“State Government and Urban Revitalization”: New Paper Outlines Principles for State Engagement with Revitalizing Cities

June 13th, 2017

By Torey Hollingsworth, GOPC Manager of Research and Policy

A new working paper written by researcher Alan Mallach and released by the Lincoln Institute of Land Policy explores how state governments can support lasting and inclusive urban revitalization. By law, cities are subject to significant intervention by state governments, even in states where municipalities have home rule authority. To greater or lesser extents, states set guidelines about what cities may or may not do, which can bolster or limit their ability to build stronger economies and neighborhoods. States also typically have access to greater resources, meaning their financial and programmatic support – or lack thereof – for urban revitalization efforts can make a significant impact. In Ohio, cities have home rule authority, which allows for a degree of autonomy from state authority. But the state can still broaden or limit municipalities’ powers, including their capacity to raise revenue, or as seen recently –can choose to reduce state revenue sharing.  Municipalities’ fates are not determined by state policy alone – but state policy can be a headwind or tailwind for cities seeking to turn things around.

Mallach defines urban revitalization as a series of processes that together can create transformative change. Specifically, he identifies five key elements of the broader urban revitalization process: fiscal and service delivery capacity; healthy real estate markets; healthy neighborhoods and quality of life; economic competitiveness; and human capital development. While each element requires unique strategies and interventions, the elements are so interdependent that cities must work on all of them in concert to make real progress.

These elements are also subject to what Mallach calls an “inclusivity screen,” which measures the extent to which the benefits of growth and revitalization are available to all of the city’s residents. As discussed in the recent report “Looking for Progress in America’s Smaller Legacy Cities,” which was summarized in an earlier blog post, many revitalizing cities have struggled to make new prosperity broadly accessible to residents. But evidence suggests that more inclusive growth leads to greater economic gains and less political turmoil, underscoring the importance of viewing all revitalization efforts through the inclusivity lens.

By examining states’ roles in impacting the five elements of urban revitalization and inclusivity, Mallach derives principles that should guide state policy in supporting successful revitalization.

  • “Support cities’ efforts rather than attempt to substitute for them”: Urban revitalization efforts will only be successful if they are driven by local leadership. State governments must recognize that local officials have the best understanding of their communities’ needs, and that constraints placed on programs or spending at the state level often hinder the local creativity necessary to successfully revitalize.
  • “Neutral is not neutral”: Jurisdictions do not begin on an even playing field, which means that places that start off stronger benefit more from “neutral” policies than those that began in a disadvantaged position. States should target their resources to jurisdictions that need them most and should reexamine policies that disadvantage central cities that are in need of revitalization.
  • “Integrate urban revitalization into a regional framework”: Cities and the suburban and exurban regions that surround them make up a single economic unit, and as such, any revitalization efforts championed by state governments should encourage greater cooperation among jurisdictions in fragmented regions.
  • “Break down silos and integrate revitalization elements”: A lack of coordination among government agencies and departments is a widely acknowledged problem. States should not only encourage local governments to remove internal barriers to coordination, they should also ensure that state agencies are organized in a way that promotes collaboration with local governments.
  • “Build an inclusivity framework into state policies and programs”: Many of the challenges related to poverty and inequality are outside of a city’s immediate ability to control, and many cities fall short of addressing even those they can impact. States have an important role to play in increasing access to economic opportunity for residents, either by enacting state policies that directly benefit low-income people or by explicitly enabling or encouraging cities to create inclusive policies.

Mallach concludes that states are important actors in revitalization activities, and provides a long list of more concrete recommendations for how they can promote cities’ success. These recommendations include allowing for diversified municipal revenue sources, providing state dollars to seed catalytic redevelopment projects, and “fix-it-first” and multi-modal transportation policies. A full list of recommendations is available beginning on page 49 of the report.

