Susan Pendergrass speaks with Judge Glock, director of research and senior fellow at the Manhattan Institute and contributing editor at City Journal, about the growing debate over data centers in Missouri and across the country. They discuss why some communities are banning data centers while others are welcoming them, how Loudoun County, Virginia became the global epicenter of data center development and what it has meant for local tax revenue, whether concerns about noise, aesthetics, and energy use are valid, and more.

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Episode Transcript

Susan Pendergrass (00:00): Thank you for coming on the podcast again, Judge Glock. We’re going to talk about something that is certainly in the news and certainly good and bad for Missouri in the past week. We’ve had stories about both new data centers being announced and more communities banning them. What’s your take on that? You live in Virginia. In Missouri, we are certainly at odds with each other between one area that is going to have both a massive Amazon and a massive Google data center and then very close to that a large county that just banned them. Where do you think this is going?

Judge Glock (00:36): In some sense, it’s going the way of a lot of American projects in that there’s going to be a diversity of local responses to them, which I think is actually quite OK. One of the things I gather when I talk to some of my friends across the pond in the UK or in Europe is that they basically have to have this grand national debate about data centers, whether to allow them and where to allow them. That’s obviously an important and worthwhile debate, but in America what we’re going to have, and what we’ve already had, is a near infinitude of local debates about data centers. I think that’s the right path. When you nationalize or centralize these issues, you create more veto points for people who want to refuse any sort of growth. You also force certain kinds of growth on people in areas that aren’t necessarily favorable to them or most likely to benefit from them. The American system of fairly decentralized governance, combined with a fiscal horse-trading side where the main benefit of local data centers is the fiscal bump local communities can get, I think is going to lead to a more positive outcome than a more centralized system that tries to create a single answer for a whole country or state.

Susan Pendergrass (02:07): But we have at least one county in Missouri that within the last few days said, regardless of the money, we’re a community and these things ruin towns and communities. I wonder if it isn’t going to be like driving across some states like West Virginia where the biggest, ugliest, most pollution-spewing plants are there. I wonder if it’s because Virginia was willing to have them. Now you have these communities in Missouri that are like, we’ve got acres and acres of land and we don’t care what it looks like, versus these other communities that are saying we don’t want big white buildings everywhere. That to me is a very interesting dynamic, because I feel like they’re going to end up in places where nobody wants to build anything else.

Judge Glock (03:02): Yeah, and that might not be the worst outcome. Can I give a quick segue into the history of something called environmental racism? This was a movement started to some extent in the South in the 1970s and 1980s to meld general anti-industrial, pro-environmental sentiment with the burgeoning civil rights movement. The argument at that time was that evil polluters were forcing their factories into places that were poor and largely Black or minority-majority areas, and that this was a travesty because it was burdening people with increased environmental harm, pollution, and factory soot. The problem with that analysis, which has been carried out by the federal government for decades, is that a lot of times poor and minority communities really, really wanted these factories. They were willing to accept the trade-offs of the environmental harms for the fiscal and monetary benefits in a way that wealthier communities were not. Precisely because they were poor, they usually put a lower value on the environmental concerns that exercised a lot of high-income people and put a much higher value on getting good jobs and all the rest. There’s a famous case from the 1990s where I believe the Clinton administration sued a Louisiana parish and a company that was trying to place a factory in a majority-minority district, claiming it was an example of environmental racism. It actually turned out that the largely Black politicians in the local area were saying this was insane, that they were being sued by the federal government for being racist against themselves when they wanted the factory. That’s a long segue into environmental racism, but I think it’s the sort of analysis we should apply to data centers. There are going to be some areas that put a higher value on the fiscal benefits of data centers than others. On the whole, I imagine those will be poorer areas that care a bit more about reducing property taxes and perhaps the fairly small but not insignificant job benefits of data centers. Estimates suggest a finished data center will create around 50 or so permanent jobs, though certainly hundreds during construction. Some of those communities will be more likely to accept them than maybe wealthy suburbs or other areas that don’t want them for various reasons. Now there are exceptions to that general framework, and I’ve written a bit about Loudoun County, which is a very strange case study.

Susan Pendergrass (06:02): Tell me about that, because I’m surprised that it’s the data center capital of the world given what I’ve seen in Loudoun County.

Judge Glock (06:08): I happen to live in Fairfax, Virginia, in part of the suburbs, and grew up in the general area. So it surprised me to learn not too long ago that Loudoun County, just a little further west from Fairfax, a county generally considered ex-urban and rural, and by one measure, median income, the richest county in America, with a median household income of around $170,000 a year. And yet despite this reputation as a wealthy Northern Virginia ex-urban community, what Loudoun has actually become is the global epicenter of data centers. By some measure, the amount of gigawatts used by data centers, the only place close is Beijing, and they’re not even close, at about half the level of what Loudoun and Northern Virginia have. As I showed in an article I wrote for City Journal that got some attention, that came from a particular confluence of events, a history of Defense Department buildup that left a lot of what’s called dark fiber in the area, which created what’s known as low latency, meaning data centers there could communicate with each other very quickly. That made it a good place to locate internet and communication-focused data centers, and today data centers focused on inference for AI, that is the answering of AI queries. That history made it a particular location. But the other side of the Loudoun story is that for decades, and especially in the last decade, the county just recognized the fiscal benefits. Right now data centers are paying for 45% of all taxes in the county, which is pretty remarkable.

Susan Pendergrass (08:12): How much are they taking in from data centers in person?

Judge Glock (08:15): For the next fiscal year, the estimate is that data centers will bring in $1.3 billion in county revenue. That’s about 45% of all local tax revenue. But maybe an even more startling way to frame it is that all local government uses and projects outside of schools are a little less than what Loudoun raises from data centers alone. So the local residents of Loudoun County effectively get free police, free firefighters, free animal control, free roads, and so on.

Susan Pendergrass (09:00): Have they lowered their property taxes?

