{"id":32561,"date":"2024-03-30T12:49:45","date_gmt":"2024-03-30T19:49:45","guid":{"rendered":"https:\/\/occupysf.net\/?p=32561"},"modified":"2024-03-30T12:49:46","modified_gmt":"2024-03-30T19:49:46","slug":"property-developers-are-exacerbating-the-housing-crisis","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2024\/03\/30\/property-developers-are-exacerbating-the-housing-crisis\/","title":{"rendered":"PROPERTY DEVELOPERS ARE EXACERBATING THE HOUSING CRISIS"},"content":{"rendered":"\n
\"Protesters<\/figure>\n\n\n\n

POSTED IN ECONOMY AND INEQUALITY<\/a><\/strong><\/p>\n\n\n\n

Hundreds of millions in tax breaks have been shelled out to corporate developers in Baltimore, showing how corruption and profiteering worked hand-in-hand over decades to worsen the housing crisis.<\/p>\n\n\n\n

BY\u00a0MEL BUER<\/a><\/strong> MARCH 28, 2024 (therealnews.org)<\/p>\n\n\n\n

Protesters demonstrate on Sunset Boulevard against the removal of a homeless encampment at Echo Park Lake on March 25, 2021 in Los Angeles, California. Photo by Mario Tama\/Getty Images<\/p>\n\n\n\n

Years of meticulous investigation<\/a> by The Real News reporters Taya Graham and Stephen Janis have shown how the city of Baltimore siphoned hundreds of millions of dollars in public funds to corporate developers over a period of decades. With their findings now available in a full documentary<\/a>, Taya and Stephen\u2019s investigative reporting has also spawned calls for an investigation<\/a> from the State of Maryland, something which major unions<\/a> in the state have also backed. Building on her previous coverage of the housing crisis<\/a> engulfing the country, TRNN reporter Mel Buer speaks with Taya and Stephen on the relevance of their findings to understanding the role of property developers and municipal corruption in exacerbating the housing crisis.<\/p>\n\n\n\n

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Studio Production: David Hebden
Post-Production: Alina Nehlich<\/p>\n<\/blockquote>\n\n\n\n

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TRANSCRIPT<\/h2>\n\n\n\n

Mel Buer<\/strong>:  Welcome back, my friends, to The Real News Network Podcast<\/em>. I\u2019m your host, Mel Buer. Thanks again for tuning in to us week after week. It means the world that you listen. Whether you\u2019ve got our shows on while you\u2019re making coffee in the morning, put our podcasts on during your commute to and from work, or give us a listen throughout the workday, The Real News Network is committed to bringing you ad-free, independent journalism that you can count on. We care a lot about what we do, and it\u2019s through donations from dedicated listeners like you that we can keep on doing it. Please consider becoming a monthly sustainer of The Real News Network by heading over to therealnews.com\/donate. And if you want to stay in touch and get updates about our work, then sign up for our free newsletter at therealnews.com\/sign-up. As always, we appreciate your support in whatever form it takes.<\/p>\n\n\n\n

For this week\u2019s episode, we\u2019re turning our attention back to the worsening housing crisis in the US. Last time, we spoke with tenant organizers who are doing important collective work to protect tenant rights against exploitation by landlords, particularly as it relates to rent control in major urban areas across the country. Today, we\u2019re taking a look at the property developers and how they leverage tax breaks intended to spur the redevelopment of underdeveloped urban areas to line their own pockets. With me today to discuss how these often hurt rather than help the working class, are my incredible TRNN colleagues, Taya Graham, and Stephen Janis. Over the last many years, Stephen and Taya have taken a look at these tax breaks and who they help and hurt. I want to read some of their previous reporting to give our listeners a bit of context before we dive into our conversation.<\/p>\n\n\n\n

\u201cUrban centers across the country have been ensnared in a cycle of underdevelopment, hindered by property tax disparities, the absence of cohesive affordable housing strategies, and insufficient educational investments. To counteract these challenges, cities like Baltimore have resorted to controversial tactics, offering lucrative incentives to developers under the guise of benign acronyms like TIF (Tax Increment Financing) and PILOT (Payment in Lieu of Taxes), despite these strategies often exacerbating the strain on their working-class populations.<\/p>\n\n\n\n

Their documentary, Tax Broke<\/em>, is not only an exploration of Baltimore\u2019s challenges but is also a critical examination of a pervasive issue affecting cities nationwide. This investigative documentary delves into deep-seated problems caused by opaque tax break systems that disproportionately impact the working class, shining a light on a matter of importance far beyond Baltimore\u2019s city limits.\u201d Thanks so much for coming on the show, Stephen and Taya. I\u2019m glad you could take some time to talk about your important work.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Oh, thanks for having us, Mel. We appreciate it.<\/p>\n\n\n\n

