Thursday, October 23, 2008

The Election - Amendment III

"Shall the Constitution of Georgia be amended so as to authorize the General Assembly to provide by general law for the creation and comprehensive regulation of infrastructure development districts for the provision of infrastructure as authorized by local governments"

Infrastructure development districts are private cities. There is no way to get around this fact.

In brief, an IDD gives a private developer access to such government tools as tax free bonds to build infrastructure such as sewers, water treatment, roads and even fire stations. The developer recoups the bond payments by charging a fee, similar to an association fee, to the individual home owners.

The IDD must still be approved by the local governing body such as a county commission, it still must comply with zoning and regulation and the home owners must still pay property tax.

So why would anyone want to do this?

Small municipalities have difficulty, even through SPLOST, raising enough capital for massive infrastructure expansion. The IDD removes this burden and places it on the developer.

Developers get a break in financing by having the ability to access tools usually available only to cities and counties.

Residents pay a little more than they would in a regular community but have the privelege of living conveniently near an Applebees, Kroger and multi-island gas station. You'd be surprised how compelling these amenities are to someone who has to drive miles to get a decent, going out on the town meal.

So what's the problem?

If you listen to the Sierra Club, it's a potential sprawl nightmare. If you listen to the risk adverse, it's a potential financial boondoggle which could wipe a local governments right off the map.

In these days of dark sheltering after the orgy of sprawl, offering new development willy nilly should certainly be a concern, but tell that to someone who has to drive thirty miles to get to a Kroger. It's also a version of sprawl rarely seen in Georgia.

I've visited "The Villages" near Oxford, Florida. It is true within the compound (it's hard to describe it any other way), you will see houses jammed so close together neighbors can pass a cup of sugar from one kitchen window to another and the oasis's of retail are pockets of pavement and box stores. But if you travel just a few miles up U.S. 301, you are immediately back in the rolling pastures of central Florida. The sprawl is contained like a virus.

Also, remember, local and state environmental regulations will still be in effect. This is not a free pass to developers and frankly, the Sierra Club's vague reaction here feels like a hammer-on-the-knee kick at the "evil builders".

The possibility of a developer defaulting is much more of a concern. It has happened in states such as Florida, although not very often, and it is always a mess. In this scenario the debt falls back on the local municipality and remember they are the ones who couldn't afford it when it wasn't under water. If the locals can't pay or can't find the scoundrel who skipped town, it defaults back to the state. But guess what happens right now if a local municipality defaults and crashes - it falls back on the state. This is the reason the legislature has to approve such things as the city of Johns Creek setting up a Parks Department. If Johns Creek goes belly up, the state is on the line for the payments.

So, the defaulting process is not that much different than it is now but the default itself could be much deeper than normal and that should be a concern.

But before we decide, let's get back to our basic tests.

First, the issue is extending government powers to private entities and there is no doubt that is a constititutional level question.

Second, it undoubtedly makes the Constitution more complicated (although less than other amendments) so the amendment must show the benefit is greater than the sin.

To answer that question, you must weigh the benefits rural communities would receive against the potential risk of developer malfeasance.

Having seen these "private cities" work in Florida and I mean work for everyone (developers make oodles of money, homeowners live with convenience, governments get more tax money), it is my belief the potential benefits far outweigh the potentials sins.

VOTE YES on Amendment III.

UPDATE: For another view here is an article by Chuck Bonner of Hiking with Chuck.

Next: House Race 80 and 81

To view amendments in their entirety please go here

1 comment:

Joeventures said...

I can understand the "it's not sprawl" argument that the developers use to justify IDDs. But I can also understand why the Sierra Club used the "sprawl" label - it's a more convenient way to deliver the message.

I don't believe it is entirely accurate to label IDDs as "sprawl." After all, as one professor said to me back in planning school, the first cases of sprawl came in the form of streetcar suburbs. But transit-induced sprawl is certainly going to be much more sustainable than highway-induced sprawl.

What I'm bothered by is the use of this amendment as a tool to make it easier to develop on greenfields. Sprawling or not, I wouldn't call it a smart way to develop.

That IDDs still have to follow local zoning codes doesn't carry a whole lot of weight for me. Existing zoning codes already brought on a lot of dumb growth. Infusing that type of growth with new infusions of capital doesn't come across to me as a good idea.

That's not to mention, of course, how often developers will seek (and likely be granted) many variances, with the argument that the project must be profitable.

Which small municipalities are trying to raise capital for massive infrastructure expansion? (By the way, large municipalities have a difficult time of it, too.) How is that a justification for IDDs? Infrastructure is difficult to build, not impossible. And I would think infrastructure should be carefully planned out in a transparent process -- not just built out, willy nilly, by developers.