In 2019, I argued that Kansas City’s debate over “luxury” apartments missed a basic point: housing markets are connected. When higher-income households move into new buildings, they leave something behind. Those vacancies matter. New research now makes that case with concrete evidence.

A recent piece in The Atlantic detailed the study. Researchers studied a 43-story condominium tower in Honolulu and tracked what economists call “vacancy chains”—who moved into the new units and who moved into the homes they left. The results were measurable and citywide.

The building’s 512 units generated at least 557 vacancies elsewhere. On average, residents moving into the tower left homes that were 38 percent cheaper per square foot. One step further down the chain, homes were 44 percent cheaper than the new condos. Each new market-rate unit created roughly 1.6 vacancies elsewhere in the city.

This research builds on earlier national work, which found that new market-rate construction prompts substantial movement out of below-median-income neighborhoods. As households move up, older units filter down. The process is gradual but observable.

Kansas City is not Honolulu. Our housing stock is less geographically constrained, and our prices are lower. But the economics of supply do not change by region. When we restrict new multifamily construction—through zoning caps, parking mandates, or prolonged approval processes—we constrain mobility.

Mobility allows households to adjust to new jobs, schools, and changing family needs. Nationally, residential mobility has fallen sharply over the past half-century. Culture plays a role, but so does housing availability. Fewer vacancies mean fewer options.

Kansas City faces a quieter risk: complacency. Because our prices have not reached coastal extremes, it is easy to assume supply is sufficient. Yet rents and home prices have risen faster than incomes in recent years. If we make it harder to build—luxury or otherwise—we should expect fewer vacancies and higher prices over time.

Certainly, luxury housing construction should not be subsidized. Much of the local controversy over “luxury” projects arises when developers seek public incentives. But housing construction at all levels is welcome. Today’s Class A building becomes tomorrow’s middle-income housing. Aging is built into the market.

The real question is not who benefits from the first occupant of a new building. It is who benefits over the next decade.

If Kansas City wants more affordable options tomorrow, it needs more housing—of all kinds—today.

The post Luxury Housing Still Helps Lower-Income Renters appeared first on Show-Me Institute.

Long-time readers of this site will not be surprised. I argued in 2018 that Kansas City’s “creative‑class” investments—downtown luxury apartments, entertainment districts, and infrastructure built for young urbanites—did not amount to a sustainable strategy for long‑term growth and retention. I observed that many millennials preferred the suburbs: affordable housing, space, good schools, and stable services.

Booth’s column helps explain why. The urban‑core housing boom may have been good at attracting people in their 20s and early 30s. But when that cohort started families, cities lacked housing and civic infrastructure suitable for children and long‑term residence. As a result, the creative‑class gamble has begun to backfire. Cities may keep a veneer of vibrancy and high rents, but underneath many are losing the people who once anchored stable communities—workers, taxpayers, parents, consumers.

That matters for Missouri cities such as Kansas City (and for other mid-size urban areas nationwide). A city’s strength does not come only from bars, nightlife, or trendy apartments. It comes from stable families, long‑term homeownership or stable renting, good schools, reliable infrastructure, and civic engagement grounded in predictable community roots. The creative‑class theory always rested on uncertain assumptions about life‑cycle stability.

As I pointed out in 2018, and as current national trends affirm, there is no magic bullet to make downtown living the default for most families. A better path remains broad and neutral: keep taxes reasonable, maintain infrastructure, support quality schools, and enable stable, moderately priced housing—suburban or urban—that families actually want.

Creative‑class strategies may look shiny on paper and flashy in media. But when they fail to adapt to one of life’s key transitions—from young adult to parent—their long‑term contribution to stable growth may have been nothing more than a short‑lived boom.

The post New Observations Confirm Skepticism of Creative Class Urbanism appeared first on Show-Me Institute.

These big convention hotels, entertainment districts, and sporting events don’t fail to live up to expectations in just Kansas City and St. Louis. They fail expectations all over the world.

