I have written numerous times about a special tax break known as a TIF for the redevelopment of the long vacant Dixie Cup factory, located in Wilson Borough, into 405 luxury apartments. At a time when many families are facing increased housing costs here in the Lehigh Valley, it seems like a sick joke. Northampton County rejected this boondoggle in November in a narrow, 5-4 vote. But three of those no votes are no longer on Council, so like the Terminator, pitchman Brian Bartee was back again before a new County Council on Thursday night to sweeten the deal with a little more sugar to make the medicine (or should I say poison?) go down. Instead of a scant $1.2 million in county coffers, he's now willing to offer $2 million up front if the county would agree to a tax break that allows him to float bonds for $26.4 million in construction costs for the nesting perches of our well-too-do betters. We'll get the money back in 20 years. What could possibly go wrong?
While running for office and after taking the helm as county exec, Tara Zrinski has stated she'd be no Lamont McClure 2.0. That may be true, but she certainly seems like at least a Lamont McClure 1.5. Instead of proposing to tax the rich, the owners and renters of luxury apartments, she wants to give them a tax break
She started off by warning everyone, "I'm going to say some pretty unpopular things." But it was sweet music to the ears of private equity and developers whose bottom line is and always has been, "What's in it for me?" It was honey on the lips of trade unions who want the temporary construction jobs. And those trade unions, by the way, have bankrolled Zrinski's political ambition.
She acknowledged that she went on a tour of the site, and as she was perched on the roof or perhaps even the Dixie Cup with the raptors and vultures, she could see the state of disrepair of Wilson Borough homes. Some are in need of new roofs. Others need siding. That alone should have told her all she needed to know. This project will do nothing but create more disparity between the haves and the have nots.
She argued that the developer is willing to make public improvements to the property that will spare the county the expense of doing so. That's a flat-out canard. She knows that the county has nothing to do with roads, power lines or sewer. Moreover, the developer has proposed these changes for his own benefit, to make the luxury apartments more attractive. In reality, his apartment is going to create an even bigger traffic nightmare along 25th Street.
Her biggest and most illogical argument is that building 405 luxury apartments will ease the Lehigh Valley's housing shortage of 9,000 units. It will in fact exacerbate the problem.
Let me give you her argument, as she states it herself. "The Lehigh Valley Planning Commission says that we need 9000 units. That's not all affordable housing. There's a downward pressure that exists that is pushing people who can afford higher level into lower level. So while it doesn't intuitively make sense that if we put this higher priced apartment in, it makes sense if somebody who is occupying a $2,000 or $1,800 apartment or a $1,600 apartment, who could move into a $2,400 apartment, would be able to move because there's a place to go. Thus freeing up the other spaces. That is the logic here."
And that logic, as she puts it, is completely illogical. It assumes, and you know what happens when you assume, that the population remains constant. And that is belied by the very same Lehigh Valley Planning Commission, who notes we are adding 4,300 people every year, most from other states. So these luxury apartments will not be attracting affluent Lehigh Valley residents who will ditch a $1.600 a month apartment for one that rents at much higher rates for that cathedral ceiling. It will instead attract NY and NJ residents fleeing a higher cost of living there. It will make housing less affordable.
Take a look at nearby Easton, beautiful river town that is beginning to rival Frenchtown, Lambertville and New Hope. There are now several luxury apartments in what was once called Fishtown. Has that eased affordable housing there? The opposite has happened. It has attracted NY and NJ tenants who can commute or work from home. This in turn has made rentals there ridiculous. That problem is just made worse by giving a tax break for more luxury apartments even when a developer is willing to give you a pittance to ease your conscience at what you must know is wrong.
And what about nearby landlords like the Wilson Borough landlord who gobbles up properties at tax and sheriff's sales and then rents them out? They are delighted and one of them actually appeared at the TIF hearing in November. They can now demand even higher rents.
The only real way to ease the housing crisis is by encouraging more smart development that includes tiny homes, a reduction in minimum lot sizes and setbacks, an ease in tariffs on construction materials, accessory dwellings and more mixed-use development. County government has no say in any of these things.
