IDEAS - Interactive Database for Economic Analysis & Synthesis

August 25, 2010

Compare and Contrast: LRA and LCRA

I attended my first Land Clearance for Redevelopment Authority (LCRA) board meeting in Saint Louis yesterday. I couldn’t help but notice stark similarities and differences between the LCRA and the Land Reutilization Authority (LRA) board.

One stark difference is the amount of information that each board expects from the petitioners. When presenting before the LRA board, an individual has to demonstrate financial ability and provide the written endorsement of an alderperson, as contributors to Show-Me Daily have communicated previously. When presenting before the LCRA board, apparently, the presenter provides neither. He only has to cite the dollar amount that the developer is spending on the project, as well as the projected number of jobs that will be created.

As a related point of contrast, committee members of the LRA board pose probing questions to petitioners, whereas those of the LCRA members ask few, if any.

As a point of similarity, both the LRA and the LCRA promote policies that remove properties from the tax base and therefore reduce the amount of property tax revenue received by the city. Each has a different way to accomplish this, however — the LRA board denies proposals from individuals to buy properties that are withheld by the city, and the LCRA board approves proposals from private corporate developers to abate property taxes.

I encourage you to compare the number of suits in the first photo below to the number in the second photo.

To me, it begs the following question: Whom is Saint Louis City government serving: taxpaying individuals or corporate developers?

Land Clearance for Redevelopment Authority (LCRA) Meeting, August 24, 2010
DSC06107
Photo Credit: Thomas Duda

Land Reutilization Authority (LRA) Meeting, June 30, 2010
Land Reutilization Authority Commission Hearing June 30 2010
Photo Credit: Thomas Duda

August 16, 2010

Is a Trash Case a Precursor to a Health Care Decision?

Last month, the Missouri Court of Appeals ruled that a St. Louis man cannot be compelled to purchase trash hauling service after he was able to demonstrate that he is a very diligent recycler and does not generate any trash. The Post-Dispatch had a story about the ruling yesterday. The trash plan for unincorporated St. Louis County was incredibly controversial about three years ago. It, along with ticket scalping, was one of the first major issues we debated and covered closely on this blog.

This is a very interesting ruling. I’m aware this ruling won’t actually establish a precedent for courts hearing lawsuits about the federal health care mandate (they’re in different jurisdictions, etc.), but it is still intriguing to note that one court has decided that the government cannot compel someone to purchase something for the public good.

Prior to the county’s trash plan, the law specified that you had to have trash service, but it was left completely up to the individual or neighborhood to acquire it. So, the man who won the lawsuit was probably technically violating the old ordinance for a long time, but nobody noticed or cared because he didn’t produce trash. Now, the hauler that exclusively covers his area wants his money. Thankfully, the court ruled in favor of the individual and against the county.

I think nuisance laws against allowing trash to accumulate on your property are sufficient legal powers for the county to enforce basic health codes against trash. If this man does not generate any trash, he should not have to pay for trash service. I agree with the appeals court ruling, and I wonder if future judges will think the same way about other goods and services. Replace “man who does not generate any trash” with “healthy 25-year-old person who does not need or want any health care,” and it will be interesting to see how the relevant cases are ultimately decided.

August 2, 2010

Individuals Make Better Decisions About Land Use Than Do Government Commissions, So Why Won’t the LRA Sell?

What a difference a month makes.

In July, the city of St. Louis’s Land Reutilization Authority (LRA) Board of Commissioners heard public testimony from six persons seeking to purchase property, and the board actually approved three of the sales! (Commissioners deferred action on one of the properties and offered a five-year “garden lease” on each of the other two parcels subject to public testimony.) Per its usual practice, the LRA sent buyers off with the encouragement that they “will receive a letter in the mail” enumerating their required next steps for taking title to the city-owned properties.

All other agenda items received their recommended actions.

The above may seem like nothing more than minutiae to persons unfamiliar with the problems associated with LRA ownership of formerly private lands, but for persons who live next door to any of the LRA’s thousands of parcels in the city or for taxpayers anywhere in the city, the above actions are of particular significance.

LRAMarch2009StockPhoto

One person who testified this month seeking to purchase a vacant lot adjacent to her home spoke of how burglaries are “a constant problem,” and that she hoped the acquisition of the lot would allow her to better protect her property. Another potential purchaser expressed her desire to become a homeowner, only to be rebuffed by the commission with an admonishment that she “talk to the alderman,” demonstrate stronger financial abilities, and await further review by the commission at the next meeting. A husband and wife expressed their desire to purchase the lot adjacent to their home in order to provide space for room additions to accommodate their daughter, son-in-law, and grandchildren. Two representatives from a church spoke about how the purchase of a fenced parking lot would greatly assist in the church’s programming and outreach.

Considered together, the myriad of motivations and the multitude of proposed uses for LRA-owned land parcels suggest to me that individuals, when free to conduct land transfers, make better decisions about land use than do any seemingly well-intentioned bureaucrats on an executive commission.

The LRA meets in the Board Room at St. Louis Development Corporation, 1015 Locust Street, Suite 1200, at 8:30 a.m. on the last Wednesday of each month.

July 30, 2010

Liquor Licenses as Weapons

Several weeks ago in a post about adult establishments, an interesting discussion about liquor licenses began in the comment section. (And I say “began”, because they sort of got out of control.) Anyway, while going through the news today, multiple examples of liquor license issues struck me as a good opportunity for a blog post. I say all this as someone who basically likes our liquor laws in Missouri. By most measures (taxes, wine import restrictions, market quotas, time limits, etc.) our liquor laws are pretty reasonable compared to other states. There are exceptions to this, but because eliminating liquor laws entirely won’t happen, the next best option is having rational, limited laws that accomplish a few goals (preventing minors from drinking), while allowing adults easy access to a very popular item: alcohol.

But anytime you give the government power to license something, it invites the opportunity for abuse. In St. John, a suburb of St. Louis, a restaurant entrepreneur will have to wait a few more weeks to know whether he can sell alcohol at his restaurant, because one councilmember does not want him to have a liquor license. Now, this may not be that big of a deal, because it appears he will get the license at the next meeting, but it is still a delay in his business plans.

A worse abuse of power was also featured in a Post-Dispatch article yesterday: A liquor license inspector has been charged with bribery. He attempted to force a prospective bar owner to pay him off and give him a job in order for the owner to get the license. Thankfully, the bar owner was able to obtain the license anyway (evidence that it is not all that hard to get a liquor license here), but this is further evidence of the inevitable abuses that come from government control.

I pointed out a moment ago that it is not all that hard to get a liquor license here. Well, that’s not true if you live in the city of St. Louis’ 20th Ward, where the local alderman decided (several years ago) that he does not want any more bars or liquor stores. If you have to have a liquor license process (and we’ll realistically have one whether we like it or not), it needs to be a public, evenhanded process, not reliant on whether or not one elected official approves it.

There are abuses in Kansas City, too. The Pitch has a story on the liquor licenses being suspended in restaurants that have been caught allowing smoking. This is terrible, and most aptly demonstrates the title of this post. If you have a law banning smoking in public establishments, the punishment should be a fine, not the suspension of an unrelated item. At the bottom of the Pitch article, you see examples of suspending liquor licenses for acts that at least relate to alcohol (one of which is actually important enough to warrant some type of punishment).

