Last month, I found that housing developments funded by the city of Boise’s Downtown Housing Incentive Program are also funded by the city’s urban renewal agency, the Capital City Development Corporation (CCDC).
However, recently, I was struck by just how much tax money CCDC gives to private housing developers, masking those funds as being for the public good. In reality, the money that CCDC gives to subsidize housing development is a form of wealth redistribution that takes money from residents and gives that money to developers that will make money off the housing units that they construct.
CCDC can distribute taxpayer dollars to developers by entering into participation agreements with them. The agency currently has five types of participation agreements, ranging from agreements that help fund streetscape improvements, like bike racks or planting trees, to agreements that transfer publicly-owned land to developers.
For housing developments in downtown Boise, most of the agreements between CCDC and the developers offer public money to add on-site parks, to cover utility updates, to cover historic preservation costs, and more. The table below cites how much government money each downtown Boise development will receive, or has received, from CCDC. Keep in mind that, since all CCDC funds are tax dollars or public debt, the amounts listed represent the taxpayer’s burden for these developments.
Note: Although the above table lists several developments that have not been given all or any of the maximum CCDC contribution, it is likely that each development will receive the maximum amount. The Fowler and The Watercooler, the two already completed developments, have been paid the maximum subsidy and the rest of the developments are currently under construction.
These ratios of private to public investment indicate that taxpayers are picking up the tab for a significant portion of the costs of these developments.
The Fowler is the least expensive of the developments for taxpayers, where the developer spent $50 out of their own pocket for every $1 of public money given to them. On the other hand, once the Ash Street Townhomes are constructed, that development will end up being the most costly to taxpayers, with the developer only spending $8 of their private money for every $1 of public money given to them.
The only real restriction to the amount CCDC can pay towards these developments is that the Participation Program guidelines discourage less than a 6:1 ratio. This simply means that a theoretical $6 million development could receive up to $1 million in subsidies—however even this is just a guideline, and not a hard rule.
As it happens, the city of Boise can also create taxpayer-funded incentive programs to give money to developers, as occurred with the Downtown Housing Incentive Program. Of course, there is no ratio limit on joint contributions from the CCDC and the city to developers.
Both the city and CCDC can fund projects they believe are for the public benefit. However, it is a hard argument to make that any housing development will benefit the whole public.
It is unlikely that every Boise resident will one day live in one of these developments. It is also unlikely that any of these units are publicly accessible. If these developments are secure, then they are not open to the public. So, most city taxpayers are funding apartments and condos they don’t live in, may never visit, and, with the expensive rents of most of these developments, may never be able to afford.