The money is to be used to help build up other parts of the Hill.

This is an important precedent that can be referenced by other communities.

2.  Related are admissions taxes on tickets more generally.  Groups always fight them, including nonprofit groups receiving subsidies.  They say it will discourage attendance.  I think they are a reasonable fee for the privilege of receiving public monies for the development of such facilities.

And sometimes they are the only way communities get anything back financially from arenas and stadiums.  For example, the admissions tax on the Washington Commanders NFL games is the only revenue that Prince George's County generates from the FedEx Stadium presence.

3.  General discussion about the progress of the redevelopment in dealing with community development concerns.  Interestingly, the article discusses the back and forth between the community and the development group on their provision of various community benefits, which the community says has been laggard.

The documents submitted to the Planning Commission included a 101 page response.  I haven't tracked it down yet.  It probably makes interesting reading.

4.  Privately managed public spaces.  Concern was also expressed by the community in terms of management of the public spaces on the site, which the developer plans to put into a third party nonprofit conservancy. It would be interesting for the community to suggest that the conservancy be run by the community development corporation, not the developer.

See:

-- "The layering effect: how the building blocks of an integrated public realm set the stage for community building and Silver Spring, Maryland as an example," 2012

Other models are community improvement districts and public improvement districts such as the Green Benefits District in San Francisco and other types of special assessment districts for community improvement.

Parking fees/admissions fees for arenas, stadiums, concert facilities to fund neighborhood improvements: Fee proposal for Live Nation Pittsburgh opposed by developer

Updated 1/11/23 here, because the developer has acquiesced to the imposition of a ticket fee to support community improvements in the Hill District of Pittsburgh

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Marimba Milliones is president and CEO of the Hill Community Development Corporation. (Photo by Maranie Rae Staab/PublicSource)

The African-American neighborhood of the Hill District ("The Story Of The Pittsburgh Neighborhood That Inspired "Fences"," NTHP, "The Hill District, a community holding on through displacement and development," Public Source) in Pittsburgh was ripped apart by urban renewal.  

One of the projects was an arena for the Pittsburgh Penguins, called the Civic Arena, which opened in 1967 and was torn down in 2010.  

Wikipedia photo.

At one time, it was proposed a new sports arena would be built there, but instead other development plans are moving forward.

But at the time of the second arena proposal, in 2015, the Hill District Consensus Group made a startling proposal, that there should be a parking fee/tax on each car parked for events, as a form of mitigation, with the monies to be used for improvement projects elsewhere in the community ("A dollar a car for the Hill," Hill District Consensus Group).

It wasn't approved, but it's a concept that I refer to in "Framework of characteristics that support successful community development in association with the development of professional sports facilities" as one of many mitigation steps that should be adopted in developing broader community improvement programs associated with such facilities. 

The Hill District Community Development Corporation is proposing something similar in association with a concert facility proposal run by Live Nation ("Hill District group pitching a plan for parking and ticket surcharges at former Civic Arena site ," Pittsburgh Post-Gazette) but the developer is opposed ("Developer rips proposal for $2 parking surcharge at former Civic Arena site," PPG).  From the second article:

Mr. Buccini’s comments came in response to a proposal by the Hill Community Development Corporation to impose a $2 surcharge on each car parked in the garage and another $2 surcharge on each ticket sold at the music venue.

The Hill CDC wants to see the revenue generated by the fees redirected to other parts of the neighborhood to fund infrastructure improvements and development activities.

Craig Dunham, senior vice president of development for the Pittsburgh Penguins, who hold the development rights to the 28-acre lower Hill site, said a parking surcharge at one time was considered as a way of generating revenues for other parts of the Hill.

But he added that idea eventually was replaced by a plan to divert tax revenue generated by development on the lower Hill property to other parts of the neighborhood.

The parking surcharge could create a “competitive disadvantage” for the garage, Mr. Dunham said.

The same thing comes up all the time with such facilities.  Owners-developers oppose ticket or parking taxes saying it will reduce patronage.  Well, that's a great way to build a source of funds for mitigation, unless the owner-developer wants to pay separately, which they rarely do.

Interestingly, if Prince George's County Maryland didn't charge an admissions tax on tickets for the Washington Commanders football team they would get zero revenue from games.

As it is, concert goers pay exorbitant fees on tickets ("Why Ticket Service Fees Are so Annoyingly High — and How to Avoid Them," Money Magazine).  The likelihood of the fee being a significant hindrance is minimal, especially as it should be built into the cost of the ticket.  The big issue is the cost of tickets generally ("Collier’s Weekly: Concert Ticket Inflation Is Out of Control," Pittsburgh Magazine).

Community benefits agreement.  From the first PPG article:

The Hill CDC also is pushing for a benefits agreement known as the Community Collaboration and Implementation Plan, or CCIP, to be incorporated into the formal preliminary land development plan for the venue.

The $4 in proposed surcharges would be in addition to a proposal by the Penguins and developer Buccini Pollin Group to divert an estimated $8.2 million in parking tax revenues to other parts of the Hill to support housing stabilization efforts.

Ms. Milliones did not have an estimate on how much the surcharges would generate. But she said such funding is needed because it can cost as much as $40 million to develop just two blocks in the Hill.

She noted that the one-block New Granada Theater redevelopment on Centre Avenue will cost about $60 million. What’s more, there are about 600 acres of vacant land in an 1,100-acre neighborhood, Ms. Milliones explained.

“We have major infrastructure issues,” she said, adding that the recent award of a $11.3 million grant to refurbish the Centre business district and several nearby streets “will not fix everything.” ...

Ms. Milliones noted that the CCIP calls on the Penguins to make “commercially reasonable efforts” to identify potential revenue streams that could lead to additional reinvestment in other parts of the Hill, including a $1 per car surcharge on structured parking.

The Middle and Upper Hill already are expected to benefit from more than $7 million advanced by First National Bank in anticipation of tax revenue to be generated by development at the arena site. FNB will anchor the 26-story office tower currently being built there.

That money is to be used for projects in other parts of the Hill. But Ms. Milliones noted that the funding is not a “generous contribution” from the Penguins but a transfer of tax revenue that otherwise would have gone to the city, county, and school district.

 A Community Collaboration and Implementation Plan has been developed for the Lower Hill District.

 -- document

A similar plan was developed in association with the new Atlanta Falcons football stadium.  It's not miraculous, but it does a bunch of interesting things ("Building a Stadium, Rebuilding a Neighborhood," New York Times).

Elanco HQ project in West Indianapolis: Harbinger of gentrification? | Economic development projects should include simultaneous neighborhood improvements

I came across discussion recently about how the expansion of a medical center in Buffalo is called "gentrification" when it is more about "reproduction of space"--a change in the use of the property, not a classic example of gentrification, or the replacement of low income residents with higher income residents ("Friction in the Fruit Belt," Buffalo News).

