Opinion: A Real 10-Point Economic Plan for Boston

On Monday, Boston mayor Thomas M. Menino announced a “Ten Strategies for Job Growth” plan during a breakfast address before the Greater Boston Labor Council. Included are ideas such as increasing vocational and technical training and summer jobs programs, simplifying the city’s permitting process, and increasing city-state tax credits for infrastructure improvements.

The mayor has done a good job of keeping the city running during this grueling recession; the city of Boston has a 7.9 percent unemployment rate whereas the nation’s rate is 9.1 percent. This new plan, however, seems unlikely to have any significant economic effect, I’m afraid.

In addition to what he's recommending, here are some more practical ideas that could better help most people.

Stop harassing non-profits (PILOTs). The first bullet point of the mayor’s plan is to give the city’s non-profit organizations credits against their voluntary property tax payments for each new hire of an out-of-work city resident.

Non-profits in Massachusetts are exempt from paying property taxes. It’s state law. The Commonwealth believes that hospitals and universities (and museums) provide a “public good” and therefore should be rewarded for this with a tax break.

PILOTs are “payments in lieu of taxes” that cities and towns in the state push for these organizations to pay in order to make up for lost revenue and to compensate the municipalities for the costs of providing such services as police and fire protection. (The non-profits still pay for sewer and water and pay their employees’ health insurance and payroll and unemployment taxes, of course.)

In Boston, City Councilor Steve Murphy has been bullying the city’s non-profits into increasing their voluntary PILOT payments and Mayor Menino is on board, too.

Yesterday, the Mayor floated the idea of rebating non-profits $1,000 for each resident they hire who is currently unemployed.

So, he’s proposing that a voluntary tax, one they’re not required to pay, will be reduced.

That just doesn’t make any sense to me. If I’m a non-profit, why don’t I just not pay you that $1,000 to begin with and we can save the city some money in processing costs, okay?

The city needs to lay off the non-profits, once and for all. The only real estate development the city has seen during the past four years is on college and hospital campuses. Construction workers only had jobs because of them. Massachusetts General Hospital and the Dana Farber Cancer Institute both completed significant construction projects during this time, as did Northeastern and Suffolk universities and Emerson College and other non-profits including WGBH and the Museum of Fine Arts. Stop penalizing them for the good they do.

Cut the PILOT talk and you’ll immediately stimulate economic growth.

No more “affordable housing” set-asides. Say a developer wants to build a new residential building - an apartment or condominium tower. The city requires (it’s not law, btw, although the Mayor likes to pretend it is) the developer to set aside up to 13 percent of any new housing as “affordable units," meaning tenants or buyers have to qualify based on their incomes.

Other U.S. cities have similar programs. New York City’s differs in at least one significant way; there, developers (actually, homeowners) get a cut on future taxes if they build, whereas in Boston the developers get squat beyond the approval to build.

Why doesn’t this help? First off, the amount of added affordable housing is so piddling small that it has no effect on the high cost of renting/buying in Boston. In fact, it causes housing to be more expensive, by inflating the prices - the developers have to make up the profits lost on the affordable units by renting/selling the other units at higher prices.

If the city wants to encourage more housing to be built, which would employ construction workers as well as architects, interior designers, lawyers, (and real estate agents), it should eliminate affordable housing set-asides and let developers build housing at prices the market will bear.

Developers are adding housing to the city, so they’re providing a badly needed product. We then penalize them by taking away their incentive to do so. Does that make any sense?

Walmart. The Boston Herald says Walmart wants to open one (or more) Boston locations in a ‘Neighborhood Market’ store format, “which averages 42,000 square feet compared to the typical SuperCenter that measures 185,000 square feet and includes a full grocery section.” Mayor Menino has been very slow to embrace the idea.

I fail to see any difference between a new Walmart and the existing South Bay Target. And, as Robert David Sullivan reminds me, there used to be a ~133,000-square-foot Woolworths in Downtown Crossing - so why not a (much smaller) Walmart? (And, stop consumers from traveling to Saugus or Quincy in order to shop.)

Union leaders are complaining about the company’s reputation for offering low wages and no benefits. Well, guess what, Massachusetts has a minimum wage 20 percent higher than the federal mandated wage and we have universal healthcare. So, these are good jobs at good wages.

Does the city want more employed people, especially in the non-skilled labor force? Open the doors to Walmart and see new jobs flood the city.

No more tax credits. Why did Steve Roth and Vornado Realty Trust stop construction on its Filene’s project? Because they wanted to wait for a hand-out from the city. And, where did they come up with the idea that Boston would give them tax breaks? Why, because that’s what Mayor Menino offered to JP Morgan Chase. And, Liberty Mutual Insurance Company. And, Vertex Pharmaceuticals.

No developer would want to invest its own money in Boston when there’s a chance the city will put it up, instead. What the tax gimmicks do, however, is create an uneven playing field. The few and the connected get the tax breaks while other developers are left waiting and wanting.

Stop giving away the store for free and you’ll give developers the incentive to build again.

Get development projects up and running. Don Chiofaro has offered to build a ginormous mixed-use project along the Rose Kennedy Greenway with no public subsidies, yet the city continues to ignore him. Other major projects are stuck in the endless approval process.

New York City fast-tracked development by getting all of the city’s planning and development agencies together at one time to review and reject/approve outstanding proposals. Boston should do the same thing.

Why does it take so long to get something built in this city? We’ve lost plenty of opportunities during times of past prosperity. It doesn’t have to happen again.

City as landlord. The city of Boston is Boston’s biggest landowner. Along with thousands of abandoned houses and vacant parcels of land, it owns two golf courses (that have lost over $560,000 during the past three years, alone) and the Strand Theatre. All this property is exempt from property taxes.

Want to stimulate the local economy? Sell off those properties to private enterprises, companies that actually have to make a profit in order to survive, unlike the city.

And, there you have it. I don’t need 10 economic stimulus points; I’ve solved our problems with just six.