L.A. is plowing ahead with infrastructure upgrades—expanding the rail system, modernizing LAX, and revamping the downtown convention center. These projects are fueled by a mix of federal funds, city dollars, and airport fees, with the idea that the influx of tourists will help offset the costs.

Mayor Karen Bass is pitching the Olympics as an opportunity not just to showcase L.A.’s iconic landmarks like Hollywood and Venice Beach, but also as a chance to shine a light on its diverse communities—Little Bangladesh, Little Armenia, and beyond. It’s a noble goal, but L.A. could take a massive financial hit if things go sideways.

And these big events are always going sideways.

The 1984 Olympics held up as their north star were a financial anomaly, largely because the city smartly used existing venues. Fast forward to today and the stakes are higher, with a nearly $7 billion budget hanging in the balance. LA28, the private group organizing the games, insists it will foot the bill through sponsorships, ticket sales, and global TV rights. But if costs spiral out of control, L.A. taxpayers will be left to pick up the tab. The city and state have agreed to cover any budget overruns, which is a colossal gamble.

We’ve seen it before—the pandemic-delayed Tokyo Games ballooned to $14 billion in costs, and Rio’s 2016 Olympics cost a staggering $24 billion, with both events blowing past their budgets. L.A. is trying to avoid that by sticking with existing venues like the Coliseum and Rose Bowl. Even with these cost-saving measures, there’s no guarantee that the numbers will add up.

The reality is the Olympics often leave host cities grappling with long-term debt, gentrification, and displacement. This risk applies to the recently closed Paris Olympics. Groups like NOlympics LA are already sounding the alarm, arguing that the games could exacerbate L.A.’s housing crisis and deepen economic disparities.

The 2028 Olympics could be a golden opportunity for L.A., but recent history tells us it is more likely to be another costly boondoggle. With so much on the line, Angelenos should keep a close eye on how this plays out.

The post The L.A. Olympics Will Likely Be an Economic Failure appeared first on Show-Me Institute.

Due to its great location, the neighborhood is undergoing gentrification as new, wealthier homeowners move in, leading to property value increases and higher taxes on long-term residents. In order to combat this, the neighborhood organization proposed turning the entire neighborhood into a Chapter 353 abatement plan designed to refund a percentage of property taxes to current residents based on their incomes.

I genuinely understand the desire for people to stay in their neighborhoods and not be taxed out by rising property values. But I think this enormous neighborhood abatement plan is a very bad idea. If it were copied throughout Missouri, it would lead to increased reliance on sales and income taxes (that is a bad thing), an increase in the abuse of abatements as certain people get special deals and other people pay higher rates, and a general increase in the involvement of government in the simple act of owning a home, since a government body has to vote on plans like this. Make no mistake: if this practice becomes common everyone, on average, is going to end up paying higher property taxes.

An article in support of this plan states that it is only available to current residents. That is deeply troubling (emphasis added):

These benefits accrue only to existing West Side residents. New people coming in would not receive any of the benefits, so the plan would not produce further gentrification.

There is a name for this type of tax policy. It’s called “welcome stranger.” That simply means that new property owners pay higher tax rates for comparable properties than current owners. The U.S. Supreme Court ruled against it in 1990, but I strongly suspect that the lawyers behind this Westside 353 plan crafted the plan to try to avoid legal challenges. Even if that is the case, is this good public policy? Absolutely not. This is going in the entirely wrong direction. We need to end tax abatements and other tax subsidies throughout Missouri so that the tax base is broader for everyone—and rates thereby lower—to fund the government services we want.

I had hoped the mayor of Kansas City would veto this bill, but he did not. I now expect the lawyers who drew this plan up to start passing out business cards at every neighborhood meeting in Missouri where there is a colorable claim for using Chapter 353. The short-term gain for the Westside community may produce long-term harms for Missouri.   ­

The post Kansas City Westside Community Goes All-in on Abatements appeared first on Show-Me Institute.

