[Source: Facebook, 18 Feb 2020 at 2:58 PM]
One of the things I love about democracy is that We the People get to decide important issues through out elected representatives. Tonight, our Council will be deciding whether to allow four 15 story buildings between 12 East Court along Burlington.
As with most issues, there are arguments on both sides, including former colleagues and mentors that I have learned so much from.
I recognize and value the expertise, opinions, skill and urban planning judgment of my former colleagues, Jim, John, and Pauline. They are such wonderful people and without them, I likely would not have an opportunity to serve this great city. I have nothing but gratitude to each and every one of them, but I disagree with them here.
In particular, with John, I have learned so much about urban planning, street design, side walk width, traffic flow, pedestrian friendly design, embarcadero freeway, Andres Duany, Jan Gehl, Chuck Marohn, Jeff Speck… Proponents should carefully consider their opinions and expertise. They are right about so many things and all possess incredibly sound judgment. And they probably are right about their views on height, density and urban design (even though I do not share those views).
But for me the issue comes down to this: Can we afford to risk, even the slightest bit, a $200,000,000 dollar investment in our community, our region, our state?
We as a City have a choice. We can either grow or decline.
There is no middle path.
We must choose growth.
We cannot risk the countless jobs to our union brothers and sisters who will be present tonight. I trust their judgment when they have expressed concerns about brothers and sisters being on the “bench” if this project does not go through.
We have $9,000,000 in our affordable housing fund that is contingent upon the growth created by all 15. Yes, we must fight for 15 to make this happen.
We have countless local businesses, some of whom are non-union, who are counting on the business this project will generate.
We also have the nearly $4,000,000 in tax revenue that will accrue each year to our schools, our city and our county.
This is real money people. We have some big needs moving forward: (1) our affordable housing fund; (2) our previous commitment to ensure that every single city employee will make $15 per hour; and (3) our hope that we can provide fare free busing to increase opportunity, lower our carbon footprint and reduce barriers for our lower income residents. These are just a few of the new investments that we need to be making in addition to the essential services upon which we all rely.
This costs money! If we choose not to grow, this will require us to cut, tax, or borrow to fund these new opportunities. If you disagree with that, please identify a clear and concrete plan how you will pay for this increase in services.
Additionally and this may be nearly impossible to measure, but what kind of signal does this send to new employers who want to invest here? Will they have to work this hard to make $200,000,000 investments with such excruciating difficulty? I have great concerns about that.
Finally, regardless of our opinions, there is no question that this proposal complies with our current urban design standards. Any change, if any, should occur prospectively and not at the end of zoning process. It is like Lucy taking way the football from Charlie Brown. If it happens too many times, trust will erode and business will go elsewhere. We must have consistent application of our development standards, even if that means they may diverge from own opinions on what should be going there.
So there it is. We have a fantastic new council. I value the wisdom and expertise of each and every councilor, even when I disagree with them sometimes.
I am hopeful that they will provide this essential cornerstone for the next 100 years of prosperity in our community…
[Source: Facebook, 18 Feb 2020 at 6:25 PM]
One postscript to Pentacrest Garden…
What about the oversupply argument? Are we creating too many units?
To answer this question requires us to make a forecast on future aggregate demand trends relating to rental market, a topic about which I know absolutely nothing. Zero. Zilch. Zed.
I just don’t think we are equipped as a City to forecast aggregate demand trends 5, 10, 15, and 20 years into the future. Other than your observation, can you? I certainly never saw any economic forecasts while deciding zoning matters on Council.
And to the extent that question be answered, I don’t think it be answered in a sufficiently precise way to give an up or down vote on a land use decision. Anecdotes or personal observations about excess supply are insufficient to override existing policies relating to land use.
It should be informed by the Comp plan which in turn was partly informed by financial forecasts as to what those trends will be.
I do know that the land owner, and bank have $200,000,000 reasons to study every possible detail as to whether the market will support that investment. While I do not know what their internal due diligence procedures, it is safe to say that they are not spinning a roulette wheel to decide whether to make that investment.
Finally, relating to the impact that excess supply will have on adjacent neighborhood rental market.
