Wednesday, April 29, 2009

Buyers pay impact fees? Myth, prof says

(More from "The Next City" conference last weekend in Cambridge, sponsored by the Nieman Foundation, the Lincoln Institute of Land Policy and Harvard's Graduate School of Design. I encountered blogus interruptus when my Mac laptop went on strike. I'm doing a series of notebook-dumping posts.)

Continuing the theme of quotable economists: Jeff Chapman, professor of applied public finance of Arizona State, who researches state and local government finance, gave a rundown of what he called "tax myths." Herewith:

1. All states are the same.
2. Tax breaks for economic development are worthwhile. His position is that almost always the companies would locate there anyway and that taxes are a lesser consideration for those corporate decisions.
3. Property taxes are regressive. (A regressive tax disproportionatelys hurt lower-income people. Sales taxes are regressive. The income tax is progressive, as in wealthier people pay proportionately higher rates.) Chapman is a fan of the property tax because it's stable, hard for people to evade, and promotes local government. " ...and it is really unpopular," he concedes.
4. Not taxing e-commerce is good.
5. Housing impact fees are always shifted to the buyer. Most empirical evidence, he said, shows that isn't true. And, he asks, if housing impact fees could be shifted so easily to the buyers, why are the plaintiffs in cases challenging them always the developers?

CRA to blame? No way

(More from "The Next City" conference last weekend in Cambridge. I encountered blogus interruptus when my Mac laptop went on strike. I'm doing a series of notebook-dumping posts.)

One more from Wellesley College economist Chip Case. Then, later today when my other opinion-writing duties are finished, I'll dive into such topics as the myth that housing impact fees are always shifted to homebuyers.

Do you get the sense Case likes to skewer conventional wisdom? He opined on the belief, particularly dear to some political conservatives, that the Community Reinvestment Act is what caused all those mortgage companies to give mortgages to unqualified people.

Now before you go off on me, I'm not saying the Democrats were blameless. The ideal of homeownership has been up there with apple pie, motherhood and the American flag for many Americans for many years, nudged along by Democrats and Republicans, conservatives and liberals, social policymaker wonks and numerous homebuilder and Realtor associations. Everyone seemed to accept as given truth that homeownership is the ticket to wealth, stable neighborhoods and family values. Which is one reason -- among many -- that the out-of-control mortgages didn't get nearly enough scrutiny from people who might have stopped it.

This is about the Community Reinvestment Act, a Carter-era federal banking law that applied to banks (not to hedge funds or mortgage brokers or insurance companies) and required them to make loans to qualified customers in poor and minority neighborhoods and to ensure banks were serving those neighborhoods. It clearly was not perfectly enforced, or you'd see a heckuva lot more Wachovias or BofA branches in Charlotte's poorer neighborhoods. But I digress. If you were a bank looking at buying another bank, the feds would look to see if you were following the CRA, and if not, perhaps might not let you make that acquisition.

Here's Case's view: I believe in the CRA. That legislation didn't cause this mess [the foreclosure and credit crisis]. Lehman Brothers [the Wall Street investment bank that went bankrupt in September] didn't give a damn about the CRA.
His point was that Lehman Brothers, as well as Bear Stearns, weren't into commercial banking anyway, or giving mortgages to poor people. The CRA applied only to FDIC regulated banks. As Floyd Norris wrote in The New York Times in September, " ... most of the worst loans appear to have been made outside of the banking system, by mortgage brokers not subject to its [CRA] rules." For a balanced discussion of the CRA-foreclosure issue, see the Wikipedia entry on CRA, particularly the section on "Relation to 2008 Financial Crisis."

Tuesday, April 28, 2009

Case of Case-Shiller dishes

(More from "The Next City" conference last weekend in Cambridge. I encountered blogus interruptus when my Mac laptop went on strike. I'm doing a series of notebook-dumping posts.)

Chip Case (right), Wellesley College economist and a founder of the Case-Shiller Home Price Index, was quite entertaining and not what you might expect from an academic in "the dismal science."

A Chip Case joke: "I had an economist call me the other day, said he couldn't sell his house and what should he do. I said, 'For Christ's sake you're an economist! It's worth -- I hate to tell you -- what someone's willing to pay for it!' "

Chip Case prediction on the commercial real estate: "It's the next shoe to fall." Every worker lost (and the U.S. job loss from December 2007 to March 2009 has been 5.1 million), creates an average vacancy of 180 square feet. "That stuff is still being held on the books of banks at par," he said.

Case response when asked about the so-called "American Dream of Homeownership"?
"It's largely bulls---." He went on to say, "Rental is better for a lot of people (unless they bought during a boom)."

