Asking Developers to Make “Voluntary Donations” is Troubling
According to the Post-Dispatch, a New Jersey developer—Aptitude Development—will make a $250,000 donation to affordable housing in St. Louis City, explicitly at the request of Alderwoman Tina Pihl. Aptitude is planning to build a 7-story, 177-unit apartment complex in Pihls’ ward. According to the alderwoman, the donation will probably go to the city’s Affordable Housing Trust Fund.
I find this very troubling.
Let’s backtrack a bit. Alderwoman Pihl, and Mayor Jones, have been very explicit about their desire to create more affordable housing in St. Louis. (St. Louis doesn’t actually have an affordable housing problem, and even if it did, government low-income housing programs would not be the way to remedy it; but that is a post for another day.)
In pursuit of that objective, Alderwoman Pihl appears to have a habit of “requesting” donations to affordable housing from developers who have projects in her ward. According to the Post-Dispatch story, Pihl also “requested,” and received, $1.8 million from the Steve Smith City Foundry in return for her support for its development project adjacent to the Aptitude site.
Now, I have made no secret of my distaste for the tax subsidies that municipalities routinely grant to developers that supposedly incentivize them to build certain projects. And I suppose if St. Louis is going to continue that practice, it makes sense to get as much as possible from the developers in return.
Yet, if the Post-Dispatch article is to be believed, Aptitude isn’t requesting any tax subsidies, which suggests that the alderwoman is using her control over development in her ward to exact funds from a private developer—not to pay for public expenses directly associated with the Aptitude project, but as a cost of doing business in the city.
In my opinion, that’s wrong. If the Aptitude project is consistent with previous rezoning requests and similar changes within that area of the city, it ought to be approved without requiring any supposedly voluntary contribution. Most importantly, the project will add housing options to the city, which will lead to an increase in affordable housing, even though the housing being built in this project is on the more expensive side.
I’m not suggesting that the alderwoman is making these requests to feather her own financial nest. I think she’s trying to accomplish a goal consistent with the duties of her office. But practices like this are characteristic of countries without the rule of law; once they become routine, they lead inevitably to threats and backroom deals and eventually outright corruption.
Here are a few questions for our leaders. Why is it necessary to alternate between bribing private corporations with tax subsidies and extorting “contributions” from them? Why should private development projects, or public goods like affordable housing, turn on the success or failure of deals negotiated by individual lawmakers? Might it instead be possible to improve the city by creating good policies, incorporating them into law, and applying the law consistently for the benefit of the public?
In other words, why not try some good government for a change?