Briley proposes massive additional debt for Nashville in order to build affordable housing.

Nashville's Mayor David Briley has proposed a plan that commits $500 million in public funds toward an affordable housing push over the next 10 years. As proposed, the money would come through general obligation bonds and would be spread out over the next decade. That is a lot of money.  Already Nashville is one of the most debt-ridden cities in America.  Forbes magazine says that when one includes unfunded metro retiree's health benefits, Nashville is the second most debt-ridden city in America. 

The  organization Truth in Accounting, says that of the largest 75 cities in America, ranked from least debt to most debt, Nashville ranks 62nd.  Among the 75 largest cities, there are only 13 cities where the citizens are burdened with more debt.

Briley's proposal would  provide $350 million to MDHA to help pay for 5,000 low and middle income homes, primarily through the redevelopment of Nashville's public housing. It is unclear if this is net new homes or replacing existing public housing.  Metro would also allocate $150 million to the Barnes Fund during the 10 years, which is a 50 percent increase over the current funding levels.

Currently MDHA is in the midst of redeveloping the Casey Homes project in East Nashville, but development is going slow.  Since 2014, when MDHA began the project, only 70 units have been constructed and MDHA has had to dip into reserve funding to finance the project. To read The Tennesseans article, follow this link.

No one can deny that housing is getting more expensive in Nashville and that many people could not afford the home they now own if they were trying to purchase it. New construction in Nashville tends to be high-end homes.  This is driven by market forces. When the city attracts lots of high paying jobs, that creates a demand for high priced homes.  This means that, that is what builders build and all homes appreciate in value and a lot of less expensive homes are purchased by developers and torn down and replaced by more expensive homes. Anyone who drives around Nashville can see it.  With more expensive housing and growing demand for housing, this means many of the people who work in Nashville can not afford to live here. The loss of affordable housing however, is not all the result of market forces.  Metro government deserves much of the blame. 

Three years ago now a developer tried to build an affordable housing development in Antioch, called
The Ridge at Antioch. The property was already zoned to allow this development, but the Council person from the district and an adjoining district tried to down zone the property. Down zoning is a taking of property. Property rights are more than holding title. If the government takes away the right to develop the property that you already possess, that is a taking of your property.  Eventually, the attempt was unsuccessful. The builder could not develop the property with this hanging over his head however, so for two years the project was delayed.  I don't think the property was ever developed.  The Council members fighting to stop this development argued they did not oppose housing development on the property but argued their part of town already had too much affordable housing.  Also, neighbors filed a law suit to stop the development but were unsuccessful. This was not "the projects."  It was an apartment complex that no one would have known was subsidized housing.  This "not in my back yard" attitude and willingness to trample property rights is one of the reasons for a shortage of affordable housing.

The Ridge at Antioch

That is the kind of thing one faces when the property is already zoned to permit development.  It is much worse when one needs a zone change to develop.  Often, developers need a rezoning to develop and not just a base zoning change but need a Planned Unit Development.  Most of the time when seeking to build an affordable development and seeking a zone change or PUD approval to do so, developers know not to even try to build affordable housing. The developer will approach a council man and be told up front, that there is no use pursuing the proposal. There is a lot of lip service paid to the need for affordable housing but no one wants it in their neighborhood.

I had a casual conversation with a large developer I met at a function recently. I asked him his take on the problem of affordable housing in Nashville. He told me that he had tried to build affordable housing but the city would not cooperate. He was going to build a condo development very near downtown where the units would be priced between $150,000 and $230,000.  He said the development would have open space, tennis courts and playgrounds and other amenities. He said rather than the city helping make it happen, the city threw up ever possible obstacle to making it possible.  He said with what one must go through to develop a property, it just makes more sense to build high priced home rather than affordable homes.

Another actions the city takes that drives up housing prices is the down zoning of whole neighborhoods from a zoning that permits two units per lot, such as R-20, to a zoning that permits only one unit per lot, such as RS-20. This happens almost every council meeting. If you lower the potential for greater density, you drive up housing prices. Less available building sights equals higher priced land.