Judge Glock (09:02): Yes. Thanks to this absolute boom in data center revenue, Loudoun not only has very well-appointed and well-funded schools, roads, and police departments, but they’ve also lowered their property tax rate pretty continuously for over a decade. It’s about 40% lower than it was in the early 2010s. Now that’s offset to some extent by increases in assessments and other rates, but it is much lower than what I pay over here in Fairfax, about a third lower. So data centers for Loudoun, which can kind of be seen as the first area to really embrace them, and home to one of the first significant data centers in America built by a now large firm called Equinox in the late 1990s, has worked really, really well for that county. I don’t think it’s necessarily going to work as well for every possible county that doesn’t have the same advantages Loudoun does, but it does show that for those that embrace them, there can be real benefits. It clearly hasn’t hampered the ability to attract high-income, well-funded residents with good jobs and a nice community. On the whole it seems to have been beneficial, even if you’ve seen growing opposition there as you’ve seen elsewhere.

Susan Pendergrass (10:46): Virginia horse country. But now it feels like the word is out and people are hearing that there could be health risks, that the buildings buzz, that they use all the water. I’ve seen some recently that have like some blue stripes and stuff on them, but the originals were pretty plain. The latest vote in Missouri was in St. Charles, and people cheered and wrote all these emails saying we don’t want them in our backyard because of health risks and noise. How valid are those concerns?

Judge Glock (11:22): Before I was celebrating the local diversity of responses to data centers relative to the alternative, but I don’t want to slight the classic concerns with local NIMBYism, the not-in-my-backyard movement, or the idea that local governments often try very hard to restrict new development of housing or other projects in their area, which can be a substantial burden for people looking for housing or hoping for jobs and fiscal revenue. On the whole, I think the competitiveness of local governments will help wash that out. If St. Charles or another county refuses to build a data center, it’s often not too difficult to find another county willing to accept one. But I do think a lot of this anti-data center hysteria is driven by people with not just local concerns, which can be legitimate though to my mind often vastly overblown, but with a general anger at technological civilization and AI writ large. A lot of that has been strangely channeled into specific local opposition to data centers. That old leftist slogan of think globally and act locally presents a problem here: a lot of local issues don’t really map well to global concerns about climate change or AI. If someone has an issue with AI and they ban a local data center, that is in no way going to stop AI. Stopping a data center nearby is not going to stop the revolution. It will barely even slow it down. There is a lot of generalized opposition to modernity and technology that gets channeled into opposition to local data center construction, which is totally irrelevant to that debate. As for the actual local concerns, when I was reporting on the story for Loudoun, I spent some time driving around and checking out these data centers. For those who have not seen one, or frankly a park of them, it’s a pretty amazing sight. These things can be huge, nearly approaching a hundred feet tall, very solid concrete boxes, not often the most beautiful structures you’ve ever seen. The trend now is placing blind windows in them randomly to make them look better, though depending on your preference that may or may not help. I think a lot could be done to address the aesthetic concerns. Those are real. If you look at some parts of Loudoun and elsewhere, there are data centers built right next to housing subdivisions, and it can feel uncomfortable to have a looming concrete block right next door. The other local concern I think is somewhat legitimate but again overblown is the noise. Data centers, mainly because of their cooling systems, emit a fairly regular hum. It’s a low frequency, low decibel hum, but at a low frequency it can go through walls and subtly shake things. It can be irritating. I personally would not like a low frequency hum right next door. But the solution, as with the visual impact, is simply to push them back a bit. This is not like a local school that needs to be right next to a subdivision. If you’re talking a few hundred yards down the road, you’ve pretty much solved most of the hum and visual impact issues, especially if you surround it with some trees or berms or other methods to both hide the structure and limit the noise. Those two issues, the noise and the visual impact, are real. I understand why people are concerned, but they can be and have been easily addressed. In most of the debates you see, that’s not really the issue. It’s these generalized concerns about AI or false concerns about water.

Susan Pendergrass (16:03): What about the use of energy?

Judge Glock (16:19): Again, to some extent this is another local versus global problem where the local energy use of a data center is not really going to change the price people pay on their local residential energy bill. Most energy here in Virginia and elsewhere is part of a big interconnection, which is a market where different energy producers and power plants share electricity across large transmission lines. The price for electricity, besides state-level mandates, laws, or environmental regulations, is usually determined in that general market. Yes, a data center will drive up electricity costs somewhat in that general market, but it’s not necessarily a substantial driver of that. One new data center will have a very minimal impact on anybody’s bills across the whole region and will have no real effective impact on somebody’s local energy bills. To some extent, data center builders have also been doing a lot more work to construct what’s called off-the-grid or behind-the-grid energy production attached to the data centers. That can be problematic because of increased noise, even in Loudoun and elsewhere where a lot of places just have backup diesel generators that can produce a loud crack when the backup energy turns on, since data centers want to be running constantly. But in general, as before, you have very localized concerns about noise that you want to address with very localized attempts to limit those impacts, either through distancing the data center or finding ways to cover it and limit the noise it emits. The electricity issue is real in the sense that demand for electricity is going up because of data centers, and as economists like to say, supply is inelastic, meaning supply of energy is not going to ramp up as quickly as demand. That means prices are going to go up a little bit nationally because of that. But as long as the value of these data centers is there and people are going to build them, they’re not really going to have a meaningful impact on local electricity prices, and the data center builders are going to find other ways to get electricity and make sure that generation capacity comes online.

Susan Pendergrass (19:28): Missouri is building these two massive data centers not far from our one nuclear plant, and I know that’s something that has been discussed. When I hear that Loudoun County was the first to do this in such a massive way that they could bring in half of their income from data centers, it feels to me like when Colorado legalized cannabis and was the only state to do so. They took in so much money that residents got money back on their income taxes, and every other state said they were going to be just like Colorado. But Colorado was the one that did it first. Maybe Loudoun is the one that did it first with data centers. So now when a community brings in a data center, it’s not going to have the same impact it had in that first wild test case that was Loudoun County, right?