As government screw-ups go, this would be the biggest one since the swaption debacle. And to make things worse, I have serious doubts that this great developer that Zrinski touted, will ever complete the project. More about that tomorrow,
23 comments:
No one expected logic from the most illogical person in government. This is a handout to developers and Reibman who holds th inflated mortgage. Of course you have Keegan, Warren and Kraft agreeing with the McClure initiative. Kraft claims it is stupid to oppose this project. Not everyone is given a business deal Kenny. This is well off welfare. This helps no one but the investors. I agree the idea of this being a palace in twenty years is a gamble county taxpayers should not be forced to make. This developer gang sounds sleazy. This was voted down and so they shop it to new McClure bought council people to pass it.
It is really sleazy to bribe government with cash handouts. He got shot down the first time, so he comes in now and at the last minute offers more cash. It should be illegal. How about decent wages and funding the retirees account as per the actuary, they need the help more than this tribe of developers.
The county executive should be more concerned the bad budget she has. The deferred maintenance, the low pay and the Nursing home rather than building houses.
Youa re right Bernie, this is not county business, but it takes eyes of th real problems in this govenrment. Along with the meaningless feel-good resolutions, they all continue to kick the can down the road.
Zrinski is everting McClure paid for.
Having grown up in Wilson and living in Northampton County all my life, I believe the worse thing for Wilson and the county is more luxury apartments.
The best thing for Wilson and the surrounding areas is to demolish the sight. Can't the county and borough buy the property and demolish it? Build a new borough park or county park with swimming pool, tennis courts, walking trails, etc....
Meuser Park is not what it once was and looks disgraceful. The pool area looks like a fair storage area and there are no families ever in the park. The borough should work on making the quality of life better for residents by not making it more congested and city like. Wilson could return to the once sought after place to live and the county adding more green space can only improve Northampton County.
From an economics perspective she is correct. ALL new housing increases supply, which does relieve some downward pressure. Whether it is cost effective is a different inquiry
Bernie, I agree with each of your points. Tara can't guarantee there will be no county tax increases over the term of the TIF, but if NORCO supports this TIF she can guarantee that the developer gets a tax break. Why should residents in Bangor, Wind Gap, Pen Argyl, Easton, Bethlehem, Hanover Township, Bethlehem Township, Nazareth and all the other municipalities (other than Wilson Borough where the project is located) be on the hook for both the subsidy and eventuality of tax increases by the county? BTW, that $2 million pledge from the developer sounds like a bribe!
She is even worse than McClueless, if that is possible. God help NC!
No one ever seems to discuss the impact these days of adding ANY type of additional housing units, low, medium, or high end living spaces. This is the impact on neighborhood public school attendance.
The reality is, most new arrivals coming into newly created rental housing bring along 1-3 children, possibly even more. An additional 100 dwelling units could well require the addition of 10 new classrooms within the school district. Multi-ply that out and over time, new school construction projects and hiring of more teachers results.
Didn't you endorse her and her colleagues, including a guy who can barely read the King's English? You were told this would happen and you carried their water, anyway. Stop complaining. You asked for this. Everyone knew they'd do this. Stay tuned for more.
I've just explained why she (and apparently you) are both wrong and illogical. Your argument presumes that population remains constant. It does not. In this area, it is increasing. Thus, luxury apartments will not provide the downward pressure on housing of which Zrinski spoke. It will do the opposite and actually spur even more rent increases. Look at Easton. Luxury apartments there created no downward pressure on rents. They created upward pressure. It's a nonsense argument to justify a bad idea.
I was appalled to see that Zrinski was carrying on multiple sides conversations from her seat during the meeting, distracting from council members speaking and being extremely rude.
I was tempted
Exactly!!!
No, I never endorsed either candidate for exec as I thought both would be fine. I believe Tara did a good job as Controller. and am impressed by much of what she has accomplished. I will be writing about that later in the week. But I am impressed by neither the approach she has taken to Gracedale nor her support of corporate welfare. And no, I did not vote for or endorse Qayyum. Also, let me add that if a candidate had to do 100% of what I want for me to support him, I'd be unable to support anyone. I'm happy if it's about 40%.
7:00 am, Not sure that is true as most rentals are 1 BRs. That's why schools like them over houses.