The city also drives up housing prices by policies that beautify low income neighborhoods. I wish everyone could live on a beautiful street with a park-like setting, but neighborhoods with low income housing are going to look different than neighborhoods with expensive housing.  Rules that restrict the type of commercial services that can be on a thoroughfare such as restricting the number of  used car lots and used tire stores and requiring nice screening and disallowing payday lenders, changes the character of a neighborhood.  It makes the thoroughfare more attractive to higher income people and the affordable housing gets replaced by more expensive housing. 

The sidewalk policy also drives up housing prices. If someone builds a house on a street without sidewalks, they must build a sidewalk in front of their property even if it is a sidewalk that goes nowhere and is the only house on the block with a sidewalk. This drives up prices.

I am not opposed to the city promoting affordable housing, but the first thing the city needs to do is get out of the way and let people build it.  There needs to be a realization that developers are more likely to build affordable housing where the land is more affordable. Also, we need to recognize that neighborhood with affordable housing are going to look like affordable neighborhoods.

While affordable housing may be a lofty goal, Nashville is debt-ridden. We do not need to take on more debt. Now is the time to focus on paying down the debt, not taking on more.

Top Stories

SIGN THE DEBT LIMIT PETITION

Initiated by Ben Cunningham with the Nashville Tea Party, working with other conservative groups across the city, there is an effort being made to amend the Metro Charter to limit Metro's debt.  I support this effort. Metro's current debt service obligation is slightly greater than 13% of the operating budget. One important thing this amendment would do is require the city to count its Metro pension obligations as a debt and set aside funds to service that obligation. Frankly, I am more concerned about Metro's pension obligations than I am our other debt obligations.  If this amendment passes, then Metro may get serious about switching from a guaranteed benefit system to a guaranteed contribution system.  Most pensioners do better with the later system but unions oppose it.

The Nashville Debt Limit Charter Amendment is a proposed amendment to the Nashville-Davidson County Charter which is designed to stop the growth of debt before it becomes dangerously high and burdensome. The amendment prohibits the issuance of new long term bonds when total debt service exceeds 15% of the operating budget of Metro Nashville. For more information, see NashvilleDebtLimit.com.

Top Stories

Common Core, mass transit fundng, the Gulch sidewalk bridge and more. Council meeting of 2-18-14 w/ commentary and timestamp.

This is a 2 hour and 20 minute-long meeting. I thought this would be a short, boring meeting but I was wrong; it is a more interesting meeting than most. Speaker Pro Temp Chris Harmon serves as Chair of this meeting in the absence of the Vice Mayor. To follow the meeting and see the agenda and the analysis, follow this link.

All appointments to Board and Commission are approved without discussion.

Consent Agenda.
A resolution is put on the consent agenda if it is likely to be non-controversial and it stays on the consent agenda if it passes the committees to which it was assigned unanimously. The Consent Agenda also includes memorializing Resolution. Resolutions on the consent agenda are passed by a single vote of the Council rather than being considered individually. However, any member of the body may have a bill pulled off of the consent agenda but it doesn't happen often. Almost all of the resolutions on the agenda this time are accepting grants. Memorializing resolutions do not have the force of law but express the will of the Council. None of the resolutions still on the Consent Agenda at the time of the Council meeting are pulled so everything passes unanimously.

Resolutions not on the Consent Agenda.