Maybe I am being pedantic, but it's not gentrification.  But no question that it is a scalar change in the nature of the place.

Indianapolis Star photo.

Apparently this is an issue in Indianapolis too, where the site of a former GM stamping plant has been empty for a decade, and an animal pharmaceuticals firm, Elanco Health, is going to build a new headquarters on the site, to accommodate the firm's acquisition of Bayer Animal Health Sciences.

Rendering of the new complex.

The Indianapolis Star reports on the groundbreaking, "Elanco breaks ground on $100M Indianapolis headquarters. Some worry about gentrification" (registration required), as well as how some residents express opposition to the project, fearing that it will spur displacement.

As part of the deal, Elanco wanted the area to be better connected to Downtown, and the city is adding bridges and other improvements.  From the article:

The state and city offered Elanco an enticing $170 million incentive package. Of that amount, $64 million is from the city in a special property taxing district called tax increment financing.

... The headquarters will consist of a 220,000-square-foot, six-story office structure and connected innovation and collaboration buildings, Elanco spokesperson Keri McGrath said. Roughly 1,000 employees will work there. 

Not everyone is for it. Jonathan Howe, who has lived near the location his whole life, has led opposition to the project, which he called government-funded gentrification. He lives in a neighborhood called West Indianapolis, which encompasses the new Elanco headquarters. 

“I’ve never received any investment from the city,” Howe said. “The amount of somersaults and backflips the city is doing for Elanco is sickening when you’re a resident here."

... The Elanco headquarters project is pitched as a way to “push downtown west,” Simmons said, “connecting The Valley (neighborhood) with the (Monument) Circle.” “Our community has longed for over a decade and much longer to be connected to downtown,” said Indianapolis councilwoman Kristin Jones, who is running for a state Senate seat. “And this project is going to provide that connectivity. (We) are going to finally have the infrastructure improvements that we have so longed for.”  ...

The alleys in Howe’s neighborhood look like a “war is taking place” he said. So badly damaged they are that residents cannot park behind their own home. The sidewalks outside Howe’s home and recording studio, where he’s lived all his life, are torn up, he said. A park sign knocked over by a car has not been replaced, he said. 

The Valley neighborhood is a historically working-class, lower-income area with a large renters population. The community has, in recent years, become home to a burgeoning Hispanic population. "People who are making $120,000, $150,000 a year at Elanco, they get all the infrastructure, they get all the roads, they get all the perks, they get everything," Howe said. "I get the inconveniences, I get to wait longer for my food, I get to continue to deal with neglect in my infrastructure and my schools and my parks."

While I'm not sure the residents are correct about gentrification, because how can improving a currently empty 45 acre site be gentrification, they have legitimate concerns.

First, they complain that the community is disinvested with significant infrastructure and civic asset needs.  Second, that the Elanco project is going to be funded in part through Tax Increment Financing (TIF), which instead of directing increased property taxes to neighborhood improvements, will take away that potential.

Cities should pair neighborhood improvements with big economic development projects, but usually they don't.  The article does make the point that the TIF district is part of the Downtown intensification plan, and that the Downtown TIF program doesn't provide for neighborhood improvements.

But that is the problem.  I understand why cities focus their economic development energies on downtown and central business districts, because that's where the best return on investment comes.  

At the same time, this creates tensions with residents, who see downtown interests as benefiting disproportionately from improvements, while they believe they get little in return.

I don't always agree with this sentiment, but indirectly it makes a very good point, that cities should ensure that economic development programs also spread benefits to the neighborhoods directly, 

-- "Revisiting community benefits agreements," 2021

rather than through trickle down and/or gentrification, which results in displacement.  (This is an issue in many places, including Dallas.  See "‘We don’t fit the demographic’: a community in Dallas grapples with gentrification," Guardian.)

Absolutely this TIF program for Elanco should be extended to include neighborhood improvements for West Indianapolis and the Valley neighborhood.  If people's property taxes are already going up, with no substantive change, they're being taken advantage of.

And if cities want to build stronger support for such property tax financing systems and subsidies of businesses, they are going to need to better link those projects with visible improvements in the greater community.

It's a no brainer to create a neighborhood improvement plan for West Indianapolis in association with the Elanco project.

Mount Dennis neighborhood, Toronto as an example.  I mentioned this neighborhood recently, which along with the addition of light rail, is getting other more resident-focused improvements.  It's a model of how to do this kind of co-beneficial planning.  

The Mount Dennis neighborhood in Toronto, which is about to be served by the Eglinton light rail line, is supportive of the new infrastructure, in part because there is a simultaneous program for neighborhood improvements ("Sidewalks, bike lanes and shops: why this neglected neighbourhood is saying ‘yes in my backyard’ to LRT development," Toronto Star), which illustrates the importance of the kind of complementary approach suggested here. 

The plans aim to make Mount Dennis a new transit hub with superior connections 

to Downtown Toronto and the Airport

The new planning framework builds on the 2019 community-initiated Mount Dennis Eco-Neighborhood Action Plan.

Note that because it's Toronto, the most populated city in Canada, densities for new development are much higher than in most US communities.

From the article:

The “Picture Mount Dennis” report contains a host of recommendations to improve Mount Dennis. Among them: 

• Encouraging the development of Weston Road, which cuts diagonally through the area, as Mount Dennis’s historic main street. 
• Low and midrise buildings would continue to dominate both sides of Weston Road. The height limit would be eight stories and the goal would be to create a “pedestrian-scaled” main street character. 
• A height peak of 45 stories would apply for buildings immediately adjacent to Mount Dennis station, with those heights gradually decreasing to the north and south of the station and towards Weston Road. Choice Properties wants to build seven towers with about 2,356 units all told, with heights ranging from 20 to 49 storeys. 
• Encourage a “balanced mix of housing types, unit sizes and tenures” in all new developments in order to provide housing opportunities for a variety of income levels and family sizes. For example, new buildings with more than 80 residential units should include more space for families, so 10 per cent of the units should be three-bedroom or larger, 15 per cent of units should be two-bedroom, while an additional 15 per cent should be a combination of two and three-bedrooms. 
• New buildings with 80 or more units should have 10 per cent of units be affordable rental or affordable condos. 
• Connect a new network of bike paths — including one that runs along the length of Weston Road — to planned cycling corridors in Toronto. 
• A “post-secondary satellite campus” should be built in Mount Dennis, that could align with clean tech or an eco-business or some form of green-friendly transportation.
• Attract jobs by promoting and attracting a major business such as a mass timber production facility that provides material for wood frame buildings, a food or social innovation hub, a photography or film museum or a major arts/cultural centre.