Judge Glock (20:18): I think that’s correct. I would note though that for some smaller communities, especially small rural communities with relatively small populations, such as some of these Texas counties, a single data center can become a third or more of the city’s or county’s budget overnight. So they can have a huge impact on smaller and poorer areas. But do most data centers as they’re built today have the huge fiscal impact that Loudoun got? Absolutely not. The other side of the fiscal story, though, and one that will apply more universally, is that data centers require very little in the way of services. When a city allows a new subdivision or apartment building, it gets more property taxes but also has to pay for schooling for the kids, roads, fire departments, and all the rest. When a city allows a new office park, there are similar property tax benefits but fewer service costs than residential development. According to one estimate I saw, for every dollar a typical office building or commercial retail project generates, a city spends about 25 cents on actual services to it. For data centers, because there’s basically no one in them, that number drops to about four or five cents. They basically need nothing. As I talked to some of the local officials in Loudoun, they said these things don’t send kids to school, they don’t even put cars on the road. There’s basically no impact on anything else. Once it’s built, it just sits there and throws off property tax revenues. No trash pickup, no breaking up fights at a local bar. It’s just money that keeps flowing in. So even if the property taxes aren’t as massive as they are in Loudoun, local communities still aren’t going to have to worry much about services, and they’re still likely going to see a big net benefit. Some people point out that data centers don’t offer many jobs over the long run, and a lot of industrial projects get approved because of job creation. But the flip side is that very few jobs also means low services and low impact. A big concern with local communities approving projects is traffic, and data centers just don’t create much of it for their size. So yes, other counties are not going to get the kind of deal Loudoun got and still is getting, because it remains the epicenter and data center builders want to build next to other data centers. But they are going to get a project that really doesn’t cost much of anything, still throws off at least some money, and doesn’t really burden local communities as long as it’s placed ever so slightly out of the way.

Susan Pendergrass (24:16): That brings me to another point. I’ve read that there are a lot of very smart engineers working on the problem of AI inference and how much energy and space it requires, and how to make it more productive. Eventually I think they’re going to solve this. We used to have server rooms that every business kept cool, and then everyone ended up with a laptop or even a phone. Eventually I think people are going to address this problem of requiring so much physical space to do what we need to do. I wonder if in a decade we’re just going to have empty white blocks sitting around because it’ll be too expensive to demo. What do you think?

Judge Glock (25:08): It could happen. You mean the data centers will be depopulated of their servers because they’ll be so miniaturized. That’s true, and it could be. To some extent, counties like Loudoun that have benefited massively from these data centers can and have set up rainy day funds, similar to counties that get a sudden oil influx, to say that if this ever starts to peter out, they’ll still have a long-term benefit they can continue placing into their budget and at the service of their residents. Right now I think we’re so far away from a potential data center bust that it really shouldn’t be a concern. As I’ve also pointed out, right now about one and a half percent of our whole economy is spent building data centers. This is just from basically zero just a few years back. This is a wild building boom, absolutely wild. We’re talking hundreds of billions of dollars a year. We need, if anything, to make sure that people can build out those data centers to do the other things that the AI revolution is going to require and demand, no matter what local opposition one county or another expresses. When you talk to people in the industry, the consensus is that we just can’t even build them fast enough. If very smart companies and very smart people are willing to invest hundreds of billions of dollars a year in data centers, and when I say data centers I mean mainly the servers and computers in them, I think they know it’s going to be a good return.

Susan Pendergrass (27:09): Well, it’s going to be interesting to see it play out in Missouri, because there’s definitely been backlash coming through the local town councils and the voters have been pretty loud in some areas. Have any Virginia counties banned them that you know of?

Judge Glock (27:29): Virginia has not only been the epicenter of the growth of data centers, it has been the epicenter of the opposition to data center movement as well. There is a group, something like Data Center Reform Watch, that has been monitoring local opposition. You’ve seen a bunch of counties take pretty strong steps against new data center construction. I forget if they’ve gone all the way to a formal and complete ban, but you definitely have votes in major counties either to block individual sites or to ban them from large swaths of the county. My take is that some other county is going to want and find ways to get those data centers, and when some of these counties realize they may have gone a little too far, they’re going to look at ways to pare it back and focus more on where to place the data centers rather than banning them outright and everywhere. I really struggle to find the logic in a local community banning a data center that’s going to be two and a half miles from anybody else. Frankly, as weird and big as they are, are they that different from, say, a local warehouse? A warehouse has trucks coming in and out all day, spewing pollution. One of these fulfillment centers is a big concrete box just like a data center, but with all that traffic on top of it. Data centers just seem much less problematic in that regard. In some sense they’re like a warehouse without all the trucks. If not for this huge generalized concern with AI, which is a separate debate, there doesn’t seem to be a lot of logic to just banning them completely.

Susan Pendergrass (29:42): Well, it is early days. I would love to have you come back again to talk to us when the dust settles a little bit, especially in Missouri. One of the first places I remember reading about a ban was Festus, Missouri, and now there are more. I’m also hearing about some of the biggest data centers going in there. So we’d love to have you back.

Judge Glock (30:02): That’d be great. I look forward to it.

Produced by Show-Me Opportunity

The post Are Data Centers Good for Communities? with Judge Glock appeared first on Show-Me Institute.

On December 2, Jabal Companies and Calvary University filed a federal complaint alleging that the City of Belton discriminated in rejecting a proposed 252-unit affordable housing project on city-owned land. The plaintiffs argue that public opposition included racially coded language and that the city council’s decision violated the Fair Housing Act by relying on stereotypes about prospective tenants.

The project was modest in scale, encompassing just over eight acres near Westover Road and Bong Avenue, across from Calvary University and adjacent to a public golf course. Plans included a mix of one-, two-, and three-bedroom apartments, along with amenities such as a pool, playgrounds, and a community clubhouse. The site had remained undeveloped for decades.

Belton’s own community development staff had described the parcel as “an underutilized property not being used for its highest and best use.” The city was expected to contribute nearly seven acres, with Calvary selling an adjacent one-acre parcel. Jabal Companies had already secured low-income housing tax credits and begun engineering and design work.

Public opposition quickly emerged. During rezoning hearings, residents raised concerns about crime, school overcrowding, and declining property values—common themes in debates over subsidized housing. According to the lawsuit, many of these objections, and the council’s response to them, reflected coded language around race and socioeconomic status.

Whether the legal claims succeed remains uncertain. But from a policy standpoint, this case illustrates a broader challenge: what political scientist Francis Fukuyama termed a “vetocracy,” in which a small number of actors can block change, even when there is widespread recognition that change is necessary.

