News

A Middle Class Pathway for Bay Area Workers

I recently attended a lunchtime forum covering research findings regarding occupation and job opportunities for low and moderate income workers in the Bay Area. The event was hosted in San Francisco by SPUR, an urban planning and good government organization of which I’m a member. My colleagues and I previously had the privilege of collaborating with lecturers Jon Haveman and Steve Levy on our report for the East Bay EDA entitled “Building on Our Assets: Economic Development & Job Creation in the East Bay,” so I was curious to learn more about their current work for the Bay Area’s Economic Prosperity Strategy (funded by a HUD Sustainable Communities grant).

The lecture focused on pathways and opportunities for the Bay Area’s low and moderate income (“LMI”) workers to access better-compensated jobs. As presented, over 35 percent of the Bay Area’s workers qualify as LMI by earning wages of less than $18 per hour. These workers primarily differ from others by their relatively low education levels (46% hold a high school degree or less) and concentration in the age group 35 and under. They work and live throughout the Bay Area since their jobs are typically on-site service jobs within all industry sectors of the economy, which leads to a surprising result: their commutes are slightly shorter than the average worker, and are more likely to occur via bus or on foot rather than by rail or automobile.

So what are these workers’ opportunities for advancement? First of all, Jon was careful to point out that this is an analysis of workers rather than households; these workers are not necessarily living in lifelong poverty since the study does not examine household income, and the data shows many will “graduate” to higher incomes over time. That said, the study’s linkage of occupations and industry growth projections provides an opportunity to identify pathways to accelerate and widen this advancement.

Jon and Steve’s analysis has found that occupations in various office positions, sales, and construction tend to have the highest concentration of jobs in the $18 to $30 per hour salary range. These occupations require strong interpersonal skills, yet otherwise often only require on-the-job training (unfortunately, “soft skills” can be hardest to teach). All-in-all, the analysis has identified approximately 155 occupations paying $18 to $30, of which about 46% have zero “hard-to-train” skill requirements. Other middle-income occupations can still provide opportunities for advancement, but require a greater investment of education and training resources for success.

I’m excited to read the final reports that emerge from this project; I think the findings and recommendations will be useful for lots of my Bay Area projects, particularly those in economically distressed communities. Jon and Steve are taking their findings on the road now, presenting at community and stakeholder meetings throughout the Bay Area. In the meantime, check out Egon Terplan and Tony Vi’s blog post about the first phase of work.

Strategic EconomicsA Middle Class Pathway for Bay Area Workers
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Koontz and the Future of Local Government Finance

At Strategic Economics, we’ve been closely following the commentary on the Supreme Court’s decision last week in Koontz v. St. Johns River Water Management District (and, to speak for myself at least, experiencing some intense flashbacks to land use law class!). For those of you who have been distracted from land use wonkery by the Court’s other major cases last week, Koontz could have important implications for local governments’ ability to mitigate the impacts of development and pay for infrastructure, protection of wetlands, affordable housing, climate change preparation, and other important community needs. The Court’s decision extended the Nollan/Dolan test – under which local governments may only require a land owner to dedicate or relinquish a portion of their property as a condition for a land use permit if there is a “nexus” and “rough proportionality” between the requirement and the permit – to the payment of fees, as well as the dedication of physical property. Previously, development fees had been subject to a less stringent test established under Penn Central Transp. Co. v. New York City, which asked local governments to balance the common good with economic impact on property owners (although many states, including California, had already enacted stricter rules). Now, local governments will need to establish that their fees have a direct relationship and are proportionate in amount to the impacts caused by a development project, or be subject to challenge under the takings clause of the Fifth Amendment. (For a more complete discussion of the case and all the legal mumbo jumbo, see the excellent summaries on The Atlantic Cities blog and CP&DR.) Cities have used development fees to pay for everything from wetland mitigation banks to new affordable housing, schools, streets, and sewers. Now, these fees could be threatened.

