Monday, July 31, 2006

Keeping Middle-Income Folk in Boston

As in an earlier post, we agree with the research and opinion that concludes that middle-income neighborhoods and families are healthy for cities.

An alternate view would hold that greed and exploitation should flourish, because they have a long tradition in capitalism, and illustrate the vitality of the market system. Those that hold such Adam Smith, invisible hand beliefs are neither analytical nor compassionate enough to suit us. The complexity and internationalization of economics in the past two centuries seems to us to have rendered that theory quaint and idealized.

Boston has remained between 500,000 and 600,000 folk for a long time and its metropolitan area has hovered around 3 million. While we lately have been losing population, the percentage loss should be of less concern than why people are leaving and what the remaining mix is.

Some of this diminution is regional. New England and New York State in general and this area in particular were hit late in the past recession and have been the slowest to show recovery signs. Inside Route 495, we remain hitched to an ever slowing technology span pulling an economic wagon that loses passengers daily. To stop that belabored metaphor, many of our tech giants either failed directly or disappeared into companies owned elsewhere.

Likewise, our quiet, obnoxious giant -- financial sevices and banks -- are shifting jobs to other regions and to their new parents' homes.

So, if we assume that we do want to keep or grow our middle-income Boston, we have to aggressively plan for that, both in public policy and from the business side. As we see in Manhattan and other cities that have lost even a greater percentage of middle-income families and neighborhoods, doing nothing creates a rich-and-poor only town.

None of the problems arose quickly and none of the solutions is all that easy. Consider that the middle class:
  • Has found housing increasingly expensive, climbing over the past few decades from perhaps 25% of income in Boston to 50% or more -- economically untenable and causing a real reduction in lifestyle.
  • Sees real income decreasing slowly but steadily. The effects of the continued economic downturn means low or no raises while general inflation and balooning energy bills eliminate disposable income and chances for upward mobility.
  • Fears public education will not prepare their children to hold their own. Boston remains a gateway for immigrants, preparing them for a life in New England, but severely taxing schools already staggering under budget restraints.
  • Finds that unfunded mandates from the commonwealth force Boston to devote an increasing percentage of its resources to meeting state demands without the authority to tax or collect fees to compensate.
  • Worries over violent crime in cities. This is normal in cities with tightening resources and a discouraged underclass, but no more acceptable to this group than to others.
It is a vicious irony that the legislature throttles Boston, Worcester and the few other large cities here. If we were a seesaw, Massachusetts would forever rest on its eastern seat. The vast majority of its citizens live in the few big cities and their closest suburbs. Despite the feigned objectivity of the General Court, the cities' problems are the commonwealth's problems. Ignoring, underfunding and not creating healthy policy for them hurts us all short- , mid- and long-term.

So, one would suppose that our gubernatorial candidates would feature their plans and programs for Boston and other cities. Nope, only Deval Patrick. In an important nod to the issue, Christy Mihos does say that giving cities more of their tax money back to fix their problems is a good idea. See another post on what the candidates have promoted so far for the cities.

While we endorse Patrick, we would much rather see multiple programs and opinions and a full campaign discussion of how our next leader intends to get Boston out of the sickbed.

Public Policy Enemy #1

Consider where the money come from, who controls it, and where it goes. A decent enough introduction is in Dispelling the Myth of Home Rule: Local Power in Greater Boston, a study funded by the Rappaport Institute for Greater Boston. This opens a PDF of the executive summary.

Personal Note: We have little good to say of the Rappaports, particularly Jerry the elder. We were condoed out of Charles River Park and knew quite a few former West Enders trampled in the rush to destroy the lower class and middle class neighborhoods. We think the family has a long way yet to go to atone. We do, however, appreciate the institute's current efforts.

The report is well worth reading in its entirety, starting with this summary. Certainly any legislators who do not understand our cities' funding issues need to digest this.

We can all understand how tempting it must be to pretend that the commonwealth can continue to bleed tax and fee income from the people and businesses of the big cities. It must feel like having a bank account that you never need to balance.

Unfortunately, taking the money, returning less and less of it in revenue sharing, and refusing to let the cities make and spend their own money backfires. Eventually, the conditions in the cities will require huge expenditures to right the wrongs of the decades.

The report has three key findings:
  1. Municipalities in the Boston metropolitan region have nothing like—and, equally importantly, do not feel like they have anything like—home rule in the local autonomy sense of the term
  2. Key aspects of the state constitution’s Home Rule Amendment do little to empower the region’s towns and cities.
  3. Home rule in Massachusetts is structured in a way that limits local power and frustrates regionalism.
The fantasy world of the legislature includes laws that require the cities to undertake and maintain systems, with no matching funding. Likewise, Boston can't even decide its housing and land-use policy. It must approach the commonwealth for anything of significance, in effect begging for permission, which is often denied.

For housing, many in and out of the major cities lament the high costs, and then look away. Boston for one can do little by itself to increase the stock of affordable middle-income housing. It needs both commonwealth regulatory permission and now financial help.

The urban-planning vision of mixed income, multi-family homes has worked in U.S. and European cities, but always with both types of government help. Pretending, as our legislature do often has, that Boston, Lowell and other cities have brought these problems on themselves is at best irresponsible.

Many policy researchers have proposals, which the state has so far not endorsed. One is from Northeastern's Center for Urban and Regional Policy, Building on our Heritage: A housing Strategy for smart Growth and Economic Development. This ties the lack of affordable housing for low and middle-income residents to larger economic issues -- worth of legislative leadership, by any estimation.

Its general recommendations are:
  1. The state provide financial and other incentives to local communities that pass Smart Growth Overlay Zoning Districts that allow the building of single-family homes on smaller lots and the construction of apartments for families at all income levels.
  2. The state increase its commitment to fund affordable housing for families of low and moderate income.
More specifically, the three-year-old report, recommends:
  1. Maintain or increase the allocation for housing under the Private Activity Bond Cap at the current level.
  2. Gradually increase the housing portion of the State Annual Bond Cap from its current level of 9.1% to 15% Gradually increase annual state outlays for housing to $120 million. In the next decade this will add about $670 million for housing affordability.
  3. Sell surplus state property, with a priority for housing and mixed use (where appropriate). Use the funds for increasing state assistance for housing affordability.
There are other ways to slice and display these solutions, but all require concerted commonwealth and cities efforts. From what we see in their local meetings and their visits to Beacon Hill, the cities are willing and aware.

The legislature will need to make major shifts, first by admitting that its laissez-faire policies and perverted home rule do not work under the current conditions. The golden goose cities are underfed and sickly.

Up next, jobs and economics.

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