I won’t get into the dispute over liquor licenses and violence at the clubs in downtown St. Louis. This post is long enough. One good thing about our liquor laws is Missouri is that we generally (with exceptions like the 20th Ward) don’t have numerical restrictions on total licenses in an area, which is usually the worst part of any licensing system. But any system can and will be abused. The most important change we need to liquor laws in Missouri is to eliminate the ability for one individual to block a potential license all on their own — be it an inspector or an elected official. Requiring that all applicants get a vote of the full legislative body could be a good start.

July 27, 2010

Indeterminacy in Public Expenditure: What Is a “Historic Preservation” Tax Credit?

I bristle when public policy advocates contend that persons who oppose a favored policy simply lack an understanding of “how well the program works.” Instead of wasting breath on patronizing dismissals of those who offer alternative perspectives, perhaps a policy advocate’s time would be best spent providing the public with valuable, unbiased information with which we can form our own opinions.

It is in this spirit that I present one of my works in progress from my summer here at the Show-Me Institute.

Backers of the 25-percent Missouri Historic Preservation Tax Credit often cite the statistic that our state is “first in the nation” for “federal historic rehab tax credit projects,” so I thought that it could prove valuable to see exactly where said federal projects occurred.

Click here to view a draft map of Missouri rehabilitation projects that received the 20-percent Federal Historic Preservation Tax Credit. Data comes from a June 2010 information request to the National Park Service, and includes projects dating from 1996 to mid-June 2010.

I see no need to editorialize about the map at this stage in my research, but I think that those who proudly support historic tax credit programs would do well by the public to explain why spending millions on certain construction activities is an appropriate use of public funds.

However, given that “historic preservation” is a catchall for education, place-making, job creation, and aesthetics, defining the precise function of public expenditures made in the name of preservation is an impossible task. Our positions as taxpayers, historians, developers, contractors, homeowners, tenants, policymakers, and tourists necessarily inform our differing and potentially divergent perceptions of these policies and expenditures. Our propensity toward repeated engagement in the same argument about the relative worth of a tax dollar spent on historic preservation as opposed to one spent on public education, while refusing to acknowledge some basic facts about the program in question, often leaves us blowing hot air.

At present in Missouri, recipients of historic preservation tax credits need not acknowledge the receipt of public funds in any format on the project site. In fact, recipients of historic preservation tax credits need not even acknowledge the historic significance of their taxpayer-supported property on site, such as in the form of a plaque. If we are to have a truly informed debate about the worth of the historic preservation tax credit, I would hope that we can all agree that disclosure is a good place to start.

Without good information, our state will never make good policy.

In my mind, the verdict is still out on whether the historic preservation tax credit really does what its backers aver.

July 14, 2010

Developer Should Bear Risk of Failure

I was pleased to see that the Post-Dispatch ran a letter to the editor today that I wrote in response to its recent editorial calling for St. Louis officials to renew efforts to subsidize the NorthSide redevelopment plan. This is the text of the letter:

Developer Should Bear Risk of Failure

In responding to Judge Robert Dierker’s ruling that St. Louis officials lacked authority to offer hundreds of millions of dollars to subsidize the NorthSide redevelopment plan, the editorial board, in the editorial “Celebrating Decline” (July 12), implies that the plan can proceed only if the city provides the anticipated subsidies. The developer’s own estimates indicate a belief that he will realize a profit of at least $251 million even without those subsidies.

Nothing in the ruling prevents the developer from pursuing his quixotic vision or from enjoying any profits that might result from its success; rather, it requires that, like all other entrepreneurs, the developer must personally bear the risks of failure instead of pushing them onto the taxpaying public.

Dave Roland — St. Louis

Policy Analyst, Show-Me Institute

June 22, 2010

The Smoke-Free Cigar Bar and the Fully Clothed Revue

The Wall Street Journal recently highlighted some of the possible effects, including increased unemployment, of a bill on the governor’s desk concerning strip club regulation in Missouri. Similarly, Christine Harbin’s post earlier this month highlights some further potential economic ramifications of S.B. 586. Among other restrictions, included in the bill is a requirement that clubs close by midnight. There are further problems beyond the economic impact on those Missouri employees affected, though.

Tightening restrictions in Missouri gives an automatic boost to the strip club industries along Missouri’s borders, which in some cases may be even more unsavory. Closing the Missouri clubs earlier than in other states will also unwittingly create more post-midnight (including cross-river) traffic — a public safety concern that effects more people than the clubs’ patrons.

Well-intentioned measures frequently have unintended consequences.

Consider Springfield’s proposal to ban smoking in workplaces. Most workplaces are smoke-free by choice, but some businesses — like cigar bars and hookah lounges — are built around smoking customers. Although it’s likely that the ordinance will make some exceptions, those exceptions themselves create a tilted playing field for competition.

If you don’t like strip clubs and smoking (and I certainly do not), the simplest solution is not to smoke and not to patronize strip clubs or smoky bars. This an example of how the over-regulation of an industry potentially creates conditions favorable to further problems — while solving none of those it was intended to solve — and, in the process, harming the livelihoods of people who have elected to work in affected industries (after all, erotic dancers need to eat, too).

The fairest (and most effective) way to kill an unsavory business remains not to patronize it.

June 15, 2010

David Stokes Takes Out a Payday Loan

Check out the latest entry in our series of economic performance art pieces, in which I take out a payday loan and then quickly lose most of the money at a casino:

Accompanied by my trusty colleauges, John Payne and Josh Smith, I decided that if we were going to write about the payday loan industry we should know exactly what the process involves. I think John summed it up best in the video when he pointed out that it took him less time to buy cars than it took me to get $50 from a payday lender.

June 8, 2010

Clear Example of Tax Laws Favoring Agriculture

Via John Combest (who played a terrific first base in softball on Sunday, if I may say so), the Suburban Journals has a good story about a smart property tax move by developers in St. Charles County. What exactly are the developers who have found themselves sitting on large lots of undeveloped property during this recession doing with it? They are farming the land just enough to get it taxed at the agricultural rate instead of at the commercial or residential rate. As the story details, the differences can be huge:

For example, an acre that goes for $5 a square foot and is assessed as commercial would have taxes of $4,800 for an acre. That same acre, assessed as agriculture, would have taxes of $7.68.

This is a topic I have been writing about since the beginning of this blog. Low assessment of agricultural land is one of the main reasons why each year the state transfers money (taxes) taken from suburban taxpayers to give to rural school districts.

The suburban residents, with their higher assessments and rates, support their schools at a fiscal level that has resulted in the state holding aid flat for years; the so-called “hold harmless” school districts. Many rural districts, with their lower assessments, lower rates, and agricultural property, pay less for their schools. The state makes up the difference with general taxes. Let’s be clear — rural districts can often educate their kids at a much lower expense than suburban districts, but the annual transfer of wealth from the suburbs to the rural areas is exactly the type of transfer that is often decried in other situations.

