An Entitlement Program for Rogers Park Landlords: How Will the 49th Ward RIF Benefit Property Owners and Help Solve Chicago's Financial Problems

Follow the link to the fact sheet for the proposed 49th Ward Rental Improvement Fund, the TIF that will cover the entire 49th Ward, and divert up to $54 Million in property taxes paid in the ward to landlords in the area to rehabilitate their properties, on the condition that they reserve a percentage of their units for low-income tenants.

Many people believe that this plan is an "improved" TIF, but the closer I look at this plan, the more difficult I find it to believe that it will benefit anyone other than owners of rental properties who are to receive the grants. 

The RIF (Rental Improvement Fund), a variation on a traditional TIF created to improve rental property, is being promoted by Marilyn Pagan-Banks of North Side P.O.W.E.R. and 49th Ward candidate for Alderman, Brian White. The RIF is projected to generate up to $54 Million over its 23-year lifespan, which is to assist (i.e. subsidize) more than 1,500 rental property owners in the ward in repairing and rehabilitating their properties on the condition that they keep their rentals affordable.

According to the promoters, we need the RIF to "improve the quality of life for all Rogers Park residents by preserving the unique diversity of Rogers Park as a community of choice", to "address the current situation- that much of the housing stock in Rogers Park is aged and could be improved with rehabilitation-while creating a future source of dedicated revenue for continued housing market stabilization and improvement"; and "Protect many of the smaller landlords who may be compelled to exist the rental market or raise rents to unaffordable levels, due to the costs to make repairs." 

The RIF will exist "solely to fund multifamily rental property repair and rehabilitation", and funding would be available to landlords in the form of grants, in return for which the landlord would agree to keep rents affordable, as defined in the guidelines, for ten years.

Taxpayers should have a lot of questions to ask about a plan that will take an "increment" of local property taxes amounting to as much as $54 Million over the next 23 years to subsidize some property owners to improve their properties while maintain rents at reduced levels. For starters,  the grants will be offset by additional property taxes to make up for taxes being diverted away from essential city services, which means that the rents in the area will trend higher and there will be no net gain for the renters on properties that benefit from these grants.

And does Rogers Park really need more cheap housing, in an era of falling house and condo prices, and downward pressure on rentals as failed condo conversions revert to rental?

Will this TIF overlap some of the areas covered by the Loyola-Devon TIF, which still has several years to run? What effect will being in two TIF districts have on the taxes for affected properties? Will it matter? 

But the most important questions are these: What gives a public agency the right to to divert public money to private property owners, whether for the benefit of renters or anyone else? And how is "continuing housing stabilization" the function of a government?

Will the RIF do more to aggravate blight than mitigate it? 

Worse, could it be that the RIF will make lower-income renters worse off, not better, and that they will end up paying more rent, not less? Will the RIF be just another factor in driving up property taxes, and rents, thus not only canceling the benefits to landlords and tenants, while increasing the load on all property owners?

Most of all, how will Chicago solve its financial problems and continue to provide essential civil services such as police and fire protection, public transportation, schools, as well as desirable amenities that make the city an attractive place to live and work, and still keep taxes at levels where Chicago can compete with other cities for businesses and residents, if we continue to divert hundreds of millions of dollars in the aggregate of all the city's 160-plus TIF districts, not to mention a multitude of other massive subsidies named differently, from city coffers to private purposes?

None of our candidates for the alderman in the 49th have addressed the city's mounting financial problems, which mirror those of the state of Illinois, now one of the most financially challenged states in the country. Much less do they seem concerned with how we will be able to fund essential services, and critical infrastructure repairs and improvements in the coming era of rising fuel prices and increasing shortages, and falling tax revenues due to the continued shrinkage of our tax base and the deteriorating incomes of the population.

Two public meetings concerning the RIF have been held so far, with only a day's notice given for each, resulting in low attendance for each. The first I attended, at which Tom Tresser spoke, had only a sprinkling of attendees. It would be beneficial and only appropriate to have another meeting for the public with more publicity and advance notice, and attended by our candidates for Alderman, Joe Moore and Brian White, especially since the latter is one of its promoters; as well as Marilyn Pagan-Banks, and the members of the ZULAC zoning committee. The public is entitled to a more solidly grounded justification for yet another massive diversion of public money for private purposes.