Should the City place its thumb on the scale of landlords to keep the market tight at the historic levels of 1 to 2% vacancy?
In my view, that excessively tight market, coupled with the increasing student numbers as well as growing population, directly led to these excessively high rents. Why exacerbate that trend?
That pricing power simply should not be enhanced through an artificially tight rental market.
To the extent we can reach the Goldilocks vacancy rate, we should follow HUD’s standards for a healthy rental market, which aims for a vacancy rate of between 8-10 percent. We are far below that number… At around 1-2% in Riverfront and possibly, upwards of 3-5% in the city as a whole.
The Goldilocks rate will provide sufficient rents to Landlords while providing more choice to tenants.
[Source: Facebook, 18 Feb 2020 at 7:07 PM]
A second postscript relating to Pentacrest Garden, NewPi, and affordable housing…
What relationship does affordable housing have in relation to NewPi? Nothing. There is no connection, but I do think developers unfairly get criticized relating to price of new construction much in the same way NewPi gets criticized for cost of food.
We want to:
- Pay farmers fair prices for crops.
- Provide great benefits to employees.
- Give money to charitable organizations.
- Do so in an environmentally sustainable way.
- Pay high wages.
- Ensure minimal debt
All while doing so at prices that cannot be set given the size, floor area and purchasing power of NewPi, a relatively tiny democratically run hippie organization (love ya NewPi!!).
Something has to give, people. You cannot charge for less than the cost of supplying item.
Similarly, with developers, we want them to:
- provide 100% affordable units;
- pay high wages to workers;
- use the highest environmental standards; and
- have top notch architectural design.
All with NO TIF!
In Pentacrest Gardens, we are the cusp of a 9 million bucks. 9 million. Did I mention 9 million?
THIS IS A RECORD, NINE TIMES OUR ANNUAL AFFORDABLE HOUSING ALLOCATION.
We should be having festivals over this and doing jigs celebrating this in the streets. With this kind of dough, the City can leverage several lower income housing tax credit projects with partnering organizations such as Housing Fellowship. I don’t know the exact number, but I would bet we could leverage an additional $20 to $ 25 Million in new units with this dough. For example, I believe we paid about 1.6 on an eight million dollar low income housing project that is being built on Rochester (which was not done by housing fellowship). Housing Fellowship does permanent affordability. Once built, they stay that way forever because they own the units.
Why aren’t there affordable units on location? Isn’t that bad? It may or not be, but the current 9 million being proposed is a direct result of at least four councilors (including most notably my hero Maz Salih) negotiating that fee in lieu of payment so that we could ensure permanent affordability as opposed to the current 10 year standard. The market prices being set are precisely what pays for the $9 million.
These units have to pencil out. They are not going to build them at even money, or even at a treasury rate. They need a rate of return exceeding that or bye bye to project.
Unless Steyer or some other billionaire intends to donate $200 million, these are the parameters within which we must operate.
Wish it weren’t so, but it is. That is where we are.
We can certainly build public units, but we need to be clear about the costs, taxes, and debt necessary to do that.
Run and win on that and we can do that, but that is not viable given our current set up.
- The Gazette, Lee Hermiston, 19 Feb 2020. “Iowa City student housing project gets OK for 15 stories” Excerpt: “The Iowa City Council on Tuesday night approved height bonuses for a proposed student housing project, paving the way for what is thought to be the largest private project in the city. The City Council approved a resolution that will allow for the development at 12 E. Court St. to reach 15 stories. The height bonuses received a 5-2 vote, with council members Pauline Taylor and John Thomas voting against the resolution.” [More…]
- Press Citizen, Zachary Oren Smith, 18 Feb 2020 at 11:36 p.m. CT. “Council passes 15 stories at 12 Court St. with additional environmental requirements” Excerpt: “Tuesday night, Iowa City Council approved 15 stories at 12 E. Court St. The vote which was deferred at their last meeting has been a controversial one with debates ranging from whether 15 stories is too high for Iowa City to what impact the introduction of several hundred new units could have on the local rental market.” [More…]