There is a lack of
affordable housing in Charlottesville. This problem falls disproportionately on
black residents- as Charlottesville experiences rising housing costs, lower income families are pushed out of their communities. The median cost of rent rose as
much as 4 percent for apartment dwellers in Charlottesville and Albemarle
County in the past year, according to data collected by the Daily Progress. The issue of
gentrification in Charlottesville is amplified by competition between students
and lower income families for affordable housing in the city. This is exemplified clearly by the "Standard" Apartment Complex, opening leases on West Main Street, which
offers "luxury apartments" for UVA students, but is not offering affordable or public housing units in the building, despite proximity to both downtown and public transportation.
However, the Charlottesville City locality
is changing its expenditure breakdown. The same day it voted to
remove the statue of Robert E. Lee, the City Council also unanimously approved a $4
million spending plan to address racial disparities. Over the next five
years, $2.5 million will be allocated redevelop public housing;
$250,000 will go to expanding a park in a black neighborhood; and $20,000
a year will pay for G.E.D. classes for public housing residents (New York Times). Invariably, this expenditure
will change the bundle of public goods that the City
of Charlottesville provides to its residents. For the past several years, the money allocated to public housing has only been sufficient to preserve affordable housing units, and the growth of total units has crawled from 1,933 to 2,006 from 2010-2015 (Daily Progress). According to Tiebout's
economic model, the City of Charlottesville's reallocation of $2.5 million towards public housing will move some individuals towards their optimal bundle of public goods, while others will move away from their
optimal bundle. Because of Tiebout's assumptions of perfect mobility and no job constraints, people will react to these changes. Individual's preferences will be revealed over the next five years as pack their
bags and move to and from Charlottesville.
1 comment:
In addition to localities voting to reallocate expenditures, as you suggested re Charlottesville, revenue-expenditure bundles will also change when the cost of providing public goods changes. The Local Initiatives Support Corporation (LISC) is a nonprofit that funds development projects in low-income communities. In July, Morgan Stanley led a bond deal that raised $100 million for LISC. LISC is the first nonprofit of its kind to tap into capital available through public bond markets. This financing has reduced the cost of public good provision in the areas that LISC serves.
Tiebout writes that localities, just as private markets, “are maximizing within the framework of the resources available” (422). Because of the IPO, LISC offers a greater pool of resources from which localities can maximize their public good provision. It will be interesting to track the development of and movement to/from these communities as a result. Revenue-expenditure bundles are constantly evolving, as these examples demonstrate.
More information here: https://www.morganstanley.com/ideas/lisc-debt-ipo-community-development-bond-issue
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