Susan Pendergrass speaks with Show-Me Institute Director of Municipal Policy David Stokes about his new paper in the Free-Market Guide to Missouri Municipalities series on planning and zoning. They discuss how fragmentation among local governments can limit overly strict zoning, how zoning rules affect housing affordability, and why “last house syndrome” poses risks for Missouri’s future growth. From accessory dwelling units and minimum parking requirements to the debate over multifamily housing, Stokes explains how smart reforms can protect property rights and keep housing costs down.

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Timestamps

00:00 Introduction to Planning and Zoning in Missouri
02:35 The Impact of Fragmentation on Zoning
05:24 Housing Affordability and Zoning Regulations
08:22 The Role of Municipalities in Housing Development
11:18 Challenges of NIMBYism and YIMBYism
14:21 Accessory Dwelling Units and Short-Term Rentals
17:00 Planning and Infrastructure in Missouri
19:57 Future Papers and Conclusion

Transcript

Susan Pendergrass (00:00)
Thank you, David Stokes, so much for being on the podcast this morning. You have a new paper out with the Show Me Institute. Well, it’s actually part three of an existing series on your free market guide to Missouri municipalities. And this one is on planning and zoning. So thanks for joining us to answer some questions about it. Great. I do have one question that I was just saying before we started recording. I’ve seen this paper a few times.

David Stokes (00:19)
Delighted to be here.

Susan Pendergrass (00:26)
And one thing that I noticed up front is that I complain about the number of school districts in St. Louis County and how fragmented it is. And other folks have also said similar things, too many small municipalities. But it seems to be the case that when we’re talking about things like planning and zoning and permitting and regulations, that can be a good thing. Is that right?

David Stokes (00:46)
Absolutely. Because it’s harder to enact comprehensive planning, zoning, major things like urban growth boundaries—the extreme things like an urban growth boundary that we don’t have in Missouri. But it’s harder to enact that the more governments you have to get in line to agree to it in the first place. So it’s definitely—I don’t want to say it’s a causation. I don’t think the data is there to—

Susan Pendergrass (00:47)
What?

David Stokes (01:14)
But it’s definitely a—I would say it’s a truism—that there’s a strong connection between the metropolitan areas that have less strict zoning around the country. And over the past decade, we’ve really changed a lot in American local public policy to realize the harms of overly strict zoning. Until the past decade or so, it was just sort of assumed that strict zoning was a good thing. So now that we recognize the harms of it, we see that the places like St. Louis—and to a lesser extent, Kansas City—that have more fragmentation. St. Louis by any measure nationally has extreme fragmentation, meaning a whole lot of local governments, be they cities or school districts or fire districts or streetlight districts. I mean, we can really get into the obscure ones here in Missouri, but the more you have of that, the less strict zoning you’re going to have. And then that results in lower housing prices.

Susan Pendergrass (02:00)
You—

David Stokes (02:10)
What is the good that comes from that in the end? I think there’s lots of goods that come from it and some harms too. But the real good—the point of this paper, and the good for somebody who doesn’t care about public policy or libertarian thoughts or anything and just wants to be able to buy a nice house at an affordable price—is: the less strict zoning you have, the more fragmentation you have, the more you see that in lower housing costs.

Susan Pendergrass (02:35)
Yeah, and if you were starting a business too and one municipality, let’s say Clayton, has really high restrictions on what you can build, where you can build a health office and be—I don’t know if they do or don’t—but then you could just simply go next door to the next place and pick a different place that has fewer restrictions.

David Stokes (02:52)
You can, and that does happen. One of the ways they’ve solved that dilemma in St. Louis County especially is they do a lot more code enforcement and permitting at the county level than at the municipal level. Because nobody wants to have to get—if I’m going to be a plumber—nobody wants to have a plumbing license in 88 different cities. So they do that at the county level. You get your county license and it’s good throughout all of St. Louis County. Now, there are good aspects of that—mostly that you have to get one license instead of 88, which is an obvious good—but it’s also subject to abuse as well. It’s sort of the counterargument to the benefits of fragmentation in that it’s easier for special interest groups, like in this case, say the plumbers union, to capture licensing in St. Louis County if they only have to dominate one board as opposed to 88 boards. So there are two different ways to go—there’s the good and then the part of it that might not be quite as good.

Susan Pendergrass (03:59)
Yeah, so you make the point in this paper that while St. Louis does not necessarily have a housing affordability issue—or maybe even Missouri—it’s still worthwhile for folks who are working at the municipal level, like if you’re working as a newly elected Board of Aldermen or newly elected county board official, to educate yourself on what is and isn’t possible to make sure that you avoid what you just described as the pitfalls of over-regulating.

David Stokes (04:28)
Absolutely. A lot of this paper is about—in the not very scientific term—sort of low-hanging fruit. Just because zoning in Missouri may be less strict than in other states… there’s actually, I discovered in researching this paper—I’d always understood and known that zoning in Missouri and in St. Louis and Kansas City was less strict than in many other parts of the country—but then I discovered that there is actually an index out of the Wharton Business School at the University of Pennsylvania that ranks metropolitan areas by zoning strictness. And St. Louis is the least strict for zoning of any metropolitan area in the country in this ranking. And Kansas City is sort of in the middle. But then you see that Kansas City on the Missouri side is closer to St. Louis, and it’s the Kansas side that is more strict and puts them in the middle. So we really do have not-strict zoning.

Susan Pendergrass (05:05)
That’s hilarious.

David Stokes (05:24)
And that’s a wonderful thing, but it doesn’t mean that cities shouldn’t make some of these reforms that are coming nationwide that would still benefit Missouri, such as abolishing minimum parking requirements, allowing smaller lot sizes, allowing people to build accessory dwelling units on their own property. It’s a great reform focus—from the Show Me Institute’s perspective—because these are changes that can be made that enhance people’s own property rights and what they can do with their own property, while at the same time giving people more choice. And in the long run, if you do more of these, you’ll help keep housing prices down even more for people. And in a good way—you’re not doing this through mandates or rules; you’re just saying we’re going to allow people to build even more. And I’m not against every limit on every property thing ever. There are some that are reasonable—particularly in Missouri we have floodplain limits on where you build that are very reasonable in many cases—but there’s still a lot of good stuff we can do.

Susan Pendergrass (06:33)
Yeah, I saw recently last week that in the upcoming election cycle, housing affordability is a top issue for folks. This is really bubbling up the list of priorities because it’s gotten so expensive and, you know, I keep reading about why people can’t afford to move, and they can’t afford to sell their home, or they can’t afford to buy a home. And certainly some markets—like you mentioned in the paper, like Portland—and you mentioned this briefly: Portland’s got a brown zone and a green zone, and you can’t build in the green zone. You have to stay in the brown zone, and it makes it very prohibitively expensive to build new housing stock in Portland, and the prices have gone up dramatically. We do not yet have that problem in St. Louis, but I know that it’s on a lot of people’s minds and certainly, statewide, we still have some concerns about having enough affordable housing for everybody. I do think it’s important to make sure that we don’t let regulation creep happen so that we find ourselves raising our prices artificially.