We often work with cities to identify potential funding sources for public improvements, and developer contributions can be an important component of these financing strategies. For us, the Koontz decision raises more questions than it answers. Some of the questions we’ve been kicking around the office are:

  • How far do the “nexus” and “rough proportionality” tests now extend, and how will local governments and courts decide what is a development fee (or to use the more technical term, a monetary exaction) and what is a user fee, special assessment, tax, or other types of fee that are not covered by Koontz? For example, will liquor license fees be subject to Koontz? As Justice Elena Kagan points out in her dissent, state courts have long struggled to make these distinctions among different types of fees. Now the distinction will become even more critical.
  • What will the Koontz decision mean for the emerging field of community benefit payments, in which developers voluntarily pay for community benefits (such as parks or streetscape improvements) in return for building at higher densities? Will these type of incentives be subject to the more stringent Nollan/Dolan test?
  • Are local governments in California somewhat protected from the effects of the ruling? California’s Mitigation Fee Act already requires local governments to establish a direct relationship between development projects and the improvement being financed, and to limit the size of the fee to the amount needed to pay for the improvement. However, some types of fees are excluded from the Act, such as park (Quimby Act) fees and fees collected under a development agreement.
  • Is Ehrlich Dead? As Bill Fulton wrote on CP&DR, the California Supreme Court’s ruling in Ehrlich v. Culver City had previously provided more flexibility for exactions that are applied as part of a general policy, rather than on a case-by-case basis. Does Koontz overturn that rule?
Strategic EconomicsKoontz and the Future of Local Government Finance
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TOD Workshop in Hartford, Connecticut

Sujata was a featured speaker at a recent transit-oriented development (TOD) workshop in Hartford, Connecticut, focused on understanding the potential for development along new transit lines in the “Knowledge Corridor” region. The Knowledge Corridor will soon have a new bus rapid transit line linking New Britain to Hartford –set to open in a couple of years — and is also planning a commuter rail connection between Hartford and Springfield, Mass. The workshop was co-sponsored by the Capitol Region Council of Governments (the metropolitan planning organization for the Hartford region) and the Partnership for Strong Communities, a regional organization focused on affordable housing and equitable development. Other presenters included Stephanie Pollack, Associate Director of Research, Dukakis Center for Urban and Regional Policy, and David McCarthy of the Jonathan Rose Companies.

Sujata and David presented their ongoing market study for the Knowledge Corridor, which has found that there is a market for TOD in the region, particularly as “Millennial” workers enter the housing market. But given that the region’s projected population and household growth will be slow, and the real estate market fundamentals are still challenging, David and Sujata recommended that the state, region, and local governments begin by 1) making strategic investments along the transit corridors, including infrastructure improvements; and 2) targeting existing economic development dollars to TOD locations. Sujata highlighted the Cleveland Health Line as a promising example of a BRT corridor that leveraged its existing large anchor institutions, including universities and hospitals, to catalyze TOD. Because the Knowledge Corridor is rich in anchor institutions and major employers – many of them within the BRT and rail corridors – this could be a key strategy for moving forward with implementing TOD in the Hartford region.

Strategic EconomicsTOD Workshop in Hartford, Connecticut
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Incentivizing TOD: Case Studies of Regional Programs

One of the things I love about our work at Strategic Economics is that we’re exposed to the range of approaches that local jurisdictions and regional agencies across the country are taking to encourage transit-oriented development in their communities. In some cases, such as our series of case studies for the Puget Sound Regional Council (PSRC) last year, we get to profile a few of the most innovative programs for our clients. Because the strategies and challenges illustrated in these case studies are relevant to a broad audience, I thought I’d use this blog post as an opportunity to share the report with Strategic Economics’ partners and friends.

The six case studies in the report describe the structure, funding and implementation of regional programs aimed at encouraging TOD. While the case studies focus on regional organizations, the roles of other actors—local jurisdictions, community groups and developers—are highlighted throughout.  Four of the programs are led by Metropolitan Planning Organizations (MPOs), one is a joint development program led by a transit agency and one is a regional collaborative of community-based nonprofit and philanthropic organizations. Key themes that emerged across the case studies include the need to advance TOD in a diversity of place types, trade-offs between planning and capital funding, and the importance of ongoing evaluation of program goals.