The 2011 Chicago Games: New Northside Candidates Bring Interest to a Dull Race

The Chicago 2011 election looks to be a dull election, a study in foregone conclusions.

The lineup for next year's municipal elections, with a few interesting exceptions here and there, is comprised of Legacy politicians whose major accomplishments are tax increases, budget crises, and massive subsidies for crony businesses, along with reduced services and increased fees for nearly everything. Only in a few wards, such as the 46th and 48th, do Chicago voters have a choice of interesting, talented newcomers who might be capable of reversing the insanely destructive policies and initiatives promulgated by our outgoing Mayor and the 50 spineless, brainless rubber stamps who have never opposed Daley on any important issue and who've played the major part in making Chicago an expensive and altogether unattractive city in which to locate a major business without being offered a massive taxpayer-funded subsidy... and making life miserably expensive for taxpaying residents and businesses while reducing essential services.

Maybe we are all so occupied with the struggle to get or hold onto a job and make ends meet in this dismal time that we have little energy to spare for the 2011 Chicago games, but a curious inertia seems to have settled over the city, for this election seems to be generating very little interest among the population. That is really astonishing given the incredible mismanagement of the city's finances and assets by our current lineup of clowns, and considering that this is the first time in 20 years we've had a real opportunity to elect someone other than Daley as Mayor, whose grip on power was considered so unshakable that he never once during his 20-year reign had a truly serious challenger. Same thing in several of the wards, where entrenched incumbents are stepping down after decades of running virtually unopposed, such as the 46th Ward (Uptown) and 48th Ward (Edgewater), where Helen Schiller and Mary Ann Smith are both retiring, creating opportunities for political newcomers..

There are at least 7 candidates running in the 46th, all of whom are interesting, and a number of whom have extremely detailed and specific ideas to address the ward's major issues. I will decline to comment further on the 46th Ward race as I am employed by one of the candidates, and wish to avoid a conflict of interest.

In the 48th Ward, the bland legacy pol, Harry Osterman, a long-time representative to the State House, is opposed by  newcomer Phil Bernstein, who is best known for his trenchant blog, Edgewater Intelligencer,  and is a feisty and original independent with over three decades of experience as a business owner and public servant who has directed major public works projects, and who offers a detailed vision for Edgwater, including specific plans for reviving Edgewater's moribund Broadway and Granville retail strips and most of all, solving Chicago's increasingly serious financial problems. His opponant Osterman is a nice enough guy in his colorless way, I suppose, but there's more to being an effective leader than being a "nice guy" and Osterman has, after all, been a part of the state government that has made Illinois one or the most financially troubled states in the union. Bernstein, by contrast, not only has very detailed plans for the ward and the city that include viable ideas for reducing expenses and balancing Chicago's out-of-control budget, but has taken real risk in publicizing his positions, his vision, and his plans in great detail at his candidate's website, which most candidates avoid doing, preferring to mouth the usual vague palaver about "creating jobs" and "improving service" and "creating coalitions". It's easy to come through on promises that are nothing but vague, general statements that promise nothing in particular. You aren't expected to deliver what you never promised, but when you say that you absolutely will, say, donate 30% of your salary to local charities, reduce property taxes, and mitigate the city's budgetary problems, you had better deliver. Bernstein pledges to do all of this, and we can only hope that 48th Ward residents are sufficiently motivated by the recent spate of violent crime, the deteriorated condition of Edgewater's retail districts, and escalating taxes, to put their Iphones aside for a few minutes this February, and go out in the cold to vote to give this talented  and spirited outsider a chance.

Here in the 49th, Joe Moore, the 20-year incumbent, has no credible opposition at all. It was not until a couple of weeks ago that I encountered anyone circulating petitions for any candidate at all, though I heard loose talk about a number of others, including Blane Roberts, Joyce Shanahan, Louis Herrera-Baker, Ben Meyer, and  Brian White. I signed Brian White's petition, holding my nose, just so there would be somebody on the ballot besides the incumbent. I have not encountered anyone circulating petitions for anyone else since, even though I walk the streets a lot, and use public transportation.