Taya Graham<\/strong>:  Yeah, we\u2019re glad to have the opportunity to talk about TIFs. Give us a chance to talk about TIFs and we will.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Yeah. For some of our listeners who maybe aren\u2019t aware of the work that you\u2019ve been doing for the last 5-6 years or so, you\u2019ve been working on an investigation of development tax breaks that happen in Baltimore and the wider state of Maryland. Recently, in the last year and a half, you finished and released your documentary, Tax Broke<\/em>. Can you give us an idea of what that work looks like for folks who maybe aren\u2019t aware?<\/p>\n\n\n\n

Join thousands of others who rely on our journalism to navigate complex issues, uncover hidden truths, and challenge the status quo with our free newsletter, delivered straight to your inbox twice a week<\/strong>:<\/p>\n\n\n\n

Stephen Janis<\/strong>:  People who probably know about Baltimore and many inner city problems, know that people talk a lot about crime and things like that, but cities like Baltimore that are poor make a lot of people wealthy who are already wealthy. So we wanted to drill into that because there\u2019s a lot of media attention focused on judicial processes, but not much on the process of how a poor city makes a rich person richer. That\u2019s what the documentary Tax Broke<\/em> is about. There\u2019s a lot of history of development, how we had redlining, enforced segregation, and things that led to this situation where Baltimore pretty much pays developers. It\u2019s a pay-for-play city. It pays developers to develop in the city. That was the underlying topic of Tax Broke<\/em>; Examining the system that has created an environment where a city must offer aggressive and more aggressive tax breaks to developers to spur development even as the city of Baltimore loses population.<\/p>\n\n\n\n

We went back in history and examined some unique things about Baltimore \u2013 Being that it is known as an independent city, that has no ties to the counties that surround it. It was isolated, economically. There was white flight from the city based on things like blockbusting, which used racial fears to get people to move out of the city. So over time, Baltimore had to increase taxes dramatically and exponentially, and eventually, that led to a city that had the highest concentration of poverty in the country, and on top of that, one of the highest tax rates. So as you can see, as famous urban planner, David Russ, said, the city was designed to fail. That\u2019s the idea we wanted to explore because it has had a huge impact on the city in terms of equity, affordable housing, and other ancillary problems that don\u2019t get tied together into a bigger picture.<\/p>\n\n\n\n

That\u2019s what Tax Broke<\/em> tried to do is say, look, all of these problems you see where people cannot afford housing, where we have vacant housing, where we have high concentrations of poverty that are not being addressed, all of this comes back to the idea of a tax break. That\u2019s why we called it Tax Broke<\/em>. Right now, some breaking news, Baltimore City\u2019s real estate tax revenues have dropped this year and are projected to drop more. All of this happened when politicians and public officials assured us that this program of offering tax breaks would eventually deliver the city from its current dilemma. So that\u2019s per te. Do you want to add something?<\/p>\n\n\n\n

Taya Graham<\/strong>:  The one thing I wanted to add is that these tax breaks, these TIFs (Tax Increment Financing), and PILOTs (Payment in Lieu of Taxes), these tax subsidies are supposed to spur development. But they\u2019re supposed to spur development in areas that are considered blighted or in need of help. What we notice through our research is that if you take a look at the redlining maps of the 1950s and \u201960s \u2013 Where banks were told by the federal government to not invest, to deny loans \u2013 And you overlay those redlining maps on our city and take a look at where the development is occurring, it\u2019s not occurring in those historically blighted areas, those areas that need a little economic boost. Instead, these monies, funds, and beautiful luxury buildings and offices are being put in the wealthiest areas of our city; As a matter of fact, in some of the most prime real estate that we have in Baltimore City. So the blighted area theory is a myth. It\u2019s absolutely a myth.<\/p>\n\n\n\n

Mel Buer<\/strong>:  To clarify some things for our listeners, what we\u2019re talking about here is a city like Baltimore \u2013 Or in my case, and we can talk about this a little bit later, a city like Omaha Nebraska, which is where I\u2019m from \u2013 That also engages in the sort of TIF projects that we\u2019re talking about. What these programs are designed to do is to redevelop an area that is underdeveloped, has been abandoned, or has found itself in an economic trough, if you will, as a way to not only improve the living conditions of the people who live there but also to invite individuals to move back to those areas. So to reverse the white flight that we see, the affluent flight that we see from certain neighborhoods as a legacy of redlining in these cities. That\u2019s what these programs are initially billed as being able to do. Can you explain to our listeners how these programs work? What is TIF? What is PILOT? How does that work and the details of it?<\/p>\n\n\n\n