David Stokes (07:36)
And you see this in disputes in our exurban areas now in, say, St. Charles and Jefferson County—surrounding counties of St. Louis—and on the Kansas City side as well. Last year, for example, in St. Charles County, a big new subdivision was rejected in a wooded part of the county—I think it was near Weldon Spring. They’re also allowing some, but—

Susan Pendergrass (07:56)
Was it Weldon Spring, or what was that?

David Stokes (08:02)
And that’s the dilemma that people face: as places like St. Charles and Jefferson County grow and get more full, there’s going to be inevitable pressure from the people there now to stop new building. It’s called last-house syndrome: “Great, my new home here is great. Now don’t build any more because I got the house and it’s perfect.” You see that everywhere, and you understand the concerns. I try not to completely ignore the concerns of the folks, because they’re not always wrong—of course, we’ll go back to the floodplain issue—but you’ll have people worry. It’s the people there now: concerns about traffic and overbuilding and destruction of wooded areas and too dense and all those things. But you want people to realize that other people probably said the same thing before they built your house, and it was a good thing that people in most instances really said no to that, and it allowed that construction to continue. And I really want people to realize that.

Susan Pendergrass (08:34)
Yeah. That’s right. ⁓

David Stokes (09:00)
If we go—it’s not about any one subdivision, because look, there probably are certain instances in certain places where the new zoning is too dense, whatever it may be—it’s not that every rejection is always completely wrong. But if you start in Missouri making a pattern of this in the outer areas of Kansas City and St. Louis, where you start turning down a lot of these new subdivisions to preserve whatever it is that people moved out there for 20 years ago, then housing prices are going to increase in Missouri. They will increase substantially, and it won’t take that long if you really do stop the building. So that’s one of the takeaways from this paper: to the largest extent possible, we need to keep allowing the building of these new homes or apartments. And obviously a big part of the paper is that apartments should be generally allowed in more places too. That’s how we’re going to continue to have low housing costs, and that’s the benefit of it. It’s not about one subdivision in one space, but if it becomes a trend, it’s really going to be a problem—the trend being protecting it.

Susan Pendergrass (10:15)
Yeah, and the multifamily for sure. What are your findings around that? People don’t seem to want to have to look at apartment buildings. Is that right?

David Stokes (10:25)
They don’t—there’s just some natural rejection against it. And it’s frustrating to see. In some spots—I remember in the City of St. Louis; this is one where, when you lived in St. Louis, you lived near there—at the corner of Skinker and Delmar there was a proposal for a large apartment building right there, and it got a lot of opposition, and it has not moved forward. It was stopped. I hope it comes back because it’s a perfect lot for an apartment building. It’s just an empty lot—it was a chicken restaurant for many, many years and a popular one—but it’s been vacant forever. And it’s right near public transit. So it’s the perfect idea where you should be able to build there, and you shouldn’t have generous or extensive—

Susan Pendergrass (10:59)
An abandoned empty lot, right?

David Stokes (11:18)
—parking requirements for those buildings, because one of the projects—

Susan Pendergrass (11:21)
That’s what people were kind of freaking out about though, was the parking. Like, where are all these cars going to go? And there was one across the street and they had only put in like one parking space for every two units or something, and they figured that people would use public transport. Anyway, I remember the pushback on that. And it’s this NIMBYism–YIMBYism thing, right? It’s so hard to push people to YIMBYism—yes in my backyard—because of things they don’t… I don’t… These same people often talk a lot about housing affordability, so I don’t mean to overgeneralize, but there are some of the very same people who are so concerned about it who don’t want to look at apartment buildings.

David Stokes (11:50)
Right, don’t want to—and you understand. That’s a very liberal area that we’re talking about. If you were to define the politics of that area, you’re right: many of the residents of those communities in both the city and in University City right there would, in theory, in the big picture, probably agree, but then, “Oh, we don’t want this development here.” And it was a perfect place for a new apartment. Again, of all the St. Louis area, it’s one of the best areas served by public transit—

Susan Pendergrass (12:06)
Yes.

David Stokes (12:31)
—with buses and MetroLink and the WashU shuttles, because so many people who would be in those apartments would be WashU students. They’ve got that extensive shuttle system. But it was rejected, and I hope it comes back. And that’s just one of many, many examples of it.

Susan Pendergrass (12:31)
Yeah, yeah. What about the—what part of zoning and planning is this push in the City of St. Louis, anyway, to try to get people to move downtown? Is that something that’s coded in? I feel like they’re trying to get people to go downtown.

David Stokes (13:03)
They are. And thankfully, I don’t think zoning is preventing that. Of all the reasons people may or may not be choosing to move downtown—fear of crime and businesses leaving downtown, the jobs—as somebody who lived downtown in the late 1990s and early 2000s, to move down there when many of the jobs have left—fear—it’s a harder thing to convince. But I don’t think there’s— I don’t think it’s difficult or has ever been difficult for the loft developers of the ’90s to get permission to take an empty commercial building and turn it into lofts. There might have been a lot of issues they had to deal with, but zoning—I don’t believe—was one of them. Thankfully that’s a very good thing. But it’s one of the fun parts about this paper, right? We’re talking in the other papers and in the ones to come about the best ways to do public safety and public works and a lot of things. In most of these instances we all agree somebody has to do this service, and it’s just a question of: does the city provide it themselves? Do they contract with a neighboring municipality to do it—such as a small city contracting with a neighboring city to do police service? Should you let the private sector do it in a regulated manner, like utilities? But we can all agree it has to be done. Whereas I started this paper saying: despite the fact that it may be incredibly common, cities don’t actually need planning or zoning—life can exist without it. And that’s where the current HOA options come into play. And the history of HOAs in St. Louis, in the private place model, is such an interesting part of that. So there’s a little bit of the historic discussion of all of this in the paper too.

Susan Pendergrass (14:53)
So where do Missouri municipalities for the most part right now stand on things like—two questions I’m going to ask you—accessory dwelling units and short-term rentals or Airbnbs? Where do they stand on ADUs?

David Stokes (15:06)
Well, slowly but surely, we’re starting to permit ADUs. We haven’t had any sort of statewide, to my knowledge, overarching legislation. And that’s where the fact that we have low housing costs in Missouri matters. I don’t think we’re going to see the California situation that had to go statewide because none of the municipalities would agree to it. I don’t think we’ll see that here because there’s not the tremendous high-cost-of-housing crisis to push that. But slowly but surely, cities are starting to allow more ADUs, and that’s a very good thing. When you get out into rural areas—and in some places that don’t even have zoning in the first place—you can do any ADU you want to, or the zoning is so loose that of course you can build an apartment above your garage if you’d like to. Why are you even asking? But the cities have the rules against it.

Susan Pendergrass (15:52)
That’s where I live.

