| The
fallacies advanced by proponents of massive growth |
||||||||||||||||||
|
At the July 5 Council meeting, Council member Michele Van Pelt (the only Council member seeking re-election in November) said housing and thousands more people were needed to "jump-start us economically." Housing, she said, "is a means to an end." At the conclusion of the meeting, she said she envisioned Louisville's population would be up to 25,000 residents—6,000 more residents than we have now and a 32% increase. But on July 5 and August 2 she said that was just a "vision" and couldn't be binding, enforceable or, in effect, meaningful. To understand why adding more people does just the opposite of what Council member Van Pelt thinks—it worsens the city's fiscal health—it's important to recognize some well-established facts. First, each resident in Louisville receives more city services (e.g., police, library, rec center) than each resident pays for through local retail sales taxes, the city's principal source of revenue. Each household unit in Louisville costs the city $1,111 in operating revenue and more than $9,000 in capital revenue. Second, Louisville residents on average do not spend enough in Louisville—do not generate enough in retail sales tax dollars—to make up the per-home deficit caused by the city's provision of services. We are fortunate to live in a "service-rich" city. But we're not lucky: we live in a service-rich city because previous city councils recognized that the secret to paying for the city-services deficit is (a) bringing to Louisville regional retail stores, which draw customers (and sales tax dollars) from the entire geographic region, and (b) resisting massive housing and population increases. In short, houses cost the city money. The more houses that are added to Louisville, the worse off is our fiscal position. As Mayor Sisk reminded his colleagues at the July 5 council meeting: "I don't care what the statistics are—you lose money on building homes in this city." The city's own financial analysis is compelling. It analyzed five different scenarios ranging from increasing the population by thousands to maintaining housing at currently approved levels while permitting additional retail/office development. The result was dramatic: the only scenario that resulted in an operating and capital surplus for the city was maintaining housing at currently approved levels while permitting additional retail/office development. |
||||||||||||||||||
Sadly,
the Council on August 16 approved the Comp Plan without applying the
proper fiscal analysis, one that ensures Louisville will have a
strong economic foundation well into the future. Instead, the Council
blindly agreed to a Plan that gives complete
"flexibility" to developers and
that already
exceeds the Council's stated intent of a population that doesn't
exceed 23,000.
|
||||||||||||||||||
| Fallacy
#2: "We don't have to worry about growth. The 'phasing' resolution will
solve all problems with growth." Before we consider the merits of the
September 20 resolution purporting to "limit" building permits issued
each year, it's important that we recognize what the resolution does
not do. It does not solve—it cannot solve—the problems resulting from
adding more than 1,600 new homes and thousands of new residents (and
their cars) into this city. Each house costs the city money; lots of
houses costs the city lots of money; each new house almost certainly
diminishes the city services provided for each existing house. The
deficit numbers in Fallacy #1 are not improved by "phasing." Phasing
simply slows the rate at which we reach the deficits the consultants
have projected.
The September 20 resolution requires that new homes in the city be built in "phases." The resolution says the city will "strive" to limit building permits to 250 biennially and no more than 150 a year. If the resolution had stopped there, it would be bad enough: 150 building permits a year exceeds by 100% the "1%" growth the Council had touted as the saving grace of its decision to increase the population of the city by a minimum of 4,000 new residents. The resolution underscores what many had suspected all along: this Council has no intention of limiting growth to 1% a year. But the resolution didn't stop there. It contains all kinds of provisos and loopholes to permit the Council to blow past the 150-building-permits-a-year "limit." It gives developers a roadmap for requesting successfully an exemption from the "limit" so that they can build hundreds of houses a year. For example, if a "residential project" meets yet-to-be-determined "specific principles and policies" of the Comprehensive Plan that we have already shown is full of flaws, the Council can exempt the developer from any building-permit limits. Fallacy #3: "22,000, 23,000, 24,000, 25,000—what difference does it make? You'll never notice the extra thousand." Let's
start with common ground: We didn't need Money Magazine to tell us that
Louisville is a great place to live because it has a "small town" feel.