The Kingsway Commercial Tax Increment Redevelopment Plan involves developing multiple projects where the Central West End meets Delmar Boulevard. But perhaps more importantly, a big chunk of funding for these projects would come via a tax-increment financing (TIF) district that would raise $6.2 million. This project will also be financed by a mixture of state and federal tax credits. There are additional plans to create a community improvement district (adding to Missouri’s growing special taxing district problem).

These economic development tools would help to finance this project at the expense of taxpayers; they give developers cash, reduce their tax burdens, and could increase sales taxes in the area. North of the “Delmar Divide” is generally a low-income area, so should we really be redistributing tax dollars from low-income residents to developers instead of using these dollars for public services? Especially when other publicly funded ventures like the Cerner headquarters in Kansas City or the Loop Trolley right down the street from this project haven’t delivered on their promises?

While I’m sure most can appreciate the “bridging the gap” intention of this project, TIF is a flawed economic development tool that often gives no benefit to taxpayers. TIF requires that an area be blighted (for which Missouri has a very broad definition), and that the development would not happen without the public funding. With the thriving Central West End neighborhood just steps from this development, it’s hard to believe that development in this area would not occur without millions of public dollars. Moreover, even if this area were blighted, does it really need these perks for the next 23 years? Is diverting tax dollars to a private development project really the best way to develop this area of St. Louis?

The post Fixing the “Delmar Divide” with a TIF? appeared first on Show-Me Institute.

Some economists and policymakers caution that the law’s loose language is ripe to be gamed or at the very least exploited outside the spirit of the program’s intent. Concerns about gentrification and the displacement of poor, minority neighborhoods in the name of economic development are legitimate, they say, and probably will play out in unexpected ways, should the program work as designed.

Later in the piece we learn the Kansas City Opportunity Zone Coalition is being “spearheaded” by the Greater Kansas City Chamber of Commerce. It is not a surprise that the chamber would be involved, but anyone familiar with their role in city and state economic development policy knows this isn’t necessarily a good sign the program won’t be gamed or exploited.

The Heritage Foundation recently published a piece on Opportunity Zones, and they remain skeptical:

Academic and government studies show that past place-based development experiments often failed to yield promised employment gains or advance general economic opportunity for targeted residents. Even in cases where place-based policies induce greater investment within the targeted zone, the favored businesses gain an unfair advantage over competitors elsewhere. Often, new investments simply represent a shift in capital away from other investment opportunities outside the zone’s boundaries. In those instances where place-based policies draw capital away from more productive investments, they can result in net economic losses of jobs and income.

Incentives lavished on downtown Kansas City are a perfect example of the failed promises of place-based development incentives. A great deal of tax dollars have been spent just to redirect investment; little if any new economic activity has occurred citywide. That’s not to say that governments are powerless. But the power they wield is often negative. They can do the most good by simply getting out of the way, as the Heritage piece notes:

The economic literature, however, does offer a positive vision for helping distressed communities access economic opportunity. Lifting government-imposed barriers to work, housing supply, and education choice can expand economic mobility and opportunity. In stark contrast, top-down federal incentives can unintentionally reward failing state and local policies by masking the need for reform. Paired with removing government-imposed barriers to success, broadly applied tax reforms that reduce taxes on investment for everyone can help lift struggling communities out of poverty.

Pundits and policymakers, like former Kansas City Star columnist Steve Rose pictured above, have for too long said they don’t care what the research reveals. That is unfortunate, because good public policy demands that we pay attention to successes and failures here and elsewhere.

The post Opportunity Zones? appeared first on Show-Me Institute.

But urban decline isn’t unique to Missouri. People all over the United States are voting for suburbs and exurbs with their feet. Giving tax dollars to a few more bars and restaurants won’t change that.

In their paper, “Beyond Gentrification,” researchers Joel Kotkin and Wendell Cox lay out the case that:

The spurt of urban core growth that occurred immediately after the housing bust was short lived. The preponderance of metropolitan growth has returned to the suburbs and exurbs, as had been the case at least since the late 1940s.

