A Rebirth for Saint Louis? and When “Smart Growth” Isn’t

Posted on by Wendell Cox

Saint Louis has been buffeted by some tough economic times over the past few years, but internationally known demographer and area resident Wendell Cox says better times may be on the way. The lack of excessive planning and regulation has kept housing affordable in Saint Louis, and that, Cox says, may trigger the area’s rebirth.

When it comes to housing, Saint Louis is one of the most affordable areas in the country.  And that, says demographer and economist Wendell Cox, is why Saint Louis is poised to recover its competitiveness…as long as area planners stay away from so-called “smart growth” policies and too much regulation.

Related Links

Housing Affordability: The Saint Louis Competitive Advantage (Full Policy Study)

Why Does Kansas City Need a Land Bank?

Posted on by Audrey Spalding

The failed Citadel Development in Kansas City. What would such a development spearheaded by a land bank look like? <p>Photo by Josh Smith.

The failed Citadel Development in Kansas City. What would such a development spearheaded by a land bank look like? Photo by Josh Smith.

On Feb. 8, I testified in Jefferson City before legislators who are considering a bill to create a land bank in Kansas City. I was there to talk about the track record of a land bank that we already have in Missouri. You may know it as the Saint Louis Land Reutilization Authority (LRA). According to our research, the LRA has frequently rejected offers to buy vacant city property, and has practices that seem to invite political favoritism.

The bill being considered, House Bill 1659, would grant a Kansas City land bank the powers that the LRA currently enjoys, and more. I wonder why Kansas City needs a land bank, given the lack of successes that we have seen in Saint Louis. In fact, there already is a government entity that deals with vacant land in Kansas City. The Jackson County Land Trust currently takes ownership of tax-delinquent properties that fail to sell at tax auction, and works to sell them.

It may seem confusing, but the actions of a land trust can be drastically different than those of a land bank. A land trust generally does not attempt to acquire property for development nor does it take an active role in deciding what the best use of the property might be. A land bank can do both of those things.

As we have seen in Saint Louis and elsewhere, city government can do a very poor job when it comes to identifying successful future developments. The LRA is an example, as is Ballpark Village in Saint Louis. The failed Citadel Development in Kansas City (pictured above) provides perhaps the starkest, most recent example.

HB 1659 would require that all property the Jackson County Land Trust holds within Kansas City be transferred to the Kansas City Land Bank. During the House hearing of HB 1659, the bill’s co-sponsor, Missouri Rep. Michael Brown (D-Dist. 50), stated that this legislation would only involve property for which there are “plans.” Does Kansas City really have plans for all 2,800 parcels within its boundaries that the Land Trust currently holds?

Brown also noted that the Jackson County Land Trust is having difficulty returning property to private, productive use. Yet, in August 2003, the Kansas City Star reported that, since 2001, the Jackson County Land Trust had sold more than 1,100 properties for more than $1 million. This is a faster rate of sale than what we have seen in Saint Louis.

The land trust owns approximately 3,200 parcels, with approximately 2,800 in Kansas City. According to the last state audit that examined the Land Trust’s operations, the trust held 3,087 parcels in August 1999. By comparing that number to the land trust’s current holdings, it appears that, in the course of selling and acquiring properties by default, the land trust has added just a little more than 140 parcels to its inventory during the past decade.

For comparison purposes, the LRA has added more than 800 parcels to its inventory. The LRA has acquired about six times as much property as the Jackson County Land Trust, and from a parcel base less than half the size of Jackson County.

What evidence is there that the Land Trust is doing a poor job of getting property back into private ownership? It appears, purely from a numbers perspective, that the Land Trust has done an adequate job of selling property. And yet, based on our review of the past eight years of its operation, the Saint Louis LRA has struggled – due to political and structural issues – to get vacant property back into private, productive use.

Shouldn’t the Missouri Legislature require evidence showing that the Jackson County Land Trust is inadequate and that creating a land bank is in the best interests of state taxpayers and Kansas City residents before passing HB 1659?

Rep. Brown stated during the hearing that “We don’t know all the wonderful things that could happen with this land bank.” Perhaps we do have a glimpse, thanks to Saint Louis, of the failures that could occur.

Lower Housing Costs, Less Urban Planning, and the Positives of 90 Municipalities in Saint Louis County

Posted on by David Stokes

The Show-Me Institute is proud to release a new policy study by Wendell Cox, one of America’s foremost demographers and a leading voice against government land use regulations. In the new study, Cox focuses on how Saint Louis can position itself for future growth by maximizing two of its assets – a low cost of living and low housing prices. One way to keep housing and living costs low is to refuse to implement the types of urban planning strategies many planners would like us to enact: “smart growth” policies like urban growth boundaries and higher density zoning mandates. The lack of those requirements in the Saint Louis area is one thing that has kept our cost of living low. On the other hand, the enactment of such things on the coasts, particularly the West Coast, is one of the reasons a substantial number of people are leaving California. Those land use rules put the price of housing and the cost of living beyond the reach of many people.