Stephen Janis<\/strong>:  A TIF, originally \u2013 The authorizing legislation for TIF started around the \u201950s and the \u201960s \u2013 Was intended to say, here\u2019s a piece of blighted property that no one will develop on. So what we\u2019ll do is we\u2019ll offer the developer the opportunity to develop without having to pay taxes on the new value-added on the property. And the way we\u2019ll do that is that the property taxes they would pay will be available to be invested in the project. In Baltimore, the way that has evolved \u2013 Because it\u2019s somewhat different in other jurisdictions \u2013 Is the city will estimate out 30-40 years of tax revenues based upon the appreciation of the piece of property, like how much it\u2019s going to be worth, and then bundle up and sell bonds to Wall Street to refund the entire amount to the developer.<\/p>\n\n\n\n

It\u2019s like you say, I bought a house and you\u2019re going to give me my 30 years of future property taxes to improve on that house and I don\u2019t have to pay property taxes, I just have to pay the bonds. What\u2019s especially fraught about that is that we also have to pay interest. The city is on the hook for interest in Wall Street. It sounds complicated, but it\u2019s not. It\u2019s saying you don\u2019t have to pay property taxes for the next 30 years and the 30 years of property taxes get refunded to you upfront, which is extremely valuable. But as Taya pointed out, in Baltimore, that has translated into developments in places like Harbor Point, which is right on the waterfront and is a very valuable piece of property, and other places like Port Covington, which is owned by Under Armour\u2019s CEO, Kevin Plank, who\u2019s a billionaire. So it hasn\u2019t worked out. Taya, do you want me to do PILOTs or do you want to?<\/p>\n\n\n\n

Taya Graham<\/strong>:  No, I\u2019ll talk about PILOTs, but I want to add to Stephen\u2019s analogy. You\u2019re going to get that 30 years of property tax that you would\u2019ve had to pay upfront, but not only that, you get to say you think that in 30 years your house is going to be worth $3 million. We don\u2019t know how I came up with that number, but I came up with it. So I\u2019m going to get the property tax money given back to me based on what I think the property will be worth, not what it\u2019s worth. That\u2019s part of the problem we\u2019re having now because some of these properties, their value has dropped.<\/p>\n\n\n\n

Now PILOT is, on the surface, a bit simpler. For example, the city will grant a 25-year tax break, and those taxes are gradually phased back in. For the first five years, the entity that owns the building might only have to pay 10%, for the next five years they might have to pay 20%, the next five years they might have to pay 30%, and so on. What we found, though, was a PILOT for the Marriott Waterfront Hotel. For that PILOT, for 25 years, they paid $1 a year in taxes. And they had the audacity to pay off their tax bill in one lump sum on a check for $25. We got to see the paper copy of it.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Wow.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  One thing interesting about PILOTs \u2013 Let me say something about them because this is what I talk a lot about when we\u2019re discussing \u2013 It\u2019s about the fiction that surrounds a lot of these tax breaks. Because a PILOT was intended to be for a non-profit institution, which wouldn\u2019t normally have to pay taxes, to pay some amount in recognition that they use city services. But what Baltimore did is take the idea of PILOT and somehow give it to developers. It\u2019s a way of euphemistically saying, we\u2019re not giving you a tax break, we\u2019re giving you a payment. You\u2019re making a Payment in Lieu of Taxes, which was intended for institutions like Johns Hopkins, where because they\u2019re non-profits, they\u2019re not supposed to pay taxes.<\/p>\n\n\n\n

But Baltimore innovated, in a sense, and turned PILOTs into this instrument of granting developers \u2014 Who were supposed to pay taxes like all other private property owners \u2013 And instead made it seem like they\u2019re doing us a favor by giving us some money over a ten-year period. The idea is that eventually the properties will be phased and will be paying taxes fully. But as we\u2019ve seen in Baltimore, there\u2019s been such a depreciation in commercial office space and other things, and it\u2019s not paying off the way people were expecting.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Right. We see the developers are making use of these tax breaks to\u2026 In my understanding as you\u2019ve explained it, it feels like a lump sum loan that they pay off over a number of years. The city is furnishing this money, these private developers do not have to come up with this money themselves. The city is essentially saying we will do this financing for you. What does that do for working-class communities that are then subject to this redevelopment, or as the case may be in Baltimore, promise this redevelopment and then don\u2019t see this in their neighborhoods?<\/p>\n\n\n\n