Somehow, none of these people seem like they're likely to offer spirited opposition. Sorry, kids, but your Facebook page doesn't make it as a campaign site, and neither does a one or two page amateur website with a couple of pictures of you and your charming family, but only vague statements about "service" and no specifics about your experience or qualifications, and most of all no vision or specific, detailed plans as to how you will implement your plans.
              
Well, Shanahan, and recently, Herrera-Baker have dropped out of the race, and Shane Roberts and Ben Meyer are invisible, so Joe Moore's only real opponent at this point is Brian White of the Lakeside CDC. White sole agenda seems to be securing a TIF to cover the entire 49th Ward, designed to subsidize landlords to reserve apartments for low-income renters, and is patently a device for conveying property taxes to certain Rogers Park landlords. Does Rogers Park need more low-income rental  housing? Does diverting our tax revenues from essential services and desirable public amenities to favored apartment owners for the purpose of securing housing for low-income tenants, benefit most of the ward's middle-class population? Since White and Moore are both supporting this TIF, and seem to have similar agendas altogether, White's candidacy seems rather pointless.

If anyone is opposing O'Connor in the 40th (Edgwater-Rogers Park-West Rogers Park, or Bernie Stone in the 50th (West Rogers Park), I haven't heard about it. If you've heard anything interesting, fill me in. These two wards are experiencing problems with spreading blight and crime, and their somnolent incumbents need to be replaced with energetic people who have visions for their wards as vibrant urban neighborhoods with well-maintained rental housing, clean streets, and lively, well-kept retail districts.

$58 Million TIF Planned for Entire 49th Ward- Meeting at Loyola Park Field House Saturday Oct 30

A TIF that will cover the entire 49th Ward is in the works, that will funnel $58 Million to connected cronies. This means increased property taxes and reduced services for 49th Ward residents.

Is Chicago broke enough from the quilt of TIF districts covering this city? How much more can we take? 

There will be a meeting at the Loyola Park Field House tomorrow, Saturday October 30, at 3 PM. 

Click on the title link above to go to the petition to ban TIFs in Cook County. 

Midas Plague

Those of us who are fanatical Science Fiction readers might remember one of Frederik Pohl's more famous stories from the early 50s, during which period Americans experienced for the first time truly incredible affluence- remember the saying "you can't starve in America"?  The Midas Plague projects a society so affluent and so awash in consumer goods of every description that you are forced by government edict to consume as much as possible, and your socio-economic status is measured by your relative freedom from forced consumption; as you ascend the ladder you are required to consume less, not more.

Pohl doesn't show the flip side of the story, which is a society  broke and resource-depleted and burdened with towering debt to make and pay for this crap, to the point where many people are walking away from houses and apartments stuffed with decent, usable belongings simply because they can no longer pay the cost of housing them all and carrying them around. This is where our wealth and a major chunk of irreplaceable natural resources have gone, and we won't be able to reconstitute it into food, money in the bank, or the fossil fuels that made this incredible superfluity possible.I think about this story a lot when I contemplate the devolution of the country into a massive coast-to-coast resale store, as people buried under mountains of unwanted possessions and the debt they accumulated acquiring them, try to unload all the outdated clothing fads, obsolete electronics, multiple sets of china and stemware and turkey fryers and chocolate fountains and smoothie makers and yoga mats and kiddie pools and bric-a-brac and spare tires and multiple sets of tools and hobby kits and old kitchen cabinets and lawn furniture and whatever else they have stuffed into houses and garages and storage lockers, to buy food and pay rent.

 It evokes revulsion, this seemingly uncontrollable urge to acquire and accumulate past any consideration of need or even visible benefit or pleasure that so many Americans seem to have, especially when it's financed by equity-stripping your house and running up credit card bills equal to four times your income. The phenomenon has become so prevalent in rich Western societies that it has triggered a reaction formation known as Minimalism, the paring of possessions to the most basic essentials and an aesthetic of utter simplicity.

In our condemnation of the "materialism" and "consumerism" we think we perceive in the compulsive shoppers and packrats of this country, we forget that the incredible abundance of Western countries in the past 100 years is anomalous in human history, and that for the 10,000 years preceding this period, it was all most humans could do to keep a few pieces of shabby clothing on their backs and acquire the rudimentary necessities of daily life. For most of the world, it still is. That's why status and achievement have usually been measured by how much and what kind of possessions a person acquires. Our urge to accumulate evolved in response to extreme and chronic scarcity that lasted until we learned how to harness the power of fossil fuels, and it is essential to our survival under normal conditions... and the conditions of extreme abundance under which we of the Western world have lived in the past century and half are not normal.