David Stokes (16:03)
Slowly but surely moving in the right direction there. And then it’s going in the opposite way with short-term rentals. Slowly but surely most cities are instituting short-term rental limitations. I’m not automatically opposed to that in every case. I get it: if you have a neighborhood and all of a sudden there’s a house where big parties are being thrown every weekend because they’re renting it out to different groups of people to throw parties, you’re going to hate that, and that’s going to impact the quality of your life. So I’ve been saying for a few years now that the short-term rental regulations I support would generally be things that don’t go to a blanket prohibition. I think that’s too far—and most cities aren’t doing that—but rather really focus on punishment of the property owner for repeated rule-breaking. One party is maybe one party, but if there’s a trend where you own the property and the people you’re renting to are consistently out of control, then the fines should be increased. I wouldn’t be opposed to them getting fairly steep up to a point too—that if it happens too often, you would lose your business license to operate that short-term rental. Because I do think that if you’re doing it a lot—if you’re routinely renting it out—you should be treated a little more like a hotel. We don’t want to give short-term rentals an advantage over the hotel-motel industry. You want that playing field to be as level as possible, especially for people who are renting their houses or condos or whatever out a lot. So then pull that license if it’s an abuse that’s happening consistently. But let’s try to—

Susan Pendergrass (17:55)
Well, I had that on my street.

David Stokes (17:56)
—go to a method through crackdown on rule-breaking, not blanket prohibitions.

Susan Pendergrass (18:00)
Yeah, we had that on my street in St. Louis, and it was a street of, I don’t know, three- or four-bedroom houses, and they somehow had eight bedrooms and a pool, which was very rare in my neighborhood. So they mostly just rented it out to college students and got called all the time—the police got brought in all the time for noise complaints. And there wasn’t really a good mechanism in place at the time to prevent it from happening. So I agree that there should be some limitations around them, but not to make it so strict that people can’t use it as intended. I mean, I stay in Airbnbs all the time. I like having them, but—

David Stokes (18:36)
Now, that police dilemma—that’s something in St. Louis and probably Kansas City, a few big cities, where the cops just have better things to do than break up parties. I mean, they’ve got violent crimes to address. That’s an issue: how are they going to take it seriously enough? In the average Missouri suburb or mid-sized cities, the police are going to take that a little more seriously, I would think. And a good comparison I like is in Lake of the Ozarks, where some cities have instituted strict rules against short-term rentals, while others, like Osage Beach—at least as of our research—hadn’t instituted anything and took a much more free-market approach: “We’re a tourist area; we want tourists to come here.” So it’ll be a good natural experiment over time to see how it affects property values, how growth is affected, as different comparable cities in the Lake of the Ozarks region choose different paths to move forward. So I definitely look forward to following that.

Susan Pendergrass (19:37)
Well, then I’ll know—another component to this paper is on planning. I think you just said a city doesn’t have to do planning if they don’t choose to, but are Missouri cities or municipalities planners? I mean, is that a planned thing, or are we more like anything goes?

David Stokes (19:56)
Most Missouri cities have plans. Right?

Susan Pendergrass (19:57)
I’ve been to New Town, by the way. I just want to say I have visited New Town, so—before you start talking.

David Stokes (20:03)
Well, that’s the architectural planning—how do we want to design it? Then there’s the legal, defined planning. And luckily, again, I really don’t think Missouri cities need to do any planning outside of general infrastructure planning. So I shouldn’t say they don’t need to do any planning—there’s the general infrastructure planning that pretty much everybody supports, meaning you should have an idea of how growth is going to go in your city and where you’re going to put sewers and sidewalks and streets. You want a general long-term plan for that, even if that plan is—as it should be—thoroughly adjustable and can be changed as growth happens naturally. But then you get into planning like we mentioned with Portland earlier—urban growth boundaries—where the planners really start to say, “You can live here; you cannot live here; you can build here; you cannot build here,” and it gets to be really extreme. We don’t really have that in Missouri. Thankfully, the plans that cities do adopt can be easily amended by any city council. They can be changed. When I worked at St. Louis County, we dealt with the county planning commission for the parts of the council district I worked in that were unincorporated, where the planning commission had a lot to say on that. So elected officials can and should be able to change that plan as they go. And then the biggest—let’s say you permitted a development that’s against your plan, but the elected officials want to do it anyway—I usually don’t have a problem with that. The fact that it’s inconsistent with your plan would generally be something that, if locals want to sue to stop the development, they would cite in the lawsuit—that it was inconsistent with your process and your plan—and then it would be determined by judges and the whole legal process. But planning in Missouri is something that, outside of basic infrastructure planning, cities shouldn’t really do. And to the extent that they do it, it’s easily amended and changed. And that’s a good thing.

Susan Pendergrass (21:55)
Mm-hmm. So the first two papers in your series were taxation, right?

David Stokes (22:20)
Taxation was number two, and the first one was just sort of the structure of municipal government in Missouri. It had a lot to do with city managers. And then the fragmentation issue was addressed as well in the first one that we discussed here, because that’s a part of that, obviously.

Susan Pendergrass (22:23)
Introductory. Okay. And taxation. And this is zoning and planning. Right. And then what’s on deck? What’s the next one?

David Stokes (22:41)
We don’t actually know yet what number four will be—germinating. Most of them are ready to go pretty quickly, so I think the next one will be released within the next two months—certainly this year. And I think it’s going to be on public works. But we have papers coming on public works, public safety, parks and recreation—which is one I’m really going to enjoy. You go to Forest Park and there’s all the great things in St. Louis’s Forest Park, and then you realize that many of the wonderful things there are actually done under contract with the private sector, either for-profit businesses like the Boathouse and the ice rink that pay the city to operate, or nonprofit businesses like the Muni that have been in the park for a long time. So it’s a great option to talk about all the different ways to provide parks and recreation services.

Susan Pendergrass (23:18)
Yeah.

David Stokes (23:35)
But those are at least three of the upcoming ones. And then there’ll be a concluding, summarize-it-all-up section as well.

Susan Pendergrass (23:41)
I look forward to hearing more about those, and thanks for coming on to talk about planning and zoning. It’s going to be a great series when it all gets put together. Thanks.

David Stokes (23:48)
Thank you very much, Susan.

Produced by Show-Me Opportunity

The post A Free-Market Guide to Zoning with David Stokes appeared first on Show-Me Institute.

Some policymakers are starting to deal with the challenge of housing inflation thoughtfully. But some cities, like Pittsburgh, are adopting half-baked (but trendy) policies from elsewhere to solve a problem that, practically speaking, may not exist locally. As reported in the Wall Street Journal:

On Monday the mayor signed an ordinance . . . to expand the city’s inclusionary zoning requirements. Developers building 20 or more units in the gentrifying Bloomfield and Polish Hill neighborhoods will have to set aside at least 10% for affordable housing. Under the rules, a designated studio apartment could rent for no more than $742 a month, though the average rent for one is $1,300 in Pittsburgh, according to the housing search website Rent.com. . . .

[I]nclusionary zoning forces developers to set aside affordable housing whether or not they receive government incentives, so “the other 90% of the units have to subsidize that cost,” Mr. Eichenlaub says. “They are making the developer and the owners of those units, or renters, absorb those costs. Effectively, it’s a tax on housing.”

