SHARE
Hace casi 30 años, Amalia Reátegui y su esposo, Eusebio, empacaron sus pertenencias, reunieron a sus ocho hijos y se mudaron a su nuevo hogar: un polvoriento lote en la árida periferia de Lima, la capital de Perú. Al principio, la vida no fue fácil allí. No disponían de servicios básicos, como agua corriente y electricidad. Las calles no estaban pavimentadas y el transporte público era inexistente. Las escuelas y clínicas sanitarias de calidad se encontraban muy lejos, en los barrios más ricos y establecidos.
Sin embargo, aunque las condiciones eran muy duras, mudarse a San Juan de Lurigancho (uno de los primeros asentamientos informales de Lima) le ofrecía a esta pareja una posibilidad excepcional de convertirse en propietarios, lo que hubiera estado fuera de su alcance en los distritos tradicionales de la ciudad.
Poco a poco, las cosas fueron mejorando. Construyeron una maciza casa de hormigón, consiguieron electricidad y, unos años más tarde, agua corriente y alcantarillado. Llegaron los autobuses e incluso un metro que conecta San Juan de Lurigancho con el resto de la ciudad. Sus hijos lograron realizar estudios terciarios y obtuvieron empleos en hospitales, en el municipio y en la marina.
Para Amalia y Eusebio, igualmente importante fue un papel que le dio el gobierno: el título que reconocía que eran propietarios formales del terreno de 120 metros cuadrados en el que vivían.
Hoy en día, la pareja sigue viviendo en la misma casa color durazno, aunque su hogar –al igual que el barrio– ha experimentado transformaciones a lo largo del tiempo. La casa, que tenía originalmente un solo piso, es ahora un edificio de cuatro pisos que alberga ocho apartamentos de dos dormitorios, uno para cada uno de sus hijos adultos.
Para Amalia, una abuela de 71 años de edad de hablar pausado y cabello negro que le llega al hombro, esto fue siempre parte del plan. “Al principio, cuando construimos la casa”, dice, “siempre pensé que sería para mis hijos. Es mi casa y es para ellos”.
Sin embargo, para sus hijos, que gastaron el equivalente a decenas de miles de dólares en la construcción de los pisos superiores, la situación en la que viven actualmente los deja en un limbo legal, donde la propiedad de sus apartamentos se fundamenta solamente en un acuerdo verbal con sus padres, en lugar de documentos legales.
Volver a la informalidad
Este caso pone de relieve una nueva tendencia que tiene desconcertados a los expertos en desarrollo urbano y derechos de propiedad en Perú. Después de años de pedir títulos legales de propiedad para sus casas, los residentes dejan ahora que sus propiedades queden fuera de la regularización, ya que no utilizan la Superintendencia Nacional de los Registros Públicos (SUNARP) para documentar operaciones inmobiliarias tales como ventas, cambios de titularidad dentro de una familia o la construcción de otros pisos que luego se subdividen en apartamentos. Como resultado de ello, las propiedades vuelven a estar dentro de la categoría de informalidad y el registro público no refleja adecuadamente a los verdaderos propietarios.
Este problema representa un creciente motivo de preocupación para los expertos en políticas, quienes opinan que esta situación podría dar como resultado grandes costos sociales, económicos y legales. Sin un registro legal, pueden surgir rápidamente controversias entre hermanos acerca de la propiedad de un hogar familiar después del fallecimiento de sus padres. Resolver estas controversias puede implicar altos costos legales en los tribunales de Perú, que ya están sobrecargados y funcionan con lentitud. Los propietarios informales no pueden utilizar su propiedad como garantía para solicitar un crédito bancario formal y, si deciden poner la propiedad en el mercado, deben enfrentar un valor de reventa mucho más bajo. Además, existe el riesgo de debilitar la sostenibilidad del programa de títulos de propiedad pionero en Perú, una herramienta popular diseñada para promover el desarrollo económico que más tarde fue emulada en todo el mundo.
Tal como indica Julio Calderón, sociólogo peruano, investigador del Instituto Lincoln y experto en derechos de propiedad: “Los hijos están viviendo ahora la misma situación que vivieron sus padres hace 40 años: nuevamente están en una situación de informalidad. En términos urbanísticos, esto es una bomba de tiempo”.
El surgimiento de los asentamientos informales en Perú
De manera similar a otras capitales latino-americanas, Lima experimentó una explosión demográfica durante la segunda mitad del siglo pasado, a medida que las personas migraban desde todos los puntos del país a esta árida ciudad costera en busca de una vida mejor.
En 1950, en Lima vivían menos de un millón de personas. Para el año 2000, la cantidad de población se había inflado a 7,4 millones, según los datos de la División de Población de las Naciones Unidas. Hoy en día, la capital peruana alberga a más de 9 millones de personas, lo que representa casi un tercio de la población total del país. Los motivos por los que se da esta migración interna en Perú son variados, aunque la causa principal son las dificultades políticas y económicas que experimenta el campo. En la década de 1970, la economía rural se vino a pique después de una fallida reforma agraria llevada a cabo por el general Juan Velasco, un dictador militar de izquierda.