Taya Graham<\/strong>:  Mel, that\u2019s a great question because when developers receive these tax subsidies we\u2019re made certain promises. For example, we are made the promise that it\u2019s going to create a certain amount of jobs for Baltimore City residents, we\u2019re told that it\u2019s going to attract population, and we\u2019re made these promises. Sometimes these tax subsidies are even tied to what\u2019s known as Baltimore\u2019s Inclusionary Housing Bill, where if you build a certain amount of rental units in your building, you\u2019re supposed to make, let\u2019s say 10% or 15% affordable, based off of the median income in the area.<\/p>\n\n\n\n

An example with the Inclusionary Housing Bill, when it was taking a look at how many units were built \u2013 It was before its last sunsetted \u2013 When we took a look at the 10 years, they built 35 or 36 affordable units. It\u2019s absolutely absurd. No one is keeping track of whether or not these folks are following through on their promises to give permanent jobs, not seasonal jobs, to actually draw in the population. We\u2019re not seeing it. We\u2019re getting what we\u2019re paying for and we are paying for it as taxpayers.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Yeah. One of the things about TIFs that should be recognized is that TIFs do not contribute to the general fund of a city, however, they do consume services. So what happens is working-class people end up paying for the services like police, fire, and sanitation for the TIF districts for decades. In other words, like say we have a place called Harbor Point, which is this beautiful mini city on the water. Because people will call the police because people will call the fire department, because sanitation has to go and pick up, and someone has to pay for those services. And because Harbor Point has been outside the tax system for 30 years, the people who are paying for it are the working-class people in Baltimore, the middle-class homeowners, and middle-class renters because everybody here pays taxes to the city except developers.<\/p>\n\n\n\n

In a strange way, a person who might be struggling to pay their rent in Baltimore ends up subsidizing the services and the lifestyle of this very wealthy, ritzy development. And a place like Harbor Point, if you walk around, you\u2019d think you were\u2026 It\u2019s a beautiful neighborhood.<\/p>\n\n\n\n

Taya Graham<\/strong>:  It was incredible, we were walking there the other day and there was a Chanel store; A Chanel store in Baltimore City. I went in and I said when did the\u2026 They\u2019re like, oh, it showed up three months ago. We\u2019re new here. There are these expensive, ritzy stores. There was a Warby Parker. I was looking, I\u2019m like, what is happening here? What is this transformation that is occurring? I\u2019m seeing all this wealth concentrating and what happens is when they build these office buildings and they build these high-rise condos, it\u2019s not attracting new residents from outside Baltimore to come in; All that\u2019s happening is they\u2019re cannibalizing residents from another part of Baltimore. They\u2019re taking people from other office buildings and moving them into this newer, glitzier, ritzier area. It\u2019s not building our population.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  One of the things we try to answer in the documentary \u2013 Which is very hard to answer \u2013 Is what is the price of these services that these very ritzy, non-taxable districts are consuming? There is some movement in the council right now to come up with a number on that. That\u2019s a big question. As you asked about the working class, it\u2019s never discussed when these developments are proposed. But they\u2019re putting a burden on people who are already heavily burdened in the city.<\/p>\n\n\n\n

Mel Buer<\/strong>:  And you see incentives like this in Baltimore, and in my hometown of Omaha, oftentimes being rather the exception, they become the standard for how to redevelop certain parts of a city. In Omaha, the TIF incentives were passed by the legislature in 1980, and the number of TIF projects has ballooned, particularly in the last five or so years. And what the city council has taken to doing is property developers \u2013 Like major, I would say, landlords in the city, they\u2019re private developers \u2013 What they do is they lobby the city council to designate certain areas as extremely blighted areas. What that means is there\u2019s a region within the city, they cross out an area on the map. Oftentimes, this area on the map doesn\u2019t have a whole lot of storefronts, per se, but are single-family homes or affordable apartment blocks.<\/p>\n\n\n\n

And they say this is an extremely blighted area. Oftentimes it\u2019s working class, oftentimes it\u2019s in the historically redlined neighborhoods in Omaha \u2013 Which, Omaha as a city, is extremely segregated as a result of that redlining, it still is \u2013 And they say, okay, we\u2019re going to designate this neighborhood as extremely blighted. And it allows these private developers to then go to the city and say, we would like $22 million to knock down this neighborhood and to build a Chipotle or a row of condos. You know what I mean? And it\u2019s a running joke because before I moved out of Omaha, I lived in one of those neighborhoods that had been redeveloped via TIF financing.<\/p>\n\n\n\n

