Economic Benefit

Facing a Unique Economic Development Challenge? Consider Taking a LEAP!

Recently, RSG partnered with the California Association for Local Economic Development (CALED) to assist with the expansion of CALED’s Local Economic Advisory Program, often simply referred to as LEAP. LEAP is an innovative technical assistance program helping cities, counties, and other communities across California achieve their economic development objectives. The program features one- or two-day events during which four leading economic development experts visit a community to tackle a specific strategic, policy, or program challenge presented by community leaders. The event culminates with the experts’ presentation to elected officials, staff, and business leaders, outlining near-term recommendations and action steps.

What kind of economic development challenge could be meaningfully addressed by a team of experts in just one or two days? Below are what we’ve found to be the top 3 characteristics of challenges that make perfect candidates for LEAP:

1.       A specific, clearly defined challenge…but no clear direction on where to start

2.       Visionary City/County staff eager to utilize an out-of-the-box approach to address the challenge

3.       Community leaders that are willing and available to participate in the process

Interested in participating in LEAP? Click here to learn more about the program!

RSG Well Deserved Fun Day

RSG’s commitment to its clients, employees, and local communities is evident daily. The 2016/2017 period has been especially challenging for RSG, given the current difficulties facing California cities and recent changes in legislation, just to name a few. Yet, without skipping a beat, staff continued to hunker down and produce top notch work; meeting deadlines, finding creative solutions for our clients and forging new relationships and service avenues. This dedication did not go unnoticed by the firm’s Partners!   

Recognizing the huge effort by staff to overcome the challenges over the past year, the Partners decided to scrap the already scheduled June All-Company meeting. Instead they treated us to a day of fun on a Duffy Boat out of Newport Harbor, followed by a yummy lunch from The Cannery in Lido Village. Very tre-chic for this group, but that was the best part about it!

Call it a re-boot for the mind, body, and soul, these types of events are relished, cherished, and appreciated! For those of us who joined the work force before the invasion of the “creative work space demanding millennials,” events like this were held only on rare occasions to commemorate extraordinary achievements by companies. However, the owners at RSG are in the trenches every day with us, working alongside us, jumping every obstacle with us. So, it is not a surprise that they felt the need to say thank you in a BIG WAY!

And for this, I personally want to express my gratitude, and let them know that I am thankful every day that I work with such committed and passionate leaders. Leaders who always strive to celebrate and appreciate more than the bottom line. They choose to celebrate and appreciate staff and all their accomplishments-because it is each of these individual accomplishments melded together that make up the RSG Family!  

Written by Business Office Coordinator, Erin Woodmas7.19.17

What is the Return on Investment for Infrastructure Improvements?

Infrastructure improvements are a sizable investment of public funds - it makes sense that evaluating the return on investment is a good first step in determining how communities prioritize these funds.   RSG recently completed an economic study assessing the impacts resulting from different rail improvement options along the Carlsbad portion of the Los Angeles-San Diego-San Luis Obispo (LOSSAN) corridor.  This study calculated the economic/fiscal effects of the different options on regional economic output including:

•    Jobs created
•    New development
•    Property values/taxes
•    Sales taxes
•    Value of lives saved/accidents avoided
•    Value of reductions in noise and traffic

RSG’s study is part of an overall Feasibility Study prepared by the San Diego Association of Governments (SANDAG).  A link to the City of Carlsbad website that provides an overview of the Study (as well as links to the actual reports) is provided below:
http://www.carlsbadca.gov/news/displaynews.asp?NewsID=1321&TargetID=61
 

Written by Hitta Mosesman
 

RSG Principal Hitta Mosesman Featured Speaker at Housing CA Conference (Sacramento) - March 2017

Housing California is the State’s leading housing organization with a mission to educate lawmakers and others on stabilizing housing, creating more housing opportunities, and implementing proven solutions that reduce the number of homeless men, women, and children in communities. The focus of Housing California is Land Use, Budget and Funding, and Homelessness.  The annual 2017 Housing CA conference, with over 1,400 in attendance, was “Block by Block – Improving Neighborhood Health.”   Workshops focused on all aspects of housing and homelessness, including financing, funding sources, policy, advocacy and new and emerging affordable housing solutions.