La economía se vio sacudida nuevamente a principios de la década de 1980 durante una de las peores tragedias climatológicas que se hayan registrado ocasionadas por El Niño, que causó terribles inundaciones y un colapso de la industria pesquera. Aproximadamente por esa misma época, los rebeldes de izquierda de Sendero Luminoso iniciaron una violenta insurgencia en las zonas montañosas del sur, lo que forzó a muchos residentes a huir hacia Lima para escapar del sangriento conflicto que dejaría un saldo de cerca de 70.000 vidas.
En Lima, el gobierno no estaba preparado para esta ola migratoria. Los nuevos residentes, sin tener un lugar donde vivir, comenzaron a apropiarse de terrenos vacantes en las afueras de la ciudad, en ocasiones enfrentándose a la policía. Uno de esos desarrollos informales se convirtió luego en San Juan de Lurigancho. Héctor Nicho, un líder comunitario del lugar, recuerda la impotencia de las autoridades ante la marea de personas que ocupaban las tierras con la esperanza de hacerlas suyas.
Nicho, que era sólo un niño cuando participó en la invasión de los terrenos hace unas cuatro décadas, lo relata de esta manera: “El primer día de la invasión hubo 15 ó 20 personas. Al día siguiente, hubo 500. Y al tercer día, 1.500. Éramos cada vez más. No podían detenernos, aun cuando el Estado había enviado a la policía”.
La ocupación de terrenos se produjo en toda la ciudad de Lima, resultando en la creación de distritos como Villa El Salvador (al sur de la ciudad) y San Martín de Porres (al norte). Los ocupantes ilegales eran algunos de los residentes más pobres de la ciudad, que vivían en áreas caracterizadas por la falta de presencia estatal y por una amplia economía informal.
Hacia finales de la década de 1980, la situación no hacía más que empeorar. La economía peruana entró en espiral hasta la hiperinflación. Sendero Luminoso, que había estado confinado a las zonas montañosas rurales, comenzó a invadir Lima rápidamente, amenazando con derrocar al gobierno e instalar un régimen de tipo maoísta.
El programa de títulos de propiedad de de Soto
Por ese entonces, Hernando de Soto, economista peruano, propuso una manera de salir del caos. De Soto sostenía que otorgar títulos legales de propiedad dispararía el desarrollo, ya que permitiría a los pobres obtener ventajas con sus bienes individuales en la economía formal y acceder al crédito. Sin embargo, según de Soto, existían barreras burocráticas complejas y costosas que impedían que esto ocurriera.
“Se dieron cuenta de que uno de los principales obstáculos a la hora de registrar las propiedades en Perú era su propio registro de la propiedad”, explica Ángel Ayala, abogado y experto en registro de la propiedad. “El problema no era la informalidad, sino que el sector formal no te dejaba acceder a él”, añade en referencia a las normas del gobierno para el registro de la propiedad que en ese momento eran complejas y costosas.
Perú abrazó las ideas de de Soto, lo que generó un nuevo marco legal con el fin de brindar títulos de propiedad a personas como los Reátegui, que vivían en asentamientos informales en lugares como San Juan de Lurigancho.
En 1996, el gobierno creó la Comisión de Formalización de la Propiedad Informal (COFOPRI), que dirigiría un programa nacional de otorgamiento de títulos de propiedad urbanos. Además se creó un registro paralelo, el Registro Predial Urbano. Este registro, que se concentró solamente en los asentamientos informales de Lima, recortó los requisitos para el registro de las propiedades, lo que permitió a los propietarios pobres de terrenos obtener títulos en forma rápida y a bajo costo.
Los resultados fueron impresionantes. Según un informe del Instituto Lincoln denominado Regularización de asentamientos informales en América Latina, cuyo autor es el abogado brasileño Edésio Fernandes, el COFOPRI redujo los tiempos necesarios para obtener el título de 7 años a 45 días, disminuyó la cantidad de trámites de 2.007 a 4, y bajó los costos de registro de US$2.156 a una suma casi nula.
Desde su creación, el COFOPRI ha emitido cerca de dos millones de títulos de propiedad, lo que lo convierte en uno de los mayores programas de este tipo en el mundo.
Tal como señala Jorge Ortiz, exempleado de COFOPRI y más tarde director de la SUNARP (el registro tradicional de Perú): “Los empleados del organismo trabajaban 24 horas al día. Verdaderamente se identificaron con lo que estaban haciendo”.
La política sobre títulos de propiedad de de Soto se convirtió en la manera preeminente de abordar el tema de la regularización del suelo en todo el mundo. Recibió elogios de varias organizaciones dedicadas al desarrollo, como el Banco Mundial y el Banco Interamericano de Desarrollo, y de políticos como el expresidente de los Estados Unidos, Bill Clinton. Perú, como país pionero en este programa, se convirtió en un modelo para otros países de América Latina, África y Asia que también estaban luchando contra la informalidad y la pobreza generalizadas.
Casi 20 años después de la creación del COFOPRI, los académicos han identificado varios beneficios sociales y económicos derivados del otorgamiento de títulos de propiedad. Por ejemplo, según muestran los estudios realizados, las familias que tienen un título formal invierten más en sus casas y en la educación de sus hijos. También tienen menos hijos.
Sin embargo, los críticos del programa sostienen que la hipótesis principal de de Soto –que los títulos de propiedad aumentarán el acceso de los pobres al crédito formal– simplemente no se hizo realidad como de Soto imaginó.
