[Note: This post is a more detailed version of “2 contending visions for Iowa City’s Future,” Iowa City Press-Citizen (April 8, 2015), p. 11A.]
Over the past several weeks Iowa City’s City Council has held two contentious public hearings. One concerned a proposed change to the City’s Comprehensive Plan. It would have paved the way toward construction of at least three 7- to 15-story buildings, including The Chauncey, in a 3-block stretch just east of downtown. The other concerned a proposal to designate two small 140-year-old working class cottages on S. Dubuque St. as historic landmarks.
On first glance these public hearings revealed a simple and quite familiar conflict between property rights advocates and proponents of broader public values.
The first claimed landowners have the right to use their property as they see fit, and to redevelop it in ways that maximize the property’s economic value.
The second emphasized the importance of preserving historic structures that contribute to the character and identity of the city, and ensuring that new development strengthens rather than undermines neighborhoods adjacent to the downtown.
Passions ran high during the hearings, with many speakers speaking in terms of Us vs. Them and Good vs. Bad. As often happens, the hearings became increasingly polarized and in some cases involved personal attacks on individuals.
I believe we cannot resolve our shared problems unless we work together. This requires treating everyone with respect, and not attacking or demeaning any of the individuals involved.
And yet it is important to recognize that something quite important was at stake in those hearings: people were expressing conflicting visions of Iowa City’s future.
Having served on the City Council for the past 3½ years and for 2+ years back in the mid-1990s, I see five major reasons why this conflict has emerged at this moment:
- Two years ago the State Legislature adopted property tax reforms that cut local commercial and industrial property taxes and are likely to reduce Iowa City’s property tax revenues by an estimated $37-52 million over the next 10 years. The reforms will also shift more of the tax burden to residential property owners, and have led City government to find ways to decrease its costs and increase its revenues.
- The City Council proposed a 1% Local Option Sales Tax to replace the revenues lost due to the State’s action, but voters rejected the proposed tax in November. Many opposed the tax because they believed it would transfer income from ordinary people to wealthier property owners, including ones that were already receiving property tax cuts as a result of the State’s reforms.
- The City has become much more active in using Tax Increment Financing (TIF) as a means of stimulating new development, primarily in response to Coralville’s very aggressive use of TIF.
- In June 2014 the State Board of Regents adopted a new funding model for the Regents’ universities. This new model has caused the University of Iowa to begin recruiting new in-state students quite energetically. It has also led local developers and City government officials to begin anticipating a large increase in demand for student housing near the University.
- Also in June the City Council adopted a new “Form Based Code” (a more sophisticated version of zoning) for the Riverfront Crossings District south of downtown.
Rather than conflict over proposed developments solely on a case-by-case basis, we need to have a vigorous and informed debate about the choices before us.
The choice involves two “maps” that chart differing paths into the future.
Urban Renewal 2.0
One of those maps currently guides City policy-making. I think of it as “Urban Renewal 2.0.” It’s a more piecemeal and localized version of the federal program that bulldozed entire city blocks throughout the nation back in the 1960s, ‘70s, and ‘80s.
Relentlessly focused on increasing the tax base, this map charts a course toward a city accentuated by 15-story mixed-use buildings that attract wealthy households and Internet-savvy Millennials (the mythical “creative class”) while marginalizing others, a city in which property values increase dramatically for some while remaining flat or declining for others, a city in which tax subsidies go to a tiny number of well-connected developers while small businesses are left to fend for themselves, and a city in which governmental processes accommodate the interests of a few while ignoring those of the many.
The Form Based Code is a key component of this Urban Renewal 2.0 map. There is much to admire in the Code, but it contains one especially problematic feature: it has increased the allowable density of new development far beyond what used to be permitted or is either necessary or desirable.
Moreover, it enables large density bonuses that far exceed what appears to be called for in the Riverfront Crossings Plan.
And, perhaps ironically, the density bonus provision in the new Code, which is supposed to provide an incentive for redevelopment in the Riverfront Crossings District, has actually resulted in developers asking for larger TIFs to pay for the taller buildings.
The increase in allowable density has combined with density bonuses and TIF subsidies to inspire a speculative scramble and a slew of new projects, including:
- a $3.1M TIF for a 14-story mixed-use structure at 201 S. Dubuque St.
- a $1.8 M TIF for a 5-story, 96-unit housing project near S. Riverside and Benton St.,
- a $976K TIF for a 4-story row of 28 townhouses on S. Dubuque St. in conjunction with a new municipal parking facility,
- a $4.7M TIF for a 15-story multi-family/student housing project at 316 S. Madison Street, and
- a $8.8M TIF for a 12-story hotel at 328 S. Clinton St.
Other TIF projects can be expected in the near future. These might include the former site of the three small cottages, the current site of the Unitarian-Universalist Church on Gilbert St., a $12.1M TIF recommended by the Council’s Economic Development Committee for The Chauncey, and several others that have not yet been announced.
Some landowners see gold glittering over the horizon.
According to those who use this Urban Renewal 2.0 map, Iowa City is booming and all we need to do is keep it up. If it ain’t broke, they say, don’t fix it!
We need to be clear: the city not working well for far too many Iowa Citians!
The direction charted by this map is simply “trickle down” economics in new clothing; it presumes that economic growth based on attracting the “creative class” will be good for all of us. Moreover, it risks erasing the very qualities that have attracted people to live here in the first place.
If we follow this Urban Renewal 2.0 map, the city we love will soon become a place many of us will no longer recognize.
Towards a Truly Progressive City
The second map charts a course toward a city that is not yet real but one day might be. It would be a city that is truly inclusive, just, and regenerative, a city that is truly good on the ground for all.
It would be the Progressive City we’ve always claimed Iowa City to be.
To move toward becoming this truly progressive city, we need to alter course. We need to:
- Create a far more trustworthy process for using TIFs. Assessment of TIF requests and the overall effectiveness of the City’s TIFfing must be conducted publicly in ways that ordinary citizens can understand, critically assess, improve, and ultimately have good reasons to trust.
- Amend the Form Based Code to moderate the maximum allowable heights and density bonuses for new buildings in Riverfront Crossings.
- Replace revenues lost through State action by adopting a new 1% Local Option Sales Tax, but only if the new tax allocates the City’s revenues in a manner voters recognize as being truly progressive.