TIF Funding of Private Enterprise: Problems & Concerns

(Guest Commentary by Rockne Cole)

20150608mo-rockne-cole-2014Tonight, the Iowa City Council will be voting to give away a $14,000,000 million dollar subsidy for luxury units, and pay $1,000,000 for five affordable housing units. The meeting will take place on June 8, 2015 at 7:00pm City Hall.

The vote in favor is, of course, assured. The measure will pass, but we urge you to show up and speak out against this wealth transfer from working families to the elite because it is wrong.

We consider ourselves to be a progressive city, but no working definition of progressive (that I know of) sanctions, or condones using the state to appropriate wealth upwards from working families to subsidize housing for the 1%…

Our Council has repeatedly told us that they will likely need to cut services and jobs due to a pending $50,000,000.00 reduction in commercial property tax revenues over the next 10 years. Yet, at the same time, they are gifting a conservatively valued parcel at $2,000,000.00, and forgoing at least $3,000,000 in property taxes over 20 years by using the money up front TIF. I find that unconscionable, especially when it is combined with: reductions elsewhere in essential city staff and services, increasing poverty rates, increasing property taxes, and countless people left out of our economic growth.

Look at the facts from a policy study cited by the Gazette last year (applies to metropolitan Iowa City area: NL, IC, Tiffin, and Coralville):

The report’s findings include:

  • The number of families in poverty in the urbanized area increased by 60 percent from 2000 to 2012. Proportionate to population growth, it is up 33 percent.
  • Participants in free and reduced lunch program (a measure of poverty) is up from 22.3 percent to 33.8 percent from 2000 to 2013.
  • The wages needed to afford a two-bedroom apartment increased from $13.62 per hour in 2006 to $16.40 per hour in 2013.
  • The proportion of severely cost burdened renters — those paying more than 50 percent of income for housing — increased 7.3 percent from 2000 to 2012.
  • 20 percent of Johnson County households earned less than $20,000.

We will never address these issues by using $1,000,000 to pay for five affordable units in a luxury tower, or paying $14,000,000 TIF without requiring at least 20% affordable housing (as Vancouver does for example). It makes a mockery of our affordable housing policy.

Don’t get me wrong. I, of course, welcome and embrace successful wealthy residents in the community. They are an essential part of our civic and cultural life. I just don’t think we should subsidize them at the expense of our friends and neighbors who need the most help. I reject trickle down TIF, and believe true prosperity rises from the roots up rather than tree branches down.

This will be one of my last posts on the Shadow (and if it is built, I will be one of Chauncey’s most ardent supporters because I want those taxes paid back as soon as possible!!)… I understand many want movie theaters, and the bowling alley, and wish this issue would go away, preferring instead to retreat to the cool, comfortable detachment of apolitical apathy, where nothing is ventured nor anything gained. But you know what? We need to address these issues. They are not going away. Poverty remains entrenched, and too many are entirely excluded from the golden age that some in this community experience through these ongoing wealth transfers.

We need to stand up and speak out on behalf of our friends and neighbors who this money is being taken from; for the future city employees who could lose jobs because of funding cuts; for the low and middle income folks who would also like to live downtown (where’s their TIF?); and most importantly, for the long term financial and civic health of our city. No community can truly thrive where it is polarized between rich and poor. And, unfortunately, our current council majority is accelerating that process through its ongoing wealth transfers, and its unstinting support for the gilded class. We must oppose these unjust transfers until the final decision is made.

So tonight, be there, speak out, and stand up for our entire community. See you there!!

__________

Note: As a community-based information resource to foster public engagement, the Iowa City Architecture website avoids taking sides on local issues. However, we welcome articles like the one above that help explore issues relating to development in an articulate, respectful, substantive, balanced, and factual way. Through open public discussion, understanding and awareness is broadened so we can arrive at the best decisions as a community. Submit your comments or articles via our contact page.

Click here for an alternate position on the use of public funds private enterprise development projects.

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