That's just the problem with so many of our basic "instincts". The behaviors we evolved in the long ages of hardscrabble existence that enabled us to thrive and build a base on which to build our civilizations have been rendered obsolete by civilization and are mostly more a threat to our existence than an aid. We once needed to reproduce endlessly because most children in pre-modern times didn't survive past the age of five, but in our present context, a large family is only so many more mouths to feed, and a major drain on the finances and energy of the parents. We once needed to hunt and fight endlessly just to maintain a hold on our territories and stave off predators both human and animal, but now our dominator urge could lead to wars that end up extinguishing the species. And until quite recently, most people needed to amass stores of food and other goods to survive through the long periods of shortages, the crop failures, and the scarcity of almost everything, in periods where nearly everything was made laboriously by hand and you had to settle for what was available to you in your own back yard because of the difficulty of travel and shipping.

We might still need the traits that seem so inimical to survival now, but which will could mean the difference between living and dying in a world of resource scarcity and vicious contests over the scraps of industrial civilization. The acquisitive urge is basically constructive, but we need to learn to channel it constructively, toward accumulation of things that are genuinely useful (like a large savings account, for example) and possibly will be essential as the affluence of the last century fades and the consumerist ethos with it. Unfortunately, we're still wed to that ethos, and haven't gotten past the idea that the best way to achieve prosperity is to buy and fill our houses with "luxuries" of no utility and little lasting pleasure that trick us into believing ourselves wealthy while the bills stack up,  our bank accounts are empty, and we are more dependent than ever on fragile systems for delivery of essentials that could fail quickly and catastrophically. Our economists still believe that the best way to repair our economy is to stimulate spending, and borrowing to spend, on the things that are not only making our houses uninhabitable but are depleting the resources we can never replace and will badly need just to live in basic comfort, at the expense of the savings and investment in the ndustries and systems we will need to provide basic technological amenities and comforts in a future of permanent resource scarcity.

So, when we're tempted to buy another toy or another overpriced trendy garment, or trade up to a bigger apartment to accommodate the swelling horde of consumer "stuff" we've maxed our cards to buy, we should take a look at our possessions and bank accounts, and ask ourselves the following questions: Would this money I'm spending on this item be better spent paying down a bill? Do I even really want this nonessential frill? Could I get this item for free or next-to-free off Craigsllist or Ebay? Do I have the stuff I really need, like a six-month supply of non perishable food and personal supplies for everyone in this house, and necessary emergency equipment like an electric generator and ample warm clothing and bedding on hand?  Would it be better to pay off my mortgage than leverage myself into a bigger house I wouldn't need if I didn't have so much useless junk sitting around? Do I have enough money in my savings account? Is my retirement adequately funded? Would I be better off just getting rid of about half the stuff I have and stop spending money storing it and hauling it from one dwelling to another?

Our core urges and drives aren't corrupt or obsolete, just misdirected because we have not yet learned to deal with the incredible affluence of the modern era in our privileged country, nor do we yet grasp how fleeting this abundance may be. We will have to learn once more how to live with less, and make our resources serve our real needs instead of being diverted into useless consumption and the manufacture of billions of items that will spend the next few thousand years in landfills, the resources that were squandered making them lost to us forever. We'll have to relearn to make truly beautiful, durable things that can be passed down through four generations instead of stuff that breaks or obsolesces in two years. In short, we'll have to revert to the frugality that most people had to practice in the past just to live, while learning to conserve rather than waste.

We Will Kill for Oil

Honesty is so distasteful.

We'd so much rather see WAR IS NOT THE ANSWER, even if this sweet homily seems sort of hollow when affixed to the back end of something that weighs 6,000 pounds and gets 12MPG. Do these people think that there is no connection whatsoever between the 20% of our oil we import from various hot spots in the Middle East and Africa, and our 65-year-involvement and multiple wars there?

