Archives for January 7, 2013

Will This Help Multi-Family Apartment Financing?

Commenter John has been scolding me over the past year to blame lending restrictions for the failure of apartment construction to keep up with the surge in demand for apartments and multi-family housing.

I am hoping that this loosening of Basel III liquidity requirements will help do the trick, and will post John’s response if he cares to write one:

Global central bank chiefs gave lenders four more years to meet international liquidity requirements and watered down the measures in a bid to stave off another credit crunch.

Banks won the delay to fully meet the so-called liquidity coverage ratio, or LCR, following a deal struck by regulatory chiefs meeting yesterday in Basel, Switzerland. They’ll be able to pick from a longer list of approved assets including equities and securitized mortgage debt as they seek to build up buffers of liquidity for use in a financial crisis.

“This was a compromise between competing views from around the world,” Bank of England Governor Mervyn King said at a briefing following yesterday’s meeting. King chairs the Group of Governors and Heads of Supervision, or GHOS, which decides on global bank rules. “For the first time in regulatory history we have a truly global minimum standard for bank liquidity.”

Banks and top officials such as European Central Bank President Mario Draghi pushed for changes to the LCR, arguing that it would choke interbank lending and make it harder for authorities to implement monetary policies. Lenders have warned that the measure might force them to cut back loans to businesses and households.


Highlights from the Willie Reynolds Campaign Website

Willie Reynolds’ campaign website is here, and of course it is as vague as the typical professional campaign website. However, there are a few clues in The Plan that suggest a Mayor Reynolds would take a “smart growth” (traditional neighborhood development, new urbanism, market urbanism, whatever term you prefer) approach to land use and development issues.

Here is the section on Sustainable Neighborhoods:

“Cities face no greater challenge than creating, supporting, and maintaining neighborhoods in which families want to raise their children. As Bethlehem moves forward, the most crucial issue facing the City will be our ability to foster neighborhood development as we continue to compete with surrounding municipalities and suburban areas. I had the pleasure of growing up in a neighborhood in which I could ride my bike with my friends and play baseball in our parks. That idea of what a neighborhood can be must be maintained and developed.

As the campaign unfolds, I will be releasing several initiatives that are designed to support this idea of neighborhoods. We must create the programs and governmental support necessary to achieve this goal and attract and retain middle class families in the 21st century.”

Translation: neighborhoods need to be more pedestrian and bike-friendly.

Here is the section on Economic Redevelopment and Revitilization [sic]:

“The City of Bethlehem has made great strides in the last several years in avoiding many of the problems that have crippled other cities throughout the country. Our community has seen the successful rehabilitation of many dilapidated properties throughout the city which has allowed us to start to recover from the hit our tax base endured with the decline of Bethlehem Steel. When Bethlehem Steel closed, as a community, we could have gone one of two ways. Fortunately, we have had leadership over the past 15 years that saw the benefits of moving forward, even if those decisions weren’t always popular with everyone in our community.

During my time on City Council, I have supported our redevelopment efforts including those involved with the Bethworks development (the former Bethlehem Steel site). Even though the BethWorks development will go a long way in revitalizing the vacant Bethlehem Steel property, we need to keep up our redevelopment efforts if we are going to see the continuation of the city’s financial picture. These efforts will be vital if we are going to rebuild our tax base in an effort to keep our property taxes low.

Translation: Bethlehem needs to keep the development momentum going, even if it’s not always popular with everyone.

Without being able to comment on specific proposals, I think that’s exactly the right political outlook for the next Mayor.

Bethlehem’s greatest asset is its land, and the potential to grow the tax base by developing underused land parcels in high-demand areas, and redeveloping vacant-but-cool buildings into useful housing or commercial space.

Much progress has been made, but city politicians can’t get complacent just because a few successful big projects have been built. There’s a lot of low hanging fruit left, but taking the city to the next level of growth is going to require the next Mayor to take on some tough political controversies over population density and parking in the neighborhoods – stuff like cracking down on surface parking lots on Southside Bethlehem, ratcheting back the scope of the Southside Conservation District, road diet and upzoning for West Broad Street, performance parking for the CBD zones, etc.