May 21, 2010

Columbia SWAT Officers Cleared

According to the Columbia Missourian, an internal investigation into the SWAT raid of Jonathan Whitworth’s home (which I have also covered here, here, here, and here) has cleared all the officers involved of any wrongdoing. Given my vociferous criticism of using SWAT tactics to serve search and arrest warrants for nonviolent crimes, you probably expect me to decry this decision as a miscarriage, but you would be wrong. From everything I know of the case, the officers did not violate any policies or statutes, whether federal, state, or local — but that’s precisely the problem. We need stricter rules for SWAT raids because under the rules in place at the time, there was nothing technically wrong with the raid.

As Radley Balko puts it, “this wasn’t a ‘botched raid.’ It was a routine raid. The police got the correct house. They found the guy they were after. They arrested him. No one was killed. Most of these raids don’t turn up huge stashes of drugs or weapons. Most result in misdemeanor charges.”

There is some reason to hope that — in Columbia, at least — using SWAT teams for nonviolent crimes will become the exception rather than the rule. Columbia Police Chief Ken Burton concedes that the department has “utilized SWAT routinely in circumstances and situations where we should not,” and promises that new reforms should cause the number of SWAT raids to “plummet.” Those reforms should be strengthened and expanded statewide to help ensure that SWAT teams are used for the intended purposes and not to shock and awe nonviolent people.

On Private Discrimination

Rand Paul, the newly designated Republican candidate for one of Kentucky’s seats in the U.S. Senate, has taken a lot of flack over the past couple of days as a result of his views on the landmark Civil Rights Act of 1964. MSNBC’s Rachel Maddow spent roughly 15 minutes of interview time with Mr. Paul trying to get him to directly express his belief that the government should not prohibit private business owners from engaging in racial discrimination. Rather than offer a soundbite that would allow political opponents to caricature him as a closet racist or opponent of civil rights, Paul first emphasized all that he found admirable and beneficial about the Civil Rights Act, then tried to express the difference between discrimination as a governmental policy, which he believes to be both abhorrent and unconstitutional, and discrimination as a private choice, which he believes to be both abhorrent and unwise, but beyond the proper authority of government to prohibit.

It’s true that a strict libertarian or free-market perspective might prevent the government from interfering when individuals choose to act in a discriminatory fashion. This may make people uncomfortable. But, as Mr. Paul pointed out, the very idea of freedom requires us to tolerate certain decisions that we might find distasteful, in order to ensure that we have the liberty to make decisions that others might find distasteful. For example: Our nation prizes freedom of expression so much that our constitutions deny governments the authority to restrict or punish speech, even if the ideas expressed are almost universally regarded as offensive. Respect for this form of freedom is so ingrained in our culture that its wisdom is only rarely challenged. Mr. Paul was trying to help Ms. Maddow understand that, similarly, if one believes in individual liberty then one must necessarily be prepared to tolerate the fact that some individuals will use that liberty in ways that others might find offensive.

The proper question, I believe, is how best to deal with those situations when they present themselves. Where speech is concerned, if someone says something offensive, the ideal solution for those offended would be either not to listen to that speaker or to respond with their own speech. Likewise, the best response to discriminatory business establishments would have been for others to boycott the offending establishments and/or to open non-discriminatory establishments of their own. The same principle can be applied to businesses that refuse to hire or promote qualified minority or female applicants. These discriminatory decisions create an opportunity for competing businesses to hire those same applicants — which, presumably, will allow them to offer higher-quality services than the discriminatory employer. The effect might not be immediate, but eventually it will become plain that discrimination is both foolish and costly.

It is also vitally important to remember that governmental power is a double-edged sword. A power that can be used in ways of which you approve can also be used in ways that you find repugnant. The problem of segregation/desegregation is a useful example, because the governmental action at issue represented flip sides of the same freedom-denying coin. In much of the Jim Crow South, segregation was not optional. Those allowed to vote — almost exclusively white people, many of whom had an interest in maintaining a privileged status in society — elected representatives who decided that individual business owners were not permitted to offer a desegregated environment. Thus, all people were forced to live with governmentally enforced segregation. After the Civil Rights reforms were enacted, individual business owners were not permitted to offer a segregated environment — all people were forced to live with governmentally enforced desegregation. At all times, individual citizens had only a limited ability to make these choices for themselves.

In a libertarian or free-market paradigm, the government would not have the authority to dictate these matters to individual in either direction. The government’s sole responsibility would be to ensure that those who sought actively to harm others would be brought to justice and, if necessary, their victims compensated for any demonstrable, quantifiable injuries suffered. Those who believed strongly in the importance of segregation would be permitted to live out their choice — but would also be forced to suffer the disadvantages that would flow from their choice. Those who favored integration would realize a unique competitive advantage that, eventually, would reveal the wisdom of that approach.

To sum up, governmental control over the decisions that individuals may make for themselves presents a seductive shortcut for those who believe that the world ought to be ordered in some particular way. But not only does it represent a denial of individual liberty, a government vested with the power to dictate decisions made by its citizens can very easily turn against those who had hoped to use it to pursue their vision of a “good” society. As George Washington once warned: “Government is not reason; it is not eloquence; it is force! Like fire, it is a dangerous servant and a fearful master.”

May 20, 2010

The Right to Have a Peaceful Life in a Quiet Subdivision

Greenberg's yard art. Photo by the Post-Dispatch
Lewis Greenberg's yard art. Photo from the St. Louis Post-Dispatch

A Ballwin-area retired art teacher was sentenced to jail time on Monday for non-compliance with two city ordinances. The ordinance offender, Lewis Greenberg, is charged with littering and storing hazardous materials.

The photo above is of Greenberg’s offense. He maintains that the structures in front of, around, and behind his house are art. Although art isn’t easy, these structures do look like abstract sculpture. The tangle of wood and metal, Greenberg told the Post-Dispatch, represents the Holocaust.

Greenberg’s neighbors, however, don’t appreciate his yard art. And, they haven’t liked it for a long time. In 2007, a woman from the area blogged: “OK, so where does Greebergs right trump the neighbors right to have a peaceful life in a quiet subdivision?”

Writes a commenter on the most recent Post-Dispatch article, about Greenberg’s sentencing:

If he wants a yard full of junk – then he can move out in the country where there are no rules. In a town and a subdivision where there ARE rules – he is BREAKING THE LAW and it needs to go….

Well, not quite. Greenberg’s art is on his property. He isn’t breaking a law just because what he has built on his property is unusual and doesn’t quite fit in with the Ballwin-area aesthetic. There is no right to uniformity.

Some neighborhoods do have codes, such as the one enforced in Shaw, that can limit what individuals can do with their property. It appears that, although the City of Ballwin has an extensive housing code, Greenberg’s neighborhood doesn’t have a rule to protect itself against his abstract yard art. Instead, the city has charged him with littering and storing hazardous materials — charges that seem like a stretch.

A survey of the Ballwin City Code reveals that the term “litter” refers to substances that could injure a person’s feet or car tires, trash and debris, earth left from an excavation, and traffic obstructions. Clearly, Greenberg’s lawn art doesn’t fall into the first, third, or fourth definitions of litter. And, although commenters hasten to compare his art to junk, can items strategically placed in order to construct sculptures on a person’s private property really be classified as trash?