Systematic neighborhood stabilization program.  I wrote a series about this:

-- "The need for a "national" neighborhood stabilization program comparable to the Main Street program for commercial districts: Part I (Overall)"
-- "To be successful, local neighborhood stabilization programs need a packaged set of robust remedies: Part 2"
-- "Creating 'community safety partnership neighborhood management programs as a management and mitigation strategy for public nuisance programs: Part 3 (like homeless shelters)"
-- "A case in Gloucester, Massachusetts as an illustration of the need for systematic neighborhood monitoring and stabilization initiatives: Part 4 (the Curcuru Family)"
-- "Local neighborhood stabilization programs: Part 5 | Adding energy conservation programs, with the PUSH Buffalo Green Development Zone as a model," 2021 

A new football stadium for the Washington "Commanders" | Virginia versus Maryland (and hopefully not DC)

 "Framework of characteristics that support successful community development in association with the development of professional sports facilities" and "Revisiting "Framework of characteristics that support successful community development in association with the development of professional sports facilities" and the Tampa Bay Rays baseball team + Phoenix Coyotes hockey" are reactions to the reality that despite advocacy against public funding for sports stadiums and arenas, with rare exceptions (California, Seattle) public funding is almost always provided as a matter of course.  

Therefore, instead of fighting funding--which admittedly is still the preferred course of action--instead we should be focusing on getting the best possible array of benefits in return for the public funding, including a kind of virtual ownership interest, to share in the value added to the team from its stadium/arena as platform.

Washington Commanders jerseys are displayed at an event to unveil the NFL football team's new identity, Wednesday, Feb. 2, 2022, in Landover, Md. The new name comes 18 months after the once-storied franchise dropped its old moniker following decades of criticism that it was offensive to Native Americans. (AP Photo/Patrick Semansky)

This comes up again, because the woefully dreadful Washington football team, recently renamed the Commanders ("Washington selects Commanders as new NFL team name after two-season process," ESPN) want a new stadium.

Right now Virginia especially, but also Maryland, are vying for the privilege of raining money on the team, even though the team is incredibly unsuccessful on the field and is a lackluster "partner" to the community that hosts it, and the state that funded the stadium.

-- "Been to Largo lately? Sports teams often aren't very good partners...,"2019
-- "Stadiums and arenas redux: Mayor Bowser still wants the area NFL team to relocate to DC," 2019

Currently the football team plays at a stadium located in a desolate part of Prince George's County, about 1.5 miles from the Largo Metrorail Station, with a lease that ends in 2027.  That stadium was built by the Maryland Stadium Authority, with limited benefits for the locality and zero ancillary development.

Parking lots aren't good generators of economic activity.

FedEx Stadium

It replaced a since demolished stadium in DC, the RFK Stadium, and because of the team's one time success there, there is still a strong drumbeat of support especially amongst elected officials like DC's Mayor Bowser, to "bring the team back."

The RFK Stadium in DC has since been demolished.

It too was not great for ancillary development, 

because of its non-central location and parking lots.

The big thing in stadium and arena proposals these days is creating an active development around the facility.  

The latest example is the district being built up around the new SoFi Stadium in Inglewood, California (Los Angeles County), which was just home to the recent Super Bowl.

-- LASED - LA Stadium & Entertainment District at Hollywood Park
-- "Inside Inglewood stadium's massive model," Los Angeles Times

The stadium opened last summer, and the area around it is beginning to be built out ("The Lot at Hollywood Park near SoFi Stadium will host drive-in concerts and movies," Daily Breeze).

SoFi Stadium.  

Photo by Mark Holtzman, West Coast Aerial Photography, Inc.

But my belief is that for the most part, such stadiums won't work well as destinations outside of football (spillover benefits), because professional football has so few regular games in the home stadium, 8-9, and maybe a few concerts, unless they are programmed super well.  The LA Stadium might be an exception, but we'll see.

Professor Frank Guridy of Columbia writes about how Inglewood is choosing to be all in on professional sports as economic development, which may have limited benefits for the city's predominately majority minority population ("A home Super Bowl is good for the Rams. But is SoFi Stadium good for Inglewood?," also see "The Rams might be winners, but two communities know what has been lost," Post).

Note that arenas home to basketball and/or hockey have a better chance at successful ancillary development because they are smaller, tend to be centrally located, and have many more events.  

The District Detroit development, home to the Detroit Red Wings and Pistons teams, and near to the baseball and football stadiums, is perhaps the premier example for arenas.  And Ballpark Village adjacent to the St. Louis Cardinals baseball stadium for that sport.

This is especially the case for facilities far from the core of the central city.  The sites proposed in Virginia are at least 27 miles from DC ("Commanders eye three possible sites in Virginia for new stadium, entertainment complex" and "Virginia’s bills to lure Commanders could offer unlimited tax dollars for ‘mini-city’," Washington Post).  (The Atlanta Braves stadium is an exception, but it was inserted into an already thriving edge city.  The strong real estate development conditions there exist independent of the baseball stadium.)

The Washington Nationals stadium is an element in the redevelopment of the Navy Yard.  But interestingly, the ancillary business from patrons is almost exclusively for food and drink, making it almost impossible for retail establishments to succeed.  And that's at a center city location.

Decades ago, a close in stadium was proposed for Potomac Yard in Alexandria/Arlington.  And interestingly, now that area is being developed just fine without a stadium ("Crystal City Arlington as Amazon one-half of HQ2").  Even before Amazon.

The current Virginia proposals are for sites in Prince William and Loudoun Counties.  One of the three sites is proximate to the Loudoun Gateway Silver Line Metrorail station, although legislators state the Metrorail system could be extended to the stadium if service doesn't exist.  

(We already know that hasn't happened for PG County's National Harbor, which has been open for 14 years.  See "Backwardness of transportation and land use planning: National Harbor, Prince George's County, Maryland | Why isn't high capacity transit access required from the outset?.")

Although Maryland wants to remain in the race for the new stadium location ("Eager to compete, Maryland developing multimillion-dollar deal for Washington Commanders," Post).  Note that despite the success of the Baltimore Ravens, the football stadium there hasn't been particularly noteworthy in terms of spurring center city economic revitalization.  Nor will the city's renovated Pimlico horse racing track, where hundreds of millions of state dollars were spent on renovation ("More sports and revitalization: Pimlico Race Course in Baltimore").

Despite the fact that Prince George's County is renaming the Metrorail station Downtown Largo ("Downtown is not a word without meaning: renaming the Largo Town Center to Downtown Largo is without meaning" and "Despite survey results, Largo Town Center Metro Station will become Downtown Largo Station," ), there is no there there, even though the stadium has been there for 25+ years.

Why would a new stadium be any different?  Why would you expect a football team owner who hasn't evinced any success at running the team to be good at real estate development?  

Although the team can hire a top notch developer, but then they'll have to share the proceeds.  (The LA Rams and SoFi Stadium are owned by a real estate developer--he married into the Walton family, and he had a sweetheart deal to develop shopping center developments around Walmart stores).