They got the city to change the direction of the roadway so that more cars were going in one direction or another. They have 5-over-1s, which are a particular type of apartment block that can be useful in redeveloping. What ultimately ended up happening is that these developers tried to pass the cost of these increased property taxes off on the consumers who were going to these bars and restaurants. So you would see an additional 19% tax on your\u2026 Like a service tax on your receipts when you would go to the bars there.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  That\u2019s wild.<\/p>\n\n\n\n

Mel Buer<\/strong>:  It\u2019s the same thing. A property developer can say, well, we\u2019re going to build this new half condo, 5-over-1. There\u2019s going to be stores and bars and we\u2019re going to rent it out for a decent price to these businesses who want to start up a business and we\u2019ll say five more jobs will be created as a result. But there\u2019s no sense of consequences when that doesn\u2019t necessarily happen. What ends up happening is working-class families who live in these single-family homes or apartments are pushed out of the neighborhood and then invited to try and move back when the cost of apartments is astronomical.<\/p>\n\n\n\n

Just to give folks a sense of the type of people who live in Omaha, the median annual income for any full-time working person in Omaha, is somewhere around $34,000 a year. The housing units now, the average rental price is around $1,100 to $1,200 per month. So that rent is about $15,000 a year. So 50% of your annual income is going towards renting an apartment. And these property developers who are creating these \u201cbeautiful housing developments,\u201d are market-rate apartments, so they\u2019re not trying to lower the cost. These aren\u2019t affordable apartments for individuals.<\/p>\n\n\n\n

I\u2019m sure you\u2019re seeing this in Baltimore, and they have the same complaints in Chicago. Without being too conspiracy-minded, it feels like a corporate crony collusion with city councils to designate certain working-class areas that could benefit from redevelopment as extremely blighted. They kick those folks out, they offer astronomical sums to landlords and individuals who own the apartment buildings to evict tenants or tell them to find another place to live, they knock it all down, they build something else, and it\u2019s all on the city and the taxpayer\u2019s dime.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Oh, I\u2019m sorry, Mel, go ahead. I apologize.<\/p>\n\n\n\n

Mel Buer<\/strong>:  No, that\u2019s it. It\u2019s frustrating.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Here\u2019s what you\u2019re seeing in very slow-moving\u2026 The US, surprise, has rolled back any investment in public housing whatsoever. It has an anti-public housing philosophy that started in the Reagan era and has continued. And representative of that is a development in Baltimore called Perkins Homes, which was built in the 1940s. It was this huge, sprawling, working-class, publicly-supported, and publicly-bolstered housing. Over time, the city and the federal government rolled back funding and the place fell apart. Taya and I did a lot of reporting there, and Taya can talk about it in a second. So what was the solution? It was not to rebuild the public housing but to have affordable housing for families who want to live near the waterfront. There were, at one point, 6,000 people living there.<\/p>\n\n\n\n

No. Instead, they knocked it all down with a TIF. In order to make the numbers work, the developer said even though they were getting public financing, they had to increase the number of luxury apartments, which is why in Baltimore now, the average rent I read is $2,000 a month, which is absolutely unaffordable for our ADI or our household income. This is perfectly emblematic of the problem in this country. We do not invest in affordable housing or public housing. We think public housing is somehow a problem but we\u2019ve intentionally created the mess ourselves, and Perkins Homes is a perfect example, which we feature in our documentary. Taya, do you want to talk?<\/p>\n\n\n\n

Taya Graham<\/strong>:  The only thing I wanted to add to that description is when he was talking about how this was created in the \u201940s, how it was a working-class community. That is absolutely correct. We met a gentleman who was one of the first residents to move in there as a child with his mother, who was a single mother at the time. He and his brother were living there and he described what it was like living there as it was slowly integrated because initially, this Perkins Home was primarily white and a place of subsidized housing. And what amazed me was the incredible sense of community. We spoke to people who had lived there in the \u201960s, \u201970s, \u201980s, and \u201990s, and this was truly a community. Was it Latrobe Homes where we went where there was a gathering? There was a reunion.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  No, that was Perkins Homes, but \u2013<\/p>\n\n\n\n