Was there ever any other reason for our cozy relationship with major human rights violator Saudi Arabia?  Or for our presence in Iraq, which is expected to displace Saudi Arabia as the largest producer and exporter of oil over the next decade? Or Afghanistan, of great strategic importance in accessing and securing the estimated $12 Trillion in oil reserves projected to reside in the Caspian Sea.

And how many people here want to reckon with the consequences of a sudden, drastic reduction in available oil supplies? So far, there is no indication that our local leaders even consider the possibility, let alone how it would cascade through our systems to produce critical shortages and major system failures. Chicago has no emergency plans in place, and instead of making the improvements necessary to our critical transportation and utility infrastructure necessary to keep the city intact and functioning with decent levels of safety and sanitation in the event of a prolonged emergency, are searching for more paths by which to divert tax revenues from essential public needs to the back pockets of corporate cronies while starving our increasingly decrepit and inadequate public transportation. To date, I have not once heard the term "peak oil" pass the lips of Obama , who prefers to talk about "reducing our dependence on foreign oil", as though there were any other kind, especially since it has become glaringly evident that offshore drilling is not likely to offset the fading production of the super giants, and neither are the tar sands of Calgary,which require staggering quantities of fresh water and natural gas to work, which means that the oil from the sands is not only partially subsidized by Canadian taxpayers and would have a negative EROEI without that subsidy, but comes at the expense of natural gas supplies, which are subject to rapid and irreversible depletion just as oil is.

Iraq and Afghanistan were Bush's Wars, then became Obama's Wars, but they're really our wars, and they probably will not end until every last drop of oil has been extracted from every last well, or at least until the cost of extraction is a barrel in for a barrel out. That time may come sooner than we think as it is. Obama's promise to end these conflicts, so quickly reneged on, is being flung in his face by foes and former supporters alike and will no doubt be used as a major wedge in the 2012 election by the next pandering con artist who runs on promises to accomplish the impossible, but anyone who believes that we'll withdraw from these conflicts anytime soon is probably someone who believes in perpetually self-renewing abiotic oil, or that we can run our economy on wind turbines, used restaurant grease and corn liquor.

It is probably useless to consider that our resource wars are only hastening resource depletion, or that all combatants will eventually lose, for the oil will deplete remorselessly no matter who controls it. But in the meantime, we probably have no choice but to soldier on, since we are still in stone denial concerning our extreme dependence on petroleum and are in no way prepared to make the adjustments and arrangements that would enable us to withdraw from the Middle East and lose access to the bounty of Iraq, or the Caspian sea. Nor is the rest of the western world, which relies upon the U.S. to do the dirty work of securing the oil supplies for other western nations, and any political aspirant who suggests that we confront the inevitability of resource depletion and consider these wars already lost, and learn to live with much less energy, is committing career suicide.

So what it all means is that we will continue to kill and be killed for the oil in the Middle East, and Africa, too,  just as we have for decades now, because the alternative, a rapid withdrawal with the possible sudden loss of 20% of our usual supply, would mean incredible chaos and violence, and random death on a mass scale,within our borders, as the systems we rely on to deliver electricity and clean municpal water and vaccines and medication and cheap, abundant food, all start to wobble and fail for lack of the necessary energy imputs to run them. It's an alternative that I'm personally not willing to accept if there is any way around it, and I'm sure you aren't, either, but I'm not holding my breath waiting for our leadership and general public to embrace the only alternative to "the war that will not end in our lifetimes", as Cheney  put it, which is to downscale and rearrange our systems and our lives to enable us provide for ourselves at a decent level of modern comfort and amenity in the absence of copious quantities of oil.

Over The Cliff

While American policy makers pass energy bills designed to pander to various lobbies and to allocate the largest subsidies to the "alternatives" to oil that are least likely to be suitable replacements and provide us with even basic amenities in the energy-short future, a number of geologists and energy analysts are eying the rapidly dropping rates of new gas discoveries, and the steeply falling drill rig count with growing alarm.

Natural gas is now considered to be the most likely substitute for oil, in spite of the fact that it, too, is a fossil fuel that is almost always found in proximity to oil, and is also subject to depletion. Gas prices are at deep lows and consumption has dropped in recent years, and policy makers and the public alike are pacified by the assurance that we have enough natural gas in North America to last 100 years at current rates of consumption. 