Kotkin and Cox make their case with census data: Suburbs are growing much faster than urban areas. Claims by urbanists such as Richard Florida that “creative class” millennials would come to cities and stay were wrong, as Florida himself admits. Unfortunately, cities like Kansas City and St. Louis spent billions of dollars exacerbating the problems of gentrification through subsidies, and continue to do so, chasing a myth.

If city leaders only understood that they are swimming against a nationwide current, they might be a bit more circumspect in their distribution of taxpayer dollars. But whether it’s misplaced faith in the promises of urban developers or the allure of campaign contributions from those same companies, something is compelling policymakers to invest taxpayer dollars in projects that benefit the developers at the expense of the communities where they are undertaken. Meanwhile, organizations such as the Downtown Council in Kansas City vacuum up tax dollars and spit out absurd population growth claims.

Kotkin and Cox point out what any close observer of Missouri’s urban politics already knows:

It seems clear that gentrification has not benefited the poor and may well have harmed them by spiking housing prices and, perhaps less obviously, restructuring urban economies in ways that hurt blue collar workers. Reporters and politicians might swoon over the latest “hip” urban manifestation, but the poverty rate is still two-thirds higher in urban cores than in the suburbs.

Beyond Gentrification then focuses on three cities—Chicago, Dallas, and Los Angeles—to flesh out what is happening in cities across the country. These things are happening in Kansas City and St. Louis, too. And no convention hotel, trolley, or new stadium will turn this around. We know, because other cities are pinning their hopes to developments like these, and it isn’t working. It won’t work for us, either.

City leaders across Missouri need to understand their cities’ competitive advantages and promote them. (The Show-Me Institute has already catalogued some for both Kansas City and St. Louis.) They need to deliver on infrastructure, public safety, and basic services efficiently and effectively. And they need to resist diverting tax dollars in pursuit of urban development that often does more harm than good to the surrounding communities.

The post Kansas City and St. Louis Battling National Trends appeared first on Show-Me Institute.

Developers and officials in University City are pushing for a $70.5 million subsidy to help fund a $190-million development at Olive Blvd. and Interstate 170. The project is slated to include a Costco, apartments, restaurants and retail space. The taxpayer money would come via tax-increment financing (TIF), which captures increased sales, property and other taxes generated by a development to cover some of its costs. In this case, taxpayers would cover nearly 40 percent of the project’s costs!

The controversial project has raised a number of concerns. Some worry about gentrification, neighborhood and cultural disruption and the possible use of eminent domain to force out longstanding businesses. These topics are serious and ought to be debated at the June 22 public hearing on the potential development. But a fundamental problem with the project deserves more attention: the fact TIF is unnecessary and fails to deliver on its proponents’ promises.

First, TIF was intended to encourage development in areas where no one wants to invest money, which hardly describes the area under consideration. The developer’s proposal cites (see pp. 6–10) conditions such as cracked sidewalks, overgrown grass and overflowing dumpsters as evidence that the area is “blighted.” These conditions, though less than ideal, surely don’t make development so unappealing as to require $70.5 million in taxpayer assistance. The area surrounds a busy interstate interchange and is flanked by Olivette, Ladue, and Clayton—there’s a reason current businesses don’t want to leave!

More importantly, proponents are promising the public higher property values, increased tax revenue for city services, and a bustling, inclusive neighborhood should the subsidy be approved, but decades of research shows these promises are rarely kept. It was just in 2016 that the City of St. Louis released a mammoth report detailing the near-total failure of its incentive programs. From 2000 to 2014, St. Louis lost out on more than $700 million in revenue because of TIF and related programs for naught. “[W]hile there may be disagreement about the value of some [incentive] packages,” the report concluded, “it is clear that the City gains no net benefit from an extremely costly program with no real economic development impact” (p. 6).

The study also failed to find a significant connection between TIF and job creation or increased property values outside parcels directly benefiting from subsidies. “[T]here is little evidence of significance [sic] spillover effects around incentivized parcels after the use of incentives. Across most project types,” the report continues, “there is no significant change in the trajectory of assessed value, permit investments or jobs” (p. 5). Economists from across the country have found almost exactly the same thing. In short, there is little evidence to support claims that handing out taxpayer cash will usher in an urban renaissance in University City, or anywhere else for that matter.