Taya Graham<\/strong>:  That was Perkins?<\/p>\n\n\n\n

Stephen Janis<\/strong>:  \u2013 It was the Perkins Homes, yes.<\/p>\n\n\n\n

Taya Graham<\/strong>:  That was Perkins. They had an annual reunion with all the people who used to live there and they said, we\u2019re from such and such court and we\u2019re from such and such court. They were exchanging stories and talking about family members who had passed and checking in with each other. This was a vibrant community. So the idea that they will be invited back to move in is honestly ludicrous. It really is.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Right. This is very emblematic of the band-aid fix that various local governments have leaned on as a way to address what is an acute housing crisis in this country. Unfortunately, in the Midwest, we don\u2019t necessarily have the same rent control legislation that you see in places like Los Angeles or New York City, for example. So what we\u2019re dealing with is we\u2019re dealing with a housing crisis that is made worse by the private, equity-owned, corporate development that is generating these projects as a profit point, not necessarily as a way of ameliorating a very horrifying crisis of houselessness and high cost of living.<\/p>\n\n\n\n

And this is what pisses me off about TIF in general, particularly in Omaha. The city council says, well, this area is extremely blighted. There\u2019s not a lot of development there. The streets are falling apart, the houses are falling down. We want to make sure that we improve this for our residents and create a beautiful space again. And they do this in this sense of being altruistic. But the reality is that the city is rubber-stamping $300 million projects that have no real benefit to the working class and only serve to line the pockets of the commercial business interests in the city. And it\u2019s frustrating.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Yeah. What you\u2019re seeing here is the American neoliberal project playing out in all its wonderful glory. Because what you have is a situation where private capital has said it\u2019s not enough that you allow us to exploit people, but also you have to guarantee our profits. You have to guarantee our private investment will be profitable. In the city of Baltimore, for example, there has been $1 billion committed in future property taxes to TIF projects. Now, if the city took that $1 billion and invested in public housing, of which we have 11,000 public housing units, you\u2019d have a pretty nice public housing review. Instead, they privatized that tax money and turned it into capital for a small handful of people, and as you point out, produced very, very expensive housing.<\/p>\n\n\n\n

So this is how neoliberalism plays out in ways that aren\u2019t always completely obvious, in the sense that instead of investing in a public good, our tax dollars have been absconded, reigned, and used for private capital and private gains \u2013 Where the government ensures the developers they\u2019re going to make money, ensures that the housing is going to be unaffordable, and then turns to the working class and says, please fund the services. So it\u2019s treacherous when you look at the forces that are at play here and the fact that this policy exemplifies what neoliberalism has always been about, which is using public guarantees and public tax dollars to ensure private wealth.<\/p>\n\n\n\n

Taya Graham<\/strong>:  One of the things that Stephen uncovered when he was looking at MuniCap and their but-for analysis, is they are the ones who say if we don\u2019t give this developer X amount of benefit through TIF, but for this tax subsidy, this could not happen. This project couldn\u2019t go through. As Stephen was taking a look at this, he uncovered not only that MuniCap was saying, yes, this looks like a great project, but they were also giving it the green light and being paid for those consultation fees to later management. Making it much to their advantage to say, what a great project this is, especially because they\u2019re going to receive fees to manage it later. But something else that we uncovered in this process is that our city is doing this in the most expensive way possible. There\u2019s something that\u2019s called a general obligation bond. Correct, Stephen?<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Yes. Uh-huh.<\/p>\n\n\n\n

Taya Graham<\/strong>:  This general obligation bond is what the city council would normally take out for it to fund a project, but \u2013<\/p>\n\n\n\n

Stephen Janis<\/strong>:  To fund infrastructure specifically.<\/p>\n\n\n\n

Taya Graham<\/strong>:  \u2013 Or to fund infrastructure. Exactly. It\u2019s very specifically infrastructure. Instead, they\u2019re saying these TIFs are for infrastructure but we\u2019re going to use these incredibly expensive TIF bonds to do this. Now this is a rough calculation, but in the most recent estimate we have, the city had committed $500 million in future property taxes, and about $240 million of that money is interest being paid to Wall Street. This is a bad deal by any measure. If it was a regular GO bond, at least we wouldn\u2019t be paying hundreds of millions of dollars in interest to Wall Street. No aspect of this is not a bad deal. So that\u2019s why we have to sit back and we wonder to ourselves with our city council members, is this incompetence or is this malfeasance?<\/p>\n\n\n\n

Mel Buer<\/strong>:  It\u2019s also important to note, too, that a lot of these projects would still be happening if not for TIF financing, right?<\/p>\n\n\n\n