Energy writer Kurt Cobb at Resource Insights, among a number of other prominent prognosticators, believes that natural gas supplies are headed "over the cliff", that the drop could be rapid and precipitous, and its onset could take place in less than three years. In a recent article at SCitizen, he outlines the convergence of circumstances now in place that could cause seemingly plentiful North American natural gas supplies to plummet precipitously in the near future. These include not only the unexpectedly rapid rate of depletion in recently drilled wells, but the shutting in of existing drills due to extremely low current gas prices.

As I've pointed out in previous posts, a 100-year supply will become a twenty-year supply very quickly were consumption to increase by just 5% a year. That's something we need to be very concerned about, because at this juncture, our leaders, driven by the fossil fuel lobby and in deep denial concerning our ability to continue business as usual as that has been done sine WW2,  are hell-bent on converting our fleet of 200 million cars and trucks to natural gas. The conversion of our gigantic fleet of petro-burners to natural gas would cause consumption to ramp up very steeply over the next decade, and drive this extremely valuable fuel into steep depletion, with dire implications for our ability to meet other critical needs, such as for food and heat.

Not only is natural gas used to heat most of the homes in the U.S. and is the most efficient and economical way to do that so far, our population of 305 million (and growing) people are extremely dependent upon mechanized agriculture for food, and natural gas is absolutely essential for manufacturing the nitrogen based fertilizers that made the "green revolution" possible.. Obviously, rapidly declining gas production could mean widespread food shortages, or even famines, in this country that has never experienced such a thing, and would also make many other essentials, such as ample home heat, unaffordable for a sizable fraction of our population. That the result would be unbelievable suffering accompanied by a steep increase in disease and hunger and rapidly falling lifespans, ought to be obvious, but our leaders don't seem overly concerned with the implications for our non-rich population, which is about 95% of us.

Rapid depletion of existing wells could easily cause crippling shortages and steep increases in prices in the next few years even if we don't increase our consumption. Therefore, it would be sheer insanity to double the demand for this fuel by adding the load of our entire transportation system, if indeed we could even begin to convert our fleet of gasoline burners, or put into place the delivery system needed to make the fuel widely available.

The promotion of natural gas as the silver bullet that will save our energy-intensive way of life is just the next stage of denial. Our business and government leaders now recognize that peak oil is a fact, and we are understandably frantically casting about for a "solution" that will permit business as usual to continue, forgetting that all resources have a depletion curve. This is why our political leadership and business elite not only will not be of any help in dealing with the vicissitudes of life in a rapidly contracting economy and increasing scarcity of necessites, but will actually be major obstacles to successfully managing the massage shift in our economy and its physical underpinnings now underway.

Eliminating Housing Subsidies Will Improve the Economy

Excellent article at Irvine Housing Blog

Eliminating housing subsidies may cause house prices to drop, says Irvine Renter, but it will free up capital for more productive uses.

How many  "more productive uses" can you think of for the $3.4 Trillion that we've committed to mortgage assistance, tax credits for new buyers, backstopping the GSEs like FMAC and FNMA against their hundreds of billions of dollars in losses on bad mortgages, and other assistance and subsidies for the sinking housing market? How much do FHA loans with their average 20% delinquency and default rates cost the taxpayers? How much do we lose to the mortgage interest deduction?

And how many poor people are living any better with Section 8 subsidies than they would be without this welfare program for slumlords?

$3. 4 Trillion would repair every dangerously deficient dam and bridge in this country. It could rebuild St. Louis' collapsing sewers, and rebuild Chicago's lakefront and rail system.

It could rebuild the aging water treatment infrastructure in all the older cities.

We could build a completely electrified rapid-rail (not High Speed) to every city and town in this country with a population of more than 5,000.

It could be put against our towering public debt load, most of all.

We might once again have productive industries making the things we badly need, to the benefit of every socio-economic group in this society, while housing costs would drop steeply. Poor people could find more "first-rung-on-the-ladder" jobs, and our middle classes could have more opportunities for advancement and more job niches utilizing a greater variety of skill sets and talents, while the rich would have more profitable investment opportunities where their capital would be utilized building new industries providing the technologies and systems we will need to maintain our technological amenity while transitioning to a low-energy regime.