And when you tax something, you get less of it. Portland, Ore., introduced inclusionary zoning in 2017. Permits for residential buildings with 20 or more units plummeted 64% in 25 months as developers went smaller to get around the mandate. The nonprofit Up for Growth concluded that “rather than increasing the number of affordable units,” the zoning scheme “appears to be diminishing the supply of housing at nearly all income levels.” [Emphasis mine]

My colleague Elias Tsapelas has done, and continues to do, outstanding work digging into LIHTC. The Pittsburgh “inclusionary zoning” mandate is the same sort of government burden as the LIHTC, minus the incentives. As the Wall Street Journal editorial board astutely observes, Pittsburgh’s newly mandated costs are likely to metastasize not only into higher housing prices for other renters and owners, but also into overall housing supply degradations.

But Pittsburgh’s housing policy change is notable for another reason: by one prominent metric, the city is the only major metropolitan area in America that doesn’t appear to have an affordability problem. Wendell Cox is a prominent researcher on the issue of housing affordability, and he has published his “median multiple” index for many years now, ranking metropolitan areas worldwide based on how affordable their housing markets are. His 2022 edition of the index is illuminating, not only for the other findings (which I’ll get into in another blog post) but especially for Pittsburgh—which now ranks as the only purely “affordable” housing market in the United States. In other words, Pittsburgh is trying to fix a problem it doesn’t really have.

My colleagues and I will pull apart why housing costs can be artificially inflated by government interventions and why those interventions can nonetheless be politically popular, but Pittsburgh stands as a cautionary tale that Kansas City and St. Louis policymakers must be aware of and must refuse to emulate. There are numerous reasons that housing costs have risen nationally, and the solution to that challenge is neither simple nor monolithic. In its case, Pittsburgh should go back to the drawing board and ensure it isn’t about to create a problem that doesn’t meaningfully exist. Yet.

The post Pittsburgh, Poster Child for Sloppy Housing Policy appeared first on Show-Me Institute.

In general, economic theory tells us that local income taxes have negative effects on population and economic growth in the cities that have them. Not only do these taxes discourage earning an income, but they are easy to avoid by moving or relocating businesses. This makes localities that have local income taxes less competitive relative to surrounding localities and encourages people to make the short move to where they can keep more of their hard-earned money.

We’ve seen this play out in the St. Louis area, especially regarding population; it’s fairly common to hear about people and businesses moving from the city to the county. St. Louis County does not have an earnings tax and the county’s population decreased by 0.46 percent from 2010 to 2019. The City of St. Louis, on the other hand, has a 1 percent earnings tax and has seen a staggering population decline for years. The city’s population decreased by 5.87 percent in the same period—that’s more than 12 times as much as the county. And just a little bit further from the city, St Charles county’s population increased by 11.12 percent in the same period.

Many factors can contribute to population decline; an additional tax on income is certainly one of them. Economic theory suggests that Multnomah County may see its local income tax hike have negative effects on population and economic growth. St. Louis can confirm that with experience. If they’d asked, we would’ve told policymakers this is a bad idea for their county.

The post Multnomah County, Oregon Should’ve Called St. Louis Before Making This Mistake appeared first on Show-Me Institute.

The study, issued by the government of the District of Columbia in December 2017, “aims to calculate the combined state and local tax burdens that would apply to a hypothetical family at five different income levels living in D.C. as well as the largest city in each state.” Kansas City is included and St. Louis is not, and neither are some cities that we’ve identified as peers. But the data are valuable nonetheless.

The estimated tax burden for a family earning $50,000 in Kansas City—the median income is $47,000—is $5,444. That’s 10.9 percent of income and includes income, property, sales, and auto taxes. This places us 8th in the country, ahead of places well-known as expensive such as Boston, New York, Portland, Seattle, Denver, and Los Angeles.

Dave Helling of The Kansas City Star has pointed out that taxes in Kansas City are also regressive. This report supports that conclusion regarding auto sales taxes, stating that “Providence, Rhode Island; Bridgeport, Connecticut; and Kansas City, Missouri are the cities with the highest automobile tax burdens across all income levels.” Combined with all other taxes, a Kansas City family earning $25,000 pays a combined tax burden of 12.6 percent; 8th highest of the cities measured. For a family earning $100,000, the burden is lower at 11.2 percent, placing us 12th.

What’s worse, the sales tax estimates are low for Kansas City. On page 39, the study lists Kansas City’s sales tax rate to be 8.475 percent, but anyone living here knows it goes much higher due to the proliferation of special taxing districts across the city.

Individuals can determine for themselves if City Hall is providing a return worthy of the investment, but the debate over whether taxes are high is settled. Kansas City is a high-tax city. Our taxes are regressive, too, but they are certainly high.

The post The Tax Burden in Kansas City Is High appeared first on Show-Me Institute.

Let’s start with some uncontroversial data.

• The hospitality industry constitutes a small fraction of the Saint Louis economy. Less than 4% of the city’s payroll comes from the hotel and restaurant industry.
• Nearly all convention business in Saint Louis could be accommodated by existing hotel and event space. In 2015, only 9 conventions had more than 10,000 attendees. In 2016 that figure rose, modestly, to 11. For 2017, Saint Louis is currently slated to host only 10 events with 10,000 or more guests.
• The Saint Louis Visitors Commission, which runs the convention center, loses some $16 million a year.

Now let’s review convention center history.

• The Saint Louis convention center opened in 1977, underwent a $150 million expansion in the late 1980s, and was flanked by the $280 million Edward Jones Dome in 1995. The expansion and dome were promised to boost hotel “room nights”—a measure used to assess convention center success—to more than 800,000 annually. But in 1999, convention business generated barely over 200,000 room nights. In 2014, annual room nights were just over 425,000.
• Nationally, nearly every convention center expansion or renovation has dramatically underperformed. Washington D.C.’s convention center saw roughly 36% of the room nights that were projected when renovation was undertaken. Austin’s saw 47%; and Portland’s saw 44%.
• While the America’s Center and dome were supposed to be profitable ventures for the city over the long term, the public still owes some $100 million on them, and won’t pay off that debt for at least 5 or so more years.  

In short, empirical evidence suggests that the financial prospects for a major overhaul of the convention center are bleak. Perhaps that’s why no private developers are interested in funding the project. But if the private market indicates that the investment isn’t worthwhile, should taxpayers be saddled with the risk?

Convention-center boosters will object, insisting that a renovation will help the local economy, especially because a high percentage of convention spending comes from out-of-towners. This objection misses the mark in several ways. For one, demand for convention center space has remained flat over the last few decades. Is investing hundreds of millions of public dollars in a buyer’s market the best way to get windfall returns? Secondly, the tax revenue that would pay for a renovation could be used in myriad other ways that would have a much greater impact on the economy, regardless of whether that revenue came from outsiders. If we’re really interested in economic growth, why not spend the money on meaningful infrastructure or use it to provide tax relief to city residents and businesses?