Why should a community gift the football team owners with the wealth coming from such a development?  Especially in a city like DC, which has the capacity to do a development at that location independent of a stadium and especially football.

====

End tax breaks for stadium municipal bonds.  Separately, something I've argued for years, there is legislation proposed in Congress to eliminate the use of tax free bonds for stadium funding ("Lawmakers seek to end lucrative tax breaks for pro stadium construction," Post).

But like how fighting public financing of stadiums and arenas is a losing game, teams are owned by billionaires with good connections to elected officials, plus lobbyists, plus the teams can organize their fans also to lobby Congress against bills that the teams disfavor.

The legislation is justified in part because of lost federal tax revenues.  But at about $200 million/year, that's not very much.

So I don't see this going anywhere.

Amazon to offer best practice bicycle commuting benefits, at least to corporate employees

Amazon, like Walmart, has a lot of negative effects on independent retail, and adds to traffic congestion via its "same day delivery" offer, which has significantly increased package delivery.  

And it uses its economic power to browbeat its "partners", such as forcing them to sell a portion of their business to the company, to maintain access to the Amazon e-commerce site ("Amazon Demands One More Thing From Some Vendors: A Piece of Their Company," Wall Street Journal).

But in developing their headquarters in Seattle, they made a number of proffers that were beneficial to transit, such as buying the city another streetcar, and paying for more frequent service ("Amazon to Buy 4th Streetcar, Fund 10-Minute Headways," Seattle Transit), the commercial district such as agreeing to not have on-site food service, thereby encouraging employees to spend money at area businesses, and bike infrastructure ("Amazon gives a push to biking downtown," Seattle Times).

Geekwire ("Amazon offering new $170 monthly benefit to employees who commute to work by bike") and WTOP ("Amazon will pay HQ2 employees in Arlington to bike to work") report on Amazon's latest announcement that they will be offering significant benefits to bicycle commuters, benefits that are significantly greater than those available via the traditional federal commuter benefits program.  From Geekwire:

Amazon says in Seattle more than 20% of its employees walk or bike to work and another 50% use public transportation or carpooling options. The company already provides free transit passes to all employees.

The federal benefit for biking is up to $20/month, while it is more than 10x greater for driving.

Bicycle parking at the Seattle Amazon headquarters complex.

The new Amazon benefits are up to $170 per month and include:

• Bike leases: Employees can lease a take-home bike, including e-bikes, for a monthly fee eligible for reimbursement. 
• Bike share: Employees can expense costs for dockless or docked short-term, app-based rental bicycles. 
• Maintenance: Employees can take advantage of two complimentary tune-ups each calendar year. Amazon will bring a provider on-site that employees can use, or if employees prefer to use their own services, they will be reimbursed. 
• Bike parking: Employees can access bike parking at public transit facilities or offices without Amazon bike cages.

These are in addition to secure bike parking and shower facilities for bike commuters, at least at their Seattle facilities ("Amazon encourages employees to bike to work—with a new perk").

In all, these are significant benefits and should be a model to other firms in bike/walking/transit centric areas.

Definitely the "bike lease" idea is the flip side of "cycle borrowing," "loans for bikes" and "employer assisted bicycle purchase programs" initiatives as discussed in "Revisiting assistance programs to get people biking: 18 programs."  The "maintenance" benefit is a nice perk too, and a benefit common to college bicycle programs.

Development mitigation measures/proffers proposed by Massachusetts General Hospital in Boston

 -- "MGH pushes ahead with nearly $2 billion expansion," Boston Globe

One interesting point made in the article is that the Massachusetts General Hospital campus has 27,000 employees, 78% who get to and from the campus by sustainable modes--walking, biking, and transit.  The Hospital is served by the very busy Charles Street/MGH Station on the Blue Line.

Bicycle parking.  While the project will add car parking spaces for a total of 971, moving them from the surface to underground, it will have more total spaces for bike parking, 1,043 than cars, with the addition of more than 500 spaces.  It also proposes bike lane improvements on Charles Street and elsewhere on the campus.

Public realm improvements.  It proposes a variety of improvements, including two outdoor plazas and a street arcade, wider sidewalks, benches, among others.

Photo credit.

Connecting the Blue and Red Line subways.  Perhaps the biggest mobility contribution is underground tunnel easement and other elements within the complex, to accommodate the extension of the Blue Line from the Charles Street/Massachusetts General Hospital Station, under Charles Street to the Bowdoin Red Line Station, thereby connecting the two lines.

This should spur the MBTA to move the project forward ("Red Line-Blue Line connection could be much cheaper than thought, study says").  They hadn't really prioritized it until three years ago, even though previous administrations had agreed to it as part of environmental and other mitigation measures although they have a target date of 2040.  From the article:

Supporters of the connector say it would make it easier to travel from Logan Airport, East Boston, and Revere — all on the Blue Line — to Red Line stops such as Massachusetts General Hospital and Kendall and Harvard squares in Cambridge. Switching between the two lines now requires a short ride on the Green or Orange lines.

The new estimate includes building a 1,500-foot rail tunnel under Cambridge Street from the Bowdoin stop on the Blue Line and new platforms at Charles/MGH station, where the lines would connect. It also includes the cost of moving utilities. 

It doesn’t include aspects of the project that could increase costs to about $500 million, such as designs, testing, any necessary modifications to vehicles, and finishing touches on the station, like adding elevators.

Since the new hospital construction project will be completed in 2030, MBTA should fast track this connection project so that it can open simultaneously with the newly constructed hospital buildings.

Community center space.  The project also calls for the demolition of a community center, and the proposal calls for providing space for a new community center in the development, along with a food bank.  

Affordable housing.  And a different building on the campus would be shifted to the provision of affordable housing.

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It's rare for nonprofit projects, even by large institutions like colleges and hospitals, to include mitigation measures in response to new building projects, which often come at the expense of existing operations.

To me one of the biggest is the cessation of the Seattle waterfront heritage streetcar service.  The Seattle Art Museum extended its campus, creating a sculpture park, and in the process eradicating the yard and maintenance buildings for the streetcar, without having to replace them.  

This is rare.

This rowhouse at 837 22nd St. NW, in the Foggy Bottom neighborhood, was built in 1886. It's the last rowhouse on the block and it does not qualify for historical preservation protection. (Frank Leone)

Separately, George Washington University intends to demolish a historic, undesignated building on its campus, as part of a development project ("A District couple hope that GWU won’t tear down an old Foggy Bottom rowhouse," Washington Post).

DC's oversight of the GWU campus plan never imposed serious mitigation measures, especially around historic preservation.

GWU's expansion in Foggy Bottom has pretty much eliminated the residential and mixed use neighborhood that had previously existed, comparable to the impact of schools like New York University on its neighborhood.

Memorable transit proffers.  Boston has some examples of developer contributions to transit station creation such as Federal Realty Investment Trust's Assembly Row and New Balance's new headquarters ("New Balance Bought Its Own Commuter Rail Station," Atlantic Magazine) providing funding for the addition of transit and other mobility improvements.