Estos críticos también señalan ciertas consecuencias no deseadas que son el resultado de los grandes programas de otorgamiento de títulos de propiedad, tales como la manipulación política y el incentivo que tienen los ocupantes ilegales para seguir invadiendo terrenos y creando nuevos asentamientos informales sin servicios, con la esperanza de que algún día puedan registrar sus propiedades.
Los riesgos de la desregularización
En Perú, uno de los mayores motivos de preocupación es la sostenibilidad de los títulos de propiedad, ya que una cantidad cada vez mayor de propiedades está cayendo en la desregularización. Muchos años después de haber ocupado los terrenos, los propietarios originales están jubilándose o falleciendo. Sus propiedades, que, por lo general, pasan a sus hijos, están volviendo a caer en la informalidad.
Según Fernandes, “Lo que hemos observado es que, a partir de la segunda o tercera operación inmobiliaria, las transacciones ya no se registran. Por diferentes motivos, la gente sencillamente deja de mantener sus propiedades en una condición por completo legal. Por lo tanto, en unos pocos años, volveremos al punto cero en términos de legalidad en el área”.
A menos que se produzca un cambio en las tendencias, los expertos en políticas dicen que el enérgico programa de otorgamiento de títulos de propiedad del gobierno podría desbaratarse, junto con sus beneficios.
Los propietarios informales corren el riesgo de perder el beneficio más básico derivado del título de propiedad: la seguridad de la tenencia y la protección legal contra el desalojo y el fraude. Y también podrían enfrentar otros costos, como gastos legales para resolver diferencias sobre la propiedad.
También existen costos de oportunidad. Los propietarios informales no pueden usar su propiedad para acceder al crédito formal, y además no recibirían una compensación al valor justo de mercado si decidieran vender sus casas.
Los alcances de la desregularización son difíciles de medir. No obstante, según un estudio reciente del Instituto Lincoln llevado a cabo por Oswaldo Molina, economista egresado de Oxford, sólo se ha registrado formalmente un 21 por ciento de las segundas operaciones inmobiliarias sobre propiedades en áreas que hace poco recibieron títulos de propiedad en Perú (Molina 2014).
Según Molina, “cuando comenzó la reforma, no se trataba sólo de una cuestión de otorgar títulos de propiedad a las personas sino de que mantuvieran la formalidad de sus propiedades. Entonces, ¿qué pasó con el 79 por ciento restante? Ahora vamos a tener muchísimas propiedades con títulos, pero a nombre de otras personas”.
Motivos para no registrar las transacciones
Ortiz comenta que, durante su gestión como director de la SUNARP, era muy raro que las personas registraran las segundas transacciones de sus propiedades. Para él, esto ha sido una desilusión.
“Yo creía en el modelo de la década de 1990”, dice Ortiz, que fue director de la SUNARP durante los comienzos del gobierno del presidente Ollanta Humala en 2011. “Ahora, unos 30 años después, veo que puede echarse todo a perder”.
Las causas de la desregularización no son muy claras, aunque los expertos apuntan a problemas culturales y cambios en las políticas públicas como algunos de los motivos más importantes.
En muchos lugares de Perú, existe un gran respeto por las decisiones que los padres transmiten en forma verbal, aun en relación con importantes cuestiones de tipo legal, como el registro de propiedad. En aquellos casos en que el hogar familiar se subdivide, los hijos dependen de sus padres –los propietarios– para firmar la transacción y así poder obtener un título formal.
Según los expertos, muchos padres no tienen problemas de que sus hijos paguen por la subdivisión, pero no consideran la posibilidad de otorgar un título formal, ya que creen que un acuerdo verbal es suficiente para dividir la propiedad. En otros casos, los padres se niegan a otorgar un título por temor a perder el control de sus casas.
“Todavía existe la cultura de respetar la decisión y la palabra de los padres”, dice Jesús Quispe, director de CENCA, un instituto de desarrollo urbano con sede en Lima que trabaja en San Juan Lurigancho. “Muy pocas operaciones quedan plasmadas en el sistema legal. Existe una cultura de la informalidad”.
Ramiro García, director del programa urbano de DESCO, una organización de desarrollo peruana, explica que muchas familias hacen caso omiso del registro público hasta que surge algún problema, como por ejemplo una controversia legal sobre la propiedad del inmueble.
“Es un trámite burocrático, costoso y las familias no lo consideran necesario”, señala García desde su oficina en Villa El Salvador.
Con anterioridad a la explosión demográfica en Lima, las familias que no podían acceder a comprar una casa podían mudarse a las afueras de la ciudad, ocupar un terreno y construir una casa. Hoy en día, ya no existen muchos lotes vacantes. Los que quedan se encuentran al borde de las montañas, terrenos que suelen ser inestables para vivir.
A medida que la disponibilidad de terrenos es cada vez más escasa, la demanda de viviendas se ha mantenido sólida. En consecuencia, la ciudad ha comenzado a expandirse hacia arriba y los edificios de apartamentos están reemplazando a las casas.
Los precios inmobiliarios también se han disparado debido al fuerte crecimiento económico que Perú experimentó durante los últimos diez años. Para las familias jóvenes de clase media-baja, los precios cada vez más altos les hacen cada vez más difícil acceder a una casa propia.
