Gary Morse: Accepting the Gary Sasse RhodeMap RI Challenge

During a recent interview on a radio talk show, Gary Sasse, Director of the Institute for Public Leadership at Bryant University, challenged anyone to point out what’s wrong with the RhodeMap RI plan.  His point being that some things in RhodeMap RI are good, and thus we need approval of the whole plan to get to the good parts.  His on-air comment was that opponents of the plan were creating “fairy tales.”  I recall similar Gruber-esque arguments during the debate on the Affordable Care Act.

Strings Attached to the Partnership Grant

RhodeMap RI was funded through a $1.9 million grant provided from the Partnership for Sustainable Communities, which consists of the Dept. of Housing and Urban Development (HUD), the Environmental Protection Agency (EPA), and the Dept. of Transportation (DOT).  The architects of RhodeMap RI were not free to develop an economic plan addressing the bare-knuckles reality of global competition.  There were strings attached requiring the plan be developed around HUD’s six “Livability Principles.”  What should have been an actionable economic plan turned into a utopian social-equity experiment lacking real cost-benefit analysis.

One of the themes of RhodeMap RI is to deconstruct single-family residential zoning.  The original 2011 state application committed to deconstruct “low-density, large-lot, single-use, and scattered sprawl development.”  The problem with this myopic view is that neither HUD nor RhodeMap RI provides any solution to overcome the reality that existing single-family neighborhoods pay the bulk of municipal costs in most RI communities.  Deconstructing residential single-family zoning has the consequence of deconstructing property wealth, and the property tax base.  The City of Woonsocket learned that lesson the hard way and is now burdened with not only a property tax, but a supplemental property tax on top.  Declining property wealth is not benign, or a “fairy tale,” as Mr. Sasse suggests.

A Tale of Two Taxpayers

RI has one of the highest per-capita property tax burdens in the nation.  It’s even worse when the figures are normalized to per-capita household income and GDP. The problem of high property taxes is well documented in RhodeMap RI, and also in the companion document, Land Use 2025, which states:

Rhode Island’s property tax situation, particularly the municipalities’ dependence on property tax to fund local education, presents a number of problems: it has motivated the flight of the middle class from the core cities, and puts great pressure on rural towns to develop a larger commercial and industrial tax base. Moreover, it leads to community resistance to increasing the amount of affordable family housing.

To get around this financial speed bump, RhodeMap RI is promoting two classes of residential property taxpayers.  The first class will be expected to pay the full weight of their property assessments, plus whatever RhodeMap RI supplemental taxes are added on to subsidize RhodeMap RI Growth Centers.  The second class of residential property tax payers will be those who provide sustainable rental housing.  Their contribution will be about one-fifth what the former pays.  It’s irrelevant that both classes of taxpayer will be affecting public schools, being the bulk of municipal budgets.

Lies, Damned Lies, and Statistics

Mr. Sasse is correct when he states that there are no new laws under RhodeMap RI.  What Mr. Sasse fails to recognize is that the issue is not over new laws, but HUD’s desire for stepped-up enforcement of HUD rules against single-family residential zoning.  HUD has made clear its intent to expand the success of a 2006 lawsuit against Westchester County, New York, toward the elimination of single-family residential zoning for those municipalities that take HUD funds.  This is well documented in the Westchester case.  Individual property rights and wealth are viewed as collateral damage in HUD’s quest for social equity.

The basis for HUD’s enforcement in RhodeMap RI will be via the statistics of “Opportunity Maps.”  An Opportunity Map is part of the RhodeMap RI color coding scheme already created for every community throughout RI, illustrating where opportunities for expansion of low-income rental housing are a priority.  HUD has made clear that low-income rental housing choice in every neighborhood is more than a just goal, as outlined under RI state law, but is instead a federal mandate for those who take HUD funds.

I suspect that Cranston residents who look over the Cranston Opportunity Map on the RhodeMap RI Web site might be picking up the phone to ask Speaker Mattiello how deconstruction of their neighborhood should become a state priority.

Is Bryant Clouding an Objective Review

Part of the RhodeMap RI plan is the development of the Smithfield Growth Center adjacent to Bryant University.  RhodeMap RI’s list of winners clearly includes Bryant University, whether it be for the HUD-sponsored affordable housing already planned for the Smithfield Growth Center, or for whatever government grants happen to come in the direction of Bryant to promote this social-equity experiment.

Until the RhodeMap RI plan addresses with hard numbers the anticipated destruction of property wealth, and increased property taxes, the plan should remain on the shelf.  Creating the good parts of RhodeMap RI could have been accomplished without help from HUD.  The state should return HUD’s money and get down to the business of writing an economic plan suitable for the real world of global competition.

Gary Morse is a retired communications consultant living in Barrington and is active in the debate on RhodeMap RI.

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