 

Shrinking Cities Reading Series Part IV: “What Helps or Hinders Nonprofit Developers in Reusing Vacant, Abandoned, and Contaminated Land?” In The City After Abandonment

June 7th, 2017

By Torey Hollingsworth, GOPC Manager of Research and Policy

Margaret Dewar discusses the differences in capacity in the community development field in Detroit and Cleveland in her article “What Helps or Hinders Nonprofit Developers in Reusing Vacant, Abandoned, and Contaminated Land?” The article, published in 2013, is focused around a central question – why are developers in Cleveland, where challenges related to demand for land that are nearly identical to Detroit, so much more successful in reusing vacant property? Although Cleveland is a smaller city, nonprofit developers there bought three times as many vacant properties as their peers in Detroit and completed twice as many projects on purchased land.

Dewar concludes that organizational capacity within community development corporations (CDC) is what separates the experiences of Cleveland from Detroit. Cleveland CDCs benefit from an established community development system that supports their actions and makes them more likely to succeed. A critical actor in this system is the city of Cleveland itself, which works closely with CDCs to enact its own neighborhood goals and provides the organizations with substantial funding through the Community Development Block Grant program. In Detroit, on the other hand, the relationship between the city and community development organizations was less collaborative and could be openly hostile. Detroit also provided a much smaller share of their CDBG dollars to local community development groups, something that Dewar concludes may be due to the city council’s at-large method of representation instead of a ward-based system that encourages spreading money across different neighborhoods. Additionally, the city of Cleveland was more effective in transferring property to nonprofit developers through its land bank while Detroit struggled to efficiently hand over land, particularly with a clear title.

DetroitSkyline wikicommons Cropped   Akron-Cle 012

Detroit, Michigan (source: Wikicommons) and Cleveland, Ohio (source: GOPC). 

Beyond city government, Dewar argues that CDCs in Cleveland have other significant advantages. Perhaps most importantly, a network of support organizations arose to help neighborhood-level CDCs take on more complex projects. Neighborhood Progress, Inc. (now known as Cleveland Neighborhood Progress) is particularly important, as they work directly on building local CDCs’ capacity and take on projects that would be hard for small CDCs to do alone. The Cleveland Housing Network can also help CDCs approach more complex or risky projects by serving as a developer and arranging financing. Detroit has neither of these kinds of organizations, although there is a trade association for local CDCs that has been moderately helpful in illuminating the challenges local CDCs are facing.

According to Dewar, personal relationships are also a challenge in Detroit more so than in Cleveland. In Cleveland, representatives of the community development industry report that most actors work collaboratively and focus on solving systemic problems together. Although a history of strained race relations exists in both cities, representatives of nonprofit developers in Detroit mentioned race as an ongoing issue in the local community development industry. According to these stakeholders, leadership in the industry is disproportionately white for a majority black city.  

Dewar concludes that the differences in the evolution of Detroit and Cleveland’s community development sectors have played out visibly in their abilities’ to reuse vacant and abandoned land. She suggests that stakeholders in Detroit can work to create a more robust community development system by reforming the city’s CDBG program, developing a local intermediary like Cleveland Neighborhood Progress, or create a regional, large scale non-profit housing developer like Cleveland Housing Network.

This article is part of a blog series exploring books and articles written about shrinking cities, or communities that are losing population and dealing with housing vacancy and abandonment. For more information on this series, see the first post “Reading Series on Shrinking Cities”. These summaries are provided only for educational purposes and opinions expressed in these summaries do not necessarily reflect those of Greater Ohio Policy Center.

 

Guests of Ann Fisher Show Discuss Emerging Land Use Trends Revealed in New ULI Report and Implications on Housing Affordability, Transportation

June 5th, 2017

By Alex Highley, GOPC Project Coordinator

The Urban Land Institute (ULI) has issued a new national report titled Housing in the Evolving American Suburb, which assesses general trends in housing, income, demographics within urban and suburban areas throughout the country. Stockton Williams, an author of the report, recently appeared on the All Sides with Ann Fisher radio show to discuss emerging patterns in housing and land use and to offer insight on the report findings’ implications for Ohio, and Columbus in particular. Williams was joined on the show by Rob Vogt of Vogt Strategic Insights, who emphasized the value of boosting transportation options in Ohio as a means of confronting suburbanization challenges detailed in the report.

