Category: Miscellaneous outrages

What's missing from the Burnham Plan centennial

Folks around Chicago are getting ready to observe the centennial of Dan Burnham’s 1909 “Plan of Chicago.” We’ve all heard about it, but who has actually read it?

Not me, so I figured I would borrow a copy from the Chicago Public Library.  Not the 1909 original, of course, but there were reprints in 1970 and 1993.   But although CPL has several copies, apparently none of them circulate.  No problem, this is a 1909 document, so it should be free of copyright.  But as far as I can tell, nobody has placed it on-line.  Sounds like a good project for the Plan of Chicago Centennial Initiative

I did spend a little time reviewing a noncirculating copy.  There’s all kinds of wonderful stuff, but I focused on the final chapter.  “Legal Aspects of the Plan of Chicago,” by Walter L. Fisher, is where issues of financing are discussed.   Except for the railroad terminals, there was no indication of funding by anything other than the real estate tax, applied equally to land and improvements.  Fisher did note that, in some places, public authorities could acquire more land than needed for the improvement, and sell the surplus to help capture some of the benefit, but this wouldn’t be feasible in Chicago.

Thanks to Robert Piper for alerting me to this project.

Off at the Georgist Conference

No blogging to speak of this week; I’m attending the annual conference of the Council of Georgist Organizations at Scranton.  

I’m not going to try blogging the conference, titled “Two Views of Social Justice: A Catholic/Georgist Dialogue.”   Probably the most striking thing I’ve learned today: Theologian Brian Benestad said that Catholic doctrine neither requires nor prohibits the single tax.  If the laity thinks the single tax is a good thing, let them put it into effect.  However, he said the single tax cannot solve all the problems of poverty and human misery, because those are caused by Original Sin, and the single tax cannot overcome Original Sin.

Can’t reply to that one.

Nic Rosen is doing some updates.

32 Years of Housing Data

Your tax dollars bought a new compilation of data from the American (formerly “Annual”) Housing Survey from 1973-2005. Data on housing costs, incomes, structure and neighborhood conditions, commuting, etc. I didn’t find a whole lot of surprises at first look, but it can be a useful and well-designed reference.  It’s a 1.6 mb pdf, downloadable here.  I suppose hardcopy is also available, though it’s not immediately obvious how to order.

Assessment limits make many homeowners worse-off

In the July issue of Land Lines, two UIC economists show how limitations on the increase in real estate tax assessments not only fail to protect all homeowners, but actually cause many of them to pay more tax than they would in the absence of the limitations.  It’s simple mathematics, say Richard F. Dye and Daniel P. McMillen.  If the total tax take does not decrease, then those with relatively small increases in home value– not protected by assessment caps– end up paying a larger share to make up for the absence of assessments on the full value of homes in areas where values are rising rapidly.

This is despite the fact that business’ share of the tax burden grows.  And it has nothing to do with TIF’s.  Well, I guess TIF’s worsen the situation further, but that isn’t discussed in this article.

Land Lines comes from the Lincoln Institute of Land Policy.  They provide free subscriptions in hard-copy.  Or you can download it without charge, but they want you to register.  You can probably avoid registration by using bugmenot.

Responding to PIRG, despite WordPress

Phineas Baxandall, one of the authors of the Illinois PIRG report blogged yesterday, commented on the item. Well, I responded to his comment, but for some reason WordPress swallowed the comment. Twice. I tried to comment as a normal person instead of myself. Swallowed again. Tried again. Rejected as “duplicate.” I don’t know what’s going on at WordPress, possibly there is some difficulty regarding html in the comment. But following is my response to Phineas Baxandall.

I’m always happy to see activists claiming that Henry George would approve of their work, but in this case there’s a serious gap between George’s proposal and yours.

George wanted to remove all taxes from productive activity, and instead charge for control of land (and other natural resources). Retail sales and service are productive activities, and when they’re taxed then the cost of living increases and living standards are reduced. Real estate transfers, too, usually involve productive activity, either construction or at least the transfer of property to someone who can use it more effectively than the seller.