A fin de ayudar a sus hijos, los padres que se asentaron en las afueras de Lima hace unas décadas ahora están agregando dos o tres pisos a sus casas para subdividirlos luego en apartamentos.
En San Juan de Lurigancho, Melly Rosas, una mujer de 53 años que trabaja de secretaria en una iglesia, decidió agregar tres pisos más a su casa cuando vio cómo les costaba a sus hijos casados ahorrar el dinero necesario para comprar una propiedad.
“Al principio, este no era nuestro plan”, dice Rosas, “pero era muy costoso para mis hijos comprar un terreno mientras pagaban un alquiler”.
“Estamos construyendo hacia arriba porque ya no hay más espacio”, agrega Rosas, en referencia a la creciente cantidad de edificios que han aparecido en su barrio.
Rosas y su esposo, Ricardo, no han averiguado cómo otorgarles los títulos de propiedad de los apartamentos a sus hijos, aunque ya lo están evaluando. Según Rosas, “sabemos que tenemos que hacerlo, porque así ellos tendrán menos problemas. Pero por ahora, todo es un acuerdo verbal”.
A una corta distancia en automóvil, en una tranquila calle residencial, Marcelo Núñez, un zapatero de 52 años, vive en una casa espaciosa con techos altos que ayudan a mantenerla fresca en los calurosos veranos de Lima. Anexo a la casa hay un pequeño negocio, donde su esposa vende refrescos y patatas fritas.
Al igual que hicieron sus vecinos, Núñez y su familia construyeron lentamente su casa durante los últimos 30 años, una pared cada vez. Ahora su hija de 28 años está construyendo un segundo piso, adonde irá a vivir con su bebé. El hijo de Núñez, de 25 años, probablemente vivirá en el tercer piso.
Núñez dice que no tiene intenciones de registrar los pisos superiores de su casa, aunque serán propiedad de sus hijos. “Por mi parte, no he pensado hacerlo legalmente, porque somos una familia”, dice Núñez. “Es bastante extraño hacer una subdivisión legal. Por lo general, esto se hace verbalmente”.
No obstante, Núñez coincide con Rosas en que dejar a sus hijos una propiedad sin título formal podría generarles problemas en el futuro. “Si ellos están de acuerdo, yo no tendría problemas en hacerlo legalmente”, dice Núñez.
Sin embargo, los factores culturales no son el único impedimento para registrar las propiedades. Los expertos en políticas señalan que las personas como Rosas y Núñez deberán cumplir varios requisitos regulatorios muy costosos si deciden en algún momento formalizar sus propiedades.
Según los expertos, los obstáculos surgieron debido a la decisión del gobierno de eliminar el Registro Predial Urbano, el registro paralelo creado al fin de acelerar el registro formal de las propiedades en los asentamientos informales de Lima.
En 2004, Perú fusionó el Registro Predial Urbano con la SUNARP, el registro público tradicional, considerado demasiado costoso y burocrático. Los trámites más simples que tenía el Registro Predial Urbano para registrar las segundas y terceras transacciones sobre un inmueble fueron reemplazados por los requisitos más complicados y costosos de la SUNARP.
Los críticos de esta decisión señalan que el gobierno realizó este cambio debido a la presión ejercida por grupos de poder que representaban a los notarios públicos, quienes estaban preocupados ante la posibilidad de perder un lucrativo negocio a causa del Registro Predial Urbano. A diferencia del registro tradicional, el Registro Predial Urbano permitía a los propietarios contratar a cualquier abogado, y no solamente a notarios, para legalizar sus transacciones.
Según Ayala, abogado especializado en títulos de propiedad, “al regresar al antiguo sistema, los costos se quintuplicaron. La gente se negó a hacerlo. El problema no es cultural. Se trata de encontrar la forma de mantener el proceso de obtención de títulos dentro del sistema formal”.
La desregularización en Perú tiene consecuencias de gran alcance para otros países que establecieron sus propios programas de títulos de propiedad siguiendo el modelo peruano.
Sebastián Galiani, de la Universidad de Maryland, y Ernesto Schargrodsky, de la Universidad Torcuato Di Tella (ambos economistas argentinos e investigadores del Instituto Lincoln) observaron que en un suburbio de Buenos Aires donde recientemente se habían otorgado títulos de propiedad, una parte importante de las propiedades estaba cayendo nuevamente en la informalidad. En un estudio de 2013, los autores concluyeron que la desregularización probablemente se debía a que el costo para mantener la formalidad de las propiedades era inaccesible para las personas (Galiani y Schargrodsky 2013).
“Este no es sólo un problema peruano”, dice Molina, el economista que estudió la desregularización en Perú, “sino algo mucho más amplio que se da en toda la región. Es un problema de visión a corto plazo de la reforma”.
Posibles soluciones
Para frenar el aluvión de la desregularización, los expertos en políticas señalan que los gobiernos deben intervenir inmediatamente para impedir que en el futuro se generen programas costosos de otorgamiento de títulos.