As many analyses have shown, the growth of suburbs came largely at the expense of downtown areas in the post-war years; one of the main discoveries of the ULI report is that today many regions exhibit suburban and urban growth simultaneously. Speakers on the show mentioned that Columbus, for instance, has seen job and population increases largely throughout suburban and city areas over the past few years. While this rise often manifests in many large cities, Greater Ohio Policy Center (GOPC) has found that over the last few decades, many smaller cities in Ohio have seen a decline in key indicators of economic health in both suburban and urban areas. GOPC’s 2016 report From Akron to Zanesville: How Are Ohio’s Small and Mid-Sized Legacy Cities Faring?, which analyzes the economic health of smaller and mid-sized cities in Ohio, shows that this dual suburban-urban growth has yet to take off in many Ohio cities. In fact, the state’s smaller legacy cities and their surrounding metro areas experienced declines in population and labor force participation along with increased poverty rates during pre-(2000-2009) and post-recession (2009-2014) time periods.

Hb 463 webinar pic

Contrary to some popular thought, suburban areas in the US are still highly inhabited. In fact, 79 percent of the US population lives in suburbs, according to the ULI report. However, as a result of the growing popularity for the younger generation to move to urban environments, urban living costs have generally gone up, and thus many families in Ohio in turn are forced to re-locate into less-costly suburban neighborhoods. As a result of this movement, speakers on the radio show explain that transportation challenges represent a substantial barrier for many families who now live in Ohio’s suburbs, because public transportation is generally less comprehensive in these areas. GOPC strongly supports policies to build a robust network of public transportation throughout Ohio’s cities and metros as a tool for economic development, whereby potential workers have a reliable means of getting to a job. To do this, Williams emphasized the need to explore ways to improve bus service and build on current public transportation systems. Guests also discussed multimodal transportation’s related benefits, such as a relaxed demand for parking and lower traffic congestion.

A discussion of the changing housing patterns and preferences along with increasing home prices and rents also feature heavily in ULI’s report. During the radio show, Fisher referred to a statistic in a report GOPC co-authored with the Affordable Housing Alliance of Central Ohio (AHACO) titled The Columbus and Franklin County Affordable Housing Challenge: Needs, Resources, and Funding Models, noting that there are over 46,000 renters in central Ohio who pay over 50% of their income on housing costs. According to Vogt, this staggering number of people considered to be “severely housing cost burdened” is reflected throughout the country, and is a function of both the price of housing and annual incomes. To narrow this gap, one example of an affordable housing solution that Williams recommends is inclusionary zoning. This tool enables a local government to incentivize a private developer to build market rate housing with some mix of below-market units in a specific area. The report GOPC co-authored with AHACO highlights inclusionary zoning and developer incentives in Denver, Colorado as successful and potentially replicable models for expanding affordable housing.

Read ULI’s Report Here

 

Shrinking Cities Reading Series Part III: Why the Garden Club Couldn’t Save Youngstown

May 31st, 2017

By Torey Hollingsworth, GOPC Manager of Research and Policy

Why the Garden Club Couldn’t Save Youngstown by Sean Safford is a commonly cited work on struggling cities, particularly smaller ones. Unlike the other work profiled so far, Safford deals less directly with issues of vacant land but examines how civic capacity and social networks can influence a city’s path. Why the Garden Club Couldn’t Save Youngstown compares the trajectory of two very similar Rust Belt cities – Allentown, Pennsylvania and Youngstown, Ohio – and examines why Allentown has been more successful in rebounding from economic decline and adapting to the 21st Century economy. Both cities experienced significant crises as their primary economic engine – the steel industry – retooled in the 1970s, resulting in fewer local jobs and the eventual dissolution of each city’s key local company. Despite these challenges, Allentown has recently experienced economic and population regrowth while Youngstown has still largely not rebounded from the crisis of 40 years ago.

Safford narrows in on the social networks between economic and business elites as a key point of divergence between the cities. He traces the structure of social networks back to the founding of each city to determine its effect on the community’s response to later crises. In Allentown, business scions settled among the various cities and towns in the Lehigh Valley and built a spirit of friendly competition amongst themselves. This resulted in investment in civic, educational, and cultural institutions that were ultimately to the benefit of the community as a whole. In Youngstown, on the other hand, Safford finds that business leaders were more closely knit together and identified more with their class identity than another identity tied to place or ethnic group.