People in the Saint Louis area often talk about the problems associated with so many different governments and so many types. Those problems are real, but there are positive aspects of having a large number of small governments, too. One of the best aspects of having a high number of smaller governments (such as the 90 different municipalities in Saint Louis County) is the inability to enact comprehensive planning in the area. Government-directed urban planning is too often just an excuse for others to tell you how to live. We do not need growth boundaries in Saint Louis. We do not need higher density zoning (which should be allowed, of course, if that is what people want; it just should not be mandated by government). We do not need excessive impact fees for construction. We do not need — and more importantly, do not have — any number of other examples of land use rules governing our lives. What does that lack of mandated planning give us? More freedom and lower housing costs; two wonderful things.

Wendell Cox is uniquely qualified to comment on the affairs of Saint Louis. While his writings and lectures are international in scope, he resides in the Saint Louis area. The Show-Me Institute is excited to have him writing for us, and you can view his full policy study here. You can also enjoy a conversation between Wendell and Rick Edlund, Show-Me Institute’s director of communications, here.

Donnybrook: Audrey Spalding Once Again on KETC

Posted on by Audrey Spalding

Show-Me Institute Policy Analyst Audrey Spalding returned to Saint Louis local roundtable discussion show Donnybrook on February 9, 2012. Among the topics covered this time were: Missouri’s recent and expensive “beauty contest” presidential primary, the federal-level employer contraception mandate, potentially eliminating Missouri’s income tax, and Kansas City’s proposed new land bank.

Click here to watch the video of the event.

Privatization of Parking Meter Collecting was Worthwhile Change for Saint Louis

Posted on by David Stokes

Saint Louis Alderman Fred Wessels has filed a lawsuit regarding Saint Louis City Treasurer Larry Williams’ privatization of the city’s parking meter operations. One may certainly wonder if this lawsuit is political? Mr. Williams made the change to privatize the parking meter collections three years ago and the lawsuit was just filed now, two months before the two men (and several others) face off in an election for the city treasurer position.

There are some public services that should never be privatized, some that should always be privatized, and some that depend on certain factors. Parking enforcement is in the “always” category. Contracting out the enforcement of parking meters is something that the private sector can easily do, and should do. There is no reason parking enforcement jobs should be on the public dime, with the benefits, pensions, etc., that are included in government jobs. Mr. Williams deserves a great deal of credit for making this change and reducing the political imprint of his office to save taxpayer dollars. If Alderman Wessels was really so offended by the manner in which the privatization occurred, I think he should have contested the move long ago.

The Reason Foundation has done some excellent work on all types of parking privatization. To be clear, Mr. Williams has not gone nearly as far with this privatization effort as Chicago did – where the entire city street parking operations were contracted out. All Williams did was contract out the collection of money from meters – the city still controls the rates, meter placement, etc. I do not support privatization law enforcement functions, but meter enforcement is hardly that. I view meter collection as a support service to law enforcement, like the mechanics who work on the police cars or the clerks who manage the department documents. You do not need a police officer to do it, and you do not need a government employee to do it.

Now, if Mr. Wessels wants something to legitimately criticize Mr. Williams for, how about the dearth of readily available data on the city treasurer’s office? This post would have been a longer and more detailed defense of the city treasurer’s privatization effort if I had easy access to the budget data from the office. (This is a blog post, not a policy study, so I do not have the time to gather data which should be up on the city website.) The city’s budget division only has very cursory information available on the treasurer’s office and the parking meter fund. So, whomever among the five candidates for the office wins in April, I hope they improve the available information for the office.

Money Down a Drain: The Millions Spent on Missouri’s No-Show Feb. 7 Election

Posted on by Andrew B. Wilson

Missouri lawmakers are feeling embarrassed. And well they should be. The representatives of the Show-Me State were shown up as knaves (worthy of foolscaps) when they called a statewide election and nobody came.

Or very few did. The state’s 454 polling places were empty for hours at a time as less than 8 percent of the state’s registered voters showed up to vote in the state’s presidential primary elections on Tues., Feb. 7.

In this case, the fault lies not with the voters — for failing to exercise their civic duty — but with the legislators, for refusing to call off a meaningless election.

In going ahead with a “non-binding” election that was empty of any real purpose, Missouri lawmakers on both sides of the aisle knowingly and shamelessly put taxpayers’ money to waste – treating the $7 million cost as a mere trifle.

“In the 10 years I’ve been here, this is the dumbest thing I’ve seen the legislature do,” Missouri Sen. Kevin Engler (R-Dist. 3) told the Show-Me Institute. “We spent $7 million — or just about $25 a vote — in an election in which not even one out every 12 people voted. This is an election that did absolutely nothing — while we as a state are firing hundreds of people in trying to cut a half a billion dollar budget deficit.”

This is how it happened.

Last year, the state Republican Party hoped to steal a march on other states in moving the state’s presidential primary to an early date. It hoped thereby to command greater national attention. But the national party foiled the plan. It passed new rules to punish states trying to hold early primary elections — refusing to recognize the results in seating delegates to the national convention Aug. 27-30 in Tampa Bay, Fla.