Hitta Mosesman, partner and principal with nearly 20 years of consulting experience in affordable housing, finance, real estate and community development, was a featured panel speaker on Community Land Trusts (CLTs) as an innovative method of ensuring affordable housing for generations.  The panel included Mark Asturias, Executive Director of the Irvine Community Land Trust (and City of Irvine’s Housing Manager), Jean Diaz, Executive Director of the San Diego Land Trust and Stephen King, Executive Director of the Oakland Land Trust.  The panel’s joint presentation focused on explaining CLT structures and benefits, as well as the different CLT models (home ownership, rental and co-op).  A link to the presentation is provided below.

https://media.wix.com/ugd/209952_d643b5c0976d49508c0e70fc98150613.pdf

 

Build It, and They Will Prosper?

 Copyright 2016 Kelly Wilson, Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright 2016 Kelly Wilson, Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Do sports stadiums generate net economic benefits for the community? 

The consensus is generally no. Economists say that sports teams spur little new spending in the community. 

While stadiums are limited in use, politicians and developers claim that a stadium is a win for local communities. Proponents say that sports facilities improve the local economy by creating construction jobs, generating new spending, attracting tourism and multiplying local income and job creation. Advocates argue that new stadiums spur so much economic growth that subsidies are offset by revenues from ticket taxes, sales taxes, and property tax increases.

These arguments may overstate the benefits of stadiums. Economic growth takes place when a community’s resources become more productive. Increased productivity can arise from economically beneficial specialization by the community or from local value added. Building a stadium is good for the local economy only if it is the most productive way to make capital investments and use its workers.

Still, there are non-economic benefits, such as community pride and cultural activity. Some projects, such as the NFL Rams’ return to Los Angeles, which occurred with limited financial obligations for Los Angeles taxpayers, provide a valuable lesson in how to attract sports teams and new stadiums based on a market’s strength rather than subsidies.

Calculating the economic and fiscal impacts of a development is crucial when deciding on whether or not a project should break ground. RSG has extensive experience in projecting tax revenue from projects and can help determine if a sports stadium or other large municipal investment would be a good idea in your community!

Written by Jeff Khau, a Senior Analyst at RSG

A Deep Dive into Property Taxes

Joan Youngman, senior fellow and chair of the Lincoln Institute of Land Policy’s Department of Valuation and Taxation, recently wrote a book covering property taxes in depth. In A Good Tax: Legal and Policy Issues for the Property Tax in the United States, Youngman defends property taxes as a more powerful revenue source than the federal income tax (generating $472 million and $297 million, respectively, from 2005 to 2015) and a vital support for independent local government.

Youngman argues that property taxes should be stable, efficient, fair, and transparent to maintain their status as a “good” tax. Limits on property tax assessment, such as the limit created by Proposition 13, generate problematic consequences, like rewarding longtime property owners at the expense of recent purchasers.

Proposed changes for Proposition 13 are at least being discussed. One source with good ideas is the Better Institutions blog. Will the ideas of Youngman and Better Institutions find open ears in Sacramento?

RSG can help you to analyze the impact of new legislation. Contact us for more details.

Written by Dima Galkin, an Associate at RSG

 

Could Now Be the Time for a CRIA?

 Copyright American Planning Association Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright American Planning Association
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

AB 2492 extends Community Revitalization and Investment Areas to wealthier regions of the state, without much change to financial benefits of these tax increment financing (TIF) districts.

Last month, RSG discussed the limited financial benefits of Enhanced Infrastructure Financing Districts, one of several newer tax increment financing tools that provide limited benefits similar to redevelopment financing. Community Revitalization and Investment Authorities (CRIAs) are similarly structured and provide these tools AND opportunities for other community development tools. These characteristics have attracted some of our clients to evaluate their benefit. As it turned out, most of California could not benefit from a CRIA given the narrow socioeconomic requirements. 

However, just this week, the Governor signed Assembly Bill (AB) 2492 (Alejo) into law that makes changes to CRIAs, so we took a hard look at these changes and how they affect cities looking for help on community development projects. As it turns out, AB 2492 primarily expands the net on eligibility for CRIAs, but fails to provide much needed new capital to communities.