Across the country, similar dynamics play out in neighborhood meetings, zoning boards, and advisory councils. These forums are intended to enhance democratic participation. In practice, they often amplify the voices of politically engaged homeowners who oppose new housing near their properties.

In Belton, the developers spent months working with city officials and cleared several early procedural steps. Yet because no binding approvals had been secured, a single up-or-down vote by the city council effectively killed the project—despite prior staff support and what the plaintiffs contend was a complete and compliant application.

These decisions carry real consequences. Projects that are blocked or delayed leave more families searching for housing that doesn’t exist. Each additional layer of discretionary approval adds uncertainty and expense, discouraging developer investment.

The current system also distorts the market. Developers recognize that affordable housing proposals often face the most resistance and may instead pursue higher-end projects with fewer political risks—or leave the market altogether. Or, as is too often the case, developers seek public subsidies to offset the additional costs of delays and red tape. In contrast, cities such as Raleigh, North Carolina, which have restructured local review boards and relaxed zoning restrictions, have seen measurable increases in “missing middle” housing options such as duplexes and townhomes.

Community input remains essential, and many developers are willing to engage with residents. But Missouri’s approval process, which features duplicative reviews, ambiguous standards, and politicized hearings, is simply too burdensome.

The post Legal Challenge over Belton Housing Project Highlights Flawed Approval Process appeared first on Show-Me Institute.

The first zoning example is in Des Peres, where the owners of a wellness and substance-abuse treatment center want to operate on the site of a recently closed hospital. Let’s repeat that. A healthcare-related business wants to open on the site of a former hospital. In a rational world, the City of Des Peres would do nothing more than say, “Welcome to Des Peres.” But, alas, nothing is ever easy. The Des Peres Board of Adjustment has decided that a wellness and treatment center is not a hospital and denied the application and permits to operate. Furthermore, city officials have said the company seeking the approval cannot appeal the decision, as it doesn’t own the property yet. The company can appeal once it finalizes the purchase of the property, but then it will be forced to make a very large investment in the site without having any idea if it will be allowed to use it after purchase. This is, of course, all completely insane.

I am not adamantly anti-zoning. Nobody here is trying to put a chemical factory into a neighborhood (or some similar hyperbolic example anti-growth NIMBYs usually make). This is a wellness and treatment center that will be located where a hospital was. The fact that the city can deny any part of this is absurd.

The other zoning example is nearby on the border of Chesterfield and Wildwood. Here, a small, tightly knit African-American community has lived for over a century, and the land has become very valuable over recent decades as the suburbs have expanded. The family that owns most of the land wants to sell its largely undeveloped property and build a lot of new, large homes there, which is exactly what has happened in the surrounding area for the past 40 years. Not so fast . . .

Among the many impediments the family is facing is the opposition of neighbors. Here is a great quote from the public hearing by an opponent of the zoning change to allow the redevelopment:

“This would certainly be a substantial change to the character of this entire area,” resident Chrissy Jurkiewicz told the city council at its Dec. 1 meeting. “The landscape would be forever altered.”

Come again? What does the speaker think happened 20 or so years ago when her own subdivision was built? Did her own house and all of her neighbors’ homes somehow not “forever alter the landscape?” Did Osage Indians roam the area in the early 1800s and see a bunch of empty houses in her neighborhood and wonder why nobody lived in them?

A while ago, the City of Chesterfield approved rezoning to redevelop the property, but the City of Wildwood (remember, it’s on the border) rejected the rezoning precisely because the Chesterfield change was “too permissive” and would “overdevelop” the land. The entire area has changed from farmland to subdivisions over the past 50 years, but a bunch of Wildwood officials who live in those new subdivisions get to tell this family that their sale would “overdevelop” the land. This is infuriating, and it’s denying this family the right to the prosperity it has earned.

Does this mean cities should have no say at all in these zoning changes and redevelopments? No. For instance, in the Chesterfield case, I think the nearby residents have legitimate concerns about water runoff if the higher land above them were to be developed. But that’s not a reason to deny the proposal; that simply means the cities should ensure a plan to address such possible harm is included. As for the eternal concerns about things such as increased traffic, cities (and counties) can use the increased taxes generated by the development to fund the infrastructure improvements it may necessitate. We used to allow people to build, and we used the expanded tax base to fund the improvements we needed. Now we either reject it or subsidize it. (Yes, I’m exaggerating, but the point stands.)

It’s great that we have more liberal city and county zoning rules in Missouri than the rest of the country. However, these examples show that there is additional room for improvement.

The post We Still Need Zoning Reform in Missouri appeared first on Show-Me Institute.

In 2022, Maryville University planned to redevelop the Woods Mill Center into a complex featuring an e-sports arena, among other amenities. While the plan faced substantial public backlash, it was recommended to the board of alderman by the Town and Country Planning and Zoning Commission. However, Maryville ultimately withdrew the proposal in 2023. The school was hesitant to spend any more money on a plan that it felt was likely to be denied by the board.

Earlier this year, McBride Homes submitted applications for rezoning and preliminary site development plan approval to redevelop Woods Mill Center into an 80-home development. Unlike the Maryville proposal, McBride’s “Woods Mill Crossing” received significant public support, especially after the plan was revised to have slightly fewer homes in response to public concerns. Nonetheless, Town and Country’s Planning and Zoning Commission failed to recommend approval of the rezoning and preliminary site development plan.

After discussion during multiple board of aldermen meetings, McBride withdrew its plan. According to reports, McBride wants to revise its plan to address some officials’ concerns and resubmit on July 19.

McBride’s biggest hurdle? Density. The St. Louis Post Dispatch reports that “the new neighborhood would have been the highest density residential development in the affluent west St. Louis County suburb.” Members of the Planning and Zoning Commission think increased density would hurt the character of the city. But should increasing density in Town and Country really be met with such consternation?

Increases in housing density are shown to have various positive impacts. Higher-density housing can make providing services more efficient and improve housing affordability. For example, while the median home price in Town and Country is around $1 million, the homes in the proposed development would be priced between $600,000 and $700,000. In addition, there are environmental benefits to higher-density housing including decreased automobile usage and, of course, less land usage. On top of that, the Woods Mill Crossing proposal is to redevelop already developed land, meaning there won’t necessarily be a loss of green space, as is often the concern with new developments (see another of McBride’s developments in St. Charles).

