Will city taxes really stop returning suburbanites?
August 8, 2008
In May, while in Las Vegas on assignment for The Daily Record I happened to interview C. William “Bill” Struever, the successful developer who heads the Baltimore company Struever Bros. Eccles & Rouse, who was there for a conference. We chatted about many things, including the state of the economy and the price of oil, and one memorable thing he said to me was this:
Clearly, these are uncertain times, but I think there’s a very helpful aspect of $120-a-barrel oil, which is the end of this destructive and wasteful fascination with suburbs and cars.
This idea resurfaced in my mind as I read two cover stories recently, one in The Washington Post and another in The New Republic. Both dealt with what academics, demographers and developers have known for years, what the Post calls “suburban migration” and TNR calls “demographic inversion”—affluent people are moving back to major U.S. cities in high numbers and pricing low-income city folks out of neighborhoods that have typically been associated with poverty, crime and urban decay.
The Post pins this almost exclusively on high gas prices, which it says are now the number two financial concern for American families, while TNR points to the retail, transit and cultural amenities that are returning to cities and attracting young professionals to live downtown.
I was trying to think of how this trend applies to Baltimore, and what the city can do to accommodate returning suburban exiles. Certainly, neighborhoods like Canton, Fells Point and Federal Hill have benefited from yuppies’ renewed interest, and many more areas stand to gain as well.
There has also been a lot of chatter lately about how to attract businesses and residents back to the city, and a lot of it involves building a more comprehensive mass transit system and lowering property taxes. Baltimore has a property tax rate nearly double that of surrounding suburbs. Some believe that high taxes have crippled Baltimore’s ability to attract and keep businesses headquartered in our town.
But if what these publications and Bill Struever say is true, why worry about the tax rate at all?
If the people and businesses are coming back to the city for reasons that have nothing to do with property taxes, why not keep property taxes sky-high, and really build the city’s tax base? That way, we’ll have more money in the general fund to improve infrastructure and mass transit, to provide social services to rich and poor alike and to concentrate on large-scale public works. Why not welcome reformed suburbanites with open arms and ask them to open their wallets?
ROBBIE WHELAN, Business Writer
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