IS IT SMART OR DUMB GROWTH FOR ALEXANDRIA?

Politicians claim we can improve our fiscal health by promoting more development. When the red ink turns up we are told to “grow ourselves out of debt”.  And when asked how, the same voices invoke the sobriquet of “smart growth”.   Whether we really can “grow out of debt” is another matter and whether our growth has been “smart” or “dumb” is also up for contention.  Smart growth has become a buzzword, loosely thrown around by developers, but it does have a real meaning.  For one it signifies that development is commensurate with the fabric of a neighborhood; next, it means that growth does not overpower the capacity of a neighborhood to absorb new residents; and, it also means that new development does not mar or exhaust the immediate environment.  Not the least, a central component of smart growth is its cost efficiency and whether it deepens our fiscal hole.  We should consider whether our current growth really has been smart and question assumptions about “growing out of debt”.    

Let’s look at what we do know about Alexandria’s budgets and its development. Over the past decade budgets have tracked upward.  With the exception of the great fiscal crisis during the years 2008-2009, debt service has moved upward along with recent development (calculated as the value of new construction).  The table below shows that pattern.

 

The solid line shows mounting budgets, beginning at a modest $521 million just ten years ago and rising to well over $625 million as of last year.  Development also rose from $480 million to $546 million. These statistics tell us that increased budgets are associated with the dollar value of new construction (development).  Digging more deeply, we know from the numbers that 18 percent of the city’s budget can be accounted for by new construction. Development does incur costs.   For every million dollar increase in development we have a corresponding rise of $180,000 in budgets.   Even more important, debt service has risen over this period from 8.4% of the budget a decade ago to 12.7 percent by last year.  The simple fact is that Alexandria is in the midst of rising budgets, rising development and rising debt service––all occurring together. 

This is not necessarily bad.  Supporters of the “grow out of debt” theory would point out that population and business have also increased; that debt service is still a small proportion of Alexandria’s assessed property values; and that increased expenditures are investments in the future.  They would be right on the first count and largely misleading or irrelevant on the others.   For one, the question is not only whether our tax base has increased, but whether those increases lagged behind expenditures.  Second, increases in assessed properties also mean higher taxes.  The issue here is not whether Alexandrians can handle higher taxes, but are we willing to incur the costs of growth.   Third, all this begs the greater question of whether our current pattern is an investment in the future or a disinvestment in the real assets of our city.  

Certainly, growth can be good if it is done smartly, but it can be bad when done dumbly. Smart growth means that we should examine every stick and brick about to be constructed to determine whether it really adds value to the city.  Budgets that grow without enhancing capital infrastructure or improving services should be suspect.  Increases in the proportion of budgets consumed by debt services should be worrying.  Even on these points we are not simply dealing with numbers but with quality of life.  21^st century congestion choking 18^th and 19^th century streets does not make for a better city; nor do modern buildings that block sunlight and obstruct waterfronts help us.   Most especially for Alexandria, the relationships between numbers and quality of life are interdependent.  We should not make the mistake of believing we can compromise our quality of life without this coming back to haunt our fiscal health.    

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Hank Savitch is Emeritus Brown and Williamson Distinguished Professor of Urban & Public Affairs at the University of Louisville and a Visiting Fellow at the Metropolitan Institute, Virginia Tech.  He lives in Alexandria and can be reached at hvsavi01@vt.edu

    

What Allison’s Victory Could Do for Alexandria

What Allison’s Victory Could Do for Alexandria

Hank Savitch[*]

               

 A new face at the mayor’s helm could eventually do wonders for Alexandria, but at the moment this can only be an early step.   Lots of people have pounced on Allison Silberberg, accusing her of seeking to “paralyze” construction and hinder business.  Nothing could be further from reality and to prove it she has come up with a stack of pro-business bona fides (supporting development at Potomac Yards, re-making Landmark Mall, and taking a stand against eminent domain to oust a private boat club).   Allison seems to be saying, build and build intensely, but pay attention to what is built and where it goes up.   

These statements alone will not give her a solid platform from which to govern.   Our new mayor will need to play a new development game and demonstrate how she differs from her predecessor.   Allison must recapture a vision of Alexandria that is both inspirational and practical––not only because it is a mark of honesty but because it runs to her political core.  She would do well to consider “smart growth” as a benchmark for assessing our city’s future.  “Smart growth” is about strategic development that weighs long term benefits against short term considerations; it means that cities must position themselves within a larger environment so they can make optimal choices, and it requires outcomes that are balanced, sustainable and equitable.  

The best cities do “smart growth” neighborhood by neighborhood.  Healthy neighborhoods keep the rest of the city alive by providing alternating streams of pedestrians, patrons, students, workers and other users.  They keep Main Streets from lapsing into cyclical ups and downs that boom at one time and fall dead at another.  The path to sound development lies in respecting the scale and diversity of our neighborhoods (sustainability), distributing movement so that narrow streets are not choked by swarms of motor vehicles while others are empty (equitability)  and resisting mindless development that will turn us all into a single industry town (balance).  While hotels and restaurants are good things for Alexandria, an overreliance can only make us more vulnerable to economic swings (as well as produce alternating periods of hyperactivity and dormancy).   

 Allison will have to work on a different kind of development that takes better account of varying scales and densities.  She will have to invigorate our commercial thoroughfares in a different way—by introducing incentives for bringing needed uses into our commercial centers.  In order to reduce the threat of more restaurant rows this city should offer tax abatements for businesses that qualify as “needed uses”.  High end uses for tourists should not drive out ordinary uses for residents.  Hardware shops, shoe repair stores, green grocers, newspaper/magazine kiosks can be encouraged through targeted fiscal relief and land use incentives.   A viable theater/movie house on King Street would go a long way toward joining both residential and tourist trades.  It would also generate an innovative, multiplier effect for other land uses.  The trick is to bring in talented management that will reproduce the success of theaters in other small cities.

There is a pragmatic and indeed a pro-business side to “smart growth”.  For one, it will temper an oversupply of buildings, thereby avoiding local market depressions.  Second, it will assure that Alexandria does not fall into the trap of a race to the bottom, where cities compete with each other to attract the same tourists and chase the same industry––often to their own detriment.  Third, it will keep Alexandria whole, with an array of mixed land uses, reasonable traffic conditions and a healthy mix of residence, commerce and leisure. 

How to do this is no easy task, but there are both short and long term paths.  The results of next November’s general election can either leverage Allison’s victory into a larger movement for “smart growth” or keep the June primary result as a one shot affair.  We will have an opportunity to opt for a new politics by voting in a new city council.  Yes, these are Republicans, who have already spoken up for supporting preservation with growth, who are fiscally responsible and who are likely to work with our new mayor despite party differences. 

A longer term path lies in changing our council from its present selection as an at-large system (citywide) to voting by districts (neighborhoods)   At-large elections are a vestige of the 1920s and have been found to create more distance between citizens and their representatives.  Voting by districts shortens that distance and increases accountability.   Alexandrians would do themselves a favor by choosing to balance an at-large mayor with council members from smaller districts.  That is the kind of balance commensurate with “smart growth” and deserving of our attention.                                 

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[*]  Hank Savitch is a Visiting Fellow at the Metropolitan Institute, Virginia Tech, NCR.  He has written extensively on urban issues through more than a dozen books and 100 articles.   He been a former consultant to mayors and international organizations and currently resides in Alexandria.  Contact at hvsavi01@vt.edu