McBride’s proposal has the potential to make smart use of underutilized land, something that many residents want for the city of Town and Country. We will see if officials accept a revised proposal and the benefits of higher-density housing are realized in this community.

The post If at First You Don’t Succeed, Try, Try Again appeared first on Show-Me Institute.

The total amount of real property associated with all solar energy projects that are established in any one county in this state shall not exceed an amount greater than two percent of all cropland in a county.

This bill highlights a legitimate concern. Solar farms take up a significant amount of space and require extensive transmission construction as well.

Nonetheless, interfering in the free market and banning the sale of land for solar energy projects seems like a step too far. While there are ample concerns with solar energy, why is the state government limiting property rights and picking winners and losers in the energy market?

If our state is concerned with the rapid growth of solar, the future reliability of our energy grid, and land use, why not take the shackles off the operation of the free market in energy? The Missouri Legislature could loosen restrictions around the nuclear industry. A traditional nuclear energy facility has a very small land footprint, requiring about 1.3 square miles per 1,000 megawatts of energy.

To generate the same amount of energy as nuclear, less powerful silicon solar photovoltaic farms need on average 63 times more land.

As I have written before, Missouri could do this by setting a solid foundation for nuclear and eliminating government restrictions on the industry. But what we don’t need is more government interference in the free market.

The post Limiting Solar Farming? appeared first on Show-Me Institute.

Often synonymous with Airbnb or Vrbo, STR properties are units intended to be rented out for less than a month. These properties provide a place to stay for people passing through and visiting St. Louis, encourage competition within the lodging industry, and bring revenue to their communities. Some owners, however, have been renting to unpredictable tenants, leading to out-of-control parties, violence, and even murder.

STR regulation has become common in major cities such as New York and London. Even some Missouri municipalities are adopting new rules. Citing similar frustrations to the City of St. Louis, St. Charles just placed a moratorium on new residential STRs in most of the city for a year.

The proposed regulations in St. Louis would, among other changes, create a permit and punishment system to hold STR operators accountable, require a Graduated Business License for owners renting out property they do not live in and a permit for individuals who rent out their primary residence, require a 24/7 available contact for the STR, and limit individuals to four permits for units they do not live in.

While some regulations on STRs are warranted due to the disturbances and dangers they can cause, parts of the proposal appear excessive.

The limit of four STR properties per owner seems like a solution in search of a problem. The city might have included a limit to prevent STR owners from operating many units (so many that someone could not realistically operate them alone) and ensuring that there is always some level of oversight for the STR properties. However, the requirements for each rental (24/7 contact, licenses, permits, punishments) should be more than enough to keep STR owners in check without more regulation. If someone can properly run several STRs without harming the community, why is the government trying to place further restrictions on them and create incentives to subvert the law?

More troubling is requiring permits for owner-occupied units. An STR is considered an owner-occupied unit when a property owner rents out a space where they live (such as a finished basement, or a garage converted into a studio). From the bill:

Applicants for a Short-Term Rental permit for an Owner-Occupied Dwelling Unit shall submit, on an annual basis, an application for a Short-Term Rental permit to the Building Division. The application shall be accompanied by a non-refundable application fee in the amount of $150.00. – Board Bill 33, Page 5, Line 19

Not only does this degrade a means by which countless people have been able to afford academic programs or help lodge friends and family, it might run afoul of state law. Missouri Statute 71.990 limits restrictions on “home-based businesses” and may conflict with the proposed bills. St. Charles’s legislation might not be legal either. It is likely that courts will have to sort out the interplay between Missouri statute and local ordinances.

Overall, these bills appear to do a good job of regulating non-owner-occupied properties. They would give communities more power in mitigating problems with STRs while not being restrictive on those who rent their property. The proposals for owner-occupied properties, however, could be improved.

My colleagues Avery Frank and David Stokes discuss their opinions on the proposed bills here.

The post On Short-Term Rentals appeared first on Show-Me Institute.

The debate over municipal limits on renting out your own property is happening all over Missouri, but most immediately in Lake Ozark and the City of St. Louis. In Lake Ozark, which currently bans short-term rentals in much of the city, the city council is voting Tuesday night on amending the zoning laws and allowing short-term rentals in certain parts of the city. I am opposed to municipalities having a comprehensive ban on short-term rentals. In a tourism-driven area like the Lake, it makes even less sense to have an outright ban.

The arguments for allowing short-term rentals are that: (a) you have right to rent out your own property if you wish to (b) allowing more rental options is good for the tourism industry and local economy; and (c) complaints about the rentals are often overblown, and police or regulators can handle such problems as they arise.

I agree with all of that—but even if you believe with all your heart that zoning violates property rights, the courts have decided that zoning is legal. So, if zoning regulations where you live say you can’t rent out your property, you may need a better argument. Point (b) is hard to dispute, and while point (c) is also true in my opinion, I understand why homeowners next door to the property that is the exception—with lots of parties, noise, crime, etc.—may want their city to take more proactive action.

The legitimate arguments against allowing short-term rentals are also straightforward. Too many of them do involve large parties and general mayhem. More importantly, one has to have sympathy for the property rights of the people who bought a home or condo under existing zoning laws that limited or prohibited such rentals, and are now seeing people trying to change (or governments ignoring) those laws. I support allowing short-term rentals, but I won’t be cavalier about the property investments people made with the understanding such things are not allowed.

It’s a tough issue. I think short-term rentals should be allowed in a tourist area like Lake Ozark (and the entire Lake region), but I understand that limits and rules may be necessary. In more residential locations, tighter limits may be appropriate. However you look at it, this issue isn’t going away in Missouri anytime soon.

I’ll be writing more soon on the role homeowners associations can play in this issue and how short-term rentals should be taxed.

The post Short-term Rentals, Long-term Questions appeared first on Show-Me Institute.

It is often taken as gospel by some local (and many national) media outlets that “affordable housing” is elusive for Americans. While that is certainly true in places such as New York and San Francisco, high housing costs are often due to bad government policies, not just housing demand. A city with a solid economy and ample developable property can still experience an affordable housing problem if policymakers distort their housing markets with unwise housing policies.