The driving force behind massively expensive convention center renovations—much like sports stadiums, light rail expansions, and other “transformative projects”—appears to be a desire to rebuild the downtown core. But like most transformative projects dangled in front of taxpayers, the prospects for success are low and the costs dispersed; a small and well-connected few are given a sweetheart deal while taxpayers are left on the hook.

For what it’s worth, the economist Heywood Sanders, in his 2014 book, Convention Center Follies, devotes an entire 78-page chapter to the failures of Saint Louis’s convention center. Perhaps that, if anything, is an indication that we should be skeptical of proposals to reinvent the convention center with taxpayer dollars.

The post Convention Center Renovations: Picking Winners and Losers with Taxpayers’ Money appeared first on Show-Me Institute.

The metropolitan area is served by a comprehensive freeway network and a good arterial street and boulevard network. Only two of the 50 largest U.S. urban areas have lower traffic volumes per freeway lane mile than Kansas City. This provides Kansas City with a considerable advantage in both personal and freight mobility.

Cox writes that according to Tom Toms Traffic Congestion Index, “Kansas City ranks as the least congested metropolitan area, overall, in the world among the 146 it ranks.” This is not because there are fewer people on the roads in Kansas City or because a larger percentage of people use transit. “Driving alone is by far the most important means of travel to work. In 2014, 82.6 percent of Kansas City commuters reached work driving alone,” writes Cox. Driving to work alone is not the sole dominion of wealthy workers, however:

Automobile usage is so pervasive that it is little different among low-income employees than among the overall work force. In Kansas City, only 3.0 percent of low income employees commute to work by transit. This is more than the share of the overall workers using transit, but still very small. Cars are much more important to low-income workers. This small difference is less than might be expected in light of the perception that low-income residents depend substantially on transit for their mobility. In 2013, 76 percent of low-income Kansas City workers drove alone to work, nearly as high as the approximately 83 percent of all workers who drove to work.

The next time you hear someone wax rhapsodically about the need for an expanded streetcar system in Kansas City so we can be like Denver and Portland—or because they think it will help poor people better get to work—direct them to Cox’s paper. Kansas City is not like those places—certainly not when it comes to density or traffic congestion.

The post Kansas City’s Remarkable Transportation System appeared first on Show-Me Institute.

More specifically, Kansas City leaders have not adopted land-use policies that have made cities like Portland and Denver so expensive. To demonstrate the impact of these regulations, Cox uses a “median multiple,” which he calculated by dividing the median house price by the median household income:

In 1990, the three metropolitan areas [Denver, Portland, and Kansas City] had similar housing affordability. The median multiple in both Denver and Portland was 2.4. Kansas City’s median multiple was 2.3. By 2015, the median multiples in Denver and Portland had more than doubled to 5.1. By comparison, the increase in the median multiple was much less in Kansas City, at 2.9.

Other cities also saw housing prices rise without a commensurate increase in median household income:

Sydney, Australia, which was among the earliest to adopt urban containment policy, now is among the least affordable housing markets internationally, with a median multiple of 12.2 in 2015, while San Jose and San Francisco have median multiples of 9.7 and 9.4, respectively. In these metropolitan areas, which had median multiples of under 3.0 before adopting strong land-use regulation, residents now face median multiples that are more than three times as large as those in Kansas City.

Kansas Citians are constantly told that we need to be like Portland and Denver by streetcar aficionados,  Dallas for folks who want a new airport, or Indianapolis by people pushing a new convention hotel. But Kansas City is not those places, thankfully. And our greatest strength—housing affordability and the cost of living it allows—exists exactly because we didn’t follow their lead on land use regulation.

Kansas City needs to be Kansas City, and Cox’s paper is required reading for anyone who wants to understand how we can promote ourselves to the world.

The post When Kansas City Leaders Got It Right appeared first on Show-Me Institute.

Cox comes to a number of very interesting conclusions.

For one, Kansas City’s housing is much more affordable relative to incomes than in any of the cities The Economist considers for their list of the 10 Most Livable Cities. The reason for this is that while cities were increasing land regulation through urban containment policies, Kansas City did not. For example, in 1990 Denver, Portland and Kansas City were all similar in the relation of housing prices to median income. Since then, due largely to excessive land use regulation, Denver and Portland housing prices have skyrocketed while incomes have not. Kansas City homes have remained as affordable as they were before.

Another one of Kansas City’s competitive advantages is commute times. Despite its sprawl, Kansas City has one of the shortest commute times in the world. Thanks to an impressive network of highways, traffic congestion is so slight that Kansas City had the least traffic congestion (tied with Richmond) in the 2015 Tom Tom Traffic Index. And lack of congestion isn’t due to public transit. Eighty-two percent of area residents commute to work alone in a car—including 76 percent of low-income workers.  In fact, only 3 percent of low-income workers in Kansas City commute to work by transit. Kansas City (like virtually all US metropolitan areas) is an automobile-oriented city and doing just fine.

Understanding these advantages is imperative if Kansas City is going to build on our strengths. Policy makers are often lured into adopting programs based on the results in Portland, or Denver, or Dallas. But Kansas City is not any of those places, and there is little guarantee that such policies will work here. If we want Kansas City to succeed, we need to understand exactly what we have to offer. This paper seeks to start that discussion.

The post Kansas City: Genuinely World Class appeared first on Show-Me Institute.

The Show-Me Institute stands arm-in-arm with those decrying the decades of neglect suffered by the East Side. In fact, we authored the chapter that exposed the fact that city economic development policy favors wealthy developers in the Urban League’s “2015 State of Black Kansas City.” Kansas City leaders have for years turned a blind eye to the economic decline suffered by our urban core. Worse still, city leaders have actively pursued development policies that diverted important resources away from schools and libraries in that same community.

Just as Kansas City’s shameful past of red-lining and block-busting a generation ago aided and abetted racial segregation, subsidies for today’s wealthy developers have diverted property taxes away from important city services on the East Side and toward the millionaires and billionaires at Burns & McDonnell, Cerner, and VanTrust.

Kansas City has so hollowed out its tax base through these diversions that the city must borrow money to provide basic services like tearing down dangerous buildings and repairing roads. While Kansas City suffers a two-year spike in homicides, our cash-strapped police force has fewer uniformed officers than it had in 2011.

Desperate for the basic services that the city government should be providing, communities on the East Side have resorted to community improvement districts (CIDs). The Independence Avenue CID charges a one-percent sales tax in order to provide security and beautification—things residents feel they cannot get from the police or the parks department. As a result, families living in the urban core are paying a higher tax rate on food just to feel safe while they shop.

Vernon Howard Jr., senior pastor of St. Mark Union Church, was correct when he told the Star, “City, county, state and federal jurisdictions have not, to date, focused upon the inner city with the kind of zeal, investment, intentionality and creativity as have been vested within mostly white and wealthier neighborhoods and communities.”

I empathize with East Side leaders, but their solution may only make matters worse. Adding another sales tax means poorer residents will be forced to pay more out of their pockets to get services they should already be getting for their earnings taxes, property taxes, (already high) sales taxes, COMBAT taxes, and all the rest.

