What’s Next for Renew LV?

RenewLV is in the process of selecting a new Director, so it’s a good time for their Board to be thinking about what can realistically be accomplished in the short run during this period of austerity budgeting at the state and local level.

As I understand it, Renew LV’s goal is to accelerate economic growth and investment in the Lehigh Valley’s older core cities.

To an outsider, the organization’s theory of change appears to be that  creating new public services, and moving more municipal services to the regional level will create more fiscal and political interdependence between municipal governments. The existing campaigns seem to have been chosen with the goal of making the Second Class townships internalize more of the external costs of suburban development, improve trust and professional relationships between governments, and build a foundation for cooperation on more politically-difficult issues like regional land use planning and a regional tax base.

The big picture goal is to concentrate development in already built-up areas and slow the spread of further greenfield development.

That is the theme uniting the Bi-County  Health Department, the Regional Water Initiative, the 1% sales tax and better mass transit.  All of these policy changes would have the effect of enlarging the tax bases of the core cities, strengthening their economies.

Unfortunately, despite some encouraging signs on the regional policing front, it now appears that even the largest contraction in state and local government spending since the Great Depression is not enough to force municipal governments and school districts to surmount provincial opposition to municipal consolidation and service sharing.

Many politicians who might be have been inclined to be more daring during the boom times have proven difficult to budge on new spending the past two years, even when there’s a strong case that an up-front investment will produce large savings in the future.

With weak growth and high unemployment as far as the eye can see, the near-term outlook for persuading politicians to vote for anything that involves new spending or revenues appears quite unfavorable.

So the most important question now is: what can be accomplished without spending any money?

In my view, quite a lot. But it’s going to require some amendments to Renew LV’s theory of change.

So far the strategy has been to get more money to the core cities by regionalizing the tax base for different programs. The unspoken assumption seems to be that cities are helpless victims of sprawl and the 5 Stages of Municipal Death, and can only stand by powerlessly while wealthy folks and their earned income tax dollars flee to the Second Class townships.

The long term revenue and migration patterns suggest that this is a big part of the story, but I do not think it is the whole story.

The fact is that the cities can get more revenue unilaterally, without any cooperation from the county or suburban and rural governments, if they are willing to roll back anti-density regulations, set explicit targets for population growth and upzone accordingly.

The key is aligning incentives, putting the correct market price on vacant urban land (in which I am including curb and surface parking) and removing regulatory barriers to dense infill development.

Here’s what I think the Renew LV Land Use Campaign would probably look like:

1) Zero out minimum parking requirements in and around central business districts. Downtown areas and immediate neighborhoods should feature no more and no less parking than people are willing to pay for.

2) Zero out height limits in and around central business districts. The more job density and residential density you can get politicians to agree to, the better off city economies are going to be.

3) Adopt Philadelphia’s formula for pricing stormwater run-off. Philly taxes surface parking lots and large impervious surfaces at a higher rate than tall buildings, creating an incentive for dense construction.

4) Replace property taxes with land taxes. People who want to speculate and take forever to develop empty parcels in urban areas should have to pay for the privilege. Vacant land can cost neighbors up to 20% of their property value. Making landowners bear the true cost of speculating would nudge them to develop sooner rather than later, and if they still wanted to wait, at least cities would get the tax revenue.

5) Set higher population growth targets, and upzone accordingly. Then establish a “zoning budget” so that any variances resulting in downzoning require a corresponding upzoning elsewhere. The goal would be to hold housing and office supply constant, or consistent with the rate required to reach the population target.

6) Get wait times below 10 minutes for LANTA’s most-traveled routes at bus stops in the core cities

What all these reforms have in common is that by making it less expensive to build in cities, they make it more attractive to locate businesses in the cities. And by making it more expensive to use downtown land for non-productive uses, they align incentives for more compact, less wasteful development. It then becomes a better value proposition for workers to live within a short distance of the city center, so more people will do it.

This agenda helps achieve Renew LV’s most important goals from a different angle, by making cities an attractive force in their own right. The upside is that you don’t have to overcome dumb provincial politics in Northampton County, and you don’t have to go to the state level to get anything done. That’s not to say any of this would be easy, but the political fights would be at a lower level of government, and the practical politics would involve putting together a well-orgaized coalition to serve as a counterweight to anti-density NIMBY pressures on city governments.

The other big lesson I’ve learned from watching Renew LV’s campaigns over the past two years is that there’s only so much that can be done within the limits of the 501(c)(3) tax status. In the short run, the Board should estabish a SuperPAC of real estate industry groups, the building trades, environmentalists, and the LV Chamber of Commerce, with the goal of electing pro-development politicians and defeating no-growth NIMBY candidates.

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