Wednesday, February 6, 2019

How To Fix a City Like San Francisco's Construction Delays

  https://www.youtube.com/watch?v=yiXjiJ5GSoM (ReasonTV: Bad Laws Worsen The Homeless Crisis)

  ReasonTV released a new video talking about how SF made their homeless problem worse by their police ignoring on-street drug use, the city encouraging homeless by choice through subsidizing their lifestyle, as well as preventing new construction for low-income or high-density housing. On that latter point, they used an example of a developer who wanted to take an old building, 15 years vacant, and turn it into apartments but was delayed four years before he could get the ok. Meanwhile, he still had to pay taxes and other costs associated with the property. Permit delays are common in CA, even in some otherwise decent cities, and do much to harm affordable housing or prevent full use of private property. It would be nice if voters in these cities simply fixed their own messes, but I believe it is wrong for the state to let a city hold a minority of their residents and property owners captive to policies where crime is permitted and reasonable private property use prevented.
  As one step towards preventing this, I think there's a law we could attempt to pass at the state level that would go a long way to help. At the point a property-owner files for permits for a complete redevelopment of a property, property taxes must stop until that permit gets final ruling(including time it may take to wind through courts while the owner seeks an appeal of improper rejections). This way, the property-owners have at least some protection against hostile municipalities.
   There would have to be some protections against abuse, of course.
  • Granting this on full redevelopment only(complete razing of property) would be a straightforward way to prevent a land-owner from using an expected denial as a way to avoid property taxes. This might encourage too many teardowns instead of more efficient and history-friendly remodels, so perhaps it could be based on whether the property would be continuously populated or used for current purposes during construction. This way, if you're remodeling half an apartment building, while the other half stays in use, you could declare as such and only pay taxes on the portion that would be in continuous use. This would also encourage cities to permit remodeling more often, as they would lose less tax revenue versus trying to deny a redevelopment. It would leave more room for debate on what percent is in-use and what percent vacant.
  • It would only start at the beginning of the scheduled construction date: if you're seeking permits but construction wouldn't start for six months after expected approval, protections would only kick in after six months.
  • You could require the land-owner to continue to pay taxes into an escrow account; if you fail to meet the start of development deadlines after having accepted tax protections, you will pay back-taxes on those dates. This is still pretty risky for the landowner, because it could let a city bleed their resources during appeals while still having to risk additional money on back-taxes(that would otherwise not exist if you had abandoned your plans and sold the property). If you win your appeal but then cannot fund the development on original deadlines, you again risk losing money. 
  • Tax protections end once a final ruling is given, or during any delay between a ruling and filing of an appeal(you cannot sit for months before filing appeal, while still under tax protections). An appropriate grace period should be granted before tax protections are lost, equal to a typical minimum time needed to prepare such an appeal. 
The hope would be that cities would be encouraged to speed up their permitting processes and prevent needless delay through improper denials. It would also protect property owners from delays caused by lawsuits from third-parties who attempt to prevent otherwise legal and approved construction: if you are approved and your neighbor files a lawsuit to challenge that approval, that would likewise trigger protections(and prevent a hostile city from using third-party challenges to get around these protections).

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