John King, urban design writer for the San Francisco Chronicle: What about all the starter-home suburbs?
Case: I don't know. They're going to stagnate.

Me (buttonholing Case after his talk): What advice would you give to governments and policymakers on how to deal with stagnating starter home suburbs?
Case: I'd appoint a housing czar, inventory what's out there, what condition it's in, and start buying. Buy, and hold until it's needed.

He then acknowledged state and local governments have no money. "The only government with money is the one that's printing it."

Friday, April 24, 2009

Housing expert: Upturn this year?

Chip Case, economist from Wellesley University and a creator of the Case-Shiller Housing Index:
"I think you're going to see things turn this year. In the housing market. Commercial real estate is going to dominate the press in the next few months. [Because of banking issues.] But the story's in residential ... "

Case noted, wryly that his long-time Red Sox fandom proves he's an optimist.

"Florida's not going to die. Arizona is sick but it's not gonna die." His point is that people still want to live in warm areas.

"Florida and California alone are one-third of the [housing and real estate] value in the United States. California alone is a quarter of it."

(This is at a conference on "The Next City" in Cambridge, Mass., sponsored by the Lincoln Institute of Land Policy, the Nieman Foundation and Harvard's Graduate School of Design.)

The 'Next City': Transit or ... another Michigan?

Justin, who commented on the previous post, hopes we (the country) are finally getting it together.

(To fill you in: I'm at a conference on "The Next City" in Cambridge, MA, sponsored by the Lincoln Institute of Land Policy and the Nieman Foundation and Harvard's Graduate School of Design.) We're now listening to economist Chip Case of Wellesley University, creator of the Case-Shiller Index of real estate. More about him later.)

Keith Schneider -- a Michigan-based writer and blogger ( who free-lances for the New York Times and founded the Michigan Land Use Institute -- opined that unless the country does get its act together, the whole country will be like Michigan. That is, suffering deeply.

By getting its act together, he means stronger transit and not jettisoning the already-built infrastructure in cities such as Detroit and Cleveland, and building in ways that aren't as expensive for public infrastructure as the years of low-density sprawl growth has been.

He noted that the problems the whole country is now seeing, such as foreclosures and declining incomes, were first visible in the outer-outer suburbs of Detroit. (And, I should add, in the new starter home subdivisions ringing Charlotte.)

The 'Next City' – on fast tracks?

I'm listening to Michael Dukakis at conference on "The Next City" in Cambridge, MA. He's a huge rail fan. Says Boston IS this country's best version of "the next city." That's because it's compact, walkable and has plenty of transportation options beyond highways.

He's optimistic, because the president and the Congress are now interested in trying to build a better national rail transportation system. "My concern is what’s going on at the state and local level," he just said. "That’s where we’ve got to spend some time." He didn't mention South Carolina specifically, but ...

Tuesday, April 21, 2009

A call to help our schools and kids

Leonard Pitts, the Miami Herald's Pulitzer-winning columnist, is in town today. He spoke to a breakfast sponsored by the nonprofit group Mecklenburg Citizens for Public Education, or MeckEd ( ). This afternoon he'll visit the staff at The Observer.

In 2007 Pitts wrote a series, "What Works," in which he highlighted more than a dozen successful efforts around the country to help children and schools. One was from Gaston, N.C. (a town near Roanoke Rapids on northeastern North Carolina, not nearby Gaston County) and featured a KIPP Academy.

"How do you change something many of us long ago learned to take for granted?" he asked the crowd. And, "If we know what works, why not just do it?"

He quoted an ancient Greek saying: "A society grows great when old men plant trees whose shade they know they will never sit in."

In other words, get involved where you can, doing what you can.

He's not the first to note this, but it's still true: A strong public education system is important for the local economy, for keeping businesses healthy and for the fiscally prudent goal of keeping local people engaged in productive lives and out of jail. It's not just a feel-good thing, Pitts said, but a common-sense mathematical calculation.

Yet if you read the comments section of this blog or many online sites, anytime the public schools emerge as a topic, and they're filled with hostility toward Charlotte-Mecklenburg Schools in particular and public schools in general. Which is, at bottom, incredibly counter-productive for the whole community. Nothing is perfect, but invective doesn't help anyone improve anything and indeed, tends to have the opposite effect.

Has my kid had some bad teachers at CMS? You bet. Been in class with a few deeply troubled kids? Yep. Do CMS administrators make occasionally silly decisions? Of course. Why should they be different from managers everywhere? (I say that as a former department head, where made my share of dumb decisions.) None of those problems is specific to CMS or even to public schools.