If officials and residents want to invest in University City’s third ward (where the proposed development would be located), there are other, more prudent ways to scratch cash together. Businesses and residents could form a community improvement district to collect property taxes—authorized by a public vote—to fund improvements. The “blight” designation assigned to the area as part of the TIF application would mean that those revenues could even be used to help fix up private residences. Before officials needlessly forego tens of millions in revenue over the next two decades, they owe it to University City residents to consider other options for improving the third ward.

The post Taxpayer Largesse Unnecessary, Wasteful in U City Development appeared first on Show-Me Institute.

popularized the early-aughts idea that faded cities could revitalize themselves by attracting the talented, intellectual types who made up what he called the "creative class." Lure some hip coffeeshops, create an "arts district," play up your gay friendliness, and watch the laptopping masses pour in.

Unfortunately for Kansas City, our leaders bit hard on the bait and haven’t yet let go. Witness the millions of dollars poured into failed downtown economic development schemes such as the Power & Light District and the H&R Block building. Note the rhetoric around the streetcar or the Smart Cities proposals. Note the Mayor’s focus on Kansas City’s startup mirage. We’re chasing a creative class dream spun by Florida. Show-Me Institute writers pointed out flaws in his ideas for years, and now, at last, Florida himself admits he was wrong:

I got wrong that the creative class could magically restore our cities, become a new middle class like my father's, and we were going to live happily forever after," he said. "I could not have anticipated among all this urban growth and revival that there was a dark side to the urban creative revolution, a very deep dark side.

For Kansas Citians, the dark side we are being saddled with now is an ever-more hollowed out tax base, a city that struggles to deliver basic services, and an east side made even more unattractive to developers due to the flow of subsidies to other neighborhoods that were already economically sound. Regular readers of this blog know we’ve argued against Florida for years.

Florida has admitted his error. Will those in Kansas City who followed his advice do the same?

The post Kansas City’s Development Guru Admits He Was Wrong appeared first on Show-Me Institute.

This development, Phase II of The Boulevard development, was set to take place years ago, but plans were put on hold due in part to the recession. Now the land is being sold to another investor, and tax increment financing (TIF) is on the table. The Boulevard’s prime location—across the street from the Galleria and at the intersection of I-170 and I-64—is one reason for the developer’s high expectations. Another reason is the average household income of $92,581 within three miles of its location. Residents of Richmond Heights might well ask why a project with a prime location in an affluent area needs to be subsidized by taxpayers.

TIF was designed to reduce the costs of private developers investing in blighted or economically unattractive areas, but the Boulevard development is far from the first instance in which TIF has gone toward a project in an area that would hardly be considered “blighted.” A recent study on incentive use in St. Louis City found that roughly two-thirds of all property tax abatement and TIF has gone toward areas with strong housing markets.

The Boulevard development is representative of the misguided use of incentives in St. Louis during recent years. When well-off neighborhoods are asking taxpayers to subsidize their investments and truly blighted regions are being ignored, it may be time to reevaluate our spending priorities.  

The post TIF Requests in Affluent Areas: The Beat Goes On appeared first on Show-Me Institute.

The city spends (or diverts) millions each year on streetcars, apartment buildings and luxury condos, and entertainment districts in a breathless effort to attract millennials. Initially there was some evidence to suggest this was working. Data from 2000 and 2012 showed that although city-wide Kansas City was not attracting those aged 25 to 34 on pace with national average, the downtown area was doing okay.

But that may be changing. A new report from CBRE Research, “2016 Scoring Tech Talent,” shows that from 2009 through 2014, Kansas City’s population of millennials ages 20 to 29 living downtown dropped 5.3%. St. Louis saw a drop of 3.5%; the national average was an increase of 3.1%. This is despite findings that Kansas City is very competitive on wage and rent obligations for tech firms, rents per square foot for offices and apartments, and the rent-to-wage ratio.