In Allentown, community leaders, including the president of Bethlehem Steel, sought to increase their own power by building stronger ties among members of disparate communities. In a particularly notable example, Allentown leaders worked to build a literal bridge between two communities and raised money and support for the project through a grassroots level campaign. The stronger ties among members of different economic classes that resulted from this effort helped build networks that were resilient in the face of eventual crisis. In Youngstown, on the other hand, Safford concludes that business leaders saw little personal value in engaging with the broader community and instead actively worked to pit ethnic groups against one another.

As the crisis in steel manufacturing loomed, leaders in Allentown responded by laying the groundwork for greater economic diversification. In Youngstown, business leaders doubled down on steel manufacturing. Once the crisis finally hit in the 1970s, Allentown was insulated from the worst effects of the downturn due to increased diversification. Local leaders turned to building local economic engines outside of the steel industry. In Youngstown, Safford says that business leaders essentially left the community on its own to figure out an answer – and the fragmented communities within the city all proposed competing responses to the crisis.

Ytown downtown

Youngstown, Ohio

Safford is able to follow the connections between economic elites in both cities to trace what kinds of networks produced the different kinds of results. He found that in 1950, economic connections in both cities are relatively dense among different powerful people. In Youngstown, those connections extended into the social realm as well, as many members of the economic elite attended the same churches and participated in the same clubs. In Allentown, social networks among economic players were much more diffuse, although a few key organizations appeared to connect many of the most prestigious leaders. Safford argues that Allentown’s more diffuse network allowed economic elites to respond to the crisis more effectively. Allentown’s social networks create multiple layers of interaction among participants that are connected but not identical to one another. When one of the layers went into crisis – as occurred in the economic realm – actors had other, insulated layers of interaction to pull from to creatively respond to the crisis at hand. Safford argues that actors were able to receive more and different kinds of opinions about potential responses to the crisis by hearing from a more diverse set of actors. Additionally, a broader set of leaders could emerge than the closed off set of “usual suspects” present in Youngstown.

Safford examined the network ties of the most powerful people in both cities again in 2000. His research showed a striking difference in the makeup of each city’s powerbrokers. Quite a few economic elites and political figures remained in prominent positions in Allentown, while in Youngstown power was much more concentrated among leaders of nonprofit organizations and educational institutions. Safford claims that Allentown was stronger because there were still economic leaders involved in its civic structure – and Youngstown suffered because that was not the case. There is little economic incentive for corporate leaders to actively participate in their communities, but in Allentown, the multiple layers of network ties led actors to find other value in participating in civic activities.

This article is part of a blog series exploring books and articles written about shrinking cities, or communities that are losing population and dealing with housing vacancy and abandonment. For more information on this series, see the first post “Reading Series on Shrinking Cities”. These summaries are provided only for educational purposes and opinions expressed in these summaries do not necessarily reflect those of Greater Ohio Policy Center.

 

Urban Expert Richard Florida Warns of Deepening Crisis of Cities But Believes Mayors Can Help Reverse Course

May 26th, 2017

By Alex Highley, GOPC Project Associate

Recently, University of Toronto professor and urban theorist Richard Florida delivered a series of lectures in Columbus. In front of a large crowd at Ohio State’s Mershon Auditorium, he spoke about his new book, The New Urban Crisis, which describes the worrying decline of the middle class in cities throughout America. After highlighting the major points of the book, Florida asked questions about solving the new urban crisis to Columbus Mayor Andy Ginther, Findlay Mayor Lydia Mihalik, and former Youngstown Mayor Jay Williams.

Florida argues that whereas the urban crises of past decades manifested in the outward movement of people and wealth from city centers into the suburbs, today’s urban crisis is marked by a growing wealth and opportunity gap throughout neighborhoods in cities, including Columbus. While the vestiges of the old urban crisis continue to live on, Florida sees a startling inequality both between various cities and even within cities. Today, a “winner-take-all urbanism” has emerged that sharpens the contrast between “winner” and “loser” cities. As young, talented, and educated, people seek to work together on innovative ideas, they cram themselves together in those areas of concentrated resources and wealth. Even within “winner” cities, suburban areas, along with some traditional urban areas, have experience marked decline and poverty while economic cleavages between neighborhoods have become more pronounced.

