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There is absolutely no reason these projects should be receiving TIF dollars.
They are receiving TIF dollars in return for meeting the affordability and density requirements. Most of the projects would likely get built without TIF dollars, but they would be constructed without the affordable units and generally at a lower-density. It is a policy choice, just like when they city and its related tax authorities choose to funnel billions of dollars to profitable private business, including privately owned professional sports franchises and a certain large pharmaceutical company.
Christopher, I think the vast majority of TIF-backed projects do NOT include and affordable housing components. As to density, I advocate for letting the market decide. While I tend to agree with your thoughts that they are overly generous with Irsay/ Simon/ Lilly, I’d rather they dial that back than use that as a reason to ease the risk for developers on private housing.
Randy S. I know it is current city policy that if a residential project receives TIF funding it generally must provide some level of affordable housing (whether the requirement is set high enough is another question).
We have always had a mixed economy to some degree, so the issue for me in most cases is not whether the government should subsidize certain goods and services (of course the government shouldn’t subsidize things that cause harm), but whether the benefit of these subsidies substantially outweighs the cost of the public subsidy. For some development projects, I think this is true, and for others I disagree with a subsidy.
Should be a stipulation that all buildings need to be 10 stories minimum to receive that type of financing if they want to be along a mass transit oriented line.
Such a mandate would force developers to ignore market conditions, potentially resulting in the construction of apartment buildings that would have very high vacancy rates. Also, to meet fire codes apartment buildings are restricted to four stories of wood-frame construction which also makes the apartments more affordable. To build the 10-story building you advocate would a “base” of six stories built of concrete and steel with the four stories of would framed used on top. The use and cost of concrete and steel makes the project more expensive and the units less affordable. Bottom line, mandating bigger, taller apartment buildings is not a good idea for the developer or the average renter.
They are at almost 100% occupancy downtown currently. I doubt there would be a shortage of people looking to rent. They need to build it and people will rent them. That’s the problem with these four-story wooden structures is they are going to require more upkeep in the long term
Murray,
No TIF and/or other incentives, no projects.
Nope, Daniel. These projects should stand or fall on their own economic merit. TIFs siphon off sorely-needed property tax revenue from the surrounding neighborhoods. And such projects also typically get free infrastructure improvements to support the new buildings. The only reason the projects wouldn’t get built in this specific locations is that there is some other locality that will offer it to them. And, BTW, there is usually an incestuous relationship between the developers and the people who approve such arrangements, who get political contributions from the developers.
Randy S., the real problem with the lack of property tax revenue is not due to TIF funding, but rather from property valuations that fail to meet the state requirement that they be based on “fair market value” and the property tax exemptions granted to religious and non-profit entities.
Brent – those issues may very well be true, and likely way more $ is involved, but there’s little political appetite among most people to change the rules and start imposing tax on religious and NFP orgs (much as I might personally agree with the concept). I don’t know how to get solid data on how under-valued all other property is.
I admit I don’t have the background to understand why a project should or shouldn’t receive a TIF grant, but the city definitely needs as much housing density along these transit lines as possible. Perhaps these TIF deals aren’t necessary for each individual project to break ground, but they encourage more projects faster overall?
Build taller!!!
Hopefully the City will hold these high profile projects to a higher design standard than in the past.
You know that they won’t.
In exchange for TIF funding, the developers must simply accept a lower rent amount on 5% of the units, but the TIF subsidies equal between 10-15% of the published costs for each entire project.