The programs profiled are:

The case studies were conducted as part of PSRC’s Growing Transit Communities (GTC) program, funded by a Sustainable Communities Regional Planning Grant from the U.S. Department of Housing and Urban Development . Over the next 20 years, the Puget Sound region will be investing $15 billion in light rail and other forms of public transit, creating a significant opportunities for TOD in new and existing station areas and other transit hubs. Other work conducted by Strategic Economics for GTC included a TOD market analysis, TOD housing and commercial demand estimates, and recommendations for promoting equitable development around transit.

Link to report on Incentivizing TOD: Case Studies of Regional Programs.

Strategic EconomicsIncentivizing TOD: Case Studies of Regional Programs
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New Report on the Savings and Revenues Generated by Smart Growth Development

Earlier this week our friends at Smart Growth America published a fascinating and innovative report entitled Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development.  Strategic Economics staff members Sarah and Alison led the firm’s contribution to this report and were supported by Dena and Sujata. The report is a must read because it is the first of its kind to aggregate the studies that municipalities across the nation have conducted to understand both the costs and revenues associated with smart growth development. In some cases, like Charlotte, North Carolina the team’s research revealed that the increased road connectivity enabled via smarter development allowed the fire department to reach residents more easily, and thus lowered the city’s service costs. In other instances, like the original research Strategic Economics conducted on smart growth development in Nashville, Tennessee the findings were similarly interesting. SE’s Sarah Graham found that a smart growth project in a brownfield location could generate two times as much revenue per unit (and 42 times as much revenue per acre) as a conventional suburban development in a greenfield location. Wow, talk about incentive to reconsider the ways we develop land!

You can check out SGA’s full press release here and download the full report here. Happy reading and happy Memorial Day Weekend!

Strategic EconomicsNew Report on the Savings and Revenues Generated by Smart Growth Development
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APA Conference 2013: Invigorating Sessions and Audiences

This last Sunday (April 14th) I blew through Chicago to attend the American Planning Association’s big annual conference. I had the privilege of being on two panels, one of which was organized by John Beutler from Calthorpe Associates and also featured that rock star Jeff Tumlin. This session was about why job location is important to regional planning and what we can do to make more pedestrian/transit friendly employment districts. I talked about why employment locations matter and why regions should work to prevent employment sprawl. John gave a very clever presentation demonstrating how things would look if we treated pedestrians like cars, i.e., privileging the pedestrian and subjecting the cars to all of the absurd things we make pedestrians  do to walk from point A to point B. Can you imagine that? Jeff then showed that if you can’t take the jobs to the transit, companies can provide their own transit. He used the company Genentech and its South San Francisco campus as a really excellent example. Overall, I ended the hour feeling that we did a good job of “making the case” and the audience seemed really engaged.

My other session, organized by David Dixon from Goody Clancy and Kaid Benfield from the Natural Resources Defense Council, addressed the issue of planning for smart growth in low income communities. I won’t summarize the content because Jared Green provides an excellent recap on The Dirt (be sure to check the post out). However, beyond the excellent content, I was very impressed by the diversity of the audience. There were many more young people of color in this session than I’ve seen in practically any conference session I’ve ever been to. It was thrilling to see the next generation of planners vote with their feet for equitable planning by showing up in such large numbers for this session! Keep it up!

denabelzerAPA Conference 2013: Invigorating Sessions and Audiences
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Financing Infrastructure for TOD

This spring, the U.S. Environmental Protection Agency released our report on existing and emerging tools for financing infrastructure for transit-oriented development (TOD). Written by Strategic Economics in partnership with CH2MHill, Arup, and EPA staff, this report provides local governments with a comprehensive overview of the tools and strategies that are available to help pay for infrastructure. In particular, it  focuses on the types of facilities that are commonly needed to support new development near transit. We’ve already heard from partners and planners around the country who have found this resource helpful, and we hope that it will continue to prove useful as debates continue at the federal and state levels about how to pay for rebuilding the nation’s crumbling infrastructure.

What will you find in the report?