Add this to our recent finding that market values along the streetcar Transportation Development District are lower today than they were in 2012, and the city’s downtown policies aren’t looking so smart. What makes this worse is that the dollars being spent to lure millennials are coming at the cost of money to schools, libraries, basic services, and infrastructure.

The post Kansas City Losing Downtown Millennials appeared first on Show-Me Institute.

As with any action from the Saint Louis city government, there are winners and losers. The obvious winner here is the land developer behind the NorthSide Regeneration project, which will get what amounts to a bailout with this deal. The city as a whole? Saint Louis will pay for the land it will turn over (at no charge) to the NGA. Because the NGA was already located in Saint Louis, the effect on the city economy will be minimal. The NGA may add more jobs, but nothing that one could expect to reverse Saint Louis’s long decline.

The families who will be forced out of their homes are the ones losing out. They face an uncertain future, and if the NGA’s decision is finalized, they’ll need to navigate the eminent domain process and find new places to live.

In Saint Louis, political officials seem to prefer looking for shortcuts to development and lack enthusiasm for pursuing the hard but boring path to civic success: low taxes, a level economic playing field, and quality essential services. Meanwhile, those without political connections or wealth are swept aside.

Will things ever change for this city?

The post Who Really Wins or Loses with NGA Deal? appeared first on Show-Me Institute.

On Thursday, American Public Media broadcast a story on NPR suggesting that millennials aren't that different from previous generations at all. 

The post Millennials Moving Out appeared first on Show-Me Institute.

I spend a lot of time talking to developers and I spend a lot of time talking to developers trying to get them to build east of Troost [Avenue]. If they don't want to do it, you can incentivize them all day long. What they look at is, "How do I get a return on investment?"

Developers can't be faulted for wanting to earn a buck, and investment on the east side of town can carry additional risks. That is exactly why governments adopted tax increment financing, or TIF, to alleviate some fo the risk that investors face. But that policy is made meaningless if everyone gets TIF, and if they get it in the nice parts of town. Of course a developer would not take on a large risk developing east of Troost when the city will subsidize a low-risk development west of Troost. The solution is to stop incentivizing the wealthy western part of the city, and save incentives for where they were actually intended.

Later in the film, Mayor James gets defensive when asked if it isn't time to take action. He says, [53:17]

Everybody says action. Nobody has an answer. If anybody had an answer to that question you don't think it would already be being used? You know, people seem to think that this is somehow a political issue. This is a citywide societal problem and the city and society has to address it; not just people in public office. That's crazy. If that were the case it would have been done by now. Certainly I would have done it by now if I had that power and authority but I don't even have the authority to keep guns out of the hands of 19 year olds.

Certainly the Mayor is correct that the problems faced in Kansas City are not unique to us. These problems plague urban areas all over the country, and they indeed stem from significant systemic issues of poverty, education, and racism. But that is not to say that the Mayor has no "power or authority," or that expecting political solutions from our political leaders is "crazy." It is not. 

The Mayor does have the "power and authority," for example, to tear down the 875 vacant and "dangerous" homes that litter the east side as featured in the documentary. He has the "power and authority" to beef up spending on code enforcement. Instead, he and the City Council have chosen policies that spend money on downtown streetcars and luxury apartments and hotels.

Frankly, if anyone lacks "power and authority," it is the people on the east side of town who can't afford to hire the high-priced development attorneys needed to get the ear of policymakers.

The post Policy Choices and “Our Divided City” appeared first on Show-Me Institute.

Why is it necessary to use TIF in a prosperous city neighborhood to finance two floors of underground parking in a walkable, urban neighborhood? 32 North Euclid is located in a thriving city neighborhood within close proximity to a 160-unit public garage, metered parking, and the Central West End Metrolink station. The program plan presented to the TIF Commission is a six-floor, mixed-use building with ground floor retail, second floor office space, and four upper floors of luxury apartments. The building will ultimately contain between 52 and 68 market-rate units with a very high price point. Koman is estimating it will construct between 70 and 80 subterranean parking spaces at a cost of $45,000 to $60,000 per space. Given these cost estimates, over 70%—and up to 100%—of taxpayer money funding the project will go to pay for parking.