Recognizing the problem, the Republican-controlled Missouri Legislature approved a measure last spring that would have reset the primary to a later date and made it binding. On unrelated grounds, Missouri Gov. Jay Nixon vetoed the larger legislation that contained the new primary date. Another effort to reset the primary date failed in a special session last fall.

However, even after the state Republican Party decided to hold a March 17 caucus to determine the state’s delegates to the national convention, some Republicans in the Senate continued to trumpet the people’s “right to vote” in the now devalued primary, even though the practical effect of the vote would be slim-to-zero.

Sen. Engler described the money and effort wasted on the primary as “a bi-partisan failure” which could have been avoided if elected officials of both parties had been less cavalier about wasting taxpayers’ money. He noted that all eight of the Democrats in the Missouri Senate joined Republicans in voting to keep the primary election in February.

I did vote on Feb. 7 — but only out of curiosity. I went to my polling place in Saint Louis’s Central West End at 5 p.m. Only eight other people were there — all of them poll workers. I was the only voter.

This much is certain: An overwhelming majority of Missourians voted with their feet in paying no heed to a meaningless election. And if there is any further lesson to be drawn, it may be this: If the Political Class is so careless in spending millions of dollars of your money, can you trust them in spending billions, or even trillions?

Andrew B. Wilson is a resident fellow and senior writer at the Show-Me Institute, which promotes market solutions for Missouri public policy.

A Steaming Pile of Pension Debt

Posted on by Greg Aubuchon

How many of you are making progress climbing out of your personal debt hole? The financial meltdown of 2008 should have taught us the lessons of excessive debt and living beyond our means. Yet even if we are now making progress in balancing our personal finances, have you considered other debts that lurk in the shadows? Such as public pension debt? If not, ask yourself how much pension debt we, the taxpaying citizens of Missouri, actually owe to state government retirees.

Begin by thinking of a pension fund as a pool of investments (like stocks, bonds, etc.) that are purchased from money that employers contribute. These contributions and investments hopefully grow enough over time to cover the future retirement benefits of retired employees. But when employers fail to remit sufficient contributions, and when investments do not grow fast enough, the amounts of money available to pay retirement benefits fall short of the promised benefits. When this occurs, you have an unfunded liability. And because we are discussing public pension funds (where the government is the employer) future taxpayers are on the hook for the unfunded liability. And a looming fiscal crisis ensues.

We have reviewed the most recent comprehensive annual financial reports of five large statewide public pension funds in Missouri. The unfunded liabilities of each are listed below:

Missouri State Employees Retirement System (MOSERS): $2.4 billion

Missouri Local Government Employees Retirement System (MOLAGERS): $900 million

Public School Retirement System (PSRS): $5 billion

Public Education Employee Retirement System (PEERS): $500 million

County Employees Retirement Fund (CERF): $130 million

That is a total of just under $9 billion in unfunded liabilities that we owe to current and future public retirees! That is $1,500 per man, woman, and child in Missouri. And this includes only five public pensions (while these are among the largest public pensions in Missouri, there are approximately 130 public funds at the local and state level). This debt exceeds Missouri’s total general revenue collections for fiscal year 2011 ($7.1 billion, see the table on page 10 of the governor’s fiscal year 2013 executive budget). Taxpayer, beware. How many of the remaining 125 pensions operate in the red and how much do we really owe after they are accounted for?

Now, of course, if the economy and stock markets recover, the picture improves somewhat. But not by as much as you may suppose. Stay tuned for further discussions on that point.

Clutching the Sewers: The Foul Smell of a Missed Opportunity

Posted on by Bruce Stahl

Last week, the Arnold City Council decided against selling its sewers to Missouri American Water. It appears that the elected city officials did not care for the terms of the sale. From the Arnold Patch:

“It was clear that not enough assurances could be provided to ensure the protection of the City’s residents or the City employees who were proposed to join American Water,” [Arnold Mayor Ron] Counts said in a news release on Friday afternoon.

Any city should consider the costs of a decision, and I am glad that Arnold took the time to analyze those costs before making a decision. However, I believe there are benefits which may outweigh the costs. Should the city ever again be presented with the opportunity to sell its sewers, I hope city officials will fully consider the advantages of privatization. Here are a few examples from an op-ed that I wrote on the topic, untimely published five days after the decision not to sell (untimely due to bad luck, not a lack of effort):

  1. Arnold’s sewers are in dire straits. The city would face less of a financial difficulty if it relied on private capital to fund renovations and repairs.

  2. Private ownership leads to more efficient uses of labor and capital. Privatization can produce savings relative to bureaucratic management.

  3. The city of Arnold would obtain monetary benefits from the sale. When Florissant sold its water utility in 2002, it was able to establish a $10 million reserve fund. Arnold could use the revenue to establish its own reserve fund, pay down debt, or lower taxes.

For more Show-Me Institute commentary on privatization, click here.

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