If Kansas City is to thrive, it needs to dramatically overhaul its taxing and spending policies. We need to limit our profligate spending on touristy frou-frou and focus on providing services quickly, efficiently, and compassionately; we need to stop subsidizing wealthy corporations and luxury high-rises; and we must focus on developing the things that make Kansas City great—rather than merely mimicking Portland or Denver or Dallas. Because as jobs and population numbers attest, we are losing that game.

The post The Consequences of Bad Policy appeared first on Show-Me Institute.

Quote 1: “Trolleys are a proven catalyst for residential, commercial and recreational development in cities like Memphis, Little Rock, Tampa and Portland.”

Quote 2: “The evidence for the streetcar’s development effects is limited, controversial, and yet widely believed among many streetcar proponents.”

. . . Well?

If you guessed Quote 2, you’re right. It’s from a recent report by the Mineta Transportation Institute at San Jose State University. Quote 1 is from rail proponents on the Delmar Loop Trolleys’ website.

Despite the lack of empirical evidence, boosters of the Trolley—a 2.2-mile vintage streetcar line slated to begin service this spring—claim it will spur economic development. But as the authors of the Mineta report (and this one) explain, there is no solid link between streetcars and development.

And the development prospects look especially grim for the Loop Trolley.

Research shows that of all kinds of mass transit, ‘vintage’ or ‘heritage’ streetcar lines like the Loop Trolley are the least likely to generate development. That’s because of their low ridership and limited service. If the trolley doesn’t effectively serve as a transit amenity—for example, by getting people to work or school—it won’t attract economic activity. But the trolley is only projected to carry a paltry 800-1,200 passengers a day and won’t even start running until the lunch hour! To put that in perspective, a busy Metro bus route can carry anywhere from 5,000-9,000 passengers a day, and operates nearly 24 hours a day.

Trolley boosters might respond that the streetcar has already spurred development, including a new residential tower. But this response ignores the point driven home in the scientific literature: subsidies, relaxed zoning, and other perks do more of the spurring than the rail does. (In the case of the new East Delmar residential tower, the project received a 16-year tax abatement.) As a recent paper in the Journal of Public Transportation states, “The real explanation for Portland’s apparent redevelopment success is most likely a combination of these factors [namely, financial incentives and regulatory inducements], combined with a desirable location and a vibrant local real estate market” (p. 44).

The truth is, the Loop real estate market is doing just fine. Delmar is not blighted, and didn’t need a $51 million vanity streetcar to grow. And if our community wants to drive development east of Skinker, it will have the most success by lowering tax and regulatory burdens, not because it has a vintage trolley creeping by. 

The post The Unscientific Claims of Streetcar Boosters appeared first on Show-Me Institute.

It looks like the city’s “frugality” will be overshadowed by the massive costs of a proposed expansion that would extend the current line 3.75 miles south from Union Station to the Plaza and UMKC.

The projected construction costs for the extension are estimated at $227M (in 2019 dollars), and the downtown line cost $102M (in 2014 dollars) to build. After adjusting for inflation, on a per-mile basis, that makes Kansas City’s proposed expansion one of the most expensive streetcar projects in the nation.

All figures in 2014 dollars

As the chart above shows, the cost per mile of the proposed expansion is over 20% greater than that of the downtown starter line. Even if the city got a good deal—if we can call it that—on the downtown line, it surely won’t if expansion occurs.

The only streetcar more expensive than Kansas City’s proposed expansion is Washington D.C.’s 2.4 mile H-St. line, which cost over $200M to build. But besting D.C.’s line isn’t much to brag about—it’s been described as one of the most poorly handled streetcar projects in the nation. 

So as efforts mount to expand the streetcar beyond downtown, Kansas Citians should ask themselves: Are we willing to pay higher sales and property taxes to fund one of the most expensive streetcar projects in the country?

Although the rail boosters hope to garner a $100M grant from the feds, the city itself will be on the hook for $130M. More on the financial breakdown of the proposed expansion in my next blog!

Note: Figures adjusted to 2014 dollars with CPI deflator, assuming 2% annual inflation 2017-19. 

The post The Ballooning Cost of Streetcars appeared first on Show-Me Institute.

In making the case for expanding the streetcar, Kansas City officials have claimed that the streetcar (despite the fact that it only recently opened) has spurred development within the rail’s transportation development district (TDD). But the data on the market value of property within the TDD tell a different story. In fact, as the chart below shows, property values within the streetcar’s TDD follow largely the same trajectory as property values did in the county as a whole. According to data provided by Jackson County, market values grew in the early 2000s, fell during the recession, and began rising again in 2014. While the market value of property within the TDD has grown faster than values in Jackson County as a whole from 2000 to 2015, that growth occurred before the TDD’s creation, and is mainly due to the construction of the Power and Light District (which opened in 2007).

If we simply look at market values after the streetcar’s TDD was finalized in 2012, Jackson County as a whole performed better than the TDD. This directly contradicts the idea that the Kansas City Streetcar is boosting development downtown:

So why the disconnect between city hall’s streetcar rhetoric and the actual property data? Findings from the latest report from the Federal Transit Administration on streetcar development may shed some light on the situation:

Almost all [civic] representatives interviewed believed that streetcars positively affected the built environment, particularly in attracting new development or enhancing revitalization, although the degree of impact varies. Few systems, however, reported the types of ancillary changes in the built environment, such as reduced parking garage construction, increased pedestrian or bike lane investments, or explicit parking reductions that often are associated with light rail systems. Few, if any, streetcar system operators seek information on their impact on economic activity, although most interviewed consider economic-related questions to be vital and desire further research on this topic. [emphasis added]

Put another way, never let the truth get in the way of a good story.  

The post Is the Streetcar a Development Magnet? appeared first on Show-Me Institute.

Far from it. Of the 77 U.S. cities that KPMG ranked (which was not exhaustive of all major metros), Saint Louis ranked 45th and Kansas City ranked 46th. Among the cities cheaper than Saint Louis (and Kansas City) are regional competitors like Nashville, Omaha, Cincinnati, Memphis, Indianapolis, Cleveland, and Oklahoma City, to name a few. Worse yet, Saint Louis was more expensive than all 18 Southeastern cities KPMG looked at, from Atlanta to New Orleans.

So where did the Post-Dispatch get a top ten ranking for Saint Louis? If we only consider regions with populations greater than two million (of which KPMG ranked 31), Saint Louis is the 9th cheapest. I will leave it to the readers of this blog to decide if Saint Louis should pat itself on back for being cheaper than New York, Los Angeles, and Chicago, when it has higher costs for businesses than Nashville, Memphis, and just about every other regional competitor. But if we do decide to use population as criteria, it seems more justified to look at metros with populations similar to those of Saint Louis and Kansas City (between two and three million residents). When we do that, Saint Louis is 7th and Kansas City is 8th out of 14 such cities. That seems awfully middling.

