economic development

The New York Times Is Wrong About Transit’s Effect on Urban Development

The New York Times has once again published a report claiming that transit hubs are a “growing lure for developers.” The Times published a similar story eight years ago, and I quickly showed that subsidies from tax-increment financing (TIF) and other government support, not transit, was what stimulated those developments.

So has anything changed since then? Nope. The first development described in the recent story by Times reporter Joe Gose is Assembly Row, in the Boston suburb of Somerville. Is it subsidized? Yes, with at least $25 million in TIF along with other state funds. Far from being “free money” as its advocates claim, TIF steals from school districts and other agencies that rely on property taxes to subsidize developers.

Then Gose mentions Chicago’s Fulton Market, downtown Kansas City, Austin, and Denver’s RiNo neighborhood. Fulton Market just happened to receive at least $42 million in support from the city of Chicago, much of which comes from TIF

Supposedly a new streetcar sparked a revitalization of downtown Kansas City. But could it be that revitalization was due more to Kansas City’s twenty-four downtown TIF districts?

Gose doesn’t specify a particular neighborhood or development in Austin, Texas. Of course, Austin is one of the fastest growing cities in America, so anything that’s open for development is going to be developed. But not satisfied to let the market work, Austin has heavily bought into the use of TIF districts. Transit is an afterthought in Austin, carrying less than 1 percent of the passenger travel; the city’s sole rail line was a huge flop that cost way more than expected and now carries fewer than 1,500 round-trips per weekday.

Denver’s RiNo neighborhood–RiNo being short for River North–is growing thanks to at least $44 million on infrastructure improvements in that neighborhood, plus additional TIF funds for special projects.

In Washington, DC, Gose mentions a $3 million project “in Washington’s fast-growing Capital Riverfront neighborhood.” That’s the same neighborhood that received at least $198 million in TIF subsidies.

India’s Faltering Economic Revolution: Lost Opportunity, Lost Future

Last year Narendra Modi won an unusually strong majority in India’s parliamentary election. Modi subsequently visited the U.S. and was warmly welcomed by both the Obama administration and Indian-Americans.

Although ethnic Indians circled the globe as entrepreneurs and traders, the Delhi government turned dirigiste economics into a state religion. Mind-numbing bureaucracies, rules, and inefficiencies were legion.

Eventually modest reform came, but even half-hearted half-steps generated overwhelming political opposition. Last May the Hindu nationalist Bharatiya Janata Party, led by Modi, handed the venerable Congress Party its greatest defeat ever. He seemed poised to transform his nation economically.

As the anniversary of that visit approaches, the Modi dream is fading. He simply may not believe in a liberal free market.

Moreover, few reforms of significance have been implemented. The failures overshadow the Modi government’s successes and highlight its lost opportunities. Critics cite continuing outsize budget deficits and state direction of bank lending.

Former privatization minister Arun Shourie observed last December: “when all is said and done, more is said than done.” Unfortunately, Modi has missed the “honeymoon” period during which his political capital was at its greatest. Time is slipping away.

Mexicans Deserve Substance Over Style in Presidential Race

Josefina Vázquez Mota won the nomination of the incumbent National Action Party (PAN) for Mexico’s upcoming presidential election. Most of the coverage in the international media today focuses on how she is the first woman to have a real shot at Los Pinos (the official residence of the president of Mexico). However, the real story should be what new ideas (if any) Vázquez Mota brings to the table. Unfortunately, there’s isn’t much to report.

Strong Cities, Strong Communities: Bad Idea

When government officials come up with what they claim to be a wonderful new idea, I often think of an old Saturday Night Live skit from 1990 poking fun at commercials for blue jeans. The skit’s scene is a group of middle-aged buddies getting ready to play basketball in their new “Bad Idea Jeans.” Each guy optimistically announces a plan to do something that is actually a “bad idea.” For example, a character says “I don’t know the guy but I’ve got two kidneys and he needs one, so I figured…” and “BAD IDEA” flashes across the screen.

Eminent Domain Shenanigans

Five years ago, in the landmark property rights case of Kelo v. New London, the Supreme Court upheld the forced transfer of land from various homeowners by finding that “economic development” qualifies as a public purpose for purposes of satisfying the Fifth Amendment’s Takings Clause.  In doing so, however, the Court reaffirmed that the government may not “take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit.”

Trade Can Help the Poor Escape Poverty

Professor William Easterly, the economic development expert from New York University, has written an excellent comment for the Financial Times online. He writes, “The Millennium Development Goals [summit that wraps up in NY today] tragically misused the world’s goodwill to support failed official aid approaches to global poverty and gave virtually no support to proven approaches.

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