Check out Greater Ohio Policy Center’s (GOPC) new blog series on shrinking cities

To combat this modern crisis, Florida believes that mayors must be given the political and fiscal tools to develop local solutions, instead of following a one-size-fits-all federal urban policy, which Florida admits he previously championed. Devolving more responsibility to mayors recognizes the reality of deep social and political differences in America, which were conspicuous during the last presidential election, and allows mayors and community leaders to promote urban policies unique to their cities. In alignment with this idea, Williams believes that Youngstown should take the unconventional step of embracing its “shrinkage,” rather than expending energy on attempts to attract new residents. To do this, the city must develop policies that accept the nature of population decline while seeking to capitalize on the great ideas and creativity already flourishing in Youngstown.

Richard Florida lecture OSU

 Seated Left to Right: Williams, Mihalik, Ginther, and Florida

Ginther, Mihalik, and Florida expressed that improving and expanding local public transportation systems will help boost economic opportunity for struggling families. For residents in many neighborhoods in Columbus, a lack of reliable transportation imposes a barrier to employers and the potential employees seeking work. In Findlay, Mihalik notes that over half of the city’s workforce actually commutes from outside Hancock County; as a result, many people are pushing for bolstering public transportation. Greater Ohio Policy Center (GOPC) supports efforts to connect Ohioans to job opportunities by improving public transportation networks throughout the state.

While many people are encumbered by today’s often divisive national politics, Florida sees less partisanship and more willingness among stakeholders to work together to achieve results at the local level. Florida notes that when he meets mayors, he usually has little idea or concern about whether they are Republican or Democrat, because party identity is less defining of the policies mayors pursue. Mihalik emphasizes the idea that mayors can elevate important public policy discussions, and should do more to promote civil dialogue among citizens. She also believes that leaders need to offer more potential solutions to problems, rather than simply criticizing what they think needs to be fixed. In sum, combining mayoral action with citizen input will help expand economic opportunity for more Ohioans.

 

Workshop Highlights Creative Placemaking in Zanesville

May 25th, 2017

By Torey Hollingsworth, GOPC Manager of Research and Policy

Last week, the Ohio CDC Association and Ohio Citizens for the Arts held a day-long workshop on creative placemaking in Zanesville. Hosted in the studio and gallery of local artists and community advocates Michael and Kathy Seiler, the workshop focused on the intersection between the arts and community development.

According to instructor Brian Friedman of Plan F Solutions, creative placemaking is the process of strengthening communities through the arts. More than just arts-based economic development, creative placemaking is a holistic, arts-centered approach to transforming communities into more equitable places for residents to live and work. Creative placemaking projects bring artists in as co-equal partners in development efforts and have an explicit focus on preventing displacement. These projects have a real focus on engaging grassroots leadership and an ultimate goal of building a stronger community – not just a real estate development.

Alan Cottrill Studios 7    Paul Emory Studio 1

In Zanesville, the ideals behind creative placemaking have been put into action as a group of local artists have rehabilitated vacant houses, industrial space, and storefronts to create new studios, galleries, and homes. A group of artists is working with a developer and the city to purchase and restore a series of historic buildings on Main Street, with the intention of creating new residential options downtown. Michael and Kathy Seiler have purchased and rehabilitated homes near their studio with the goal of drawing new residents to the city’s core. Many artists are members of the Artist Colony of Zanesville, which is dedicated to “community development and economic growth” in and around downtown. The Artist Colony also hosts a monthly First Friday event, which draws visitors downtown as the galleries open to the public.

Greater Ohio Policy Center’s research on smaller legacy cities has found that placemaking is one strategy that helps promote urban revitalization in smaller communities that have experienced significant economic change. Building on an authentic sense of place can help attract and retain talented residents that draw jobs, new amenities, and other investment.