As for the hazardous materials charge, it could be argued that children could run onto Lewis’ property and hurt themselves. However, unlike a person keeping dangerous animals on their property, if anyone hurts themselves on Greenberg’s property, it is entirely that person’s fault. Furthermore, if a person did hurt themselves while on Greenberg’s property, that person could attempt to find recourse through the court system. It’s not the city of Ballwin’s place to stop low-risk accidents from occurring through prior restraint. If it were, the city should immediately crack down on the construction of swimming pools.

I suspect that the neighborhood’s problem with Greenberg’s lawn art is not one of danger, but one of annoyance. It is unfortunate that the City of Ballwin is claiming to protect the safety of “the children” in an effort to censor Greenberg. Instead of reacting in this negative way, the annoyed neighbors could have realized what Mr. Plumbean and his neighbors realized:

My house is me and I am it. My house is where I like to be and it looks like all my dreams.

May 18, 2010

SWAT Raids vs. Military Raids

A commenter on this Show-Me Daily post about SWAT raids wondered how much worse military raids in Afghanistan might be compared to SWAT raids in this country. An Army officer writing to Radley Balko suggests that it is actually easier to obtain permission for a SWAT raid in America than a military raid in a war zone like Afghanistan, and that SWAT teams here use more aggressive tactics:

I am a US Army officer, currently serving in Afghanistan. My first thought on reading this story is this: Most American police SWAT teams probably have fewer restrictions on conducting forced entry raids than do US forces in Afghanistan.

For our troops over here to conduct any kind of forced entry, day or night, they have to meet one of two conditions: have a bad guy (or guys) inside actively shooting at them; or obtain permission from a 2-star general, who must be convinced by available intelligence (evidence) that the person or persons they’re after is present at the location, and that it’s too dangerous to try less coercive methods. The general can be pretty tough to convince, too. (I’m a staff liason, and one of my jobs is to present these briefings to obtain the required permission.)

Generally, our troops, including the special ops guys, use what we call “cordon and knock”: they set up a perimeter around the target location to keep people from moving in or out,and then announce their presence and give the target an opportunity to surrender. In the majority of cases, even if the perimeter is established at night, the call out or knock on the gate doesn’t happen until after the sun comes up.

Oh, and all of the bad guys we’re going after are closely tied to killing and maiming people.

What might be amazing to American cops is that the vast majority of our targets surrender when called out.

I don’t have a clear picture of the resources available to most police departments, but even so, I don’t see any reason why they can’t use similar methods.

I can’t personally vouch for anything this officer claims about Army protocol, but if what he claims is true, it’s very disturbing.

Re: [Shawtalk] Historic Code

I live in the Shaw neighborhood in Saint Louis, and I subscribe to the area’s email listserv. Last week, a subject of much debate was the Shaw Neighborhood Local Historic District’s long list of Use, Rehabilitation and New Construction Standards, which describes which architectural details, roof shapes, roof materials, etc., that residents are allowed to use.

When a person walks through a neighborhood like Shaw that features aesthetic continuity, he sees only part of the story; historic codes like those in the Shaw neighborhood entail many unseen costs and negative unintended consequences, which I will attempt to enumerate in this post. For these reasons, historic building codes discourage the practical use of existing structures — the very thing they are supposed to encourage.

  1. Historic codes violate private property rights.
     
    They restrict individuals from altering, adding to, or demolishing the buildings that they own. By purchasing an older property, an individual assumes the risk that it could lose value in the future. Property owners have an incentive to maintain their investment, because otherwise the value of the property will decline.
  2. Mandating aesthetics should not be the role of government.
     
    Ensuring that a building is structurally sound is one thing, as David Stokes has written previously, but mandating how a building looks aesthetically is another. In my opinion, individuals should be free to enter into voluntary agreements of this nature, but only as a private matter (e.g., neighborhood covenants). I disagree that it should be the role of the government to ensure that the block “works visually,” as one person writes on Shawtalk:

    There is something to be said for architectural cognizance-for having the entire block look so different that it no longer works visually. Sort of like wearing a plaid shirt with flowered pants and a striped jacket-one can do it but it looks silly.

    Furthermore, mandating and regulating this conformity is largely redundant, because the majority will not choose to make egregious violations of social convention, such as paint their houses hot pink. As an analogous example, there is no law against cutting in line, but people choose to wait their turn out of social convention. People choose to wear jeans because many other people also wear them. Businessmen and politicians wear dark suits because their peers and colleagues do.

  3. Historic codes increase the cost of the materials required to rehabilitate a house.
     
    A homeowner has to search for windows, doors, and millwork that fit the conditions of the code. There can also be additional costs for compliance, such as, say, the need to build a different fence because the one you have is an inch too short. As a negative consequence of this increase in cost, homeowners have less of a marginal incentive to repair their property.

    Tangentially, supporters of historic credits argue that the regulations benefit the local economy, because the code-appropriate items are often made regionally or locally. This argument fails because it ignores the unseen. The resources that are devoted to making code-approved materials could be put toward other uses. It’s possible that local manufacturers do not possess a comparative advantage in manufacturing windows and doors, and that they could manufacture other products more efficiently.

  4. Historic codes discourages people from making technological improvements to their home, such as upgrading the energy efficiency.
     
    How new can something be and still be considered historic? Is modern plumbing historic? Is central air historic? Is an Internet hookup historic?
  5. Housing codes are passed under the guise of protecting quality, but homeowners have other avenues of redress.
     
    Another commenter observes:

    It also plays into safety issues as some people would do very flimsy and faulty work in an effort to sell the house without regard for how well the job was done.

    This is one reason that the judicial system exists. If a carpenter does flimsy and faulty work, the homeowner can take him to court. Furthermore, if a carpenter does flimsy and faulty work, the homeowner would discourage his friends and neighbors from hiring him. The carpenter would lose business as a consequence.

  6. Historic codes like Shaw’s favor home ownership over renting; cementing such preferences through policy also should not be the role of government.
     
    The Shaw Neighborhood Historic District Rehabilitation and New Construction Standards explicitly state the following:

    it is the intent of this ordinance to decrease the density of housing units within the neighborhood without demolishing buildings. Whenever feasible, buildings should remain with the same amount or less living units as the building was originally designed.

    [...] Buildings should not be converted from single-family to multi-family. Two-family structures should not be converted to more than two units. Four family buildings should not be converted to more than six units with no units having less than six hundred net rentable square feet.

    First, this code prohibits a person from subdividing her property. This means that she cannot lease out her property and receive rental income. Second, this policy restricts renters and people of lower income from moving into the neighborhood.

    Through this policy, the government favors home ownership over renting. Owning a home is a significant investment that isn’t suitable for all individuals; by renting, many people who can’t afford the investment commitment and risk of a home can live within their means.

May 13, 2010

Like I Said, It’s Pretty Common

Most people probably believe that the mistakes of the SWAT raid on Jonathan Whitworth’s home in Columbia are extraordinarily rare. That is, unfortunately, false. I’m sure most SWAT raids do find the person and evidence they are looking for (even if the amount of force they use is unnecessary for the task), but raids that turn up nothing or hit the wrong house are unacceptably common. Today’s example comes from Georgia:

An elderly Polk County woman is hospitalized in critical condition after suffering a heart attack when drug agents swarm[ed] the wrong house. Machelle Holl tells WSB her 76-year-old mother, Helen Pruett, who lives alone, was at home when nearly a dozen local and federal agents swarmed her house, thinking they were about to arrest suspected drug dealers.