We've known it; we've cherished it; and citizens have insisted that
preservation of this "feel"—our
character—deserves the highest
priority. At some point, the small town feel is gone. No one would say
Denver has a small town feel; no one would say Boulder has a small town
feel.
No one knows the magic number at which the small town feel will be gone from Louisville, but one thing is certain: When it's gone, it's gone for good. We know what our character is as a city of 19,000. We do not know if we can retain it—likely, we can't—if we become a city of 23,000, or 24,000, or 25,000. Does a thousand, or two thousand, or three thousand additional residents make a difference? Common sense says yes. Louisville is a landlocked city of about 7 square miles. How many thousands can be added into that box before each resident begins to notice the difference—in city services, the rec center and in just how long it takes to cross some of our already-too-busy streets? Our new library is a good example. We voted for a new library because the current library was overcrowded. The new library is designed with the current population in mind, not 25,000 or more. If this city grows by a third or more, as the pro-growth council members would permit, we'd need a new library before the dust from building the new one settles. Fallacy #4: "When I
moved into Louisville, I was welcomed. We can't pull up the ladder once
we're aboard."
One thing we need to get cleared up right away: Louisville is not an island. Or a gated city. Or a boat. No one is suggesting that Louisville "pull up the ladder" and prevent any non-Louisville person from moving into the city. Louisville has a history of welcoming any new resident, and new residents move into Louisville houses every day. The "boat" analogy is a remarkably poor one. It confuses intentional, deliberate exclusion with a community recognition that, if the city grows more, it will lose the very qualities that make people want to move here. There are two options: either we as a community "let the market decide" how many people should live in Louisville, or we as a community must decide that there is a point at which, as the Planning Commission recognized, our population will have increased to a level that destroys our small-town character and causes "the typical maladies of urban life." Louisville is at the crossroads when that decision must be made. When we make that decision, we would do well to remember there was a time when the City of Aurora had a population of 20,000. Either it made a conscious decision to become a large(er) city or, worse, it had no plan and simply grew with abandon. It can no longer claim to be a city with a small-town character. All around us there are municipalities that have joined the race to grow. To what end, Louisville citizens have asked? Size matters, but not in the way ambitious cities think. Louisville has been the quiet part of a rapidly growing storm of growth in the metro area. Look at the maladies that growth has brought to the metro area. Compare those headaches with our quality of life. We are surrounded by other communities—Lafayette, Superior, Broomfield, and so on. If we make a mistake and decide to re-join the growth race and we dig ourselves into a financial-housing hole, as former Council member John Leary has demonstrated, we can't "grow" ourselves out of the fiscal problem by adding more land. Fallacy
#5: "We need more houses so that Louisville can have more affordable
housing. It's elitist not to build more affordable housing."
It's hardly a question of
"elitism." Like Boulder
County did, Louisville surrounded itself with open space, which
makes our city unique and imposes a kind of natural growth "cap." The
effect? More people want to move to Louisville, but we can't—we
won't—sell our open space to make more land for houses. As the Camera
recognized, the economic laws of supply and demand predict that these
"growth policies" will result in increases in home values and housing
prices. We have two choices: make our city a less desirable place to
live, or live with our "growth policies." Anything else is "talking
politics, not reality."Affordable
housing is a good idea. That's why Louisville has affordable housing.
Very few people are opposed to it. But there are even fewer people—no
one we know—who have come up with a viable way to make large numbers of
good homes affordable in Boulder County.
Here's
the problem. Even if it were possible to build an inexpensive house or
condo in Boulder County, we all know that construction expenses are
only a part of the problem. The bigger problem is the price of land. It
has skyrocketed over the last 15 years in Boulder County. Let's say we
could overcome those big problems and Louisville or some other Boulder
County city could offer to a single person, couple or young family an
affordable home. How would we keep that home affordable when that
person, couple or young family is ready to move up? Would we prevent
them from selling for the highest price the market would bear? If we
didn't, the affordable home would be affordable for one family only. If
we did, the family has no incentive to buy it in the first place
because it wouldn't be able to capture the increased value; so it might
think—correctly—that "buying" that affordable home is no different from
renting: it was unable to realize any increased equity value.