Ya se han tomado algunas pequeñas medidas. En 2007, el gobierno promulgó leyes para otorgar fondos a propietarios de bajos recursos con el fin de formalizar las subdivisiones de sus propiedades, un proceso que requiere, en primer lugar, registrar la construcción de la vivienda (el programa de registro en Perú otorgaba a los residentes el título de propiedad del terreno, no de la vivienda que se construía sobre el mismo). Sin embargo, los expertos en registros dicen que el programa de 2007 nunca se implementó de manera completa.
Lo que es más importante, los expertos dicen que el gobierno debería restablecer los trámites simples, como aquellos que se eliminaron cuando el Registro Predial Urbano se fusionó con la SUNARP. Según Molina, “algo concreto que puede hacerse es reconsiderar los mecanismos que se utilizaron anteriormente. El Registro Predial Urbano se creó con el fin de que los pobres pudieran obtener los títulos de propiedad de manera correcta”.
Pero tal vez no sea suficiente hacer cambios sólo en las regulaciones. Muchos expertos insisten en el hecho de que el problema requiere que las autoridades aborden también el tema más amplio de la cultura de la informalidad en Perú. Para ello, según los especialistas, el gobierno debería lanzar una campaña con la finalidad de educar a los residentes sobre la importancia de mantener la formalidad de sus propiedades.
“Este es un problema que debe tratar el gobierno”, dice Gustavo Riofrío, sociólogo e investigador del Instituto Lincoln, quien ha dedicado su carrera a estudiar los derechos de propiedad. “Tenemos una ciudad entera que ha sido construida por personas que enfrentan el mismo problema. Ya no se trata de un problema individual, sino social”.
Los funcionarios de la SUNARP dicen que están trabajando para simplificar los trámites relacionados con las operaciones inmobiliarias sin poner en riesgo la seguridad legal que brinda el sistema actual. Señalan, además, que están trabajando para educar a las personas en a la importancia de utilizar el registro, aunque reconocen que el gobierno “no ha logrado inculcar en la población la importancia de la formalización”.
Hasta que exista una mayor aceptación del sistema regulatorio, algunos abogados opinan que Perú debería establecer la obligatoriedad del registro. A diferencia de muchos otros países, Perú no requiere el registro de las operaciones inmobiliarias, sino que es voluntario.
Como asegura Ortiz: “Debemos educar a las personas para que comprendan que el registro no sólo les brinda seguridad sino que también genera valor. Pero hasta que tengamos una nueva cultura, será necesario modificar el Código Civil para requerir a las personas que registren sus propiedades”.
En el hogar de Amalia y Eusebio, en San Juan de Lurigancho, su hija de 40 años, Emma, está ansiosa por hablar acerca de los títulos de propiedad.
Emma, que vive con su hijo en un apartamento del tercer piso, dice que la subdivisión de la vivienda familiar hasta ahora ha funcionado bastante bien. Los diferentes miembros de la familia respetan el espacio de cada uno, pero siguen reuniéndose los domingos para almorzar. Los hijos también ayudan a sus ancianos padres con algunos gastos, como los alimentos.
No obstante, Emma sabe que es muy importante definir legalmente la titularidad de la propiedad, en particular después de haber visto a otras familias quedar atrapadas en conflictos legales relacionados con sus propiedades. Emma cree que sus padres, a la larga, comenzarán el trámite para otorgar los títulos de propiedad a sus hijos.
“Mi madre y mi padre todavía se sienten bien físicamente. Cuando esto cambie, creo que lo dejarán ir”, dice Emma. “Pero por el momento, todavía lo mantienen todo junto. Para mí, está bien”.
Ryan Dubé es un periodista canadiense que vive en Lima, Perú. Sus artículos han sido publicados en The Wall Street Journal, The Globe & Mail y Latin Trade. También ha trabajado en proyectos para la Unidad de Inteligencia de The Economist.
Referencias
Fernandes, Edésio. 2011. Regularización de asentamientos informales en América Latina. Cambridge, MA: Lincoln Institute of Land Policy. www.lincolninst.edu/pubs/dl/1962_1283_Regularization%20PFR%20Span%20Rev%202012.pdf
Galiani, Sebastián y Ernesto Schargrodsky. 2013. “Land De-Regularization”. Documento de trabajo. www.utdt.edu/ver_contenido.php?id_contenido=2674&id_item_menu=4526
Molina, Oswaldo. 2014. “Loss of Plot Formality through Unregistered Transactions: Evidence from a Natural Experiment in Peru”. Documento de trabajo. Cambridge, MA: Lincoln Institute of Land Policy. www.lincolninst.edu/pubs/2447_Loss-of-plot-formality-through-unregistered-transactions
Even as the economy begins to recover from the greatest recession since the 1930s, the worst may be yet to come for state and local governments because their fiscal situations typically lag the general economy by two to three years. State budget deficits for FY2010 totaled more than 25 percent of general fund budgets—the largest budget gaps on record.
Making matters worse is the impending “stimulus cliff,” which arises because most of the roughly $135 billion in federal stimulus aid to state governments and school districts was used to help close state budget gaps in FY2010, leaving a small fraction of the aid for FY2011 (Lav, Johnson, and McNichol 2010). Even before the current recession, states faced substantial structural deficits. The U.S. Government Accountability Office (2007, 1) predicted state and local governments would face “large and growing fiscal challenges” within a few years time, and continuing through 2050.
