IBJOpinion

WIEGAND: Does Indianapolis suffer from 'economic apartheid'?

Kurt Wiegand
October 17, 2009
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Mayor Greg Ballard’s plan to demolish abandoned homes is undoubtedly welcome by many in the community who are tired of vacant and abandoned homes and the problems they bring.

Mayor Ballard should be commended for working with the neighborhoods on this problem. However, I see it differently—I see the plan as a sign of failure. I see it as an acknowledgment that our leaders—those whom we elected, business leaders, policy people, and leaders of not-for-profits—have failed us, much in the same way leaders dramatically failed the auto companies, investment banks and mortgage companies.

We understand the macro problem: The greater Indianapolis area has been flooded with far more homes than there are new households. The Brookings Institution noted that 27,500 homes were built between 2000 and 2004 in greater Indianapolis, while the population grew only 3,000. If that pattern held true through 2008, something on the order of 49,000 more homes were built than there were additions to the population.

The result is that we have abandoned entire areas of the city. We aren’t redeveloping those abandoned areas. They have been allowed to become gangrenous and now the mayor is going to spend tax dollars to bulldoze them.

To be fair, this isn’t the current mayor’s fault. For years, our state and local leaders have kicked this problem down the road in hopes that somehow, something would be different. A reasonable person would look at the city of Indianapolis and question its viability in the near term, not to mention the moderate and long term. There isn’t much room for growth in Marion County. There’s virtually no redevelopment of existing property outside the Mile Square, and vast areas are deteriorated, underused and hollowed out.

Along with the deteriorating tax base and a soaring demand for services is a crumbling infrastructure with an estimated repair bill of $5.3 billion—which doesn’t include schools. Bulldozing empty houses and feel-good stories of urban gardens doesn’t solve that problem—it just masks an immediate symptom that has become overwhelming.

From a financial standpoint, overbuilding is devastating both for the abandoned areas and for the areas that get the new development. Not only are huge amounts of money that were already invested in existing infrastructure, parks, schools, etc., wasted, but the cost of building schools, roads and water treatment plants—in what were once cornfields—creates a large tax burden on the surrounding areas.

Look at all the new development in Carmel, Westfield, Fishers, Greenwood and Avon. Very little of that is real growth; most is simply leapfrog development. These communities also will face the burden of an aging infrastructure in a few short decades.

By flooding the market with new homes, we destroy values of existing homes and make it much easier to segregate people by income. As was also noted by the Brookings Institution, middle-income neighborhoods in Indianapolis have bifurcated into poor and wealthy neighborhoods. The “economic apartheid” is stark and untenable.

What we are doing is devastating also from a cultural, historic and livability standpoint. We are repeating a mistake of the 1960s and 1970s, when “urban renewal” meant bulldozing entire blocks of a city. Ironically, some of the cities that have been most successful at rebuilding their urban neighborhoods were ones that were too poor to raze entire areas in the 1960s.

Older parts of the city have a strategic competitive advantage in that they have density, culture and livability the suburbs can’t replicate. That competitive advantage needs to be developed, not destroyed. It’s not possible for older neighborhoods to “out-suburbia” the suburbs, nor should they try. Suburbia, like the suburban mall, is a concept whose time has come—and will soon pass. In the meantime, it seems we are destined to repeat the mistakes of 40 years ago.

Given the mismanagement, it may stretch credibility to say we know how to build a city. But we really do know what makes cities work, what makes them human, what makes them financially viable, and what makes them someplace we want to live, work and raise a family. We also know that what we are currently doing is unsustainable—financially, environmentally and from a livability and community standpoint. The fact that we know these things makes the failure of leadership difficult to excuse.

The solution requires a regional approach. Instead of an artificial “growth ring” that has been used by other cities, we should use market forces by including a substantial environmental impact fee for new “greenfield” development. We need to place the burden of paying for new schools, roads and infrastructure on the people who purchase a house in a new development.

We must stop subsidizing development on the very edges of the Indianapolis area and instead make the price of this development reflect its actual cost. As it is now, it’s cheaper to build in a cornfield and let others pick up the tab for the resulting infrastructure demands than to redevelop an existing neighborhood.

Requiring a substantial impact fee for new development would boost property values of existing homes, promote redevelopment of existing property and, very important, reduce property taxes. It would also slow the construction of economically unsustainable infrastructure needed to move people and services to the far-flung reaches—the cost of which already threatens to bankrupt both families and municipalities.

The huge runup in property tax bills in the past several years and the massive bill for deferred maintenance are symptoms of a dysfunctional system. Using public money to bulldoze homes is another. It’s long past time to address the larger issue.•

__________

Wiegand is information technology director for a local company. He sits on the steering committee for the Emerson Avenue Corridor Gateway Project and is active in his Emerson Heights neighborhood on the east side. He previously spent eight years at Eastside Community Development, a neighborhood development organization.

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  • Right, In the Purse Strings!
    My friend, you are right on target. We should be taxing all socially denegrating behaviour!

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