Thursday, August 16, 2012

City to subsidize development of luxury apartments rather than affordable housing

It's a well rehearsed mantra any time a professional sports teams asks the government to use public money to fund a private business (what about that free market, boys?) - the new stadium will spur economic development in the area. You know, new bars, restaurants and shops.

Of course all those folks seeking to be entertained had to come from somewhere. And that somewhere is generally another entertainment and shopping district located somewhere else in the city. All the new stadium does is take money and jobs from one part of the city and transfer it to the area around the stadium.

Now the city of Houston is looking to subsidize the development of more living space inside downtown. Your tax dollars are going to be handed out to developers who promise to build apartments near the convention center.

So let's get this straight. The city is still trying to balance its budget. One member of city council suggested the city just default on pension payments for former city employees. The city has put in place hiring and wage freezes. The school district is laying off teachers and using long-term subs because the state has cut funding - and the city won't lift a finger. But we can afford to write a check to every developer that promises to build an apartment unit on the east side of downtown?

The city claims it has to do this due to the high cost of land and the expense of building. But haven't we been through this before? Remember when developers were running all over downtown buying up old buildings and turning them into lofts? Remember how that was supposed to revitalize downtown?

What happened was there was such a glut of apartment space on the market downtown that prices went down and owners and investors found themselves upside down.

Bars and restaurants opened and closed and opened and closed.

There are few of the amenities downtown that there are in the neighborhoods throughout the city. There's one grocery store and it doesn't even compare to the stores elsewhere inside the Loop. There's a gas station that charges way too much because there's no one to compete with it. And there's the parking nightmare that is downtown Houston.

If the developers can't build and sell units downtown profitably without taking a government handout, then maybe they shouldn't be building new units downtown. Maybe the city shouldn't be in the position of favoring one part of town over others. Maybe downtown Houston will never be the urban mecca the planners are trying to turn it into. Unlike New York or Philadelphia or Chicago or Baltimore, Houston was nothing more than a sleepy mosquito-infested hamlet until  President Eisenhower decided to build interstate highways as a means to transport nuclear weapons across the country.

Houston grew up with highways and air conditioning. The city sprawls out for miles because developers built where the new highways and roads were being built. There's no effective mass transit in Houston because there was never much of a grid (other than downtown) to start off with.

If developing more residential units in downtown Houston will create a financial windfall, developers would have no problem lining up investors. The fact that they can't come up with the cash to make the projects profitable should tell us something. If private investors won't pony up the cash, the city sure as hell shouldn't either.

If the city has money burning a hole in its pocket, maybe the money should be used to subsidize the development of low-cost affordable housing instead. But we all know that'll never happen. After all, it's the developers that pump all the money into city elections, not the folks who can't afford housing.

What the hell was I thinking?

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