These grim forecasts for state and local budgets have led some analysts and policy makers to call for reducing the size of state government, consolidating local governments, restructuring tax systems, and even changing state constitutions. According to Rob Gurwitt (2010, 18) of Governing magazine, the “fundamental assumptions about how state government operates need rewiring.”
Given the likelihood of a long-term state and local government fiscal crisis, property tax relief is an important state government function that is now more critical than ever. This article argues that most efforts to provide property tax relief, such as assessment limits and homestead exemptions, are inefficient and create substantial unintended consequences. Circuit breaker programs—a property tax relief mechanism first developed in the 1960s—deserve renewed attention in an era of streamlined state government because they target aid to those who need it most.
Alternative Approaches to Property Tax Relief
The property tax accounts for the largest share of own-source revenues for local governments, and is particularly suitable for funding local services for at least two reasons. First, it is a stable revenue source: property tax revenues do not fall dramatically during recessions as income tax and sales tax collections generally do. Second, property taxes are imposed on an immobile tax base: while people may have the option to buy the same goods in a nearby town with lower sales taxes, or move across state lines for lower incomes taxes, they cannot move their land across city lines to seek lower property taxes.
The property tax is not without problems, however. Chief among them are the disparities in property values across communities, an inexact relationship to taxpayers’ ability to pay, and the long-standing unpopularity of the tax. Its revenue importance means that improvement rather than elimination is the best way to address these problems.
Property tax relief can be provided in many ways, some of which are more effective and equitable than others. Wealth disparities among communities make locally funded property tax relief programs inherently problematic. Funding property tax relief at the state level is a better option, since communities with large concentrations of needy taxpayers are unlikely to have the resources to fund local-option tax relief programs. State funding also eliminates inequities in property tax relief among communities.
Assessment caps are used as a property tax relief measure in 20 states, and other states regularly examine proposals to employ such measures. A recent comprehensive study on assessment limits found, however, that “30 years of experience suggests that these limits are among the least effective, least equitable, and least efficient strategies available for providing property tax relief” (Haveman and Sexton 2008, 37). Assessment caps provide the greatest tax reductions to homeowners whose property values have increased the most. Even though such gains in housing wealth are not a liquid asset, tax relief should not be structured to provide the greatest benefit to those with the greatest increase in wealth.
Assessment limits also create horizontal inequities in cases where two homeowners with identical incomes and homes in the same community face dramatically different property tax bills solely because one owner has lived in the home longer. Fixed-dollar homestead exemptions are better, but still do a poor job of targeting homeowners with the highest property tax burdens, because they provide the same dollar value of property tax relief to all homeowners facing a particular tax rate, regardless of their income.
Residential property tax relief programs across the United States are seldom targeted by income—the best measure of a household’s ability to pay taxes. Of the 216 residential property tax relief programs in effect in 2006, only 81 took income into account when setting benefits by using an income ceiling, and only 37 programs set tax relief benefits that varied by income (Significant Features of the Property Tax 2010). Given the fiscal crisis, states should consider replacing untargeted property tax relief with circuit breaker programs that can provide relief to more households in need, without spending more money.
The Case for the Property Tax Circuit Breaker
When applied to property tax relief, the term circuit breaker is used to describe programs that provide benefits directly to taxpayers, with benefits increasing as claimants’ incomes decline. As an electrical circuit breaker stops the flow of electrical current to protect a circuit from overload, a property tax circuit breaker is a policy mechanism designed to stop property taxes from exceeding a claimant’s ability to pay, protecting the taxpayer from property tax overload.
A clear definition is critical since most states with true circuit breaker programs do not use that term to describe them. For example, Maine calls its circuit breaker program the Maine Property Tax and Rent Refund Program. Meanwhile, some states use the term to refer to property tax relief programs in which relief does not vary with income. In Indiana, a program is called a circuit breaker even though the program ties relief to property value, not to income.
Over the last 40 years, two-thirds of the states and the District of Columbia have adopted state-funded circuit breaker programs (see figure 1). Each of these programs satisfies the circuit breaker definition described above. However, the design of these programs, and consequently their effectiveness, varies considerably. Properly designed circuit breakers can target property tax relief more precisely and with less expense than broad-based mechanisms such as homestead exemptions and assessment caps.
Recommendations for a Circuit Breaker Program
We offer seven recommendations designed to obtain maximum benefit when creating or reforming a circuit breaker program. The New York case study presents the efforts of one state trying to reform its circuit breaker program (box 1).
Box 1: New York’s Effort to Provide Targeted Property Tax Relief
Policy makers in New York state are considering adopting a new, expanded circuit breaker program to provide more targeted property tax relief because the existing circuit breaker program does not provide adequate assistance. It currently excludes households with incomes above $18,000, and provides an average annual benefit of only $109 per claimant (Bowman et al. 2009).
The state’s primary means of providing direct property tax relief to households is the School Tax Relief program (STAR), which has three components. Basic STAR is available to all taxpayers on their primary residence, and exempts the first $30,000 in property value from school district taxes, with adjustments for municipalities where assessed values diverge from market values and for downstate counties with high real estate prices. Enhanced STAR exempts a higher value, and is available only to homeowners over age 65 with limited incomes. Middle Class STAR provided a rebate check that depended on households’ income and their other STAR benefits, but was repealed in 2009 for 2009–2010 and subsequent fiscal years.