While I understand the financial reason for wanting ground floor retail along Euclid and the aesthetic reason for wanting to hide parking, these simply don’t justify diverting millions of dollars of future tax revenues to finance parking for a luxury development in a neighborhood with a Walkscore in the low 80s. Classifying the current building as a blight to the community is dubious at best. This TIF proposal demonstrates how a subsidy intended to spark redevelopment on sites where development would not occur “but-for” the subsidy is being abused to finance luxury residential developments in wealthy, high-growth neighborhoods at the taxpayer’s expense. 

The post Taxpayers Shouldn’t Have to Subsidize Parking in Upscale Central West End Redevelopment appeared first on Show-Me Institute.

• Cordish, the company that brought us the Power & Light District then sued to lower their county property taxes, says that the downtown investment has been a success! But apparently the success wasn’t great enough to forgo further subsidies for two more residential buildings.
• The Port Authority in Kansas City recently announced that they will be using public dollars to subsidize the construction of luxury residential condominiums along Kansas City’s riverfront. There is great demand they say, but apparently not enough to avoid the use of public underwriting.
• A Crossroads hotel has received TIF subsidies, and an apartment building in the same area is receiving a property tax abatement and a $1 million exemption in sales taxes.

When will the public subsidies end? How do we know when we’re done? Is there any incentive for developers to say they do not need public subsidies? (The answer to that last question is no.) This is important because every subsidy means less money for city and county services; every abatement means less money for schools, less money for libraries. Right now, at least $93 million of city revenue is redirected each year to these developers. That doesn’t include the new projects for Cordish, Burns & McDonnell, and Cerner. Developers shouldn’t be encouraged to build skyscrapers while digging taxpayers into a hole.

The post Kansas City Builds by Digging Itself into Holes appeared first on Show-Me Institute.

The immediate culprit of the decline is construction: work on the area’s road system and renovations to the Arch grounds have made the Landing difficult to get to for tourists and residents alike. With construction slated to continue for the next couple of years, many local businesses are calling it quits. According to some business owners, regional planners were so focused with large improvements to the riverfront that they were unwilling to heed the concerns of the neighborhood.

Officials can argue that, despite the present hard times, the area will be better served in the long run by riverfront improvements. However, Laclede’s Landing has deeper problems than transitory construction disruptions. Saint Louis has changed since the 80s and 90s, when the Landing was downtown’s premier entertainment district. From the mid-90s onward, Laclede’s Landing has had to deal with the rise of competitor bar districts, often heavily subsidized by the city and state government.

We can see evidence of the declining comparative vitality of Laclede’s Landing in the neighborhood’s building permits. In the 1990s, Laclede’s Landing had a greater value of building permits per square mile than other entertainment districts in the city, excluding the Central West End.

Since the 1990s, Laclede’s Landing has been eclipsed. Whereas the Landing had more building permits than the center of Washington Avenue in the 1990s, in the 2000s Washington Avenue had more than ten times the permits of Laclede’s Landing. From 2011-2014, Laclede’s Landing had the least new building permits by value of any of the neighborhoods sampled, even falling behind the upstart Cherokee Street. Lacelde’s Landing was also the only entertainment district to have fewer building permits in the 2000s than it had in the 90s.

One entertainment district being eclipsed by others is no reason to blame regional planners. However, the competition has not been on a level playing field. The region and state have given extensive tax credits to much of Laclede’s Landing’s competition (especially nearby Washington Avenue), as the map below shows:

In just the sample area of Washington Avenue, the city handed out more than $60 million in tax credits from 1999-2011. The sample area of the Central West End received almost $50 million. Laclede’s Landing, by comparison, received less than $2 million in tax credits.