 

Panelists at Eviction CMC Discuss GOPC Co-Researched Report Findings on Housing Affordability Challenge in Central Ohio

May 23rd, 2017

By GOPC Project Associate Alex Highley

Recently, Greater Ohio Policy Center (GOPC) staff attended the Columbus Metropolitan Club’s (CMC) session Highest Eviction Rate in Ohio, Consequences?  During the luncheon panelists explored the topics of affordable housing and the high rate of eviction in central Ohio, often referring to research in “The Columbus and Franklin County Affordable Housing Challenge: Needs, Resources, and Funding Models”, a report GOPC recently completed in collaboration with the Affordable Housing Alliance of Central Ohio (AHACO). Panelists for the session comprised of moderator Dan Sharpe of the Columbus Foundation, Brad DeHays of Connect Realty Mid-Ohio Contracting Services, Elfi Di Bella of the YWCA Columbus, and Stephanie Hightower of the Columbus Urban League.

The luncheon began with Sharpe explaining that Franklin County is the state leader in evictions while discussing some of the community development efforts to support families who are at risk of being evicted. To provide context to the housing situation, Sharpe noted that according to the AHACO report informed by GOPC’s research, a household needs to earn $15.98 an hour or $33,238 annually, at a full-time, year-round job in order to afford a two-bedroom apartment at Fair Market Rent. With the rate of poverty population growth three times faster than the rate of overall population growth in Franklin County between 2009 and 2014, residents are finding housing costs increasingly burdensome.

CMC 5.10 edited

According to the AHACO report, there is a glaring shortage of 54,000 affordable housing units in the region, which, as DeHays explains, is a direct contributor to the high rate of evictions in Franklin County. Often, the first step to an eviction is an unfortunate event such as illness or a flat tire, and then suddenly problems spiral out of control when bills rack up and families cannot pay their monthly rent. While Hightower was keen to stress that there are often a wide variety of reasons people are evicted, the root of the problem is that one in three families in Columbus live paycheck-to-paycheck, and therefore struggle to afford basic costs such as paying rent. 354 families are evicted in Central Ohio every week and to compound this problem, a portion of them may later end up homeless, often in part because of the stigma and barriers which a record of eviction brings to future housing opportunities.

In alignment with models analyzed by GOPC as part of the AHACO report, Hightower points to incentivizing developers to create units for low- to middle-income people as a potential tool for expanding affordable housing. Speakers at the session also suggested strengthening the Section 8 voucher program and simplifying the Low Income Housing Tax Credit (LIHTC) program, along with improving education for landlords and tenants. GOPC supports Hightower’s emphasis on the importance of building capacity of organizations currently working on affordable housing issues and minimizing duplication by coordinating efforts. With a large number of nonprofit, public, and private groups in Columbus working to expand affordable housing, it is important to maximize the work of leaders currently working in this policy arena and to ensure that future interventions are done collaboratively.

For more information, including GOPC’s exploration of affordable housing models from around the country, read the AHACO report: The Columbus and Franklin County Affordable Housing Challenge: Needs, Resources, and Funding Models

 

Ohio’s FY2018-19 Main Operating Budget Moves to Next Stage; GOPC Offers Recommendations

May 18th, 2017

By Jason Warner, GOPC Manager of Government Affairs

Recently, the Ohio House of Representatives approved a drastically different two-year state budget from the one proposed by Governor John Kasich in January. The House budget included roughly $632 million in reductions due to decreased state revenue collections, and so far for the fiscal year FY2016-17, receipts are $773.7 million, or 4.2 percent, below projections. This followed an announcement in April by state leaders that the budget would need to be revised downward by roughly $800 million for the next biennium (FY2018-19).

With passage of the House version, the budget now moves to the Ohio Senate, where additional reductions will be needed to meet the $800 million in cuts. The deadline to approve the budget is June 30, when the current state fiscal year (FY2017) ends. Greater Ohio Policy Center (GOPC) continues to testify on several changes to be made in HB49, including the following provisions. 