STAR is an expensive program—the three property tax components cost about $3.9 billion in 2008–2009. However, because benefits are spread so widely, many homeowners still face excessive property tax burdens. According to the 2006 American Community Survey, even after accounting for reductions under the Basic and Enhanced STAR programs, 20.1 percent of New York homeowners paid more than 10 percent of their income in property taxes, while 52.6 percent paid less than 5 percent. By providing such generous relief to the second group, the state is not able to provide enough for the first. Also, by providing larger exemptions for counties with high house prices, STAR largely subsidizes households in property-wealthy communities, which makes the state’s property tax system more regressive (Duncombe and Yinger 2001).
To provide more targeted relief, several proposals have been introduced to establish a new circuit breaker program. During the 2005–2006 legislative session, Assemblywoman Sandy Galef and Senator Betty Little sponsored a plan with many desirable features: a multiple-threshold formula to make the distribution of tax relief more progressive; an income ceiling high enough to include all middle-income households; and a copayment requirement to discourage excessive spending by local governments. The cost would have been limited by making homeowners choose either circuit breaker benefits or Middle Class STAR.
The Omnibus Consortium put forward a proposal similar to the Galef–Little plan, but with two improvements. First, it includes renters. Second, it uses a graduated structure for the income brackets, so that a small income increase that moves a claimant from one bracket to the next does not result in a much larger decrease in circuit breaker benefits.
The consortium’s proposal was introduced in spring 2009 by Senator Liz Krueger and Assemblyman Steve Englebright; it is cosponsored by Galef, Little, and many other legislators. Once fully implemented this plan is estimated to cost $2.3 billion annually, which is 65 percent less than the cost of the 2008–2009 STAR property tax programs, even though the new plan would provide much more generous relief to households facing the largest property tax burdens.
Plans to pay for the circuit breaker have been clouded by the state’s repeal of the Middle Class STAR rebates in response to the 2009–2010 budget deficit. Governor David Paterson has also proposed a circuit breaker plan, which would tie circuit breaker benefits to a spending cap for state government. Annual spending growth would be restricted to inflation growth. When revenues exceed this limit, the surplus would be returned to homeowners via a circuit breaker. While this plan may seem attractive, it would accentuate budget cycles and result in unpredictable year-to-year fluctuations in tax relief for homeowners.
Given the state’s fiscal crisis, creating a new circuit breaker program now seems more difficult than when the Galef–Little bill was being actively debated in the 2006–2008 period. Still, it is a positive sign that many legislators and the governor are all advancing targeted and cost-effective circuit breaker proposals, and have repealed the expensive and untargeted Middle Class STAR program.
Provide property tax relief to owners and renters of all ages. Currently, more than two-thirds of state circuit breakers do not cover nonelderly households, and a quarter of programs do not cover renters. Restricting eligibility to seniors is based on the false assumption that age is a good proxy for property tax burden. In fact, while the elderly have higher property tax burdens on average, Census data show elderly and nonelderly homeowners both devote about 35 percent of their incomes to all home ownership costs combined (Bowman et al. 2009, 11).
Furthermore, circuit breakers eliminate the need to use age as a rough proxy for property tax burdens since they target relief based on each household’s income and property tax liability. States should also provide circuit breaker benefits for renters, because they pay property taxes indirectly as part of their rent and they generally have lower incomes than homeowners. States that cover renters typically estimate renter property tax payments by specifying a percentage of rent equivalent to property taxes, most commonly 20 percent.
Avoid low income ceilings and restrictions on maximum benefits.
Many circuit breakers fail to provide meaningful tax relief because they have low income ceilings that exclude middle-income households, or low limits on maximum benefits that result in inadequate relief. For example, Oklahoma’s circuit breaker program restricts eligibility to claimants with incomes below $12,000 and caps relief at $200. In 2008, almost three-quarters of state circuit breaker programs had income ceilings below the national median household income of $50,223. In the current fiscal crisis, states should take care to set appropriate limits to restrain the cost of circuit breaker programs without rendering these programs ineffective.
Use a multiple-threshold circuit breaker formula.
States use three basic types of circuit breaker formulas: threshold, sliding-scale, and quasi circuit breakers. Threshold circuit breakers are the only type that bases tax relief directly on property tax burdens—that is, the percentage of income spent on property taxes. Using multiple thresholds will result in a more progressive distribution of benefits.
Threshold formulas provide a benefit for the portion of a claimant’s property tax bill that exceeds set percentages of income. For example, the Massachusetts circuit breaker, which is limited to taxpayers over age 65, uses a 10 percent single-threshold formula. The taxpayer is responsible for the entire tax bill up to 10 percent of household income, while the circuit breaker benefit offsets the tax bill above this threshold, up to a maximum benefit of $960.
Multiple-threshold formulas set multiple threshold percentages that increase from the lowest income bracket to the highest, with these thresholds usually applied incrementally like a graduated income tax. Maryland uses four threshold percentages: the circuit breaker benefit offsets any property tax liability above 0 percent of income for the first $8,000 of income, above 4 percent for the next $4,000 of income, above 6.5 percent for the next $4,000 of income, and above 9 percent for income of $16,001–$60,000.