The future of Laclede’s Landing is uncertain. But it seems assured that Saint Louis will continue to make where people spend their free time a matter of public policy. And while government preference can create well publicized winners, it can also make losers. In the 70s, Laclede’s Landing was arguably part of the former, now, it is in danger of joining the latter group.

The post Can Laclede’s Landing Survive Government Planning? appeared first on Show-Me Institute.

If you only look at the close-in downtown neighborhoods, defined by the study as those “within 3 miles of the center of the central business district,” Kansas City saw an increase of 63 percent over the past 12 years. Compared to our peer cities, this is impressive. (See Table 1.) So supporters of using taxpayer dollars to subsidize development might argue their profligate spending is working.

But the data about cities as a whole is not so positive. Of those same cities, Kansas City as a whole ranked last in growth of this sought-after population. (See Table 2.) The average population increase for this demographic in all 51 cities was 25.2 percent. Kansas City came in below that.

City leaders have put their faith in an idea about urban millennials that may or may not be legitimate. In doing so they have diverted funds from projects and services throughout the city to build and maintain things downtown such as the streetcar and Power and Light District. But any subsequent population growth downtown is dwarfed by population stagnation elsewhere.

The argument over attracting urban dwellers is hotly contested. Regardless of who is right, Kansas City is not seeing much success, and economic development is more cannibalization than growth. Residents in the north, south, and east should be wary of sacrificing their own needs in favor of a downtown strategy that so far isn’t working.

The post Kansas City, Millennial Magnet? appeared first on Show-Me Institute.

It doesn’t work.

Richard Florida first proposed the idea that cities need to attract the so-called creative class in order to survive. His prediction was not borne out by time. But like all good economic theories, zealous adherents aren’t swayed by plain evidence. Here in Kansas City, leaders still talk about attracting this creative class with streetcars despite the fact that the evidence tells us that even the millennial-age cohort is no less likely to own cars than their peers in past generations. They act the same way any group does: They move to regions that offer jobs.

A study of successful innovation hubs even demonstrated that among those that have been successful there is no winning government strategy—success does not lend itself to a simple formula.

Boosters of Baristanomics point to the slight growth of downtown residents to show the success of the city’s profligate spending. As another high rise is proposed for downtown—and subsidized with taxpayer dollars—the high availability no doubt will drive prices into the basement. Laying aside the question of whether such modest growth is worth the huge cost to taxpayers, it is clear that Baristanomics has not produced the jobs necessary to keep people downtown. Downtown residents commute out of the core for work—something that writers elsewheredubbed Urban Inversion. Basically, Kansas City is turning itself inside out.

Without jobs—baristas, hotel concierges, and restaurant staff notwithstanding—any measure of success will be short lived if Kansas City isn’t attracting jobs. In fact, the growth of residential development is coming at the cost of commercial and industrial growth potential as one-time office buildings and warehouses are converted into trendy lofts. Furthermore, many of those living spaces were built or renovated with tax abatements or subsidies that will make them much less attractive in 25 years when they end.

Cities do not form around coffeeshops and large entertainment venues. (If they did, where is the development around the Truman Sports Complex? There are barely hotels over there.) People generally live where they work, and if Kansas City continues to be an unattractive place to build a business, all the hip speakeasies and entertainment subsidies will amount to nothing more than curious finds for future archeologists.

The post Kansas City Embraces Baristanomics appeared first on Show-Me Institute.

The map above shows the Loop Trolley in relation to existing demographic characteristics. As the map shows, the Loop Trolley’s path is intersected by seven MetroBus routes and passes within a few meters of two MetroLink stations. The trolley, if it is built, will be redundant for nearly all conceivable transit trips. The map also shows the percentage of renters per census bloc around the proposed route. While multi-unit housing and a high renter population generally means more transit usage, it also means that most of the benefits from any gentrification will accrue to landlords, not residents. Renters as a percentage of total occupants are relatively high around the trolley route. Read more from the Show-Me Institute on the Loop Trolley here.

The post Map Series: II. The Loop Trolley and Existing Transit appeared first on Show-Me Institute.