A casino, the Pittsburgh Stadium Authority and other interests paid towards the extension of the T subway to the North Shore, serving a casino and stadiums for the Pittsburgh Pirates and Steelers.

In Portland, Portland State University paid for station creation and other improvements for the streetcar, including providing access to the streetcar route within the campus, while Oregon Health Sciences University operates the aerial tram.

In New York City, SL Green constructed underground connections between subway stations, its building, and Grand Central Station ("Behind the rise of the 77-story One Vanderbilt," New York Post).

The New York Islanders are paying almost the entire cost for an LIRR station to serve their new arena ("Islanders arena project at Belmont Park now includes new LIRR station," Newsday).  The Golden State Warriors, Phoenix Suns, and forthcoming Seattle Kraken hockey team pay/will pay local transit systems for transit access for ticket holders.

In DC, the city, federal government, and a TIF district taxing property owners each paid 1/3 towards the construction of the infill New York Avenue Red Line Station.

In Seattle, Paul Allen's Vulcan Investments, developer of the SoDo district, paid towards ("Paul Allen's major makeover offers high risks, huge payoffs," Seattle Times) the creation of the Seattle streetcar, to help facilitate his real estate developments (which was a particularly common method by developers during the streetcar development era).  

Subsequently, Amazon paid for additional streetcars and payment for operations to expand service.

Historically, the Van Sweringen brothers of Cleveland are perhaps the most remarkable.  They wanted to build a streetcar service to serve their developments in Shaker Heights and Cleveland Heights but couldn't get right of way.  So they bought the Nickel Plate Railroad to get access to the railroad's existing right of way to include the rapid transit service.

Opportunity zones and revitalization planning

 The New York Times reports ("Biden Administration Debating How to Overhaul a Trump-Era Tax Break") that the Biden Administration is proposing changes to Trump's Opportunity Zone initiative.  

8.764 census tracts are designated as Opportunity Zones

Source: OpportunityDb investment website

Trump et al touted it as a great program to stoke development in distressed areas, but mostly it was a boon for real estate investors.  From the article:

The most comprehensive study of investment in the zones to date, released by a pair of University of California, Berkeley, researchers last week, contradicts Mr. Trump’s assessment of the zones’ early performance. The authors, Patrick Kennedy and Harrison Wheeler, are graduate economics students who were granted access to anonymous tax returns filed electronically. Mr. Kennedy is also an economic analyst at the congressional Joint Committee on Taxation. 

The study suggests that in 2019, only about 16 percent of the 8,000 census tracts nationwide that were designated by state officials as opportunity zones using criteria set under the Trump administration received any investment at all. Rural areas received almost no investment. Most of the capital was concentrated in a small slice of zones.

That shouldn't be a surprise.  Even in the best of circumstances, revitalization is tough.  It's toughest in weak markets.

But it's also hard to stoke when the process is run by real estate investors motivated by tax savings, not the best interests of the community.

Not unlike my point to artists ("Reprinting with a slight update, "Arts, culture districts and revitalization" from 2009") that they shouldn't be looking to real estate interests to save them or do their planning, the same goes for revitalization.

My basic point is that real estate development interests have their own interests apart from artists, and that artists and arts organizations need to be conscious of what those interests are, harvest what they can from them, but never stop representing their own interests first and foremost.

I know the Trump Administration would have been opposed, but before initiating investments in these communities, there needed to be a revitalization plan.  Maybe there were in many of the communities, but even so they likely required an update.  I wrote about this at the time:

-- "I figured out why Opportunity Zones won't amount to much: no planning," 2019

I make similar points that:

• an RFP isn't a plan ("Another example of an RFP isn't a plan: Santa Fe, New Mexico versus Denver, Colorado," 2021)
• that the EB5 visa program needed broader plans to direct where the money went
• that community benefits agreements need to be based on an overall plan of consensus priorities to be able to direct proffers in judicious ways ("Structuring community benefits agreements," 2015)

And about how revitalization planning should be organized, with what I now call "Transformational Projects Action Planning":

-- "Why can't the "Bilbao Effect" be reproduced? | Bilbao as an example of Transformational Projects Action Planning," 2017

Plus, the program is for ten years.  The revitalization process usually takes a lot longer than that, especially in distressed communities--periods of a minimum of 20-30 years are not uncommon.

How to move capital to underinvested areas?  But, you can also argue that as charlie pointed out wrt the New Deal, that it was about moving capital from Wall Street to the country's interior, especially the South and West, there need to be vehicles to incentivize capital investment in these places.

Especially because projects in distressed areas are harder to do, often more expensive, less profitable, and more risky.

Needed changes to the program.  But the program requires major changes:

• community development plans should be created for each "Opportunity Zone"
• investment incentives should be targeted to community priorities set out by the plans
• extend the length of the program
• provide the most incentives for the most difficult areas, especially weak market communities and rural areas
• graduate the tax benefits, with minimal extra benefits in strong markets, e.g., Brooklyn
• coordinate with other investment programs like New Markets Tax Credits, Historic Preservation Tax Credits, Low Income Housing Tax Credits, and Community Reinvestment requirements for banks.

Other changes to Trump changes in tax credit programs are in order.  Note that the lowering of the corporate tax rate made participating in tax credit programs much less attractive.  

Plus they made changes to certain programs like the Historic Preservation Tax Credit making it much less beneficial and therefore less effective as a tool for revitalization ("Historic preservation tax credit is saved, but weakened," Chicago Tribune).  And if anything, it should probably be increased from 20% to 30-40%.  

Same with tax credit programs for affordable housing ("Trump’s proposed tax overhaul puts affordable housing in jeopardy," The Real Deal).

These programs should be revisited as well, and necessary changes made.

Revisiting community benefits agreements: Part Two | Professor Peter Dreier

Peter Dreier is the Dr. E.P. Clapp Distinguished Professor of Politics and Founding Chair (1996-2019), Urban & Environmental Policy Department at Occidental College.  In the CBA discussion thread on the pro-urb list, he wrote a couple posts full of resources, . This is reprinted with permission.

From Peter Dreier:

Community benefits agreements and real estate development projects.  I am on the board of the Los Angeles Alliance for a New Economy (LAANE), which pioneered the first Community Benefits Agreement (CBA) in the 1990s. The idea has now spread across the country. 

LAANE is a member of the Partnership for Working Families, a national federation of local coalition groups that bring together labor, community organizing, environmental, and civil rights groups. PWF published this great report, “Unmasking the Hidden Power of Cities,” that identifies various progressive policies that citizen groups can use to leverage local government to bring about more economic, racial, and environmental justice, including CBAs. 