For instance, rent controls freeze rents for some below market rates and can disincentivize the improvement of existing rental properties. It also deters investments in new housing that may be more affordable to the public and can put downward pressure on the rents of older properties. Government meddling in the housing market could be dissuading market participants from meeting each other’s needs.

Rent controls aren’t the only supply-limiting policy that can reduce affordability. Washington, D.C. is one of the most expensive cities in the country to rent or buy a house, and that’s in no small part due to government interventions such as the 110-year old Height Act. The Height Act, a federal law, caps buildings in the nation’s capital at 160 feet, making it impossible to convert low-lying properties into high-density high rises.

For perspective, the tallest residential building in Kansas City, the Power and Light Building, stands at 481 feet—three times Washington, D.C.’s height cap. The reason for the D.C. law is aesthetic—to keep buildings in the city shorter than the Capitol Building—but the practical effect is to drive up the price of available housing for all residents by reducing housing supply. Again, this isn’t the market failing; it’s the government failing.

State and local governments can also impose costs on the provision of housing through other regulatory practices. For example, land use limitations prohibiting multi-family dwellings on single-family lots, particularly in dense urban settings, can prevent obsolete structures from being replaced with housing consistent with present day housing stock needs. Needless red tape slowing the construction of new housing stock or slowing its development can also be a barrier to lower prices.

For its part, the City of Kansas City doesn’t have rent controls, nor are its other regulatory excesses terribly pronounced. There is also plenty of developable land throughout the region, even if such burdensome limitations were in place in Kansas City proper. Knowing all of this, the basis for Kansas City’s “housing crisis,” if it exists, would not seem to be closely correlated with government policies regionwide.

If Kansas City has an affordable housing problem, could it have more to do with how it’s defined? More on that in the next blog post.

The post Part Two: Does Kansas City Have an Affordable Housing Problem? appeared first on Show-Me Institute.

The power producer Invenergy canceled plans for a wind farm after the city of Monett expressed concerns over the turbines’ effects on its regional airport.

But what do wind turbines have to do with airplanes? Wind turbines can create turbulence several miles away from their site, generating hazards for general aviation airplanes and airports. Additionally, the turbulence created from wind turbines can pose problems for radar scanning and airplane communication systems, while the sheer height of some turbines can obstruct flights if they are located close to an airport.

Local naturalists also expressed concern that turbines would jeopardize eagles and an endangered bat species. The conflict between green energy and wildlife conservation has raged for years. Wind energy plants have come under serious scrutiny for killing hundreds of thousands of birds (including protected birds of prey) and bats annually. Many wind energy companies consider precise wildlife casualty details to be a trade secret and have sued to block their public release.

This tug-of-war is emblematic of a struggle developing nationwide between energy planners and local communities. Some communities welcome wind energy development, while others like Buchanan County have banned it entirely. In the Northeastern United States, many developers are building wind energy projects in the state of New York, where the governor created a rule that allows the governor’s office to override local opposition to wind energy project locations. Many communities have declared themselves “sanctuary towns” in opposition and plan to refuse such projects.

As I wrote earlier, land use is an important part of energy production and cannot be overlooked. Green energy is not free energy, as each energy source has its own set of tradeoffs.

The post Local Wind Farm Project Highlights Electricity Generation Tradeoffs appeared first on Show-Me Institute.

A study released earlier this year from the Brookings Institute drew attention to an often-overlooked aspect of electricity generation—land use.

The determining factor for the amount of land an energy source needs for its operations is power density. Power density measures the amount of land needed to produce a given amount of energy. Each energy source has its own power density. Fossil fuels are quite power-dense by nature, whereas wind and solar power are less dense by several orders of magnitude. In fact, wind and solar energy can require up to 100 times more space than a natural gas plant to generate an equivalent amount of electricity.

The power densities of several forms of electricity generation can be seen below. The higher the median power density (red dot) is, the less space it takes to generate electricity.

These results have important implications for Missouri. Land use for energy purposes was a contentious topic this past legislative session, with overt and covert attempts to block the developers of a wind energy transmission line from using eminent domain to acquire land.

Land is scarce and has competing uses. Currently, however, Missouri’s Renewable Energy Standard mandates an increasing amount of electricity be generated by the least power-dense sources. The Standard requires 15 percent of electricity come from renewable sources by next year, and an initiative petition circulating proposes to increase that number to 50 percent by 2040. Meeting these mandates would require either a significant buildout or utilities buying power from out of state.

The scholars who created the above graph note that “increasing the U.S. renewable energy portfolio will increase land-use, presenting challenges for other sectors such as agriculture.” This concern is especially relevant for Missouri, as agriculture, forestry, and related industries are among Missouri’s top industries and constitute 10 percent of the state’s employment. Missouri is one of the top states in the country for farm operations, soybean production, and beef cattle production, with farmland constituting two-thirds of state land area.

Missourians should be wary of green energy mandates that require massive land use. Shouldn’t land use  be driven by fair competition and markets, not government mandates?

The post Is This Town Big Enough for the Two of Us? appeared first on Show-Me Institute.

The proposal is for BWB Sports to lease the land that now holds the Olivette Community Center and athletic fields around it. (My kids have played many team sports on those fields.) The company wants to build ice rinks, lacrosse fields, and more, and operate it as a private entity. BWB officials do not appear to be asking for a subsidy (I’ll amend this post if they are), which is one of the reasons I support this. However, the fact that they are going to lease this land will likely limit the expansion of the tax base, as the city will still own the land. (There likely will be some tax base expansion from business equipment taxes, concession sales taxes, etc.) Not to mention the fact that the company will pay Olivette to lease the land.

So, basically, you have some residents of Olivette telling me that the park and community center really are not in very good shape and desperately need an upgrade. While others – the ones showing up at the meetings attacking the proposal – are demanding that the park be protected and the land preserved.

There is no doubt about one thing – this is not a half-measure. This is a major change to the property that I think would significantly upgrade the facilities and use of the land. The only thing the proposal is missing is an outright sale of the property, which is politically impossible and legally complicated. So they are just leasing it, but I doubt that means much to the opponents.

