collage of politicians

The following is from the author of Boomtown Columbus, Ohio’s Sunbelt City and How Developers Got Their Way

Joe Motil’s article in the Free Press published November 1st makes some excellent points. He is absolutely correct on how Columbus City Council is a closed shop; a case for breaking and entering, though it is very hard to do. What concerns me most here is Joe’s reference to City Council’s incestuous relationship with the developers. How to resolve this subordination isn’t clear, except that discouragingly, the solution is unlikely to be local.

The fact is, Columbus is in no way an exception among American cities. Developers rule the roost virtually everywhere, bending mayors and city councils to their will. But aside from the occasional glaring case of clear corruption, and the sort of news that Joe conveys about how local election campaigns get financed, just how embedded their influence is and how it has enduring effects that work to the public’s disadvantage is not widely understood.

Impact fees are a case in point. The theory is that since new developments impose increased public costs for schools, highway improvements, parks and the like – developers should foot the bill. This is typically construed as a fee for each house sold. The practice, though, is that aside from the hotter housing markets of coastal California and the Northeast, very few cities have managed to implement this, so the public pays the bill.

In Columbus this story goes back at least to the mid-80s. The developers deflected any negative press and continue to do so. The claim is that they would have to pass the fee onto the buyer; as if they cared. In the Columbus context, and historically, this is simply rubbish. The reason is that the housing market here has been very competitive. It has been a buyer’s market, so that developers themselves would have to eat the fee. And this is not to mention all the other public subsidies to new developments: generous tax abatements, construction of freeway interchanges to benefit developers – think Polaris, or closure of a freeway ramp so that Ohio Health can build a parking garage, or creating new ramps so that Les Wexner can have his own personal entryway into Easton. The latter instance did not involve Columbus money but state money and buckets of it. All this is discussed in my recent book on Columbus, Boomtown Columbus.

There are exceptions, but they are ones that prove the rule. The most notable is that of Santa Cruz where developers met their come-uppance in dramatic style: a total comedy show. As reported in The Leftmost City by Richard Gendron and William Domhoff, the developer lobby there had long waxed lyrical about the possibilities that would open up with a campus of the University of California. They eventually got it, but to say that it would be a poisoned chalice would be an understatement. This is because, in a city of Santa Cruz’s modest size, faculty and students would be able to exert crucial influence on local elections; which they did, opposing all manner of projects near to the heart of the developer lobby and eventually coming to dominate city council. They then imposed a developer’s worst dream. But Columbus is not Santa Cruz and nor yet are the vast majority of American cities.

American cities are different because of the weirdness of the American state. This is extraordinarily decentralized. Cities have to find their own money. There are federal subsidies, rarely of the equalizing sort. Local governments need the new property and sales taxes and the developers know it. Local governments also have powers that the developers can turn to their purpose: powers to grant tax abatements, powers to determine land use, and to sell bonds for public works, like airport expansions.

On the other hand, every American city is different in its institutions, and extraordinarily so. So little wonder that developers get to know how a city functions and are unwilling to give up that advantage by taking the time and resources necessary to expansion elsewhere. The big developers in Columbus are different from those in Denver, and the names you’ll find in Denver are different from those in Pittsburgh and wherever. This setup is as different as you can possibly imagine from, say, France, Germany or the United Kingdom – all countries in which local government is far less susceptible to developer rhetoric and where developers can operate in several different cities simply because the local rules are so much the same.

Regarding the local rules in Columbus, there is a common view that at-large elections play into the hands of the developers. These are elections in which voters select from a list of candidates to represent Columbus as a whole and those getting the most votes, get elected. The contrast is with wards where candidates choose to contest the vote in some geographically-defined part of the city. The incentives that the two extremes set up are quite different. In a ward system, you need to be well known, have visibility and a reputation in the ward, but not in the city as a whole. In at-large systems you need city-wide visibility, which is a much tougher proposition. To make yourself visible you need money, which is where the corporations and the developers come in, offering campaign finance. This has been the logic behind the drive to change Columbus to a ward system and the fact that the developers opposed the change seemed to corroborate the view that at large elections worked to their advantage.

But judging from cities where ward systems prevail, and as I again discuss in Boomtown Columbus, one would hesitate to be optimistic, even setting aside the Chicago case that is noted for its corruption, including on development matters. Los Angeles, where the so-called pay-to-play system has recently been subject to critical scrutiny, is a case in point. All this suggests that developers will make a virtue of necessity. They are infinitely adaptable and have to be if they are to make money.

In the Columbus case, moving to a ward system would disrupt current modes of influencing government decisions – which I suspect explains their resistance – but once the dust had settled they would find a way. For them, too much is at stake. So the best opportunity to put a brake on largesse for the developers would be to take advantage of the dust and impose new rules: like serious impact fees.