GOPC-Supported Provisions:

- The budget bill provides $4.8 million in annual funding over the biennium for lead remediation and associated testing services for homes under lead hazard orders, ensuring that more properties are made safe for families. This will be done through the use of federal funding available to the state.  GOPC is pleased by the state’s commitment on this important issue and encourages the Legislature to ensure local lead abatement programs are empowered to utilize the funding.

GOPC-Opposed Provisions:

- A House amendment would mandate stickers be affixed to retail service station pumps displaying the rates of federal and state taxes applicable to gasoline and diesel fuel. The stickers would be produced and distributed by the Department of Agriculture at an unknown cost. All pumps would be required to have the stickers affixed within 14 months of the bills effective date and would need to be replaced if damaged or if the state or federal tax rates change. 

- The House reduced funding for public transportation by more than 11% per year for both FY2018 and 2019. This line item provides funding for the Public Transportation Grant Program and the Elderly and Disabled Fare Assistance Program. This line item has been reduced by more than 68% or $17,969,134, since FY2000. 

GOPC’s Proposed Amendments to the Bill:

- GOPC proposes an amendment to make it easier for cities to clean up contaminated brownfield sites.  The proposal would modify Ohio law to make it clear that urban renewal projects can recover the costs of environmental remediation. In an urban renewal project, a municipality and a developer create a development agreement to mitigate a blighted area.  After development begins, the property owner makes service payments in lieu of taxes, based on the increased valuation of the property.  Service payments support bonds that have been issued to support redevelopment costs.

- The federal Center for Medicare and Medicaid Services has issued a directive that Ohio cannot continue applying state and local sales taxes on the premiums of Medicaid Managed Care Organizations. HB49 provides for a new service fee to be charged to make-up for lost state revenue, while only providing partial, temporary financial relief to counties and transit agencies. GOPC supports the inclusion of a provision in HB49 that will extend greater financial relief to counties and transit agencies. 

For more complete coverage of the Main Operating Budget, please visit here.

Infrastructure Week Highlights Urgent Need to Invest in our Declining Transportation and Water and Sewer Systems

May 15th, 2017

By Jon Honeck, GOPC Senior Policy Fellow

Infrastructure Week is May 15 – 19, 2017.  GOPC considers infrastructure, especially transportation and water infrastructure, to be vital components of Ohio’s economic revitalization agenda.  During Infrastructure Week, groups across the nation are holding events and doing everything they can to draw attention to the unacceptable condition of the nation’s infrastructure.  Overall, the American Society of Civil Engineers (ASCE) gives U.S. infrastructure a grade of “D+”.  Although the term “infrastructure” usually brings to mind surface transportation – roads, bridges, and railways – the ASCE’s concerns extend to many forms of infrastructure that make a modern economy work, including drinking water and wastewater systems, air travel, ports, and the electrical transmission grid.   The ASCE estimates that underinvestment will cause the average family to lose $3,400 each year as a result of infrastructure deficiencies. 

As seen in the chart below, public sector spending on infrastructure declined from nearly 3.5% of gross domestic product (GDP) in the late 1950s to just above 2.5% today.  Although federal policy definitely shapes overall societal policy choices (e.g., the interstate highway system), the chart also makes it clear that states and local governments have been doing the heavy lifting when it comes to infrastructure spending, and probably will continue to do so in the future.  Federal outlays in recent years been about 0.6% of GDP, about one-fourth the state and local government total.

 Infrastructure Spending as a Percentage of U.S. GDP

infrastructure chart

Source: GOPC analysis of BEA and CBO data.

Across the country, states are doing what they can to take charge of their own destiny, including finding ways to pay for what they need to improve transportation.  Most states, and the federal government, rely on gasoline excise taxes to pay for surface transportation.  For many years, discussions about raising the gasoline tax were off the table at both the state and federal levels.  The federal gasoline tax has not been raised since 1993; Ohio’s has been the same since 2005.  This inaction meant that state transportation budgets have failed to keep pace with inflation, putting more pressure on their ability to perform basic maintenance.  As the economy has improved, however, state leaders have put together coalitions to support improved funding.  Since 2012, nearly half the states have adjusted their approaches to taxing gasoline.  Some of the most recent to move in this direction in 2017, including Indiana, South Carolina, and Tennessee, are generally considered to be fiscally conservative states.  These changes at the state level may build momentum for a reexamination of transportation funding at the federal level. 