I hope that Olivette officials can see the long-term benefits in this proposal. But, unlike other NIMBY situations, I see some merit in the residents’ concerns. This is not like recent disputes in Brentwood, Maryland Heights, or South County. I understand why some neighbors are objecting. As I said in my study about privatization in Missouri, park privatization proposals are very contentious for good reason. Outsourcing the management of existing park facilities is not that controversial, but wholesale changes to parks themselves are.

This is the latter. I hope it passes. I think the long-term benefits are significant for Olivette and Saint Louis County. This plan would increase use of the property, grow the tax base (somewhat), inject private money into Olivette recreation instead of counting on tax dollars, and more. But I am not going to attack the opponents as NIMBY-based obstructionists, even the Keynesians among them.

The post Great Idea Will Be Hard Sell In Olivette appeared first on Show-Me Institute.

Read the full testimony: .

The post The Next Step In Flood Plain Protection And Tax Increment Financing Reform appeared first on Show-Me Institute.

Alwal Moore owns a 10-acre property near Tapawingo National Golf Course. He had plans to construct a private library on the property that would offer cultural classes such as violin and yoga. But the streets leading to his property are privately owned, and homeowners were not happy with his plans.

Resident Chris Rothrock said the library “will be nothing short of disruptive to all of our lives and it presents a significant safety threat to all of the children in our neighborhood.”

Overwhelming opposition to the project, including a petition that 68 percent of residents on surrounding streets signed, prompted the Sunset Hills Board of Aldermen to reject Moore’s private library proposal. But why was the government involved in the first place?

As a private neighborhood, these homeowners have a right to stipulate how their streets will be used and who will use them. Moore, as a private property owner (not part of the surrounding neighborhood associations), has a right to do what he wants, to a certain extent, with his property.

Zoning laws already allow the construction of a library in a residential neighborhood. I do not see a need for additional government approval here.  If private property owners oppose the project,  that is a matter for them to take up with Moore without government involvement.

Moore should be able to work out a deal with area residents to get them on board, such as contributing toward their annual maintenance fees. Because, what good would the library be if homeowners decided to close their streets to public traffic?

The post This Land Is My Land appeared first on Show-Me Institute.

Eating inside a cargo container sounds even less appealing than Choo-choo Chewies. (Unless it means I get to hang out with the Boxcar Children.)

As difficult as it may be to believe, there is a new project in Saint Louis that could make dining in cargo trendy and charming. Washington University in St. Louis and the City of Saint Louis named Bistro Box, “a small business incubator that transforms surplus cargo containers into a compact restaurant and culinary destination,” as one of the finalists in Washington University’s Sustainable Land Lab competition.

The Sustainable Land Lab competition invites teams to design innovative projects that transform vacant lots into assets. The City of Saint Louis owns more than 8,000 vacant lots that are just sitting there, deteriorating and underutilized. Show-Me Institute policy analysts have offered suggestions in the past about how the city can work to get more of those lots back into productive use. The Sustainable Land Lab competition is a great method to put these vacant parcels in the spotlight, and proves that innovators and entrepreneurs have exciting ideas to utilize this vacant land.

This is the first year of the competition. I hope that it will be successful in transforming vacant land and will shift the way Saint Louis treats that land. The best outcome of this project is that it would not only help improve blighted areas of the city, but encourage others to take on similar projects. Revitalization lies in the hands of eager residents who care about the community. In the past, the Saint Louis Land Reutilization Authority (LRA) has not been willing to allow development to occur organically, preferring to hold land for development that the agency chooses. But the government cannot predict what will be the best use of the land (remember Pruitt-Igoe?), nor will it come up with the most creative solutions.

Anything — including eating train-track chicken in an abandoned cargo container — is preferable to the city holding the land for decades.

The post Transforming Vacant Land appeared first on Show-Me Institute.

The legislation has out-of-state advocates. Dan Kildee, the head of a nonprofit that has advocated for land bank legislation in numerous states, is quoted in the Star extensively. Kildee told the Star that a land bank could acquire abandoned property in order to keep it out of the hands of private speculators. This statement ignores the fact that if a land bank is acquiring property because it thinks a better buyer will come along in the future, then the land bank itself will be acting as a speculator.

We have seen this model fail in Saint Louis. The Saint Louis land bank, also known as the Land Reutilization Authority, has existed for more than 40 years. In that time, it has amassed about 10,000 parcels of vacant land. My research showed that during the past eight years, the Saint Louis land bank rejected almost half of all formal offers to purchase its property. The most common reason for rejection was that the property was being “held for future development.” Sadly, the hoped-for development rarely materializes.

Instead of taking heed of the 40-year-old failure in our own state, legislators are willing to bet Kansas City’s future on glorified accounts of a land bank’s operations in Michigan. That land bank, the Genesee County Land Bank, has been trying to sell vacant property for less than a decade. When I have testified about the failure in Saint Louis, legislators and lobbyists quickly state that Saint Louis is “different” than Kansas City. Why, exactly, is the short-term record of a land bank that is more than 500 miles away more relevant than the long-term failure of a land bank in our own state?

The post Legislators Are Ignoring 40 Years Of Failure appeared first on Show-Me Institute.

The Facebook page for Save The Historic Pevely Complex references numerous prior plans to rehab the complex using historic tax credits (emphasis mine):

The Pevely Dairy complex is on the National Register of Historic Places. Under our city’s preservation ordinance, such buildings should not be demolished if they are structurally stable and have rehabilitation potential. The Pevely buildings are both, as evidenced by the numerous plans to rehab them using historic tax credits prior to SLU’s purchasing the site in August 2011.

A search of the Missouri Accountability Portal and the Show-Me Living tax credit tool, however, indicates that no development tax credits have been issued to SLU for this project. Imagine that. A new development project in Saint Louis apparently not in need of state tax credits!

As discussed in my previous post on this topic, the goals of social progress and economic growth direct our attention to the future. While a healthy respect for the past is not a bad thing, given the current state of the city’s economy, a new ambulatory care center is more important than a brick smokestack and a declining building. The sentimental value of the Pevely site and its smokestack, while endearing, pales in comparison to the value of a modern medical facility to the Saint Louis community.

So let’s continue to train our sights on the future, and leave the image of the Pevely site to scrapbook photo montages and warm reminisces.