  • Accessible explanations of how particular funding tools work, and how they can be assembled into financing strategies that communities can use to pay for infrastructure
  • Case studies of how communities from across the country have successfully financed their infrastructure projects
  • Profiles of innovative efforts to “think outside the box” and come up with creative solutions for financing TOD infrastructure, including partnering with anchor institutions, managing and paying for parking at a regional level, and implementing district energy systems

…and much more. So please download a copy and let us know what you find valuable for your community!

Strategic EconomicsFinancing Infrastructure for TOD
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Jetsetting

The month of March has been busy one for us at Strategic Economics. We kicked things off with a staff retreat, started several new projects and our principals Dena, Nadine and Sujata traversed the country for convenings and project work in Boston, New Orleans, Washington DC and beyond!

Earlier this week, Nadine traveled to Boston, MA to speak at the Value Capture Forum: Innovative Strategies to Fund 21st Century Transportation. This forum, hosted by HNTB Corporation and Metropolitan Area Planning Council (MAPC) provided a space for attendees to develop and explore ideas related to value capture concepts. Specifically, it addressed how Value Capture can fund capital needs for new transportation and/or provide support for ongoing operations and maintenance. Nadine’s overview of Value Capture laid the groundwork for the day’s subsequent presentations on Value Capture in practice and the development of innovative funding and financing strategies. Looking forward, MAPC hopes to see forum attendees use their newly acquired Value Capture knowledge to garner greater public and political support for their projects and related economic strategies. MAPC’s forthcoming whitepaper will synthesize forum topics and present the ways value capture concepts can be used to help the region meet its transportation needs. Keep your eyes out for this resource, as it is sure to be a good one.

On the same day, just a few states Westward, Dena presented on Transit-Oriented Development (TOD) and economic development to planners, policy makers and developers in the Lansing, MI region. Her speech was part of a longer-term effort led by the National Charrette Institute to help develop a unified vision for the Michigan/Grand River transit Corridor. Located in the Greater Lansing / Mid-Michigan region, the 19-mile corridor is a major artery through the region with great economic and revitalization potential.  The Corridor connects the State Capitol in Downtown Lansing with Sparrow Hospital, Michigan State University, and several key retail destinations.  In fact, jobs in this corridor comprise almost 40 percent of the region’s total jobs and closer to 50 percent of the region’s transit supportive jobs. Dena’s presentation included an introduction to TOD, a discussion of the relationship between transit and economic development, and a Q&A session (link to the video coming soon). Central to her overview were descriptions of how employment conditions in the Michigan/Grand River corridor make this an important employment spine for the region and an opportune place for enhanced transit.  The presentation set the stage for a more comprehensive charrette that will be happening in two parts.  The first part will take place in early May, and the second part will be in the fall.  This work is being funded by the Tri-County Regional Planning Commission as part of their Sustainable Communities grant from HUD. Additional support comes from the Michigan State Housing Development Authority.  For more information about the project go to http://migrand-charrette.com/

Future travel destinations for StratEconers include Anchorage, Alaska and Lakeworth, Florida. Until then, we are happy to have the office full and are enjoying the longer days.

Happy Spring everyone!

Strategic EconomicsJetsetting
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A Tropical Town Embracing TOD

When you think of Honolulu, Hawaii what comes to mind? Perhaps it is iconic images of sunshine, tropical fruits and sandy beaches, but as we’ve recently learned this state capital is also confronted with some less romantic realities, like heavily congested transit corridors and high energy costs. In efforts to remedy this situation, the state retained Strategic Economics and Smart Growth America (SGA) to identifying strategies, tools and resources that they can use to maximize the benefits of future rail investment in Honolulu and support the state’s future economic development and fiscal sustainability. The team’s report, “Leveraging State Agency Involvement in Transit-Oriented Development to Strengthen Hawaii’s Economy” is discussed in more detail here and available for download here, so check it out! We are pleased to see the how welcoming the state has been to TOD and sustainability (as evidenced by Governor’s New Day Plan) and are eager to see the application of our work in this unique market.

Strategic EconomicsA Tropical Town Embracing TOD
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