The Lehigh Valley as we knew it is gone. Between the warehouses, traffic and influx of people from New York and New Jersey it is no longer affordable. You cannot find a place to park in Easton. This project, as you correctly state, will make things worse. We left the area 3 years ago to find affordable housing.
Move 50 miles to the west.
Matt, One of the shortcomings of watching a meeting on Youtube instead of being there in person is that I miss these off-record interactions. They often reveal more than the meeting itself. But the advantage is I can get a little more sleep. If this occurs often, it betrays a lack of respect for the governing body. But Zrinski was a member herself and all but one of her colleagues on Council belong to her party. So I suspect it was just an anomaly.
I can always find a place to park in Easton. If not on the street, in one of the garages. Some people don’t want to park indoors but there are always spaces.
Jeff Ward
Bethlehem
Wilson Borough currently has zero properties properties using TIF or LERTA. But let's talk about LERTA. While Wilson gets blasted for attempting to use TIF to redevelop a property that has been vacant for 40 years, Easton requests LERTA after LERTA (possibly upwards of 90) with little to no resistance from County. Some granted to luxury developments. Would be interesting to know how much these have cost the County taxpayers. And does County require an affordable housing contribution for LERTA? I remember a few years back when Wilson supported a mixed use facility in the Dixie, asking for a LERTA and was shot down by a hostile County Council. Seems to me like this is a political issue with Wilson Borough and nothing to do with taxation.
Why did they give this tax break to Bethlehem for the steel TIF.
Look how BAD that worked out in the long run (Sarcasm intended)
You tout her work as Controller? Her staff did all the heavy lifting and the reports- she just read them.
Maybe someone is lining the pockets of the People's Commissar. Comrades gonna comrade.
Does anybody in local government have a clue as to how many apartments an area SHOULD have? You know, an analysis of home ownership and more transient renters? Surely there’s a percentage that’s healthy, and when you exceed that percentage (of renters vs homeowners) it creates problems beyond just having a roof over people’s heads.
I addition, many of the so-called “solutions” that are proposed or implemented actually make the problem worse! In Allentown, they’ve relaxed the zoning to allow larger single family homes to be carved up into rooming houses. Beyond the noise, traffic, and parking issues (which deteriorate the quality of life in existing residential neighborhoods), it actually raises the cost of home ownership.
How? By raising the return for landlords and developers who couldn’t care less about anything other than the bottom line.
A single family looking for a home can only afford to pay so much based on that family’s income. But someone who isn’t going to live there and is just looking to maximize their profits can carve the home up into 5 or more rooming units (at $1,500-$1,800 a room, per month). That translates into being able to borrow (and pay) a much higher amount. In essence, Allentown is pricing single family buyers (who the city should want) out of the market. Meanwhile, nobody looks at the first question I asked (above), and the school districts get crushed with more students than they’re built for.
I have a feeling that there will be similar negative effects in Northampton County if this is approved. Zrinski is not a deep thinker, and Northampton will pay for her lack of logic (as Bernie puts it).
And it's only April. Tara has no clue so she has to have those rude sidebar conversations even during her nonsense presentations. It would be great if we could just put our heads into the ground and ignore her but we can't. Look what happened when many did that with Biden. It is now a race to see which county (Lehigh or Northampton) bursts into flames first.
But not EVERY apartment will go to out of towners. By your logic, every person in the housing mobility chain (for want of a better term) would have to be out of towners. If even one "current" resident "upgrades" to these wilson units, that creates vacancy where they were, thus increasing supply. Your logic would suppose that EVERY person who rents the wilson units is from out of the area. In the absence of meaningful stats showing that ALL these units go to out of towners, the argument fails. Unlike you, I think these new units will somewhat decrease demand, but I don't know how much. Hence my question as to whether the effort is cost-effective.
The idea is to push riff-raff out. It's worked in most of Easton (West Ward is the exception). Easton's problems have been pushed into Wilson and even parts of Palmer. Wilson would like to clean up, as well. Where will the riff-raff live? They'll move to Carbon and Schuylkill, as has been happening for over a decade. It's musical chairs for what civic leaders deem problem populations.
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