-- Community Benefits Agreements: Making Development Projects Accountable, Partnership for Working Families
-- "Do Community Benefits Agreements Benefit Communities?," Boston Federal Reserve Bank

Some CBAs require that the commercial tenants in developments pay living wages to employees. Some CBAs require developers to provide affordable housing as part of their projects – either within their otherwise market-rate projects (i.e. inclusionary) or to provide funds for the city and nonprofits to build affordable housing off-site. Almost all CBAs require developers to use Project Labor Agreements to guarantee union-level wages to the building trades workers on the project.

Community Reinvestment Act and banks.  CBAs are a close cousin the Community Reinvestment Agreements, which local community organizing and civil rights groups use to get banks to deal with their own redlining and predatory lending practices. 

These groups used the Community Reinvestment Act to pressure banks to sign these agreements, which got banks to agree to open up new full-service branches in communities of color, make more loans for affordable housing projects sponsored by nonprofit groups, hire more people of color in decision-making positions in the banks, etc. There have been hundreds, perhaps thousands, of Community Reinvestment Agreements between community groups and banks since the 1980s. 

 I wrote an article about this back in 1991, "Redlining Cities." Alex Schwartz wrote a report about them for Fannie Mae in 1998, "From Confrontation to Collaboration? Banks, Community Groups, and the Implementation of Community Reinvestment Agreements." The Harvard Joint Center did its own report in 2002, THE 25TH ANNIVERSARY OF THE COMMUNITY REINVESTMENT ACT: ACCESS TO CAPITAL IN AN EVOLVING FINANCIAL SERVICES SYSTEM.

Local governments as parties to Community Benefits Agreements.  The difference between Community Reinvestment Agreements and Community Benefit Agreements is that in most CBAs the local government is a party to the agreement, because it is the local government’s leverage over zoning, tax abatements, and permits that make these CBAs possible. 

CBAs are possible and effective when local community/union/enviro groups have enough clout in City Hall to get the local government agencies to require developers to agree to these CBAs as a quid pro quo for getting their projects approved. 

Leverage with Banks.  Community Reinvestment Agreements are made possible by the Community Reinvestment Act, but they only work when banks think that activist/advocacy groups have enough clout that federal bank regulators might reject their applications to buy other banks or expand to new areas if they don’t sign an agreement with these advocacy groups.

[Separately, this is how Cleveland was able to get local banks to provide funds for property rehabilitation loans in the city, when otherwise property owners wouldn't qualify for loans. These are called "depository agreements."  Some cities create community benefits requirements in return for earning city business.]

-------------

WRT Community Reinvestment Act reporting, one of my ideas is that banks should be required to publish CRA data by bank branch, presented as a type of infographic, putting out into the community the information on their compliance in an accessible way.  Right now they produce text-based reports that can be incredibly difficult to digest.

Something like this, but with data organized in terms of the "retail trade area" served by the branch, along with city and/or county data, on projects that transcend individual branches.

Creating transportation management districts (sustainable mobility districts) as an organizing framework

An entrance to the Kendall Square T Station.

The Boston Globe reports ("Boston Properties’ $6 million pledge to Kendall Square transit could be a model) that planning and transportation agencies have secured a $6 million payment towards transportation improvements in the Kendall Square district of Cambridge, Massachusetts from the real estate development firm Boston Properties, in return for development approvals beyond what would normally be obtainable through standard zoning and planning rules.
From the article:

City and state officials expect to sign an agreement with Boston Properties this month that would set aside $6 million from the developer for transit improvements there. The money would go toward a mix of short-term fixes, such as expanded MBTA bus service or more privately subsidized EZRide shuttles between Kendall and North Station, and longer-term improvements like new technology on the Red Line, or dedicated lanes for “rapid-transit” buses.

Boston Properties agreed to the contribution as part of discussions to gain approvals for 1 million square feet of housing and offices along Broadway and Binney Street. The project includes a new headquarters for Akamai Technologies.

This is a typical practice.  Other examples include:

• New Balance paying towards commuter rail improvements and agreeing to fund the station's operation for at least 10 years ("New Balance bought its own commuter rail station," The Atlantic)
• Paul Allen's Vulcan Investments and other developers paying half the cost of a new streetcar service to facilitate redevelopment in the SoDo neighborhood of Seattle ("Seattle's streetcar rides route to success, San Antonio Express-News)
• Amazon paying for additional streetcar services in return for development approvals in SoDo ("Amazon to Buy 4th Streetcar, Fund 10-Minute Headways," Seattle Transit blog)
• development approvals in the Potomac Yard district of Arlington and Alexandria in Northern Virginia are tied to transportation improvements, etc.

and of course, this is a historical practice as well.  Many communities were built by real estate developers who created transit services to make the often distant locations convenient to reach, leading to what have often been called "streetcar suburbs."

A PCC streetcar train on the Blue Line Rapid along Van Aken Boulevard at the Lynnfield station. Jet Lowe, Historic American Buildings Survey.

In the DC area, the Chevy Chase area of DC and Maryland is a leading example of such development ("Chevy Chase, Maryland: A Streetcar to Home," video, Chevy Chase Historical Society), as are Cleveland Heights and Shaker Heights in Greater Cleveland ("The Van Sweringen Developments in Cleveland, history thesis)

In most places, rather than organize a formal city- or county "transportation management district," voluntary associations, called "transportation management associations" in the trade, are created.

But I argue that the process should be formalized, creating transportation management districts--beyond "parking" and "parking districts"-- with plans for multi-modal improvements (walking, biking, transit, delivery, not just for cars), and ways for funding these improvements including "public improvement districts" and proffers, which is what Boston Properties is doing in Boston, need to be provided.

One-off funding events, like what Boston Properties is doing, don't fully leverage what is necessary, and should be integrated into the creation and operation of TMDs.

See:

-- "(In many places) Public improvement districts ought to be created as part of transit station development process: the east side of NoMA station as an example," 2016
-- "Parking districts vs. transportation/urban management districts: Part one, Bethesda," 2015
-- "Parking districts vs. transportation/urban management districts: Part two, Takoma DC/Takoma Park Maryland," 2015

Although note that Cambridge has organized the Kendall Square Mobility Task Force, which could be the prelude to the organization of a TMD.

Baltimore's Port Covington TIF deal and concomitant community benefits package

Kevin Plank, founder of Under Armour separately owns a real estate development company, Sagamore Development, and his firm has been pursuing a big redevelopment project in a part of the city's formerly active industrial waterfront now called Port Covington, which is adjacent to I-95.

This project succeeds another project for the same area, then called Westport, that went for nought because of the recession ("As Plank announces Westport acquisition, city's hopes are high," Baltimore Sun).

The project will include a new headquarters for Under Armour, more than 14,000 units of new housing, other office and retail development, and public space and infrastructure improvements.

The total value is expected to be about $5.5 billion.

To fund the new infrastructure for the area, Sagamore is asking the city for $660 million in "tax increment financing," which is a huge amount for any city, let alone Baltimore, a city with declining revenues and multiple priorities.

