City Hall Hustle: Anyone for Unemployment?

Once again the growth conundrum: If we don't Hanger together, we'll all hang separately

With Federal Reserve Chair Ben Bernanke's reappointment potentially running into a buzz saw, Austin has a suitable fed replacement – in the form of Brian Rodgers.

City Council watchers may have experienced a profound sense of déjà vu last week (Jan. 21), as Rodgers stood in council chambers, weighing in on Domain-related city incentives. But it was markedly different this time around: The special meeting was called to consider city incentives for Hanger Orthopedic Group, designed to entice the company into relocating from Maryland to the Domain, North Austin's mixed-use mall. Moreover, Rodgers was not here in opposition; in contrast to the undeniably messy Domain incentives (which had served as the casus belli behind Stop Domain Subsidies, the campaign that brought Rodgers into the public eye), he, like virtually all the speakers this day, didn't expressly oppose the city's proposed payments.

Indeed, as compared to other incentive agreements, the simplicity of the Hanger deal was roundly praised. (Basically, it's a $50,000 yearly grant for five years, dependent on the creation of 133 jobs, continuing for five more years if at least 250 jobs are created.) And also, the public process addressing the incentives – the first under expanded notification rules prompted, in part, by Rodgers' Stop Domain Subsidies work – was praised for its far more transparent process. As Rodgers himself acknowledged, "the process is much improved."

But there's no improving on perfection, and the question at the meeting's forefront was a classic in Austin politics: Can growth pay for itself? While Rodgers didn't oppose the terms of the incentive, he questioned the reasoning of incentives in general. The city's financial analysis of the package posited benefits of nearly $6 million to Austin, while tabulating additional expenses – utility costs and added strains on services such as courts, parks, libraries, public safety, and the like – at more than $5 million, leaving an estimated net revenue of roughly $877,000. But in addition, Rodgers extrapolated costs of additional public infrastructure – roads, utility lines – for new homes to absorb the new jobs, which, according to his math, puts the city "in the red" for some $1.8 million. "This is not a Hanger problem," he said; instead it's an "underlying structural problem with the way the city deals with growth. ... The city's in a box, because the more housing units we build, the more money the city needs to raise from its existing citizenry." Sheryl Cole pointed out the potential fallacy of assuming the 100-plus hires would all be clamoring for new homes, to which Rodgers responded, "We already have an inventory of homes, but then they'll build a new inventory of homes."

While Rodgers seems right that growth is a treadmill that incessantly revs up its own speed, like the rest of us he doesn't necessarily have a realistic handle on controlling it. After he said "you don't fan the flames" of growth through pro-Austin lobbying and PR, Randi Shade opened up on him. "We've been growing at a steady clip since 1880, since they've been measuring it, whether we were paying for PR firms or whether we weren't, whether we had Opportunity Austin or we didn't, whether we had an economic development-savvy City Council [or we didn't]. ... I'm just perplexed, because I don't know that activities like this are what are creating the problem."

Ultimately, Rodgers proffered a harsh prescription for growth management. "What is the solution to keep people from moving here? Well, I guess its to let the unemployment rate drift up to about 6 percent. ... People move here because of jobs. The more jobs, the more net in-migrations. ... By getting our unemployment rate so low, we're inducing people to move here. So I guess you would say we have to let the unemployment rate drift up a bit." In this respect, Rodgers is an improvement on Bernanke: Ben's been pilloried for implying 10% unemployment is the price for low inflation; Rodgers thinks 6% is OK if it keeps taxes lower.

Aside from the inherent selfishness of the proposal, it raised another problem: in the words of another speaker, Michael Oden, "I don't think there's a whole lot that cities can do to determine what their growth is going to be." Oden, an associate professor at the University of Texas' School of Architecture who specializes in city planning, held forth with Shade on the various – and radically opposed – growth problems cities can face. There's our problem of trying to pay for expansion or the counterpoint problem of decline (think Detroit or Las Vegas), where infrastructure demands must be met with a dwindling, not expanding, tax base.

The Hanger package comes back before council this week (Thursday, Jan. 28). While its passage seems all but assured, the eternal argument over how to manage Austin's exponential growth isn't going anywhere.

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City Council, Hanger Orthopedics Group, Brian Rodgers

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