Development impact fees likewise make it more expensive and difficult to provide housing (or other kinds of development). If such fees were truly user fees, then they’d be paid by all users, rather than just by those who seek to build.

You’re certainly not the first person to misunderstand George’s ideas, which is why we have Henry George Schools in Chicago and elsewhere, run courses by Internet, and have Progress & Poverty posted in original and modernized versions. Some relevant (and more succinct) modern documents are here.

It’s not so important whether your proposal would please Henry George. What’s important is that, had you proposed supporting transit thru a tax on location values, you would have recommended a policy to reliably fund transit in the long run, encourage transit-supportive development patterns, and improve the standard of living of ordinary working people.

"Protect land speculators" — Illinois PIRG

A solicitor stopped by my house a week or so ago pushing Illinois PIRG’s campaign to “save our transit.” They do have a report, funded by the “Illinois PIRG Education Fund” and prepared by Brian Imus, Nick Christensen, and Phineas Baxandall, that explains how they want us to pay more money for transit service.

The report notes that “Locations served by transit… show increased property values compared
to similar locations not served by transit.” Although they do cite sources for this assertion, they don’t refer to either of the Chicago studies which are (see footnotes 3 and 4 on page three of this). So then do they propose a tax on location value?

No surprises here. They proclaim “Seven Principles for Funding Transit:”

1-Enhance market efficiency

2-Low collection costs

3-Reliability

4-Diverse funding

5-Fare increases are self defeating

6-Budget accountability

7-Community participation

They do provide some discussion of each. Then they evaluate several potential sources of funding:

-Sales taxes

-Gasoline tax

-Rental car tax

-(auto) License, registration or title fees

-Several other driving-related taxes

-Real estate development impact fees

-Stormwater fees

-Real estate transfer tax

-Parking tax

Their recommendation:

-Higher sales tax

-Extend sales tax to services

-Establish a real estate transfer tax, or maybe one of a few other taxes.

But although they acknowledge that transit service increases land value, there is no consideration of this option. Instead, they want to reduce economic efficiency by raisng taxes on economic activity.

Two more nonviable projects?

Today’s Tribune tells of two more TIF subsidies, one to keep an employer in Chicago and another to build hotel and office space.

Navteq will get $5 million that would otherwise go to schools and other public services, to retain 550 jobs (a total of 900 including expected growth) in downtown Chicago.   Navteq CEO Judson Green implied that California would be a more efficient location for the company, but that $5 million persuaded him to remain in Chicago.  btw, he is obligated to donate $50,000 of that to “non-profit organizations.”  So I wonder about two things:

(1) Wouldn’t the  230,000 square feet that Navteq is taking at 100 N. Riverside have been rented to some other employer, if not Navteq?  And if it would’ve remained vacant, wouldn’t that have eased, at least a little, the peak-hour load on the CTA and Metra?

(2) If in fact California is a better location, will Navteq execs and customers end up flying back and forth, adding to O’Hare congestion and greenhouse gas?

Maybe RM Daley answered the question at his press conference to announce the deal.  If he hadn’t used our tax money to persuade Navteq to stay in the City,  “there’d be a big headline, ‘Why does Mayor Daley let those companies move?’ “  And I guess he’s right, at least in some cases.  Apparently there’s no headline, “Why does Mayor Daley waste all this money?”

The other TIF subsidy is $58.8 million, covering about 1/8th  the cost of renovating/expanding the space atop Union Station.

The new Union Station will have an additional 14 stories on top of the existing eight stories. It will house a 300-room hotel, likely to be operated by Hilton Hotels Corp.; 85,000 square feet of retail space; 200 condominiums; and 600,000 square feet of office space.

The office anchor tenant, the American Medical Association, has agreed to lease 275,000 square feet, said a Jones Lang LaSalle spokeswoman.

This project was first proposed over a decade ago.  Maybe it’s not viable on its own, without the subsidy, in which case one wonders why it is needed if no one who will use it is willing to pay for it.  Or perhaps market conditions have improved and it’s viable now, in which case one wonders why the developer should  be given what amounts to about a dozen years worth of taxes on a thousand Chicago bungalows.