Obama Not Compromising Over Default Ceiling

There’s nothing to negotiate about. Congress needs to pay its bills:

Obama noted that additional revenue could come from closing tax loopholes and deductions Republicans themselves sought to reform throughout the 2012 presidential election and the fiscal cliff talks but were not altered in the compromise Congress passed to avert the fiscal cliff. Congress enacted $1.7 trillion in budget cuts last year and raised $620 billion in revenue in the fiscal cliff fix, a number that is far below House Speaker John Boehner (R-OH)’s offer of $800 billion during the cliff negotiations and lower than what would have been raised under Simpson-Bowles or Rivlin-Domenici.
From Obama’s remarks:

I believe we can find more places to cut spending without shortchanging things like education, job training, research and technology all which are critical to our prosperity in a 21st century economy. But spending cuts must be balanced with more reforms to our tax code. The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.

And as I said earlier this week, one thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up. If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic. The last time Congress threatened this course of action, our entire economy suffered for it. Our families and our businesses cannot afford that dangerous game again.

Willie Reynolds Running for Bethlehem Mayor

I’m still hoping to see Donna Taggart get in the primary for Bethlehem Mayor, but I think the next best hope for staving off 4 years of no-growth NIMBYism in the Mayor’s office is Willie Reynolds. So I’m glad to see Councilman Reynolds will be announcing a run this Tuesday.

My big fear is that Willie, like Bob Donchez, is disturbingly inclined to coddle NIMBYs at the expense of population growth and redevelopment. He’s shown little interest in moving towards a form-based zoning code, instead of a use-based one:

Other council members said zoning ordinances may be favored by the city as a whole, while their impact may have a negative effect on a few.

“People want these types of changes to occur, but not necessarily in their own backyard,” said councilman J. William Reynolds. “We have to make sure there’s a balance that we get the best for everyone.”

I was also none too pleased with this quote from back in 2011:

Do you support Tax Incremental Financing for the Martin Tower tract, where $10 million would be borrowed and turned over to the developer, with bond repayments coming from increased real estate tax revenues from the property?

Reynolds: I would support a TIF if the project was one which I was comfortable with. The challenges of redeveloping the Tower are enormous. The expense of removing the asbestos alone is a multimillion dollar issue. I am not in favor of building too much high density housing around the Tower. Bethlehem succeeds because of our neighborhoods and our balance of high, medium, and low density housing. Whatever development occurs at the site must rely on smart growth.

Smart growth is great, but in this context what it means is maximum infill. At a regional level smart growth means land use planning for no growth in the exurbs and greenfields and as much growth as is politically feasible in the central cities. The only reason to spend taxpayer dollars on redeveloping Martin Tower is if you’re also willing to develop the huge surface parking lots that surround it. It’s only worth it if that whole property becomes a multi-building high-rise mixed use district with a lot of shops, apartments and condos. And the same goes for the former Steel land. If you’re not interested in using these TIF projects to really increase the size of the zoning envelope and do something huge, then you’re better off sticking to granny flats and small scale infill projects in the neighborhoods as a redevelopment strategy. “Smart growth” has to be more than just a political buzzword, it has to mean something in policy terms.

Those problems aside, I think that Willie probably is more persuadable than Bob Donchez on some other issues like mobile vendors, single hauler trash collection, 911 regionalization, parking reform, etc. He’s just a younger guy and is going to be more interested in doing some interesting things in the city that will look good on his resume and advance his political career. He’s going to be more willing to learn from all the great stuff that’s happening in Philly and Pittsburgh and NYC and try to import some of their successes to Bethlehem. Donchez has given every indication that his would be an administration that gets spooked at the very hint of controversy. In practical terms that means 4 years of painfully slow progress, which Bethlehem just can’t afford.