Healthy Communities

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
 

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

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

Economic Development for People and Places

Aaron Renn recently wrote a thoughtful, balanced opinion piece about the dilemma between people-based and place-based economic development. People-based economic development is theoretically more effective. Place-based economic development, which is sometimes the only available approach for local governments because of their territorial nature, generally is structurally incentivized and provides quicker gratification.

At RSG, we are very familiar with this dilemma. Our clients are usually cities. We recognize that they need to generate property and sales taxes now to fund core services. Investments in education that pay off 20 years later (and possibly somewhere else) are needed, but difficult to justify. At the same time, with our focus on people and relationships, we know that people-based investments are more sound in the grand scheme of things.

Renn provides solid advice for state and federal governments to change the incentive structure to make it easier for local governments to pursue people-based economic development. Keeping in mind the glacial pace of state and federal policy change, we’re here to help cities balance economic development for both people and places.

Written by Dima Galkin, an Associate at RSG

Considering All Options in the Affordable Housing Toolbox

In the National Housing Institute’s blog “Rooflines,” Alan Mallach, former director of housing and economic development for Trenton, NJ, encourages us to consider which tools are most effective in creating affordable housing. Sometimes, apartments and houses can be purchased and restricted to residents of certain income levels more cost-efficiently than building new affordable housing. Average existing homes in cities like Dallas and Phoenix (Mallach’s examples) can be bought for under $200,000 while building affordable housing can cost over $200,000 per unit.

Mallach doesn’t argue against new construction. In places like San Francisco, the market for existing homes is incredibly expensive. A per-unit construction cost of $300,000 or more is “still a good deal.” Mallach urges consideration of all affordable housing tools.

RSG maintains and analyzes a database of California’s affordable housing tax credit projects. The database for 4% projects shows that per-unit costs range from $85,000 to $782,000. Acquisition and rehabilitation may not be cheaper than new construction, depending on the specific market and the specific project.

RSG can analyze the market and project results to maximize the effects of affordable housing spending. If you wonder whether spending money on acquisition or new construction will provide the most benefit in your community, contact RSG today!

Written by Dima Galkin, an Associate at RSG

The Pros and Cons of Gentrification

In our last post, we provided a definition for gentrification. What are its impacts?
 
“The hipster-hating mob ignores evidence that gentrification helps eradicate gang violence, strengthens the local economy, and encourages diversity in neighborhoods separated by racial lines. These positives far outweigh the only logical advantage to opposing progress: cheaper rents and Spanish colonial architecture that will crumble like Jenga pieces in the next big earthquake,” according to an opinion article by Art Tavana in LA Weekly (“Just Say Yes to Gentrification,” January 2015.)

However, Isaac Simpson, in the companion article, “Gentrification Is a Form of Oppression,” points out that gentrification can also lead to displacement, eviction, forced homelessness, police violence, and destroyed communities. He adds that though it may be done with good intentions, the result can be devastating to the residents who are pushed out of the path of development. Gentrification can also cause clashes between classes instead of bringing people together as a community.

While gentrification can benefit an area by decreasing crime, improving the economy, and increasing property values and taxes, it can have the negative consequences of pricing out former residents, changing the culture of the community, and causing resentment. Are the benefits and costs unevenly distributed? If so, are there tools available to mitigate this phenomenon? We will explore this question in our next post.

Written by Brett Poirier, a Research Assistant at RSG

Homebuilders Giving Back to the Community

Every Wednesday night Granville Homes, located in the Central Valley, provides free meals to the community of Firebaugh. Working in conjunction with the Salvation Army, the company welcomes anyone to come and enjoy a hot meal from 5 to 7 p.m. Typically 200 to 500 (!) people come for delicious meals such as beef stew. This is part of the Granville Foundation’s focus on programs that provide access to food, shelter, healthcare, and education for people in need.  

The Granville Foundation was created to help improve the wellbeing of people in the Central Valley, the United States, and the world. According to the Granville Homes website, “Our passion drives our involvement in programs that provide access to food, shelter, healthcare, and education for people in need.”

Kudos to the company for recognizing the needs of the communities it serves. Companies can make a profit by developing communities while contributing to disadvantaged people. The free community dinners create a sense of place, bring the community together, and help those in need. More businesses should consider giving back in a direct and meaningful way. 

Written by Tara Matthews, a Principal at RSG

Making Me a Priority

As a mom of two children under 4 years old, with a wonderful, supportive husband, four chickens, a dog, a gecko, fish, and a business, it is easy to overlook taking care of myself. This year I have started heated yoga, clean eating, and meal prepping. 

Making time for ourselves and getting back to our roots makes us more effective. Taking care of ourselves physically and mentally avoids stress and health problems.

I want to teach my kids to respect the earth, enjoy its bounty, and focus less on material things. Too much of society is focused on living life through electronics and social media, destroying our planet, and not being kind to our neighbor. 

RSG strives to build communities that represent everyone while creating a sustainable planet. Let's focus on making our communities better with less emphasis on the material things and more on the real needs of people. 

Written by Tara Matthews, a Principal at RSG

How Health Can Contribute to Economic Wealth

For many people, a new year means new commitments and resolutions, such as getting in shape and being healthy. While eating better and losing weight may be great for your waistline, having a healthy lifestyle can also benefit your community!

Exercise makes your body release a protein called BDNF (Brain-Derived Neurotrophic Factor) that makes you feel at ease and happy. Endorphins, chemicals that fight stress, are released in your brain during exercise, minimizing discomfort, blocking the feeling of pain, and creating a feeling of euphoria.

A focus on individual health also provides benefits for the local community and workforce. Working out clears cortisol, the stress hormone, out of the body. Walking improves both convergent and divergent thinking, enhancing creativity. Exercise can help us to focus more through building stamina and productivity. Workplace health programs that combine individual and organizational strategies can produce benefits for individual employees, their families, and the organization as a whole by reducing sick days and enabling employees to be more productive.

Though not a typical part of economic development strategies, improving individuals’ health can provide local economic benefits. With a strategic approach and comprehensive vision, RSG helps clients develop solutions for their economic and fiscal health.

Written by Evanne Holloway, a Research Assistant at RSG

Consensus Building

Public involvement is more than just a process. It often determines the outcome.
 
Because a new development in a city can have a big impact on local residents and business owners, cities should understand the gravity of why public participation is important and also the risks involved with conducting second-rate outreach.

For example, Eric Jaffe of CityLab writes about a bridge project in Philadelphia that almost fell through because city planners were not aware of changing preferences and, more importantly, the social shift happening on the neighborhood level:

When talk of a new bridge had first surfaced, it was common for urban bridges to look and function just like highway bridges. Bike lanes, pedestrian access, and the concept of limiting travel lanes to slow down traffic hadn’t been part of the original design discussion; the goal was moving cars.
The people had also changed. Neighborhoods at both ends of the bridge had gentrified over that time period, and the stale highway design that former residents had approved — or, perhaps, felt resigned to accept — now received a chilly reception.

It’s important to engage in the public for several reasons: The public is a rich source of ideas. Community members understand their region's transportation issues and challenges. Outreach leads to representation from broad and varied segments of the communities. And federal law often requires projects to include public participation. 

Lack of funding is the top reason behind most lackluster attempts at public participation. Cities can solve this by budgeting more money upfront for community meetings. This can save money in the future in:

•    Legal fees spent in litigation
•    Staff time spent educating the public
•    Delays in development and construction

Communication is the key to success, and RSG can help with that communication.

Written by Jeff Khau, a Research Analyst at RSG.