The post Putting Land To Productive Use appeared first on Show-Me Institute.

Our research showed in 2011 that the LRA had a track record of frequently rejecting offers to buy city property, often for no discernible reason. The agency would cite “lack of aldermanic input” when rejecting offers, or plans for “future development” that would fail to materialize.

I have written here about improvements to the LRA’s practices that were made in the wake of the publication of our research and the resulting media attention.

This month’s meeting went pretty well — most offers to purchase property were accepted or countered (meaning the LRA asked for a higher purchase price or change in contingencies). However, I still cannot help but think that Saint Louis City aldermen still have outsize influence over whether the agency accepts or rejects offers to purchase property.

An offer from Transformation Christian Church and World Outreach Center to purchase four properties illustrates this well.  LRA staff members recommended that the church’s offer be rejected. However, former Alderwoman Irene Smith (ward 1) spoke on behalf of the church during the meeting and managed to sway the commission. It seemed that the decision of whether to sell the property hinged on whether the area alderman was supportive of the sale.

Smith, speaking to the commission, noted that the church had spoken with Alderman Sam Moore, saying that after “swapping” some property with him, he had agreed to provide a letter supporting the sale of LRA property to the church.

But LRA Chairman Mark Wells initially would not recommend moving to sell the property, saying that “Based on the information we got from Alderman Moore, I think more discussion is needed.”

Smith responded: “We’re taken aback by that. We sat down with Alderman Moore.”

Ultimately, the commission moved to counter the church’s offer instead of rejecting it. And I am glad — the church has a history of purchasing, maintaining, and rebuilding LRA property.

But, I wonder: If the church has a track record of being a strong community resource and has the funds to buy the vacant city property, why does it matter what the alderman thinks? The LRA does not have to consider the input of an area alderman. The agency’s authority was established under state law, and the LRA law does not suggest that the agency consider the input of any political officials. Saint Louis government has implemented this practice by choice.

You can download the LRA’s meeting agenda (with a few of my notes) here.

The post Do Aldermen Still Have Outsize Power Over Whether LRA Sells Property? appeared first on Show-Me Institute.

The LRA side lot. Photo by Alex Ihnen of nextSTL.com

The lot, owned by the city’s largest landholder, the Land Reutilization Authority (LRA), is a small one: It measures 27 feet wide, which, according to LRA policy at the time, made it just a bit too large to sell it as a side lot. Side lots are just that — lots that are combined with an adjacent building in order to create a garden or yard.

The would-be buyer, Ihnen writes, is an exceptional developer with a history of quality renovations in the neighborhood:

The possible purchaser today is Grove Properties, LLC. Grove Properties has been completing high-quality gut renovations in FPSE for several years. Some properties have sold pre-completion and sales have continued to raise the ceiling on home prices in the neighborhood.

However, under the LRA’s policy at the time, the agency wouldn’t sell this lot to Grove Properties because it was two feet wider than the 25-foot maximum that the LRA had imposed.

This is not uncommon. A good example of this policy in action is that of Landy Cauley. Cauley, who owned property adjacent to 4233 West Belle Pl., attempted to purchase the lot in July 2006. The LRA turned him down, according to the agency’s minutes, “because the parcel does not meet the side lot policy of 25 front feet or less. The parcel is being held for infill development.”

Today, the property is still vacant and owned by the LRA. The lot, to the right-hand side of the building below, looks like it would be a great addition to Cauley’s current property (but I’m no city planner).

4233 West Belle Place. Image by Google Maps.

All that being said, it seems as though the LRA may be once again changing its side lot policy, slightly, for the better. Otis Williams, deputy director of the Saint Louis Development Corporation (SLDC) told Ihnen that the agency has now changed its side lot limit from 25 feet to 30 feet. This, combined with the LRA’s recent vote to reduce side lot prices, certainly could free up more of Saint Louis’ vacant city property for purchase.

Even better news is the possibility that the LRA will lessen its restrictions on who is allowed to purchase side lots. Under current policy, the LRA will sell side lots only to residential owner-occupants. As Ihnen reports, the LRA may vote to allow more people, such as apartment building owners and developers, to purchase side lots.

We shall see. If you are interested in seeing the LRA in action — perhaps in the process of making another policy change, in the direction of freeing up vacant city property for purchase — I encourage you to attend the agency’s next public meeting on April 27.

The post More Good News for People Who Want to Buy Vacant City Property appeared first on Show-Me Institute.

As I’ve written previously, the city’s Land Reutilization Authority (LRA) owns more than 9,000 parcels of vacant land, and isn’t selling most of it. Cheatham investigated two properties where the LRA had turned down great offers, for no apparent reason. To my (happy) surprise, Cheatham’s investigation led to the LRA re-evaluating its rejection of one offer to buy property: Anthony Barber’s offer to purchase 1252 Academy Ave. in order to develop the property into a restaurant. You can see 1252 Academy in the photo below.

Photo by Thomas Duda

According to Cheatham’s report, the LRA met with Barber today to reconsider his offer. The agency may, facing public scrutiny, accept Barber’s offer.

This is great news! If the LRA sells 1252 Academy, that is one less vacant eyesore, and one less property the city has to spend money maintaining — and those costs can add up. Furthermore, I am sure the neighbors of 1252 Academy will prefer living next to a restaurant rather than a vacant, boarded-up city property.

But the LRA’s decision to reconsider its decision on 1252 Academy makes me wonder whether the agency is open to reconsidering other offers it has rejected. According to Show-Me Institute research, the agency has rejected offers to purchase more than 2,200 of its properties. Only about a quarter of them were rejected because the agency thought the would-be buyer didn’t have the means to complete the project. The most common reason for rejection was that the agency was holding property for “future development.”

Of course, in most cases, that future development has yet to materialize.

Is the LRA open to taking a fresh look at some of the other offers it has rejected? As part of my research into the city’s landholding policies, I’ve worked to collect the data necessary to put together a list of other offers that might be worth reconsidering. It would be wonderful if the agency would seriously consider recanting some of its past rejections.

The post Is Saint Louis Now Open to All Development? appeared first on Show-Me Institute.

2003

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2010

The post LRA Meeting Minutes 2003 through 2010 appeared first on Show-Me Institute.