That’s probably why, if one reads the study that the Post-Dispatch reports on, they’ll find that it does not claim that Saint Louis is among the most competitive cities in the country. KPMG didn’t even break down cities by population in the study, choosing instead to do so by region.  The Post-Dispatch story (while citing the study) is actually based on an ancillary KPMG press release, which lauds Cincinnati, and is careful to note context.

Titling an article “St. Louis among most cost-competitive cities for business, report says” when the report in question says no such thing is a questionable decision for a newspaper of record. But this is not just a problem with the headline. The article itself is equally misleading, and it was not a headline writer who placed this story front and center on the Post-Dispatch’s website less than a week before a vote on multiple tax issues (where the city’s business climate is an issue). 

The post Report: Saint Louis, Kansas City *Not* Among Most Cost-Friendly Cities for Business appeared first on Show-Me Institute.

                The problem with the city’s property tax collections is not the rate (around $7.5850 per $100 assessed value), but the fact that most of Saint Louis City is not actually paying the posted property tax rate. As this and future blog posts will detail, most of the city’s land area and much of the city’s properties either enjoy special property tax breaks or are exempt from property tax altogether.

                One type of entity that pays little or no property tax is government. This includes city, county, state, and federal government, but does not end there. In Saint Louis City, many properties are owned by other quasi-governmental bodies, including: the Bi-State Development Agency, the Metropolitan St. Louis Sewer District, Great River Greenways, the Land Reutilization Authority (LRA), the Saint Louis Convention and Visitors Commission (CVC), the Saint Louis Housing Authority, the St Louis Municipal Finance Corporation, and others. Altogether, government-owned properties make up almost 30% of all properties (by area) in the city, as the map below illustrates:

Large city parks are one reason governments own so much of Saint Louis City. But even if we take parks out of the equation, governments still own more than 23% of the city by land area and 12% of land by value. For instance, the city’s land bank, the LRA, owns more than 11,000 parcels of land, including the land on which Busch Stadium stands. Busch Stadium’s public connection is not an outlier. Many large entertainment venues in the city, including the Scott Trade Center and the Edward Jones Dome, are on public land. Different government organizations own housing complexes, office buildings, theatres, parking lots, and wharfs. Setting aside the question of whether or not all of this government ownership is justified, little if any property tax money can come from these parcels.

Check back for our next post on this issue, which will explore the prevalence of tax-exempt properties in Saint Louis City.  

The post Saint Louis Property Taxes, Part 1: This Land is Their Land appeared first on Show-Me Institute.

In reality, streetcars went away virtually everywhere because of cost, and what people now consider quaint was once seen as outdated technology. Streetcar ridership waned in the early and mid-20^th century, as they were outcompeted by buses and private cars. When public transportation became publicly owned, policymakers switched to buses, which were seen as cheaper, faster, and more flexible. Cities where streetcars persisted tended to be those with long tunnel stretches, where diesel buses would have created ventilation issues.

Returning to the question of cost, it’s important to remember that streetcars require their own dedicated infrastructure, while buses can share roads with cars, freight, and bicyclists. People complain about highway subsidies, but from the transit planner’s point of view the local streets are going to be there whether they decide to run a bus route or not. With a streetcar, the rails need to be built, maintained, and replaced on a regular basis.

While Saint Louis is building a 2.2-mile vintage streetcar line and considering a modern seven-mile route from downtown to the Central West End, these efforts are more expensive showpieces than a return of streetcar transit. For instance, in 1902, Saint Louis City, Saint Louis County, and Saint Clair County had a combined 560 miles of streetcar lines. That’s a long way from nine miles. Even in cities like Portland, which have spent serious amounts of money to bring back streetcars, total mileage is still less than 20.

Nor could Saint Louis afford to bring such a system back. Modern streetcar lines now require more than $50 million in capital costs per mile. Even assuming some economies of scale and track sharing, building 560 miles of lines would cost billions, possibly tens of billions. If the region went for a less expensive vintage streetcar system (like the Loop Trolley), the cost could still be almost $10 billion to build. For comparison, MetroBus, which runs a system roughly three times as extensive as that 1902 streetcar system, only spent $333 million on capital expenses between 1992 and 2013.

In the end, it was mostly costs that killed the streetcars, and mostly costs that will prevent them from ever being anything more than retro-transportation options for cities with more money than sense. As for Saint Louis, the city needs to consider whether its transportation goals are about moving people or moving the city back 100 years. 

The post Why Did Saint Louis Get Rid of Its Streetcars? appeared first on Show-Me Institute.

Not being from Saint Louis, the advisor did not know that almost unrealistically cheap rent (from the rest of the country’s perspective) is readily available in the region. In fact, Saint Louis was just named the most affordable major city in the country for recent grads by Trulia Trends (“investigators of unconventional house hunting trends”).

Their analysis showed that a recent grad in Saint Louis would on average make just under $26,000, allowing them to afford almost 20 percent of units in Saint Louis. How expensive can it get in other cities? In Portland, Oregon, the median wage of recent grads is under $19,000, which would allow them to afford about 0.1 percent of rental units available. Following close behind Portland, in terms of unaffordability, are Riverside, Orange County, and Miami.

One might assume that the relationship here is one of growth and desirability. Saint Louis, with relatively low growth, is not as attractive as the fast-growing Portland or Miami. But economic growth is not the whole story, because following Saint Louis on the list of affordable metros are some of the fastest-growing metropolitan areas in the nation, including Houston, Dallas, Atlanta, and Phoenix. Most likely, multiple factors, including desirable weather and urban containment policies (of which Portland has been a very prominent example), are important in making a city unaffordable for young people. Put simply, it takes capped supply along with high demand for rent to become unattainable for the average grad.

As things stand, Saint Louis is in the opposite situation from cities like Portland or Boston, in that there is plenty of supply but not a whole lot of demand. That puts Saint Louis in a good position to attract startup businesses and startup graduates from more expensive metropolitan areas. However, if Saint Louis is to gather momentum in attracting businesses, it should keep a positive regulatory attitude toward new building and avoid restricting supply through urban containment.

The post Cheap Rent: A Saint Louis Advantage appeared first on Show-Me Institute.

Back in the real world, Kansas City is caught up in a questionable transportation project of its own – joining the rush to become the latest U.S. city to build a super-expensive, super-trendy downtown streetcar system.

With an initial 2.2-mile line already under construction, the Kansas City City Council has unanimously approved the creation of a Transportation Development District (TDD) to expand the streetcar line to almost 10 miles. Kansas City residents need to consider the project’s enormous costs and questionable benefits of the proposed expansion.

Streetcars are an extremely costly form of public transportation. The Kansas City TDD aims to spend $472 million to build 7.6 miles of streetcar routes in Kansas City. That is a mind-boggling $62 million per mile to build a system that (as one critic puts it) “offers little more than a way to move downtown workers from their offices to lunch.” For no more money, Kansas City could add 100 buses to its existing fleet of 250 buses and greatly increase bus service throughout the entire Kansas City metro area.

It is always fun to spend other people’s money and supporters of streetcar expansion expect to raise more than half of the needed funds – or more than $250 million – from the federal government. That still leaves a substantial sum of money that will have to be raised in additional taxes on residents and businesses inside – and, it is important to note, outside – the transportation district.