Yet there's a vein of what seems to approach hatred running through parts of Charlotte, toward its public schools that too often drowns out an equally strong vein of support.

MeckEd hopes to start a community discussion on public education. Here's a link to their new discussion board, being run with help from the Crossroads Charlotte initiative.

And don't forget, where you can put your money to good use helping classroom teachers who really need the help.

Friday, April 17, 2009

High-speed rail in N.C. on a faster track?

The News & Observer reports that N.C. transportation officials are optimistic that the Charlotte-Raleigh-Washington route will fare well in snagging some of those $8 billion in stimulus money for high-speed rail, and that it's one of six corridors feds have said are likely candidates for the first stimulus funds to be distributed later this year. (Associated Press report here.) If that's the case, then kudos to North Carolina for having worked for years to try to keep alive the idea of high-speed inter-city rail travel, even during years when many taxpayers thought the idea was just a waste of money.

I'm just back from a week spent traveling by rail in and around New York, New Jersey and Washington, DC. Took commuter rail from NYC to Princeton. Took heavy rail (that would be the subway) around Manhattan. Took Amtrak from NYC to DC. It was easy. It was fast. It was environmentally prudent. It was more convenient than flying -- downtown to downtown. And the whole time I was on the train I didn't worry a bit about landing in the Hudson River.

Does inter-city rail cost money? You betcha. But so do our taxpayer-built airports (don't forget the air traffic control system), as well as the interstate highway system, with which we are all busily polluting our atmosphere (possibly destroying the global environment as we do so, though I think I'll be dead before we know whether that's really what we're doing) and enriching some Middle Eastern potentates I'd just as soon not enrich. Everything's a trade-off.

Wednesday, April 15, 2009

Architects, and the GREEN Line

UNCC's planned uptown building (above)

Good news for N.C. architect Phil Freelon. His firm, the Freelon Group, has been named to a team that will design the Smithsonian's new Museum of African American History and Culture on the National Mall. David Adjaye, an up-and-coming young architect from London, will be lead designer. The Freelon Group is also designing Charlotte's now-under-construction Afro-American Cultural Center, to be named for architect and former Mayor Harvey Gantt.

Speaking of Gantt, he was one of the many glitterati (such as we have in Charlotte) at the UNC Charlotte groundbreaking on Monday for the 12-story building at 9th and Brevard streets uptown. Among the folks who spoke or whom I spotted in the crowd: UNC system president Erskine Bowles, UNCC trustees chair Ruth Shaw, Mayor Pat McCrory, City Council members Patsy Kinsey, Anthony Foxx and Andy Dulin, county commissioners' chair Jennifer Roberts, ex-BofA exec Dennis Rash, former First Union CEO Cliff Cameron, retailers Al and Leon Levine, and a string of city staffers including City Manager Curt Walton.

And if the firepower assembled at that party tent makes any difference, you should put money on the northeast transit corridor -- an extension of the existing Blue Line -- being renamed the Green Line, after UNCC's colors. References to the "green line" drew enthusiastic applause.

Tuesday, April 14, 2009

Do 'uptown leaders' still rule the roost?

Vacation over. No more outerbelt opinions -- at least for a while. Onward to other things.

Is the Saturday Observer so slightly read that a huge package on the future of Charlotte -- one suggesting that the city's "business leaders" weren't the leaders anymore -- got only two comments? Maybe everyone was busy dying Easter eggs or playing in the sunshine. Even a column from UNC Charlotte's Jeff Michael attracted little reader attention online. He writes that based on planning textbook factors, Charlotte shouldn't have been an urban success at all.

So take a look. Do you agree that the local oligarchy of business leaders is gone? If so, who should take their place, and how should that process happen?

I wrote, "I keep hearing people asking who Charlotte's next leaders will be – as though some king-maker somewhere gets out the royal staff and taps a few CEOs, who become The New Leaders. I think Charlotte is too big and too diverse for that old pattern of oligarchy to work, even if we wanted it to."

Put your comments here, or on the article, if you care to comment. Reactions (those that are civil and have some thought informing them) will help shape comments at a series of forums around the region next week, with 2008 Citistates Report writers Neal Peirce and Curtis Johnson and local elected officials, business leaders, environmentalists and others.

The forums are free and open to all. To Register:
They'll be:
Tuesday, April 21, Gaston County: 2-4:30 p.m. at Gaston Citizen's Resource Center, U.S. 321 North, Dallas.
Wednesday, April 22, York County: 1-3:30 p.m. at Rock Hill City Hall, 155 Johnston St., Rock Hill.
Thursday, April 23, Cabarrus County: 1-3:30 p.m., Cabarrus Arena and Events Center, 4751 N.C. 49 North, Concord.