In return, the firm has agreed to a reasonably large community benefits package ("Port Covington $135M deal with BUILD, city hailed as end to 'business as usual' in Baltimore," Baltimore Business Journal) but negotiating it was not without controversy, and pitted nonprofits against each other.

Interestingly, on Wednesday, Kevin Plank representing both Under Armour and Sagamore Development, published a full page ad in the Baltimore Sun to communicate their side of the story.

BE SURE TO CLICK THROUGH AND READ THE AD.

Community benefits packages.  See the past blog entry "Community benefits agreements: revised (again)" for more discussion on the general issue of proffers and getting a reasonable economic return.

In 2014, there was a very interesting article on the topic, with a concerted negotiating group and strategy for a project in Southeast DC ("Ward 8 group wants millions from Congress Heights developer") in the Washington Business Journal, but I could never get the firm City Partners, to talk with me about it. From the article:

A collection of Congress Heights-area community leaders is seeking millions of dollars from the development team planning a 446,000-square-foot mixed-use project atop the Congress Heights Metro station.

A draft community benefits agreement drawn up by "A Community Coalition for Responsible Development,"or ACCORD, includes demands for office space, financial assistance for local nonprofits, revolving working capital funds for subcontractors, attorney's fees, jobs and job training, and reduced rents for retailers. ...

ACCORD includes Advisory Neighborhood Commission 8E, the Congress Heights Community Association, Congress Heights Community Training & Development, Lead the Way Foundation and Ward 8 Council Against Domestic Violence.

Its requests are extensive. Square 5914 has not signed onto the agreement.

The provisions include:

• A minimum $2 million financial support for ACCORD, paid out over 20 years, to support Ward 8 nonprofit organizations that provide recreational, social services, and educational programs.
• A 1,000-square-foot office space for 10 years, with three 10 year extensions, for ANC 8E, at a cost of $1 per month.
• Attorney fees up to $25,000 to pay for the negotiation of the community benefits agreement.
• A $200,000 revolving working capital fund to ensure that small subcontractors can cover payroll and other costs on a weekly basis.
• Guarantees that the general contractor will spend at least 40 percent of its project funding on certified business enterprises, 50 percent of which much be located within Ward 8.
• Providing at least 30 percent of its construction jobs to Ward 8 residents.
• Setting aside 8 percent of the total amount of residential square footage for households earning less than 80 percent of the area median income.
• Employment training for graduates of occupational skills training programs, with the Far Southeast Collaborative and OIC getting first preference.
• Two street level retail spaces for local businesses, at 75 percent of market lease value, plus assistance with initial tenant improvements.

FWIW, I don't imagine this proposal got very far.

There isn't all that much in the way of "big profits" on such properties in weak real estate submarkets.

To pay big community benefits you have to expect either that the property was government owned and was sold below cost or that there is great profit to made.  Instead people believe that "community benefits" are in order as a price to pay to be able to enter a community (see the past blog entries "In lower income neighborhoods, are businesses supposed to be "community organizations" first?" and "What community benefits are supposed to be versus what people think they are about" and "Jamaica Plain group drafting deal to negotiate with Whole Foods," Boston Globe).

But it is interesting that like in Baltimore, allied groups collaborated and negotiated jointly, and they are thinking big.

Weak markets and the tension between revitalization versus new construction.  The Port Covington project also sheds light on a big problem faced by weaker market cities, the tension between reinvestment in existing places versus investment in the production of brand new development on brownfield and "grayfield" sites, where industrial or other sites are converted to new uses, but while there are other buildings elsewhere in the city accommodating many of these uses already.

The site formerly known as Westport.  Baltimore Sun photo.

New construction vs. stoking demand for existing underutilized property.  Part of the problem is the issue of demand.  Baltimore's problem economically is weak demand for real estate/commercial activity, and building new may merely shift tenants around, rather than create (or attract) new economic activity.

In fact that was the root of the difficulty of launching the Westport project, because there was already so much vacant extant property elsewhere in Baltimore, financiers weren't interested in creating even more commercial space ("Westport Waterfront's woes loom particularly large for surroundings," BBJ).

Similarly, this has been an issue in Philadelphia, with the construction of the new Comcast headquarters, which comes at the loss of tenants for other properties ("Will new towers boost Philly rents, or cut them?," Philadelphia Inquirer, because demand for commercial space isn't increasingly substantively commensurate with the additional commercial space delivered through the project.

Tenants seeking special concessions or modern spaces move to the new space, leaving older spaces vacant..

An economically substantial anchor is key to big new projects.  Generally, these kinds of projects, especially at this scale, are fraught with risk, but having a large anchor tenant like Under Armour reduces the risk considerably.  Port Covington is less risky and much easier to finance compared to Westport, but it's still not a slam dunk.  Hence the request for TIF funding, which reduces how much traditional financing the project needs to move forward, especially at the earliest stages where costs mount and revenues are nonexistent.

Executive jobs vs. "back office" jobs and the return to the city movement by corporations. While there is the visibly evident trend of large corporations moving back to cities (past blog entries "Smart Growth America report on businesses moving back to center cities (and suburban core business districts)" and "A lesson that seeing is believing: Panasonic's new building in Newark, NJ as an example, positive and negative, in businesses coming back to the city center"), it is not lockstep.

Some cities, like Washington and Philadelphia, don't seem to be big beneficiaries of such movement ("Businesses moving back to the center: not a universal trend"), and in many places, other firms continue to move to the suburbs.

Furthermore, companies moving back aren't moving everyone back, but mostly "command, control, and coordination" positions ("Leaving for the city," Economist). continuing the multi-decade trend of separating lower value ("back office") positions and either outsourcing them or moving them to lower cost locations.

One Court Square Citibank complex in the Long Island City district of Queens.

For example, in the 1980s Citibank moved certain functions to Long Island City from Manhattan ("Citi-Owned LIC Site Could Give Rise to a 40-Story Building," Curbed NY), and other financial firms moved "back office" functions to Jersey City ("Lehman Bros. to Move 900 Back-Office Jobs to Jersey City," New York Times, 1993; "Jersey City remains attractive to corporations," Jersey Journal) and elsewhere.

This helped them cut costs.

In weak real estate markets, there isn't the same imperative to real estate costs.  What makes Under Armour unusual is that at this stage of the company's development, they haven't separated out "back office" jobs from their corporate campus, the way that companies have done so in higher value real estate markets.

Managing corporate real estate costs.  I haven't been keeping up with the Harvard Business Review now for the past couple years, which is unfortunate because it usually has some conceptually provocative writings.

But long before I was involved in urban revitalization, when I was doing business television production, I remember coming across the first article by "Sandy" Apgar of Baltimore in the mid-1990s, and finding it very interesting.