“She was at home and a bang came on the back door and she went to the door and by the time she got to the back door, someone was banging on the front door and then they were banging on her kitchen window saying police, police,” said Holl.

Holl says her house was surrounded and she was scared to open the door. When the Polk County Police Chief finally convinced her she was safe, she let them in.

“They never served her with a warrant. At that point, she said the phones were ringing with the other men that were in the yard and they realized that it was the wrong address,” said Holl. [...]

“My mother has had a heart attack. She has had congestive heart failure and she is in ICU at the moment. She is not good condition and her heart is working only 35 percent,” said Holl.

Holl admits that her mother has had three heart attacks but has been doing well for the past couple of years.

“She was traumatized. Even the doctor said this is what happens when something traumatic happens. He said it’s usually like a death in the family or something like that just absolutely scares them half to death, and that is what has happened,” said Holl.

SWAT raids are designed shock and confuse, which is why, when they occur, many people believe the police are actually criminals attacking them. This can lead to heart attacks or residents attempting to defend themselves from perceived criminals, setting off a deadly firefight. When SWAT raids are used for nonviolent situations, they almost always introduce danger into the situation rather than removing it.

Also, there is this tidbit:

Police say they have had her mother’s home under surveillance for two years.

Holl says if that’s true, how could police get the wrong address?

“We have just found out from a neighbor that they (police) went into some other elderly woman’s home who was on oxygen and took her oxygen off of her and scared her half to death,” said Holl.

If the police really have been watching the house for two years and still raided the wrong house (I have my doubts), it certainly makes the Columbia Police Department’s new rule of keeping houses that they plan to raid under constant surveillance seem woefully inadequate.

Story via Hit and Run.

May 6, 2010

Coming Soon: Using Tanks to Collect on Parking Tickets!

Video of a February SWAT raid in Columbia was recently released and has been causing something of an uproar. The article accompanied by the video on the Columbia Daily Tribune’s website currently has over 450 comments, most of them disapproving of the police officers’ tactics, which included shooting suspect Jonathan Whitworth’s two dogs while his wife and young son were present. I doubt many people would complain if the police employed such aggressive tactics in response to a hostage situation or a bank robbery, but all the police had to show for the violence was a misdemeanor amount of marijuana and paraphernalia.

Regardless of your opinions about marijuana, I think we can all agree that it is an inappropriate use of force to call out the SWAT team for misdemeanor offenses. Granted, the police argue that they suspected Whitworth was selling marijuana, and it is certainly possible that they were right but happened to raid his house when he was essentially sold out. However, the fact that the police department’s intelligence indicated that Whitworth’s son was not present when, in fact, he lived there suggests that they did not really do their homework on the case.

This case highlights the need for greater information about the use of SWAT raids in Missouri, but it is hardly an isolated incident. Cheye Calvo is the mayor of Berwyn Heights, Md., and in 2008 the Prince George’s County Sheriff’s Department deployed a SWAT team to his house after a package containing drugs meant for someone else was delivered to his house. In that case, as well, the officers shot and killed Calvo’s dogs, two Labrador retrievers. (They always seem to shoot the dogs.) Calvo fought back and was instrumental in passing a law in Maryland that requires all police departments in the state to report when and why they deploy SWAT teams. The results so far in Maryland have not been encouraging:

Over the last six months of 2009, SWAT teams were deployed 804 times in the state of Maryland, or about 4.5 times per day. In Prince George’s County alone, with its 850,000 residents, a SWAT team was deployed about once per day. According to a Baltimore Sun analysis, 94 percent of the state’s SWAT deployments were used to serve search or arrest warrants, leaving just 6 percent in response to the kinds of barricades, bank robberies, hostage takings, and emergency situations for which SWAT teams were originally intended.

If Missouri police uses SWAT forces for similar purposes, we have a right to know and a duty to do something about it.

May 5, 2010

Dreadful Assessment Lawsuit in Platte County

A simply atrocious lawsuit has been filed in Platte County (which includes part of Kansas City), according to the St. Joseph News-Press, regarding the assessment of a power plant there. You might think, from the opposition, that the power plant had received a tax exemption, or a TIF, or a CID, but no. People are complaining — and suing — because the new plants were assessed at a reduced rate while they were under construction.

If you go out and build your dream home with a worth of $500,000, should your county begin taxing you at a rate based on a half-million dollar property as soon as you lay the cornerstone, or wait until the house is completed and you move in? I have to believe that every single person reading this (which is a very large number of people, I trust), thinks the full assessment should start when the house is complete. In Missouri, in fact, that is exactly how it works. The full assessment applies according to the date of the final passing inspection / occupancy permit / utility hookup, and the annual taxes are prorated for that year. (Unlike cars or boats, which are taxed as of Jan. 1, real estate can be prorated for taxes; also, the land would have been fully taxable during contruction.) Presumably, the land for the power plants was fully assessed during the construction, and the building was assessed at 50 percent (the article does not make a distinction). That seems perfectly reasonable to me. Now that the project is finished, the company is paying taxes based on its full assessment. Anyway, the final decision should rest with the voters who elect, or unelect, the assessor — not on a lawsuit.

The single silliest (putting it nicely) statement in the article belongs to one of the lawyers in the case:  

“It’s been difficult for school districts to have a voice in the assessment process,”

I will gladly stand corrected if anyone can show me one place anywhere in Missouri law that says school districts are supposed to have a voice in assessments — or any taxing district of any type, for that matter. TIF commissions and tax exemptions are not an answer to this challenge; they deal with rates and abatements, not assessments. Assessors are supposed to be independent, so that they can set market assessments as fairly as possible, from which various taxing districts can set their rates. School districts are in no way, shape, or form supposed to have a voice in those valuation decisions. It is just an unbelievable statement.

May 3, 2010

A Place That Puts Some Fun Into Life

The Wall Street Journal ran an article over the weekend about Saint Louis’ beloved City Museum, its potential hazards, and the lawsuits they sometimes generate. The museum is privately owned — few government agencies would ever make something as quirky and fun as the City Museum — by Bob Cassilly, who emerges from the article as a heroic if offbeat businessman fighting to keep his dream alive against tiresome safety scolds:

“We like to be the devil’s advocate for society,” says Bob Cassilly, the museum’s 60-year-old founder, a self-described “idiot savant” with wild gray hair. “When you have millions of people do something, something’s going to happen no matter what you do.”

The City Museum, housed in 10-story brick building, shows none of the restraint or quiet typical of museums. A cross between a playground and a theme park, it recycles St. Louis’ industrial past into such attractions as slides made from assembly-line rollers. Just about everything can be touched or climbed, including dozens of Mr. Cassilly’s sculptures, among them a walk-through whale on the first floor.

Despite the whiff of danger, or perhaps because of it, the City Museum is one of St. Louis’s most popular attractions. Its 700,000 annual attendance is roughly twice the population of St. Louis and dwarfs the turnout at refined destinations such as the St. Louis Art Museum.