The country’s focus on infrastructure is not only an opportunity to rebuild, but also to improve and rethink what we need to be successful in the 21st Century, as GOPC outlined in a Cincinnati Enquirer op-ed.  Proceeds from the state gasoline tax in Ohio are constitutionally required to be spent on highways, and do not address the needs of Ohio’s residents for public transit or alternative modes of travel such as biking or walking.  Despite an increased transfer of federal funds to public transit in the Ohio Department of Transportation budget, Ohio’s overall state level of support for public transit is minimal compared to that of other states.  GOPC believes that future state transportation reform should include a dedicated revenue source for public transit that will help local transit authorities design the kind of flexible and affordable systems that Ohioans deserve. 

 

Shrinking Cities Reading Series Part II: Terra Incognita

May 10th, 2017

By Torey Hollingsworth, GOPC Manager of Research and Policy

Terra Incognita, published by Ann Bowman and Michael Pagano in 2004, was one of the first academic works focused on the factors that influence how local governments interact with vacant land. The authors take a broad view of what constitutes vacant land – ranging from abandoned housing or industrial sites to greenspace, and seek to move beyond the perception that vacancy is always negative for a city. The authors use survey data and interviews to understand how cities with different tax structures, social systems, and economic development needs perceive and utilize vacant land.

First, the authors set out to gain a better sense of the extent and condition of vacant land in cities around the United States. They sent surveys to the planning directors of all U.S. cities with populations above 50,000 and then followed up with interviews in certain areas to understand how governments make decisions about vacant properties in their cities. The survey results revealed varying perceptions of vacant land: some cities felt they had too much, while others felt that they had too little to promote new development. Unsurprisingly, increases or decreases in vacant land were found to be tied to market conditions, specifically whether the population was growing or declining. The authors focus in on three metropolitan areas for case studies – Phoenix, the quintessential sprawling city where vacant land is frequently open desert; Seattle, where state annexation laws limit the ability of the city to grow even as its population increases; and Philadelphia/Camden, shrinking cities with substantial amounts of abandoned and contaminated property.

sidewalk      flint2

After attempting to quantify the amount of vacant land in different parts of the country and looking more deeply into the case study cities, the authors propose a model for how local governments engage with vacant land based on three key considerations. These are:

  • The need to raise funds through taxation, i.e. the “land-tax dynamic.” The land-tax dynamic is related to the relationship between tax structure and land use. The authors argue that there are specific spatial outcomes based on what kind of taxation structure is available to a city. Cities that are primarily dependent on property taxes are incentivized to push for higher market-value developments while attempting to push negative impacts like traffic to a neighboring jurisdiction. Cities that rely on a sales tax seek to create “shopping sheds” that can draw residents as well as people from neighboring jurisdictions. Cities that rely on the income tax – including most cities in Ohio – are encouraged to draw high wage earners to work in the city and are not as concerned about them living there.
  • The social value of land. The social value of land is related to a city’s need to create a positive social environment and protect property values. As such, it considers how vacant land can serve to divide or unite parts of the city. Vacant land is sometimes used to separate higher income areas from lower income ones, but it can also provide opportunities for positive social interactions like park space or community gardens.
  • The need to promote economic development. Finally, the need to promote economic development encourages land that has higher value to be put to its highest and best use.

These three imperatives work together to shape local government actors’ choices about vacant land, including which areas are most likely to be redeveloped and which are likely to be left alone. The authors illustrate this through a three-dimensional cube, where each imperative represents one facet. Any vacant parcel in a city fits somewhere in the cube based on the interplay of its revenue, social, and development potential. City leaders can use a parcel’s position within the cube to guide long-term decisions about reuse, even as political or market conditions remain uncertain.

 

This article is part of a blog series exploring books and articles written about shrinking cities, or communities that are losing population and dealing with housing vacancy and abandonment. For more information on this series, see the first post “Reading Series on Shrinking Cities”. These summaries are provided only for educational purposes and opinions expressed in these summaries do not necessarily reflect those of Greater Ohio Policy Center.