I'm moderating the panels on Tuesday and Wednesday. I hope I'll see some of you there.

Thursday, April 02, 2009

No, DON'T make 485 top priority

I'm going out on an opinion limb here, but I've been trying to figure out why just about every elected official around here seems to take it on faith that finishing that final leg of the outerbelt should be at the top of all local transportation spending lists. It shouldn't. There are better and more useful ways to spend that estimated $220 million.

Putting a lot more of it into Charlotte's transit system and better -- faster and more frequent -- rail service between North Carolinas cities would be a good place to start. Yes, it's expensive. But it would solve a lot more congestion than any urban loop road ever would. Yes, the money's in different legal "buckets." So change the law, already.

Meanwhile, we should get smarter in using state and federal transportation money restricted for streets and roads. There are plenty of legitimate projects in Mecklenburg County that are sorely needed, as development has overtaken old farm-to-market roads. But instead of building the typical NCDOT-style four-lane country highways, build four-lane boulevards. This is, after all, a city.

And this is the most important part of this piece: Build plenty of streets that connect. The more connections, the less the load on any one road. And can we stop calling them "roads"? They're streets. Streets are what you have in cities. Roads are what you have in the country.
Did I mention that this is, after all, a city?

On those interconnected streets, build (or require others to build) sidewalks and bike lanes. If key thoroughfares need connecting, buy the houses that stand in the way, and connect where needed.

Note what the state of Virginia has done. The state recently decided it will no longer maintain (or even plow) state-owned streets in new subdivisions that don't meet state requirements for connectivity and sidewalks. Here's a link to a WashPost story. The reasoning is sound: State taxpayers are funding road widenings that wouldn't be necessary if subdivisions and other developments were required to connect with each other. And disconnected neighborhoods pose a serious problem for emergency services.

That's true in North Carolina as well. Your tax dollars will pay for a Shelby bypass to bypass the current Shelby bypass, because Shelby and Cleveland County welcomed all that sprawling development along the U.S. 74 Bypass (while sort of pretending it also was supporting its downtown. Come on.)

Ditto Monroe, although are planned to help pay some of the planned Monroe bypass. Supposedly. (And anyway, it's looking as if the "Finish The Outerbelt" forces will use up that Monroe bypass money for a few years.) Ditto widening Providence Road, a state highway needlessly carrying thousands more vehicles than it would if developers had been required to connect their developments with a street network. But the developers didn't want to do that, because customers like to live on cul-de-sacs, so local rule-makers didn't make them.

Sure, that little gap atop 485 looks weird. But in terms of solving traffic congestion, it's a nonstarter. Loop roads have no history of solving congestion in any city. They generally clog shortly after they open, because local elected officials happily OK just about any development proposed anywhere along the route -- thus packing the outerbelt with what is, essentially, local traffic. That's one important reason I-485's southern leg is so congested. Mecklenburg County commissioners, plus municipal officials in Charlotte, Pineville and Matthews, pretty much let any developer who wanted to build anything do so.

What we need, instead of widening 485, is about 10 more connector streets besides 485, N.C. 51 and the handful of others.

Indeed, old-timers remember when the outerbelt was first proposed back in the 1960s, its rationale was more openly stated in those innocent times. It was "to open land for development." Transportation rationalizations came much later, after developers had already snapped up the land along the route.

Hardly any local transportation professionals believed the outerbelt was necessary, longtime local transportation planner Bill Coxe told me more than a decade ago. But knowing the powers pushing it, they didn't openly oppose it. "That bulldozer was way too big for anybody to get down in front of,'' Coxe told me.

I remember in 1998, hearing Harry West, the longtime director of the Atlanta Regional Commission, who had seen how Atlanta's Perimeter Highway pushed that city's sprawl. Speaking about I-485, he told a Charlotte conference sponsored by, among other groups, the Charlotte Chamber: "If I thought you would listen to me, I'd tell you not to build it.''

Obviously, we didn't listen to him. And we still aren't.

Wednesday, April 01, 2009

USDOT a Ponzi scheme?

This just in: U.S. Transportation System is a giant Ponzi scheme.

OK, it's an April Fool's joke (sort of) by the clever folks at the Project for Public Spaces. The "Faking Places" newsletter today has these other headlines:

-- How football stadiums can be transformed into vital community places.
-- Get your kicks on I-95: USDOT announces "Roads with Character" initiative.
And my favorite:
-- Ice rink tops list of amenities proposed by residents of Hell.