The injuries and lawsuits put the City Museum at the center of an enduring argument over the line between liability and personal responsibility. Some of the injured and their lawyers say the museum is deceptively dangerous and doesn’t do enough to publicize its risks through signs or other warnings.

Mr. Cassilly counters that it is as safe as it can be without being a bore. “They [lawyers] are taking the fun out of life.”

How very true. There are numerous warnings throughout the museum to avoid certain activities and that everything done there is at your own risk, but apparently that’s not enough for people who think life should be risk free. The City Museum is essentially a giant playground for children and adults alike, and like all playgrounds, the players occasionally get injured. That’s unfortunate, but it’s no reason to sue playgrounds out of existence.

March 29, 2010

SMI on Public Radio Tomorrow

Tomorrow (Tuesday), I’ll be a special guest for the Legal Roundtable segment on Don Marsh’s “St. Louis On The Air” radio show. The show will run from 11:00 a.m. to 12:00 noon on 90.7 KWMU — with live streaming over the Internet available here.

Our primary topic will be the constitutional issue swirling around the new federal health care reform law and Missouri’s Health Care Freedom Act, which would prohibit punishment for individual citizens who decline to purchase a product they may not want.

Your Government, Your Editor

The Riverfront Times blog points out that a judge in the local U.S. District Court has determined that St. Louis city may choose which messages it permits citizens to express. In a case that we’ve previously discussed here, Jim Roos sued the city when officials demanded that he remove a mural on one of his buildings calling for an end to eminent domain abuse. Roos pointed out that the city’s laws would have permitted the mural if only he had chosen to communicate a different idea (such as displaying a flag, some other approved symbol, or “Go, Cardinals!”), and that the First Amendment does not allow government to make content-based distinctions in deciding when and where citizens can express themselves — especially when that expression is related to issues of political importance.

The court ruled today that the government does, in fact, get to choose which messages citizens can communicate. In the words of Michael Bindas, one of the attorneys from the Institute for Justice representing Roos in his lawsuit, “The court’s decision gets it precisely backwards.” Fortunately, IJ and Roos intend to keep fighting, and the Eighth Circuit Court of Appeals will have the chance to correct the lower court’s mistake.

March 2, 2010

April Ford-Griffin on Proposed “Open Space”

I wanted to note that Alderman April Ford-Griffin called me today to discuss the proposed open space map that NorthSide Regeneration Regeneration LLC submitted as part of its plan for a $8.1 billion development of the city of Saint Louis.

I have written about how owner-occupied homes appear to be slated for open space, as are some area businesses.

When I asked Ford-Griffin about the fate of Fehlig Brothers Box & Lumber, a 137-year-old area business that, according to NorthSide’s plans, will become open space, she said that much detail can’t be read into the company’s plans.

“That is a concept,” she said. “That is not a document where you take it and say this is what’s going on this block and this is what’s going on that block,” she said.

You can read the updated report, with Ford-Griffin’s comments, here.

Fun With Guns

The U.S. Supreme Court heard arguments today in McDonald v. Chicago, otherwise known as the Chicago gun ban case. The court’s decision in this case will determine whether the Fourteenth Amendment means that the Second Amendment right to bear arms should prevent state and local governments from prohibiting citizens’ possession of functional firearms in their homes.

This is a very, very important case — but maybe not for readily apparent reasons. The central question is not so much the meaning of the Second Amendment — that was largely decided by last year’s D.C. gun ban case. Rather, this case concerns the meaning of the Fourteenth Amendment.

When it was drafted and ratified, the first section of the Fourteenth Amendment was intended to do several things: First, to ensure that United States citizenship would be universal for those born within the country, and that no state could deny state citizenship to someone who is an American citizen; this was a pressing concern given that the recently Confederate states might well have denied citizenship to freed slaves. Second, to ensure that all citizens were assured of a certain baseline of liberty that could not be denied by any state or local government, because some state governments, when left to their own devices, had previously refused to offer the same protections for liberty enshrined in the U.S. Constitution. Under the new amendment, states were required to afford all U.S. citizens the “privileges and immunities” protected under the U.S. Constitution — including a right to travel freely across state lines, a right to earn a living in a common profession, etc. And, finally, the amendment was intended to ensure that all citizens must be treated equally under the law, so that no state could fashion laws that would discriminate against newly freed slaves or other “outsiders.”

Very shortly after the amendment’s ratification, however, the U.S. Supreme Court handed down The Slaughterhouse Cases. At issue was a law in New Orleans that created a butchering cartel controlled by the city, limiting the number of people permitted to practice the profession. The law made it so that citizens could only practice the profession with the city’s permission, and then only at a time and place of the city’s choosing. The city’s butchers sued, claiming that the Fourteenth Amendment prevented a state or local government from infringing upon their right to practice their profession. The Supreme Court responded with a ruling that the vast majority of legal scholars now consider one of the least-defensible in the court’s history (see p. 11 of the brief in the preceding link).

The court couldn’t negate the provision establishing universal citizenship, but its decision in Slaughterhouse completely eviscerated (so to speak) the other provisions of the first section — leaving the states free to limit access to professions, set up sweetheart deals for favored business interests and industries, institute poll taxes or other requirements that disenfranchised targeted segments of the population, and pass the Jim Crow–era segregation laws. Had the Fourteenth Amendment been properly applied from the outset, there might have been no need for a civil rights movement because segregation would never have been permitted in the first place, and freed slaves (as well as new immigrants) would have had easier access to self employment in entry-level professions.

Over time, the Supreme Court realized the evils that states were perpetrating against their citizens and so they came up with the doctrine of “substantive due process” as a way of selectively applying the Bill of Rights to strike down illegitimate state laws. It’s an absolute legal fabrication, but it has allowed the court to address issues of constitutional freedom in the way it has seen fit, without admitting that the court got Slaughterhouse wrong. So, almost the entire Bill of Rights has now been “incorporated” into the idea of substantive due process (meaning that 140 years later, the court has almost completely accomplished the original purpose of the Fourteenth Amendment), but several of the most important “privileges and immunities” — such as the right to earn a living — remain on the outside looking in. For whatever reason, the court has continued to hesitate in taking the final, proper, liberty-respecting step.

Taking that step would mean that federal courts could strike down state laws in violation of the privileges and immunities that have been neglected for all this time – but that is not only what the Constitution requires, it is inherently a good thing for liberty! Getting the history and constitutional theory correct would simply re-anchor the methods of analysis to their historical underpinnings, instead of allowing the unprincipled free-for-all that sometimes becomes apparent in the way the court addresses constitutional freedoms. I can’t help but think it would be a good thing, both at the philosophical and the practical level.

March 1, 2010

When Is a Home Not a Home?

On Feb. 23, I wrote about the proposed “open space” that NorthSide Regeneration LLC, has planned for the company’s $8.1 billion development of the city of Saint Louis. According to NorthSide’s plans and other publicly available documents, at least four owner-occupied homes are slated for open space.

When discussing the possibility of eminent domain, NorthSide representatives, including developer Paul McKee and attorney Paul Puricelli, have stated that eminent domain won’t be used to take owner-occupied residences. The specificity of the qualification “owner-occupied residences” should make anyone looking into the project take pause. After all, there are many types of properties that are important to lives and livelihoods that aren’t owner-occupied residences — for example, businesses. In the latest Show-Me Report, I profile Fehlig Brothers Box & Lumber, a business slated for open space.