The Boulder Daily Camera in an editorial recognized the problem of trying to make homes "affordable" in Boulder County: Of course, "permanently affordable" housing, while immediately helpful, isn't always a long-range solution. Because owners are limited to 3 percent profit upon sale, they can't leverage ownership into a new or bigger home when their families grow, as can those who buy on the open market. Owners of permanently affordable homes aren't so much in the real estate game as watching from the sidelines. Frankly, the city's efforts — its resources — may be too focused on those who could buy a home in another nearby market. Some affordable housing resources might be better used to subsidize rentals or transportation for the poorest residents, the backbone of the service economy. Boulder's efforts to provide more affordable housing are
admirable. But anyone who implies that we can escape the consequences
of our growth policies and make a real difference in housing prices is
talking politics, not reality. But if we wanted to experiment with affordable housing ideas, why not build affordable homes on land already zoned for residential development instead of doing what the current Council is doing—rezoning revenue-producing commercial land to deficit-causing residential land? Fallacy #6: "We need
more growth to persuade regional retail stores to come."
Louisville currently has nearly 800 housing units already zoned (636
in North Louisville and 150 in Old Town), even if the Comp Plan had
never been amended. These housing units were approved more than a
decade ago.Let's try to see things through the
eyes of those using this fallacy to push for thousands more people in
Louisville: if we have some growth, say 1% a year (what pro-growthers
have proposed), regional retailers
will see we're growing and want to build a store in Louisville. What's
wrong with this belief?
To begin with, the belief isn't based on reality. Regional retailers, like Kohl's or Home Depot, typically do not depend on a single municipality (especially small municipalities) for its sales. That's why they're regional retailers: they draw customers from 10-15 miles away, according to Louisville's consultants. They do not choose to locate in a given municipality because they expect that municipality exclusively to generate their sales. For them, municipalities are less relevant than the large arterials. That's why regional retailers are located near highways, expressways and interstates. This is why the pro-growther's notion—that if Louisville could just have a small growth rate the regional retailers would flock here—is so unpersuasive. To be sure, the population and population growth may well be a factor for a regional retailer, the population it would consider is the "regional" population, not the particular small municipality in which it is choosing to build a store. Nor would any regional retailer be impressed with a small city in the region because the small city can tout a "1%" growth rate. To see these concepts at work, we need look no further than Louisville. Most of Louisville's regional retailers—Sam's Club, Home Depot, etc.—located in Louisville when the city's growth rate was virtually non-existent. Common sense tells us that many other characteristics of a region—e.g., the population of the region, the disposable income of the population and the absence or presence of competitiors—are more likely to influence a regional retailer's location decision than the single-digit growth rate of a specific municipality in the region. Given that regional retailers need an urban population of 250,000-400,000 to be successful, it is simply nonsensical for pro-growthers to believe that Louisville's ability to tout 1%, or even higher rates of growth, would even register with a regional retailer. In other words, we would lose our small-town character over the pro-growthers' fantasy of attracting a retional retailer if only we would risk losing our character. At the end of the day, however, all growth must be viewed through the quality-of-life prism: as much as we may want all manner of regional retail stores to locate in Louisville, are we willing to sacrifice our quality of life and our character? If we could attract another three regional retail stores if we doubled in size and grew to 40,000, would we do it? The pro-growthers seem to believe they have the answer and the answer is yes. We doubt the community would make that devil's bargain. Our community values its quality of life and our small-town character too much. See the discussion on Fallacy #1. Fallacy #7: "We need housing for 'empty
nesters' and senior citizens."
If pro-growthers were interested only in building "empty nester" and "senior citizen" housing, it would be easy enough: use the nearly 800 units that already have been approved to build multi-family or ranch housing or patio homes. There is no need to add thousands more residents to get "empty nester" and senior housing. |
||||||||||||||||||
| | Home | |