Monday, March 21, 2011

Urban renewal bills clear Idaho Senate committee | Idaho Legislature | Idaho Statesman

From the Idaho Statesman, Mar 16, 2011:

Two bills aimed at urban renewal reform cleared the Senate Local Government and Taxation Committee on Wednesday. HB 95 would require a citywide election to form a new urban renewal agency. It also would limit bonds and districts to no more than 20 years; require an annual public hearing on the district's finances and projects; and prohibit district expansion once boundaries are set. HB 110 would require a public hearing before an urban renewal plan is implemented. Both bills were sent to amending order for possible amendment to clarify language.
The House unanimously passed both bills March 1.

Accessed at Idaho Statesman

Wednesday, March 16, 2011

Why Urban Renewal is Unpopular in Idaho

From the Idaho Statesman, Mar 13, 2011:

Supporters say it’s a valuable economic development tool. Critics say it siphons off property taxes with little accountability.
Lawmakers and other critics cite these complaints:
- Cities create urban renewal agencies without a vote of the public. The boards of the agencies get to spend property tax dollars and have power to condemn property, but are appointed, not elected.
- Once created, agencies can start up urban renewal districts and go into debt without a public vote.
- Urban renewal districts keep the property tax money generated by new development, leaving others to pick up the costs of fire, police and other services that new development demands.
While some lawmakers are champing at the bit to curtail the agencies, others urge caution. Sweeping change could make it difficult for cities and urban renewal agencies to do their jobs — attracting businesses, creating employment and boosting the economy.

- Debt: According to the Idaho Constitution, a city or other local government that wants to build a new building or other capital project must pay cash or get two-thirds voter approval to incur debt.
Urban renewal agencies do not need voter approval to issue bonds — take on debt — to finance a project. Those agencies should be “treated like every other taxing district,” said Rep. Phil Hart, R-Hayden. “They’ve got to get voter approval before they go into debt.”
- Over-broad powers: All it takes to create an urban renewal agency or a district is a city council vote. Under state law, urban renewal areas are intended to address blight. But in the past, farm, forest and even desert land has been deemed blighted. The city of Nampa took a chunk of agricultural land to build the Idaho Center; Coeur d’Alene created an urban renewal district next to a resort.
- Board accountability. Last year, the 40 urban renewal agencies in Idaho took in about $52 million in property taxes. The boards for school, highway and irrigation districts that control how property tax money is spent are elected. But mayors appoint urban renewal agency board members, who also have the power of eminent domain.
- Unfair distribution of taxes. New buildings in an urban renewal district place new burdens on fire, police and roads. But the tax revenues from those new buildings go back to the agencies to finance urban redevelopment, not government services.

Urban renewal supporters say that all these criticisms miss the mark. Cities, counties and the state ultimately benefit from the new development — and urban renewal spending — through increased sales and income taxes.
“Urban renewal has been one of the cornerstones of economic development in this state and a proven jobs generator. Look at Twin Falls last year, where an urban renewal project created 700-plus jobs in the depths of the recession,” said Mark Rivers, who developed the BoDo project in Downtown Boise and is working with the Twin Falls urban renewal agency.
Proponents also note that the property tax diversion is temporary. Urban renewal districts use that “incremental” property tax for the 24-year life of the district (although legislators want to change that to 20 years). When the district expires, the gains in value are added to the tax rolls.
“Many of Boise’s best projects were made possible through urban renewal, including The Grove Plaza, the Wells Fargo and One Capital Center buildings, BoDo, the 8th Street market, the Basque Block, the Convention Center, and a long list of others,” said CCDC’s Kushlan.
Proponents note that mayors and city councils are the elected officials who oversee urban renewal agencies — and do answer to voters. Agency board members often are selected for their business, legal or financial expertise.

Because it’s hard to change agencies retroactively — many are in the middle of decades-long bonding projects — urban renewal critics are likely to return in future legislative sessions for more tinkering. No law changed this session will end the debate.
Rivers, who testified last month at a House committee hearing, said he came away believing “legislators themselves don't even understand the policy.”
Critics’ misinformation, he said, hurts cities that are trying to increase jobs, investment and economic activity.

Access full story here.

Tuesday, March 15, 2011

Urban Housing Crisis: The Case of Peru

In Peru it is estimated that up to 80 per cent of the country's population could be living in urban areas by 2030.

With half of Peru's economic activity based in the capital, Lima, it will put enormous pressure on the city's already floundering services.

Many of the country's poor come to Lima in search of work. As the city cannot accomodate the numbers, many migrants end up building their own homes in run-down areas on the outskirts of the city.

Most of them lack basic services like running water and sewage systems.

Here's a video clip on the urban housing crisis in Peru but the country is not an isolated. A large of part of the rapidly growing developing is experiencing a similar crisis.

Sunday, March 13, 2011

How urban renewal districts work:

Example: THE C.W. MOORE PLAZA, 250 S. 5TH ST.

In 2010, the Capital City Development Corp. collected $9.1 million in property taxes on about $528 million worth of new, or “incremental,” property value in Boise’s urban renewal districts. Here’s a look at one property.
1994: The River/Myrtle urban renewal district is formed. The assessor establishes a “base” value for each property in the district. The vacant 1.25-acre lot is assessed at $217,800.
1999: The C.W. Moore Plaza is completed.
2010: Moore Plaza land and building are valued at $13.5 million.
2024: District will sunset and all governments will again share the tax revenue on the property’s full value.
C.W. Moore Plaza 2010 property taxes: $231,698
Seven taxing districts receive property taxes on the 1994-set value of $217,800:
- $1,520.40: City of Boise
- $1,214.88: Boise School District
- $666.56: Ada County
- $258.78: Ada County Highway District
- $35.21: College of Western Idaho
- $33.56: Emergency medical services
- $7.49: Mosquito abatement
CCDC receives the tax on the difference between the 1994 and 2010 values, which is $13,286,500:
- $227,962.53: Urban renewal district
Boise, Eagle, Garden City, Meridian, Nampa and Caldwell all have urban renewal agencies.
The oldest and biggest is Boise’s Capital City Development Corp., which has three urban renewal districts totaling 518 acres, with a fourth under consideration:
- The 34-acre central district Downtown is set to expire in 2017.
- The River-Myrtle/Old Boise district is 340 acres; it expires in 2024.
- Westside is 144 acres; it expires in 2025.
- In July, the Boise City Council directed CCDC to prepare a study and plan for a new district, the 573-acre 30th Street area. The detailed urban renewal plan would have to be approved by the Planning and Zoning Commission and the council.
CCDC also owns and operates eight parking garages.
CCDC receives about $9.1 million in property taxes annually. By comparison, property taxes generate $105.8 million for the city, $81.7 million for Ada County and $31.7 million for the Ada County Highway District.

Accessed here.