February 23, 2010

At Least Four North Side Homes Slated for “Open Space”

The home of Shirley Hamilton, in the 2200 block of Madison Street, in Saint Louis' north side. Photo by Caitlin Hartsell.
The home of Shirley Hamilton, in the 2200 block of Madison Street, in Saint Louis’ north side.
Shirley Hamilton. Photo by Caitlin Hartsell.
Although NorthSide redevelopment plans for her area indicate that Hamilton’s neighborhood is slated to be replaced, Hamilton said she’s not concerned. As a resident of a city block with only three houses, she said, she’s been expecting this. “It’s been going on as long as I’ve been here,” she said.
Another home on the 2200 block of Madison. Photo by Caitlin Hartsell.
Another home on the 2200 block of Madison. Photos by Caitlin Hartsell.

Shirley Hamilton has been living at 2209 Madison since 1978. Her home is one of three houses on the 2220 block of Madison, all of which are small, but tidy. Between each house is a good amount of open space.

These three houses fall squarely within the boundaries of the recently approved $8.1 billion development of the city of Saint Louis’ north side. Of course, about 4,600 other properties also fall within those boundaries, but in the case of the 2200 block of Madison, NorthSide Regeneration LLC, the company behind the development, may be endangering one of its most frequently invoked promises.

That promise concerns the use of eminent domain. Although eminent domain is constitutional, it can be very unpopular, especially if it appears that a government agency is using that power merely to help a private business.

Proponents of the development, including developer Paul McKee, NorthSide lawyer Paul Puricelli, Alderman April Ford-Griffin, and Alderman Marlene Davis, have said repeatedly that the city won’t use eminent domain to take owner-occupied homes, and that fears to the contrary are unfounded. In fact, the company went even further. When NorthSide applied for millions of dollars in tax credits from the state, the company submitted an affidavit stating, among other things, that “The Applicant has not identified any owner-occupied residences for acquisition under the Redevelopment Plan.” McKee, the chief manager of NorthSide, signed it.

Along with that affidavit, NorthSide submitted a list of about 260 owner-occupied residences to the state. Hamilton’s home and the house sitting the farthest west on her block were on that list.

NorthSide has also disclosed some of its preliminary plans for the area in its redevelopment plan, which was submitted to the city when the company applied for nearly $400 million in tax increment financing (it has been approved for up to $380 million). One of the more interesting pages of that plan is page 24, which is a map of “proposed open space” for the area.

According to that map, NorthSide plans to remake four city blocks into open space: the area lying between Madison Street and Maiden Lane, west of 22nd Street and extending a little past Jefferson Avenue. In other words, despite all the assurances about the limits on eminent domain for the NorthSide project — including the affidavit of its chief manager — Hamilton and her neighbor are two owners who may not have long to occupy their homes.

That’s not to say that the company didn’t try to purchase Hamilton’s home. About a year ago, she said, she got a letter from a lawyer, representing an anonymous buyer, looking to purchase her home. When Hamilton called the number listed, she said, she was quickly offered $60,000 for the property. But Hamilton, who is retired, wasn’t interested in searching for a new home, and asked instead if the buyer could offer her a deed to a different property, elsewhere in the city. The lawyer promised to check, Hamilton said, but never called back. A few months later, Hamilton said, she was sent the same form letter.

Hamilton said that her next door neighbor did sell. According to city property data, the second house on the block is owned by MLK 3000, one of the companies that NorthSide used to acquire properties under the radar. Hamilton said she isn’t interested in moving, but if the developer could offer a trade instead of money, she would consider it. She’d like to stay in the city.

An email inquiring about how concrete the plans for open space are, and whether NorthSide would adjust its plans if property owners were unwilling to move, did not receive a response from Bill Laskowsky, NorthSide’s chief development officer, and a company representative.

Ultimately, Hamilton said, she’s not concerned. As a resident of a city block with only three houses, she said, she’s been expecting this.

“It’s been going on as long as I’ve been here,” she said. Laughing, she noted that when Mayor Freeman Bosley Jr. was in office, her home was slated to become a golf course.

“I’ll deal with it when it comes,” she said.

According to NorthSide’s plans and its submitted list of owner occupied residences, two other homes appear to be slated for open space: one on the 2500 block of Madison, and one on the 2700 block of Glasgow Street.

Within other documents submitted by NorthSide, the company has designated the area surrounding Hamilton’s home as “mixed use,” which could indicate a different set of plans for the area.

Limiting Casino Competition

A committee in the Missouri House has heard a bill to keep the Missouri Gaming Commission from closing the President Casino (or any other casino) on “purely economic grounds.” The testimony makes clear the Kafkaesque bureaucratic nightmare into which the commission has placed the President Casino:

Some House lawmakers said the idea of “inadequate declining performance” seemed subjective and was a hard standard to interpret.

Rep. Vicki Englund, D-St. Louis County, questioned how the commission evaluates casino’s performance and asked lobbyist Jim McNichols, who testified on the commission’s behalf to explain how casinos could be expected to meet standards when they weren’t explicitly provided with standards to comply with.

McNichols said the commission works hard to involve casinos in the rulemaking process.

The Missouri Gaming Commission opposes the bill, but McNichols said he couldn’t speak to the specifics of the President Casino case because there was a pending legal matter.

This may strike some people as a crazy idea, but I think it should be up to the owners of a business to decide whether it lacks sufficient revenue to justify operating, not the decision of a government commission with no set standards by which it must abide. And, of course, if the President is forced to close, it is not only the casino’s owners, employees, and patrons that would suffer, but also gamblers at other casinos. Following the decrease in competition, casinos would be able to pay out a lower amount in winnings at the margin.

Missouri Gaming Commission Executive Director Gene McNary got right to the heart of the matter in his written testimony when he wrote that passing the bill to keep the President Casino open would “neuter the commission and, in effect, take away our ability to regulate Missouri’s gaming industry.” I doubt he shared my view that this would be a positive development, however.

February 19, 2010

Payday Loan Industry Bad; Mob Racketeering Good

Yesterday in St. Louis, opponents of the payday loan industry held a hearing, which was covered by the Post-Dispatch and linked to by Combest.

Here is my advice to every person in Missouri: Stay away from the payday loan industry; the vast majority of the time, it is a terrible financial decision to make use of it. Here is my advice to the government: Stay away from the payday loan industry; it is not your role to interfere in private contracts and prevent people from making poor financial decisions.

Then there are the unintended consequences that would result from eliminating, or severely restricting, the industry. It is not as though the people who now use payday loans would suddenly no longer have any need for a loan. Some would move into receiving loan services from the banking system (a good result), some would entirely lose the ability to obtain credit (a mixture of both positive and negative results), and some would turn to the loan shark industry with all of its attendant risks, violence, etc. So, if you want to improve the climate for loan sharking and enforcing collections with baseball bats, then by all means legislate the payday loan industry out of existence.

This set of arguments about payday loans has also been covered by Show-Me Institute op-eds superior to this blog post.