-- "Uncovering Your Hidden Occupancy Costs," Harvard Business Review, May-June 1993, which was followed by

-- "Managing Real Estate to Build Value," Harvard Business Review, November-December 1995,

Today this is nothing new ("Changing Office Trends Hold Major Implications for Future Office Demand," CoStar Group; "Law firms in D.C. are shrinking, leaving behind vacancies," Washington Post); National Strategy for Real Property, The White House/Office of the President) but 20 years ago it was a big deal.

A new progressive urban politics and social housing

There has been a fair amount of writing about a renewed progressivism in municipal politics as a result of the election of Bill de Blasio in New York City ("More liberal, populist movement emerging in Democratic Party ahead of 2016 elections," cf. "ALEC stands its ground," Washington Post) and the rise of local minimum wage initiatives, such as the $15 per hour minimum wage in SeaTac, Washington, which is where the local airport is located and where unionized operations have been outsourced by airlines as a way to lower labor costs ("$15 minimum wage measure headed for recount" and "Push for minimum wage hike led by localities, Democrats," Washington Post).

Michael Gecan of the Industrial Areas Foundation has a piece, "How De Blasio's Real Estate Choices Can Save NYC," in the Boston Review blog, where suggests that Bill de Blasio, the incoming Mayor of New York City, needs to follow through on his election victory speech, and develop a focused agenda for "real estate development for working- and middle-class people," pointing out that private sector development and housing for people with means is the primary focus of local housing policy.

In terms of the housing market, he writes that there are three cities within the city: the city of the well off and institutions (like universities), the first city; the second city is made up of public housing; and the third city is in the middle, that of working-class and middle-class communities.

While the article focuses on New York City, the recommendations are extendable to most major cities.  From the article:

Even in our global, virtual age, local property is critical. National and international shifts—toward intellectual, cultural, and educational work, primarily—have their effects, but thanks in large part to real estate, cities aren’t passive victims, or at least don’t have to be. Cities are still physical places, and their available space—abandoned sites, brownfields, public lands, buildings of all kinds—is tremendously valuable. Real estate owned and regulated by cities remains central to the fortunes being amassed in New York, Boston, Washington, D.C., lakefront Chicago, and elsewhere.

As de Blasio kept hammering on during his campaign, NYC's policies under Mayor Bloomberg were focused on enabling more development of and within the first city, although the Mayor did use the revenues from the first city to support some improvements that trickled down, although even this past week, NYC announced that it would be closing two of the city's three immunization clinics, forcing most low income residents on very long treks for service ("Bloomberg Administration Renews Plan to Close Two City-Run Immunization Clinics, Leaving Just One Open," Independent Budget Office blog).

Gecan suggests that with regard to "the first city," cities should extract more concessions that support housing in return for zoning relief and the utilization of city-controlled property.  For the second city, cities need to commit to high quality appointees for housing agencies and providing funding for housing programs, both for maintenance of existing stock and new production.  For the third city, he recommends robust policies and programs that support the "preservation" (preservation in the context of affordable housing has a very specific meaning, keeping housing affordable) of middle class and working class housing as well as its maintenance.

I think this are very good organizing points to frame what should be driving housing policies for each of these segments of the housing market.

Gecan believes very much in the opportunities that cities have to do better, and the article closes with this:

... Cities can make decisions. Cities can set their own priorities. Cities can resist the self-interested categories of those with extraordinary wealth and an unlimited sense of entitlement. Cities can be living actions, maintaining the crucial middle of people and institutions and neighborhoods that serves as a bridge for those struggling to rise from poverty and as a brake on the adolescent appetites of the militant rich.

And the new batch of American mayors can lead that action.

but the reality is that Mayors and Councils are very much beholden to the real estate industry and aren't likely to be visionary without a significant push.

Therefore I think the article needs to be followed up with a more detailed policy and practice framework for each of the "sub-cities" housing segments.  

This is crucial because a housing policy that is better balanced and not almost exclusively focused on housing for the most profitable segments is not likely to find favor with the real estate industry (which is comprised not just of developers, but construction firms, banks and other financial firms, and legal practices specializing in land use law, contracts, and financial transactions), which is the source of the majority of political donations (such donations vie with those from municipal workers unions as the #1 or #2 source in most every local election across the country)

Which is the point by Molotch in "City as a Growth Machine: Toward a Political Economy of Place),"  and expanded into the book Urban Fortunes, local land use development unites political and economic elites on a common, pro-market agenda--witness DC's recent and present experiences with Walmart (see "The Selling of Walmart: How the world's biggest retailer won over D.C. without a fight" from the Washington City Paper)

My biggest retrospective lesson as a budding community activist starting around the period when Anthony Williams became mayor is that not having plans in place means that when the velocity of change becomes voracious, you're almost completely unprepared and unable to take advantage of favorable opportunities that might be presented.

Also see past blog entries "How will Obama relate to the District," ""Chance" continues to favor the prepared road builders," and "Chance favors the prepared advocacy group"), which elucidate my point that "chance" favors the prepared city, that a prepared city plans ahead and has plans to begin with.

That's what developers do, they plan and work to achieve their goals over very long time frames (which is also the point Professor Clarence Stone makes in "urban regime" theory, that elites work on long time frames and stick to their agenda, see "If you don't know urban political theory, it's likely that you don't understand local land use").

Gecan admires developers for preparation and perseverance.  From the article:

Every major developer, construction company, global investor, financial institution, and building-materials supplier understands this. They understood it decades ago, when I was starting out as an organizer in the housing field. Thirty years ago, I sat down for coffee with a Chicago developer visiting New York and asked what he’d been doing. “Walking,” he said. He’d spent the previous two weeks walking every block in Manhattan looking for potential sites. I admired that relentless drive and attention to detail, which developers maintain today.

Advocates need to be equally well prepared.  Typically we are not.  But as Michael Gecan points out, there is an opening now for more progressive municipal and county housing policy, and we need to avail ourselves of the opportunity.

Some past blog entries related to housing policy include:

-- Community benefits agreements
-- Look ma, no comprehensive housing policy
-- The public housing: building communities vs. providing a place to live
-- Learning from Vienna and from Vienna's Social Housing Model
-- Deeper thinking/programming on weak residential housing markets is required: DC example, Anacostia
-- Tower Renewal
-- Something I forgot to mention about the Watergate and "Tower Renewal"
-- One element typically ignored in housing policy: helping low income families stay in their homes
-- Affordable housing policy: it's not just one element, it's many elements
-- Cool graphics showing transit lines and median income by census tracts in NYC and Chicago
(this entry references two reports, the Puget Sound Regional Equity Network: Principles of Equitable Development and from the Dukakis Institute at Northeastern University, Maintaining Diversity In America’s Transit-Rich Neighborhoods: Tools for Equitable Neighborhood Change)

I can't say that I am familiar with what might be an example of a best practice municipal housing plan.  Recommendations are welcome...