People within the TDD will have the opportunity to vote in a special election (at a time yet to be determined) on whether to accept higher sales or property tax levies to support the project. Taxpayers outside the district will not get a chance to vote, but they will be on the hook as a result of the fact that the city of the Kansas City is a major property owner within the TDD. As such, the city will shoulder a significant portion of the tax load – and it will pass that burden along to at-large Kansas City residents through higher taxes or reduced services.

The whole project begs the question: What possible advantage can there be to building a new streetcar system, given the much lower costs and the much greater range and flexibility that buses provide?

NextRailKC and others describe the huge expense and extreme inflexibility of streetcar systems as a hidden asset – signifying a valuable long-term commitment on the part of government to provide reliable public transportation within a designated area. According to this argument, developers and investors see this commitment, and so they are inspired to build around streetcar routes.

As a favorite example, streetcar supporters point to Portland’s celebrated Pearl District. There, it is argued, is the proof that streetcars can spearhead incredible urban development that justifies the streetcar system’s out-sized expense. However, even streetcar proponents admit that Portland’s streetcar was only a part of a large-scale investment plan, involving more than $400 million in tax subsidies that supported growth in streetcar corridors.

Kansas City residents would be wise to reject Bart’s advice and listen to his mother’s more mature assessment. Better to improve what is already there – roads and existing public transportation – than to join the rush to be part of the latest urban planning fad.

Joseph Miller is a policy researcher at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Beware The Jabberwock (And Downtown Streetcars) appeared first on Show-Me Institute.

Contrary to the rhetoric, millennials are relatively immobile and have lower incomes than generations that preceded them. This most likely is an effect of the credit crunch and economic downturn, which has left many millennials without steady incomes to spend or credit to buy new housing.

Also contrary to rhetoric, millennials are not upending the dominance of the car in American travel. In 2000, 5.4 percent of workers ages 16-34 used public transportation for their commutes. In 2010, that number increased to 6.1 percent. That is an increase for sure, but a rather small one considering the expansion of transit systems in the 2000s and the wealth-reducing effects of the recession. The vast majority still drive. Most trends point to a “car light” preference among young people rather than a dramatic move to transit reliance.

When millennials do move, it appears to be for economic reasons, not whether a city is considered cool or has a streetcar. The list of top 20 millennial destinations (of which Kansas City is No. 14), contains some cities with lots of public transportation (Portland, Washington, D.C.), but also many cities that are derided for urban sprawl (Houston, Atlanta, etc.). While the transit correlation may be spurious, all of the cities popular with millennials are among the top performing metro areas in economic growth. The obvious conclusion is that millennials, like the generations that preceded them, chase economic opportunity, not transit. As a millennial who has moved to cities for jobs multiple times, my experience is that the number of sports teams or streetcar lines matters very little in the decision-making process.

If Kansas City planners really want to attract millennials, they will stop trying to make Kansas City cool and focus on creating more opportunity. The millennials will bring the cool with them. Instead, Kansas City officials use a millennial straw man as support for a fabulously wasteful streetcar and other large government projects. And if we believe an author at the Kansas City Star, the only problem is the city hasn’t approved streetcar expansion fast enough. When it comes to looking cool, Kansas City spares no expense. That is, of course, until those millennials buck the plan and want to rideshare with Lyft. Then it’s more important for the city to protect taxi companies than to look cool.

The post The Illusive Millennials: Kansas City’s Hunt For The Perfect City Dwellers appeared first on Show-Me Institute.

According to the NextRailKC website, the 7.6 miles of streetcar could achieve anywhere from 13,700 to 23,200 passengers per weekday, based on modeling they have performed. With 7.6 miles of track, that is between 1,800 and 3,000 weekday passengers per mile. While models can be useful, at some point, someone should have checked what streetcars achieve in other cities.

Simply put, these ridership estimates are unrealistic. The high-end estimate would make it the most successful streetcar line in America according to ridership. It would have more riders than Seattle, the busiest streetcar line in America, which is only a mile long and is right in the heart of downtown Seattle. Do they really think that is going to happen?

If Kansas City achieved its low estimate of 13,700 riders per day, it would be performing about as well as Portland’s streetcar.  Portland’s system is considered highly successful in terms of riders, but there are reasons to think that Kansas City will have difficulty reaching Portland’s ridership levels. Portland has offered streetcar users low fares (originally there were free zones and the price eventually increased to $1) and used significant subsidies for transit-oriented development.  In addition, rail lines in Portland run through much denser population centers than what is proposed in Kansas City.

Of course, other streetcars see much less ridership than Portland’s and Seattle’s. Streetcars in Memphis, Tenn., and Kenosha, Wis., each had ridership below 1,000 daily passengers per mile. Why do Kansas City planners see no possibility of their streetcar performing at that level?

It is possible that the Kansas streetcar will be wildly successful, and garner 23,200 passengers on an average weekday. But that is not something that is fair to sell to the public as a likely occurrence. The lower estimate, 13,700, is a more realistic maximum estimate given the performance of existing streetcar operations in other cities.

The post The Overly Optimistic Estimates For The Kansas City Streetcar appeared first on Show-Me Institute.

The TDD is intended to raise $471.9 million to complete the nascent streetcar system throughout the inner city. Our position is that these systems are less efficient at moving people than buses and that the promises of economic development from streetcars are without empirical basis. To their credit, most streetcar supporters spend their time arguing that the streetcars bring economic development and do not try to claim that streetcars are more efficient people movers.

Nevertheless, many proponents have the idea that it is cheaper in the long run to build a streetcar system than to expand bus service. This post addresses these arguments and asks how many buses the Kansas City Area Transportation Authority (KCATA) could buy and operate if it were given the resources of the $500 million streetcar plan.

Using data from the National Transit Database, KCATA, and actual performance of streetcars in Portland, I estimated yearly operating costs and revenue streams for the streetcar and an expanded bus system. While any such calculations on an unfinished system require some estimation, my calculations are streetcar-friendly by assuming high ridership, elevated farebox recovery, and controlled capital and operating costs.

The findings were that KCATA could buy and operate 105 additional buses for the same cost of building and operating 7.6 miles of streetcar lines.  To satisfy objectors who might claim huge life cycles for streetcars, I also made a calculation assuming the streetcars were not replaced and that only buses were replaced. This reduction in streetcar costs meant KCATA would only be able to buy and operate 100 buses.

To put that in perspective, KCATA currently only operates 257 buses for 61 bus routes that serve the entire Kansas City region. Adding 105 buses would significantly improve regional services and would utterly transform bus service if they were bound to the TDD meant to serve the streetcars. The chart below shows what type of bus service 7.6 miles of streetcar lines buys:

The case is clear. Whatever one believes about the economic development promises of streetcars, in terms of providing mobility, buses are far more cost-efficient than streetcars.

The post Kansas City Streetcar Expansion Could Buy More Than 100 Buses appeared first on Show-Me Institute.