February 17, 2010

WashU Economist Testifies NorthSide Forecasts “Made Out of Thin Air”

The first round of arguments against a projected $8.1 billion development of the city of Saint Louis’ north side was made in court yesterday.

The bulk of the trial, which will continue on Feb. 25, was devoted to testimony by Washington University economist Michele Boldrin, who clearly doesn’t think much of the projections and forecasts developer Paul McKee used to persuade city officials that his development was viable and worthy of more than $390 million in tax increment financing (TIF).

“I find these numbers completely unbelievable,” Boldrin said. “Pie in the sky” was another frequent characterization.

And, later, “This is something that if an MBA student came up with this as a term paper, I’d throw him out of the office.”

Boldrin’s main argument, repeated many times, was that no justification was given for any of the especially rosy growth and employment estimates. For example, the development company, NorthSide Regeneration LLC, estimates:

  1. That property value growth rates will be as high as 20 percent in 2010, and 15 percent in a number of following years.
  2. That more than 20,000 new, permanent jobs will be created as a result of this development.
  3. That there will be buyers for 6,000 new homes, valued at an average of more than $450,000.

Dave Roland, a policy analyst at the Show-Me Institute, testified briefly that the north side area, which you can explore here, is not as blighted as NorthSide asserts. He, and Terry Artis, the owner and founder of the River City Examiner, took video of some of the areas NorthSide had noted as being especially blighted. The video, which is a publicly available court record, is linked below.

Dave Roland – A Look at Purported Cases of North Side “Blight” in St. Louis from Audrey Spalding on Vimeo.

February 15, 2010

NorthSide Trial on Tuesday

NorthSide Map
Click to Enlarge
Interactive NorthSide Map
Interactive NorthSide Map

Another round of challenges to the $8.1 billion development of the city of Saint Louis’ north side will be heard in court tomorrow.

If you’re about to skip reading this post because the word “development” seems boring, hold on a moment. The project, put forward by developer Paul McKee, is contentious because it’s enormous — about two square miles — and because it has been approved for a large amount of public financing. McKee has asked for about $380 million in city tax increment financing (TIF), received approval for more than half, and will likely receive the rest in a few years. In late December, the state granted the development company, NorthSide Regeneration LLC, more than $19 million in tax credits (which can be used dollar-for-dollar to pay off taxes). Interestingly, the Department of Economic Development did not issue a press release, which it generally does when it issues tax credits.

One of the issues that will likely be raised at trial tomorrow is whether NorthSide unfairly characterized the area as being blighted. In its TIF application, NorthSide submitted a blighting study that systematically categorized more than 4,600 properties within the redevelopment boundary as being blighted. Along with its classification of properties as blighted for being dilapidated, unsafe, or unsanitary, the company also included blighting factors for properties with excessive vegetation, properties that had neither increased or declined in assessed value between 2003 and 2005, and properties with an increase in assessed value that totaled less than the city average from 2003 to 2008.

Another issue that could be raised at trial is that of eminent domain. McKee, along with the city aldermen who backed the project and pretty much every other public proponent of the project, have sworn repeatedly that eminent domain will not be used on owner-occupied property. What that means for the fate of non-owner-occupied properties within the boundary is less than clear.

Publicly available court documents also reveal some interesting details:

  • NorthSide is curious about how the plaintiffs’ court costs are being financed, and requested that Sheryl Nelson and Elke McIntosh (two of the plaintiffs) reveal how they’re paying for litigation. Judge Robert Dierker did not grant the request.
  • Both sides have taken deposition from Michele Boldrin, an economics professor at Washington University.
  • NorthSide submitted a letter of interest from the Bank of Washington (in Missouri) as evidence of financial backing of the development. However, NorthSide has not submitted evidence of a contract with the bank, which has less than $800 million in total assets.
  • According to NorthSide’s application for state tax credits, the company has spent about $25 million to purchase property in the redevelopment area.

The trial will start at 11 a.m. in Division 18 of the city’s Circuit Court. Judge Dierker, who quoted economist F.A. Hayek when rejecting the plaintiff’s request for a preliminary injunction, will hear the case. You can read that ruling here.

The Will of the People, Revisited

Today, I’m going to Jefferson City to testify on bills related to the initiative and referendum powers that the Missouri Constitution secures to this state’s citizens.  One of the points that I hope to make plain is related to an article that ran last week on the Kansas City Star’s Prime Buzz blog, which quoted the president of the Greater Kansas City AFL-CIO as saying that the organization would work to prevent citizens from being able to vote on whether Kansas City or St. Louis should replace their earnings taxes, claiming, “This is not the will of the citizens.”

The irony, of course, is that nothing demonstrates “the will of the citizens” more than, say, letting them vote for themselves!

This is yet another example of a problem I have noted several times before: Powerful interests can (and do) game the system to prevent Missouri citizens from voting on issues of great importance. The most prominent example is the way that the Missouri Municipal League has for years been engaging in litigation strategically calculated to keep eminent domain reform off of the ballot. The most damning element, in my mind, is that at least in the case of the Missouri Municipal League, the opponents acknowledge the virtual certainty that eminent domain reform would be approved if the citizens were allowed to vote on it.

If an organization or some other group of citizens is concerned about the wisdom of any given ballot initiative, they are well within their rights to communicate their concerns to voters and to try to persuade Missourians not to approve the proposition. But to manipulate the system in such a way that citizens are denied the opportunity to adopt what they believe to be valuable changes to their laws is reprehensible.

February 2, 2010

Smoke ‘em While You Can

Although both Saint Louis City and County have recently passed a smoking ban (albeit a relatively mild one in the city), this has not placated anti-smoking crusaders in Missouri. Instead they are emboldened, now proposing a statewide ban on smoking in almost all public places. From the Saint Louis Beacon:

State Rep. Walt Bivins, R-Oakville, is leading a bipartisan cadre of at least 20 legislators who’d like to see smoking banned from most public places by next year.

In an announcement this week, Bivins and co-sponsor Jill Schupp, D-Creve Coeur, say their aim is to create “uniform statewide smoke-free standards in bars and restaurants.”

But the bill, HB 1766, is generating lots of attention because it goes much further.

The measure also would outlaw smoking at public “aquariums, galleries, libraries, and museums,” as well as sports arenas, convention halls, bingo facilities and “At least eighty percent of hotel and motel rooms that are rented to guests;”

The few exemptions include private residents not used for day-care facilities, tobacco stores, those 20 percent of hotel/motel rooms and “outdoor areas of places of employment.”

Public smoking is already banned in some form in 23 localities in Missouri, including Saint Louis, Kansas City, Columbia, and Springfield. Furthermore, even in places with no smoking ban, many businesses either forbid smoking completely or offer patrons a nonsmoking option. So, what is the necessity of this bill?

The irony, of course, is that if smoking were so widespread that no nonsmoking options existed for drinkers and diners, a smoking ban could never get a hearing in the first place. It is only when there are already many nonsmoking businesses, and smokers are a small group, that the majority can impose its will upon them so thoroughly.

I am a smoker, but I have been trying to quit lately. However, if this bill passes, I think I might have to start smoking two packs of Pall Malls a day … out of spite.

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The views expressed by each contributor to this blog are those of that contributor alone, and do not necessarily represent the views of the Show-Me Institute.

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