Taya Graham<\/strong>:  Right.<\/p>\n\n\n\n

Mel Buer<\/strong>:  A lot of times they try to build a TIF financing as saying, well, if we don\u2019t get this tax break, then we won\u2019t be able to gather the capital to do this important redevelopment. In the case of Omaha, Omaha wanted to build a $220 million casino. $17.5 million of that came from TIF financing. And the reality is the casino would still be built even if they didn\u2019t get the TIF financing. So you\u2019re using this tax break that is supposed to redevelop an area that desperately needs it, and it\u2019s being used on vanity projects or private projects that, realistically, they could gather the capital because we\u2019re talking about private equity here, we\u2019re talking about major development companies that can raise these funds elsewhere. And they are leaning on these tax breaks and the altruism that the city wants to put forward as a way of good faith to the community if you will. And it\u2019s a waste of money.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  We have a project that specifically proves your point. The Harbor Point project was built on a unique space, a waterfront space. Not many left on the East Coast. But for a merger between what was Constellation Energy here in Maryland and Exelon Energy in Chicago, Exelon had agreed to locate their headquarters in Baltimore, and they had agreed to do it at Harbor Point. This is like a state agreement, and yet Baltimore still gave $106 million TIF to the developers on the site at Harbor Point, which included Exelon even though it was already guaranteed. So it wasn\u2019t like it was blighted, it wasn\u2019t like this area needed anything. There\u2019s a little bit of virality to these TIFs and other tax breaks because once one guy gets them or one person gets them, everybody else wants them.<\/p>\n\n\n\n

Taya Graham<\/strong>:  Stephen, that\u2019s exactly what I was thinking about. When Mel said the way these TIFs ballooned, I could not get those words out of my head. Because it\u2019s like once that door is opened, everybody puts their hand out and everybody wants a TIF. And what drives me crazy is that the surrounding counties \u2013 Baltimore County, Howard County \u2013 If you are fortunate, the builders out there and the developers out there, they pay impact fees. They pay the county and say, I\u2019m sorry for the burden that we\u2019re going to be putting on your infrastructure because we know we\u2019re going to be using water, fire, and law enforcement. We know we\u2019re going to be a burden, so let us pay an impact fee. And instead, we are handing them hundreds of millions of dollars saying please take our best property and build whatever you want here.<\/p>\n\n\n\n

Whereas in the surrounding counties, they\u2019re getting impact fees. And that speaks to a slightly different issue with Baltimore, which is as Stephen mentioned earlier, that we\u2019re annexed, that we\u2019re separated from the surrounding counties. There are not many cities that are like this left in the country. I think there\u2019s Carson City, Nevada, which is smaller, but the \u2013<\/p>\n\n\n\n

Stephen Janis<\/strong>:  St. Louis.<\/p>\n\n\n\n

Taya Graham<\/strong>:  \u2013 St. Louis \u2013<\/p>\n\n\n\n

Stephen Janis<\/strong>:  Yeah. It\u2019s the only other one.<\/p>\n\n\n\n

Taya Graham<\/strong>:  \u2013 Missouri is the only other one and they both happen to be majority Black cities. We have this invisible wall around us where we\u2019re constantly being told that we\u2019re not worthy and that we don\u2019t deserve to receive impact fees. Baltimore County doesn\u2019t have to pay their water bill to us. And we constantly have the surrounding counties beat up on us for our crime rates, and we\u2019re the redheaded stepchild of Maryland, and they\u2019re constantly beating up on this. One example of that is the fact that we\u2019re giving away the store every single time we let these developers get a TIF.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Right. A good way to round down this conversation is to think about the scrutiny that these redevelopment projects and tax breaks are getting from legislators. I know recently you both were in Annapolis discussing potential legislation to try and curtail some of these projects or restrain some of the runaway trains of what these tax breaks do. Can you give us a little sense of what that looks like?<\/p>\n\n\n\n

Stephen Janis<\/strong>:  What\u2019s interesting is this isn\u2019t about legally curtailing, it\u2019s only about transparency. One of the most frustrating things was \u2013 We just did a big investigation of Harbor East, which is another heavily subsidized development \u2013 And it took us a year to get some of the data about what the project had gotten from the city. So this bill called the Transparency Act, transparency and tax breaks is about getting the information to the public in terms of metrics, in terms of how much has been given to these developers for these developments, which is sometimes hard to figure out. And had they performed, what are some metrics we can use to measure their performance? That\u2019s what\u2019s astounding about this.<\/p>\n\n\n\n