Here are the main changes:

  • More communities qualify – a greater number of lower income neighborhoods qualify because AB 2492 allows wealthier areas of the state to identify CRIAs in areas that have a median income less than 80 percent of the city or county median income, not just the state;
  • More flexibility - Added flexibility in measuring what parts of communities qualify by allowing the use of census tracts and/or block groups;
  • Any California Environmental Protection Agency-designated “disadvantaged community” automatically qualifies for CRIA - this certainly helps some very low and low income neighborhoods that would otherwise not qualify under the old law; and
  • Some added financial benefit – in addition to tax increment generated by the CRIA, special districts may now have the authority to allocate funds from certain tax and assessment revenues to the CRIA.  Cities and counties already had this ability.

We would love to see more done to make these districts more attractive by:

  • increasing the amount of tax increment revenues,
  • lowering the costs for startup, and
  • providing some other efficiencies like those RSG outlined in last month’s article for EIFDs. 

It’s important to note -  qualifying alone does not mean this tool is right for you.  It’s important to look at the financial feasibility carefully before jumping ahead.

Written by Jim Simon, a Principal at RSG

Seeking Greater Housing Affordability

 Copyright American Planning Association Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright American Planning Association
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

A recent Urban Land Institute Terwilliger Center for Housing article emphasizes the scope of the US housing shortage. According to the article, new residential construction is below its historic average and even Great Recession-era levels.

Currently, much new apartment development aims for the high end of the market to make the financials work for developers. Rising land and labor costs, local regulations and NIMBYism make it even more difficult and expensive to build new housing. 

Many cities are spending precious funds to subsidize rent-restricted units, proving that we as a society care about housing affordability. Maybe we should consider the maxim of “first, do no harm.” How can cities reduce barriers to encourage more housing development, both market-rate and rent-restricted? How can we get community stakeholders to recognize that some development and change is needed to accommodate new residents and maintain affordability for renters? 

We passionately discuss topics like this affecting cities and towns at the RSG office, in search of solutions. Contact us today if you’re looking for such solutions.

Written by Dima Galkin, an Associate at RSG

Summer Festivals: Parties with A Purpose

 

Summer is here and festival season is upon us. Whether it is a community concert series or an event of a larger scale, festivals bring people together. Summer events are a great way for local governments and municipalities to celebrate local culture, spurring short- and long-term investment in an area. Although we may not be the festival’s headliner, RSG can help clients capture the economic and social impact of these summer events to realize opportunities for community development.

Here are a few tips about making your summer event successful:

  • Communicating clearly, getting the word out, making the event a team effort, planning for the unexpected and reining in the budget are helpful in making an event go smoothly, according to Asa Gurden, head of the Scout Association's Scout Activity Centres, as reported in The Guardian.

  • Staying true to organizing principles, spreading the word sensibly and knowing whom you want to attract are tips from Joanne Steele at RuralTourismMarketing.com.

  • Keeping people hydrated, ensuring proper layout, providing activities for all ages, providing safety and security measures and showing appreciation are some important aspects of planning a summer event, according to EventManagerBlog.com. The site lists important “don’ts” like: overserving guest, skimping on restrooms, overscaling events, and not being environmentally sensitive.

Better communities, bolder futures – that is what we do.

Written by Evanne Holloway, a Research Assistant at RSG

Dissecting Brown’s Budget

 Image courtesy of http://calbudgetcenter.org/

Image courtesy of http://calbudgetcenter.org/

Governor Brown and the California legislature approved a $122.5 billion budget to fund state operations for 2016-17. The budget allocates $400 million for affordable housing construction, increases preschool/child care funding by $500 million, increases reserves by $2 billion, invests $200 million in college readiness programs, and redirects $2 billion in Proposition 63 mental health funds to provide housing for mentally ill homeless people.


Putting an extra $2 billion into the rainy day fund suggests that state lawmakers are weary about a looming recession. There was a notable focus on alleviating poverty and income inequality in this year’s budget process. Brown and lawmakers failed to agree on a spending plan from the state’s greenhouse gas reduction fund, also known as the cap-and-trade fund, and failed to reach a deal on funding to fix crumbling roads and highways, which they have labeled as a top priority for several years.


To learn more about how the state budget impacts your local community and how you can make the most of it, contact RSG.


Written by Jeff Khau, a Senior Analyst at RSG