• RESOLUTION NO. RS2014-948 is substituted to remove the money for other things except the money for the training and software for Common Core testing, reducing the bill from $13.1 million to $4.3 million. Last Council meeting the Council approved issuing bonds for funding the purchase of computers. Councilman Maynard, rightly I think, makes the point that this is premature and should wait until budget time and until after a meeting that the Council Budget and Finance Committee will have with the School Board Finance Committee. As substituted, the resolution is deferred to the second meeting in March by a vote of 29 to 6. To view the debate see time stamp 11:43-28:47.
•  RESOLUTION NO. RS2014-988 and Resolution RS2014-989 and BILL NO. BL2014-689 are all bills which are part of another one of those deals to provide incentives to businesses to locate or expand in Nashville. These bills transfers money from one fund to another and then appropriates money and tax incentives to subsidize HCA for a development on the north end of the gulch. The total amount of the subsidy is $4.9 million. Usually Councilman Josh Stites takes to the floor and is the lone voice against this type deal but does not do so on this bill and it passes without opposition. I hope Stites had not given up the fight. I am conflicted about this type deal myself. On the one hand, I do not think we should do it, on the other hand as long as other cities are doing it, we lose if we don't. See 28:54-35:05 to see the explanation of this deal. 
•  RESOLUTION NO. RS2014-984 requests the Davidson County Delegation to the Tennessee General Assembly to introduce and support the necessary legislation to provide a dedicated funding source for local mass transit. The mayor has come out against this resolution saying it is unnecessary. it is deferred at the request of the sponsor to the second meeting in May. 
•  RESOLUTION NO. RS2014-1001 endorses Common Core and opposed all state action that would discontinue the use of the standards or delay the implementation. I support Common Core and if I were in the Council, I would have no problem supporting this resolution. However, many conservatives, especially the more tea party aligned conservatives, have objections to Common Core. Also, for reasons other than those of tea party conservatives, some educators also oppose Common Core. After some lively discussion the motion passes 25 to 9. Those voting "no" are Bennett, Standley, Tenpenny, Moore, Blalock, Dominy, Duval and Mitchel. See time stamp 38:06-51:36.

All bills on First Reading pass without discussion by a single vote, as is customary.

Bills on Second Reading

• Bills 665 and 666 which address establishing a dedicated source of funding for mass transit are deferred until the second meeting in May. The sponsor, Councilman Tygard, takes to the floor and explains his bills. "Mass transit is not free," says Tygard, "Somebody has to pay for it." Councilman Stein argues against the bill and moves to table it. The tabling motion fails. Great presentation by Tygard! He explains how other cities have funded mass transit and the financial choices facing the city. To understand the logic of these bills, watch the presentation. See timestamp 53:15- 1:22:54. 
•  BILL NO. BL2014-670 authorized the acquisition of property for the Gulch Pedestrian Bridge. The Council pleasantly surprised me by rejecting this bill. The Council finally says "no" to a major new spending project. They vote 30-2 to defer indefinitely. This is a great turn of events. It is not that I do not think a pedestrian bridge connecting SoBro to the gulch would not be a nice thing but we can't afford every nice thing. After the debt of the Music City Center, the Sulphur Dell Ball Park, the east riverbank development, the planned west bank riverfront expansion and amphitheater, and the proposed AMP, the city is pushing its debt capacity. We are even borrowing money to buy laptop computers. At the same time, we are facing a budget shortfall next year and we are ignoring other needs such as new sidewalks in neighborhoods and roadway improvements. Councilman Clairborn does a great job arguing against the bill as does Robert Duval and Tygard. Please watch it. To see the debate see timestamps 1:24:30- 1:54:16.

Bills on Third Reading are almost all zoning bill and would interest no one except those near the property being rezoned.

Below are local media reports on the Council meeting.

From the Nashville Scene:  Council Burns a Bridge in the Gulch, Advances HCA Incentives 

From The Tennessean:  Council slows mayor's progress on Gulch-SoBro pedestrian bridge

Top Stories

Council says "No" to $17 million pedestrian gulch bridge

In a move that surprised me, the Council finally said "no" to a major new spending project. Last night the Council, after lengthy debate, voted 30-2 to defer indefinitely the bill to acquire land for a $17 million pedestrian bridge over the railroads to the developments in the gulch.  This is a great turn of events. It is not that I do not think a pedestrian bridge connecting SoBro to the gulch would not be a nice thing but we can't afford every nice thing. After the debt of the Music City Center, the Sulphur Dell Ball Park, the east riverbank development, the planned west bank riverfront expansion and amphitheater, and the proposed AMP, the city is pushing its debt capacity. We are even borrowing money to buy laptop computers. At the same time, we are facing a budget shortfall next year and we are ignoring other needs such as new sidewalks in neighborhoods and roadway improvements. I don't know what happened to cause the Council to finally say "no" to a spending proposal from the Mayor, but I am pleased they did.

Top Stories