Auckland News Now – Understanding the Howard Terminal stadium project is difficult for an amateur as it is both an urban construction process and a stadium construction project. In addition, it represents both old and new ways to help finance affordable home construction in Auckland: the intersection of tax increase financing and impact fees.
The problem is that the current Auckland City Council and Auckland City staff are accustomed to using shock rates to get developers to build affordable homes in Auckland. This is the only tool they know. They are unaware that an old-style profit-making approach called tax-raising loans was also used in Auckland to get developers to build affordable homes. That is, until California Governor Jerry Brown abolished the use of tax-raising loans in 2011, when he was enthusiastic about abolishing the California Redevelopment Act.
Currently, tax-raising loans or TIF are back in the form of three laws affecting Howard Terminal. And while TIF is involved in all of Auckland Mayor Libby Schaaf’s life in Auckland, she doesn’t know much about it, neither her staff nor the current city administrator, Ed Rayskin. .. So what happens is that Libby and the council try to impose a collision fee on Auckland A for affordable housing at Howard Terminal, and A’s president Dave Kaval says no, it. I believe that is the purpose of TIF.
So how does Cabal come to think about it? Well, in a phone talk about the stadium on April 4, 2017, I introduced him to the use of tax-raising loans for affordable homes. No-it was a kind of idea session, not a video blog interview. In conclusion, Cabal vowed that public funds could not be used for the stadium. I introduced him to SB 628 Bealle. This is a law that introduced the concept of extended infrastructure financing districts, which is now common, and led to the formation of Cabal and State Senator Nancy Skinner. A unique version called SB293 Skinner.
I introduced Mr. Cabal to the idea of using public funds because he believed that Howard Terminal would not be able to pass Auckland approval without affordable housing parts. I came from a school on how to use tax increase loans as a development incentive. In this case, to enable the construction of affordable homes at Howard Terminal.
At Howard Terminal, the Impact Fee approach wasn’t taken into account for me as it applies to developers who want to build in an area. So basically, “If you want to build here, you have to pay this fee, called OK, Impact Fee.” Such fees are for public art, parking, and affordable housing payments. will be used. However, economic development experts understand that it applies when there is development pressure. Otherwise, the developer said, “No, thank you. We’re going somewhere.”
In contrast, TIF income arises from the expected increase in annual valuations from a given area approved by the city council or a financial institution created by the city council (in this case Howard Terminal). It is used to provide subsidies to make a certain percentage of housing units affordable by bridging the gap between lower rents and the cost of building a multi-unit structure. .. Developers don’t have to worry about losing money on a project, but they can offer affordable housing on a contract.
The formula for TIF is simple. The “base year” of the valuations of all lands and buildings and vehicles and leases in a given area is deducted from the valuations of all lands and buildings and vehicles and leases. The same given area for the following year, which is multiplied by the fixed asset tax rate to give the first year of TIF revenue. The second year of TIF revenue is the second year of the valuation of a given area minus the base year, and TIF revenue is added to the first year of TIF revenue. Run this process 45 times to get total TIF revenue for a given area for 45 years (current legal restrictions on the law the city wants to use).
Then apply the so-called bond sizing formula to determine the size of bond issuance that can be created (without being statistically afraid of defaulting, the ability to pay annual debt costs called “debt repayment”) and redevelopment plans. Create. Around the money we know we can get-it’s called bond income.
Part of the bond income will be used for affordable housing according to the redevelopment plan. Do you understand now? In contrast, Impact Fees are financial children born (for our purposes) in San Francisco.
Influential fees created for direct development in San Francisco
Broad-view impact charges were created in the middle of 20 yearsth century. However, in San Francisco, it was first applied as an important part of the downtown San Francisco plan formed by renowned planning directors Allan Jacobs and Dean McCris (the cities and regions of the University of California, Berkeley, graduated in 1987). With great support from the planning department)).
Impact fees were used to direct development away from San Francisco’s financial district to the underdeveloped South of Market. Importantly, Impact Fee was adopted as part of the plan to mold and shape the development and control the overall development pressure. In contrast, Oakland has recently experienced considerable demand for construction, which began in the last 17 years, but became most prominent during the 20 years of 21 years.NS century. Still, Auckland’s Impacts Fees have been used to build affordable homes to replace tax-raising loans, even though they earn far less than TIF income.
That happened despite the availability of tax-raising loans to Auckland by SB 628 Beale and AB2, the Alejo for Community Revitalization Authority since 2015. At the time, SB 628 beer was the most advertised of the two, so I told everyone in Auckland that the law should be used. We pushed not only to Howard Terminal, but also to Oak Knoll in late 2017.
Not only did Auckland not listen, Mayor Schaaf once said Impact Fees was just as effective. In other words, the fees are as strong as the property tax revenues the agency collects annually for the issuance of redevelopment bonds. Yeah. all right. Gatcha.
And here, six years later, creating a redevelopment area for Howard Terminal would generate over $ 1.6 billion in TIF revenue over 45 years, and assuming a base-year valuation of $ 2 billion, the mayor would still be charged an impact. Is pushing up. In addition, the annual growth rate of the valuation is only 4%. This effectively results in a $ 800 million bond issuance using a principal and interest repayment ratio of 2.
So if the city of Auckland formed Howard Terminal the right way, knowing the $ 800 million target we expect would raise the question of what to pay. Now, ask yourself. Have you ever read or seen about the Mayor of Auckland or city officials? Do you talk in a way that starts with how much money you have available? The simple answer is no.
As a result, the entire conversation about Howard Terminal is overly politicized and unstructured due to the lack of a revenue financial model and bond issuance plans. Oakland Athletics is being asked to pay to build affordable homes, rather than giving them incentives to build affordable homes. The reason for the question is covered in a stupid class struggle against millionaires and does not take into account the fact that a large project like Howard Terminal requires financial support from the millionaire. Hmm. Good development projects are not meant to be a tool for governments to absorb the rich, but to be subsidized to pay for themselves and make them affordable for everyone.
With the California Redevelopment Act, Oakland once had the right idea about government. Use TIF to steer the power of the market and build affordable Oakland. But with Impact Fees, the city of Auckland today is building Auckland, which may own affordable homes, but it’s not affordable for the middle class. Howard Terminal represents an opportunity to reform Auckland’s gentrified economy, but as things progress, Auckland’s city blows away that opportunity, creating a city rich in skyscrapers and poor people look like San Francisco. As threatening. Meanwhile, A departs for Las Vegas, and Oakland again boasts of not spending public money on large-scale development projects.
Auckland leaders may like the rhetoric, but in reality it is a product of a city without the will and initiative to complete a big project. A big convention center? Not in Auckland. Sports stadium? Not in Auckland. A major hotel that attracts tourists? Not in Auckland. And the Oakland version of LA Live? Not in Auckland. Auckland’s history is characterized by a loss after the loss of a public-private partnership, and recently Mayor Schaff is proud of what Auckland is not spending. Today, downtown Auckland is characterized by a shiny new building next to many withdrawal examples and a large proportion of the growing homeless population. Need a low-skilled, high-paying job? Oakland drives them away because they are technical and not cool. Today, Oakland looks like a loser. My question is when will it stop?
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