You think about it from the perspective of how private business is always like, I\u2019m not going to invest in something that I don\u2019t know the costs and benefits. That\u2019s exactly what the taxpayers are being asked to do, and this legislation focuses on that. It\u2019s having some problems that we\u2019re probably going to be reporting on later. But that\u2019s it, it\u2019s saying, well, let\u2019s give the information to the public so the public that\u2019s paying for this can know what they\u2019re getting.<\/p>\n\n\n\n

Taya Graham<\/strong>:  As a matter of fact, there was a smaller version of that bill in our Baltimore City Council. Councilwoman Odette Ramos showed up. She said, look, I want to do an analysis, an audit, so to speak, of seven TIFs in Baltimore City. I\u2019m curious to see if a TIF could work in my community. She has some blighted areas and she was hoping it could help her district. The study was going to cost $30,000-$34,000. The money was already set aside, she didn\u2019t have to go hat in hand to get this money. Our city council voted no against it, and the look of shock on her face because she thought this was an easy done. All this is is an audit.<\/p>\n\n\n\n

And I\u2019ll never forget, one of the city council members when explaining why we didn\u2019t need this audit of TIFs or to see any of the metrics of how they perform, he says, we know they work. That was his response. We know they work well. If you know they work and you know they\u2019re so good, then why are you so afraid of letting us take a look at those numbers?<\/p>\n\n\n\n

Stephen Janis<\/strong>:  We testify and we\u2019re going to be reporting on it more for transparency. And shockingly, a billion-dollar program here in Baltimore has little or no transparency for the public.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Yeah. I would say that\u2019s pretty par for the course. The same thing is happening in LA. The City Comptroller is trying to engage in an audit of the budget because we are running into a $100 million deficit for 2024. Pushing back really hard. Folks don\u2019t like having that spotlight which is why the work that you do is important in trying to shed light on some of the things that have a real material impact on how folks live and operate in the cities that they live. Stephen, and Taya, thank you so much for coming on. I want you to come on anytime to talk about this. As new reporting comes to light, please come back on the show. This is important for our listeners to get a sense of what\u2019s going on and how it impacts them. So thanks again.<\/p>\n\n\n\n

Stephen Janis<\/strong>:  No, thank you so much. We will definitely come on again.<\/p>\n\n\n\n

Taya Graham<\/strong>:  Absolutely. It was absolutely our pleasure.<\/p>\n\n\n\n

Mel Buer<\/strong>:  Absolutely. Thank you so much. All right, thanks. That\u2019s it for us here at The Real News Network Podcast<\/em>. Once again, I\u2019m your host, Mel Buer. If you loved today\u2019s episode, be sure to subscribe to the podcast to get notified when the next one drops. You can find us on most platforms, including Spotify and YouTube. If you\u2019d like to get in touch with me, you can find me on most social media. My DMs are always open, or send me a message via email at Mel@therealnews.com. If you\u2019re listening to us on YouTube, feel free to leave a comment down below. And if you would like to send me an email, don\u2019t forget to send tips, comments, questions, episode ideas, gripes, or whatever you would like to send me, I read those emails. I\u2019m happy to hear from you. Thank you so much for sticking around, and I\u2019ll see you next time.<\/p>\n\n\n\n

Republish our articles for free, online or in print, under a Creative Commons license.TAGGED:<\/strong>baltimore<\/a>, economy<\/a>, podcast<\/a>, tax broke<\/a><\/p>\n\n\n\n

<\/a><\/p>\n\n\n\n

MEL BUERASSOCIATE EDITOR<\/a><\/h2>\n\n\n\n

Mel Buer is an associate editor and labor reporter for The Real News Network. Prior to joining TRNN, she worked as a freelance reporter covering Midwest labor struggles, including reporting on the 2021 Kellogg’s strike and the 2022 railroad workers struggle. In the past she has reported extensively on Midwest protests and movements during the 2020 uprising and is currently researching and writing a book on radical media for Or Books. Follow her on Twitter<\/a> or send her a message at mel@therealnews.comMore by Mel Buer<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

POSTED IN ECONOMY AND INEQUALITY Hundreds of millions in tax breaks have been shelled out to corporate developers in Baltimore, showing how corruption and profiteering worked hand-in-hand over decades to worsen the housing crisis. BY\u00a0MEL BUER MARCH 28, 2024 (therealnews.org) Protesters demonstrate on Sunset Boulevard against the removal of a… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/32561"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=32561"}],"version-history":[{"count":1,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/32561\/revisions"}],"predecessor-version":[{"id":32562,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/32561\/revisions\/32562"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=32561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=32561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=32561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}