No Mint on the Pillow?

Hotel owners and managers are usually the biggest boosters of their cities. Stands to reason: If outsiders want to visit a place, the hoteliers are the beneficiaries.
September 2002
By Otis White  |  Contributor
President of Civic Strategies Inc.

Hotel owners and managers are usually the biggest boosters of their cities. Stands to reason: If outsiders want to visit a place, the hoteliers are the beneficiaries. So it says something about San Francisco that the city's Hotel Council put up 33 billboards around town slamming the Board of Supervisors for letting the homeless situation get out of control. One billboard says, "I don't want to sweep people off my doorstep." Another: "I want to know why homelessness is still a problem after we spent $200 million last year." What's behind the outburst is frustration that, after numerous newspaper articles about how the outsized homeless population is driving away conventions and businesses, the city's elected officials still won't act. "We've sat down with the supervisors," said one hotel manager, "and they are all bright people, but they just seem scared to take on the cottage industry of homeless-service providers." The frustration boiled over when tourism officials made a recent sales trip to Paris. "There you are trying to sell the city to [tourist] booking agencies, and all you hear is, 'Your city is dirty,' or 'You have homeless--they're aggressive and they scare people.'" The supervisors' reaction: One denied the city spends $200 million on homeless services with nothing to show for it; the figure is more like $100 million, he said. Another said if the hotel owners have a problem, they ought to take it up with the mayor, not them.


Let's say you lived in a marginal urban neighborhood where property values were declining. If I offered you an insurance policy that, for $20 a year, guaranteed you could sell your house one day for at least as much as it's worth now, would you take it? Apparently a large number of people in Pittsburgh's West End wouldn't. They're protesting a new city program that, for the price of four McDonald's value meals a year, ensures they can only make money when they sell their houses. Background: Borrowing from a similar program in Chicago, city officials proposed a program to stop declining home values in the West End by requiring 8,000 homeowners in the area to pay $20 into a fund to stabilize property values. To take advantage of the program, you have to have your house appraised (one-time cost: $125) and take care of your property. If you want to sell your house after five years and no one offers more than the assessment, the fund will make up the difference. What's not to like about this deal? Hard to say, since the protesters were loud but mostly incoherent. Even local newspaper columnists were hard-pressed to explain why so many people being benefited so greatly for so little money would get so worked up. Most chalked it up to deep-rooted cynicism. Said one: "New ideas are welcomed in Pittsburgh with roughly the same enthusiasm that Superman has for Kryptonite."


Across Massachusetts, including some suburbs of Boston, communities are doing everything they can to keep out families with children, a practice one state senator refers to as "vasectomy zoning." Why? Because school children are expensive. "The way [school funding] is structured," says one town planning official, "it's the only way a community can save itself." In Plymouth, city officials figure a house must be valued at $475,000 to produce enough property taxes to educate a child. So while cities want more houses and residents, they don't want kids. How are they keeping them away? By requiring larger lots, refusing multi-family housing and limiting housing permits. The idea is to push up the cost of housing so only families with no small children can afford them. "It's frustrating," says David Farbman, a physician who can't afford to move his family out of their Brookline condo. "We keep saying to each other, where are the millionaires who can afford these?" It's also a foolish policy, observers say, and will simply result in young professionals moving to other states.


The Austin, Texas, newspaper has figured out who moved to the Austin area in the 1990s and precisely what they brought with them: brains and money. Using Internal Revenue Service statistics and some original computer programming, the Austin American-Statesman found that from 1992 to 2000, 57,000 more people moved to the area than moved out. More important, the newcomers made, on average, 17 percent more money than the emigrants. Net gain: $2.15 billion in annual income. Other Texas cities did well, too, the newspaper reported. Houston, which had trying economic times early in the decade, still attracted 71,500 more people than it lost, with a net gain of $1.23 billion. Which cities are sending Austin and Houston so many high-income workers? Cleveland, Baltimore, Kansas City and Louisville. High-tech cities such as Atlanta and Seattle fared far better; they sent about as many people to Dallas and Austin as they got in return. In the past, academics pointed out, cities gained by taking in the rural poor, but today's boom cities grow by swiping others' best and brightest.