Sliding-scale formulas reduce property taxes by a set percentage for each income bracket, with lower relief percentages for higher income brackets. All claimants in a given income bracket receive the same percentage of relief regardless of their property tax bill.
Quasi circuit breakers use multiple income brackets to target benefits to low-income households; benefits are determined without reference to a claimant’s property tax bill, except that they cannot exceed the actual property tax paid. A few states use hybrid circuit breakers that employ elements of all three types of formulas.
Ensure reliable state funding.
Even generous circuit breakers can become ineffective without reliable state funding. Circuit breaker benefits should be treated as an entitlement, rather than relying on budget appropriations that can result in pro-rated benefits (as in Iowa), unpredictable annual changes in formulas (as in New Jersey), or elimination of benefits in some years (as in California). Unpredictable fluctuations in circuit breaker benefits are difficult for taxpayers to manage and can have potentially dire consequences on household budgets.
Given the disparities in property wealth across municipalities, it is important for circuit breakers to be funded by the state, rather than at the option of local governments. Because of differences in program design and participation levels, the costs to state governments of existing circuit breaker programs vary considerably, ranging from .004 percent to 6.3 percent of property tax collections among 14 states where program cost data are readily available (Bowman et al. 2009, 20).
Use copayment requirements with threshold circuit breakers.
States that use threshold formulas should relieve only a portion of property taxes exceeding the threshold. The remaining difference between the taxes exceeding the threshold and the circuit breaker benefit may be considered a copayment. Copayment requirements are important for avoiding inefficient increases in local spending. If a circuit breaker shields taxpayers from 100 percent of any property tax increase, they have no incentive to scrutinize increased local spending since they will benefit from better public services without any increase to their tax bill.
Deliver circuit breaker benefits in a timely and visible way.
States use three methods of distributing circuit breaker benefits: rebate checks, income tax credits, and property tax credits or exemptions. A property tax credit reduces the tax bill based on a property’s full assessed value, while an exemption reduces a property’s assessed value.
Providing benefits through a property tax credit or exemption has two key advantages over rebate checks or income tax credits. First, taxpayers receive an immediate reduction in their property tax bills instead of facing a delay between the date they pay their property taxes and the date their circuit breaker application can be processed. Second, taxpayers observe the benefit as property tax relief instead of mistaking an income tax credit for income tax relief. Since renters do not pay property taxes directly, their circuit breaker benefits can be dispersed through a rebate check.
Use a public outreach campaign.
Low participation is a common problem among existing circuit breaker programs. Taxpayers will not apply for benefits if they are not aware of the program, or if they do not believe they qualify for benefits. To increase awareness and participation, states may promote programs through print advertising, broadcast media, and/or speaking tours. The Internet is a particularly useful and low-cost tool for circulating up-to-date program details including deadlines, contact information, printable claim forms, or online applications. Some states are able to enlist the help of nonprofit organizations in promoting participation if the group views the circuit breaker program as supporting its mission. For example, the Gerontology Institute at the University of Massachusetts promotes that state’s program as part of its efforts on behalf of the elderly.
Conclusion
The current fiscal crisis may usher in a new era for state governments under intense pressure to redesign programs to “do more with less.” Property tax relief is a core function of state governments, and it can be made more fair and cost-effective by using a circuit breaker program. This policy tool is designed to stop the property tax from exceeding a taxpayer’s ability to pay by targeting tax relief to those who need it most.
A majority of the states currently employ circuit breakers, but most programs fall short of ideal leaving ample room for improvement. New York’s poorly targeted property tax relief system, for example, could be replaced with an expanded circuit breaker that provides more help to taxpayers overburdened by the property tax, but costs less than the current program. Circuit breaker programs can also help strengthen the property tax itself as a mainstay of local government finance.
About the Authors
Daphne A. Kenyon is principal of D.A. Kenyon & Associates, a public policy consulting firm in New Hampshire, and a visiting fellow at the Lincoln Institute of Land Policy.
Adam H. Langley is a research analyst at the Lincoln Institute of Land Policy and a graduate student in economics at Boston University.
Bethany P. Paquin is a research assistant for D. A. Kenyon & Associates and the Lincoln Institute.
The authors thank Frank Mauro of the Fiscal Policy Institute in New York State and Joan Youngman of the Lincoln Institute of Land Policy for helpful information and comments on previous drafts.
References
Bowman, John H., Daphne A. Kenyon, Adam Langley, and Bethany P. Paquin. 2009. Property tax circuit breakers: Fair and cost-effective relief for taxpayers. Cambridge, MA: Lincoln Institute of Land Policy.
Duncombe, William and John Yinger. 2001. Alternative paths to property tax relief. In Property taxation and local government finance, Wallace E. Oates, ed., 243–294. Cambridge, MA: Lincoln Institute of Land Policy.
Gurwitt, Rob. 2010. Broke and broken. Governing 23 (4): 18-23.
Haveman, Mark and Terri A. Sexton. 2008. Property tax assessment limits: Lessons from thirty years of experience. Cambridge, MA: Lincoln Institute of Land Policy.
Lav, Iris J., Nicholas Johnson, and Elizabeth McNichol. 2010. Additional federal fiscal relief needed to help states address recession’s impact. Washington, DC: Center on Budget and Policy Priorities, January 28. www.cbpp.org
Omnibus Consortium. 2010. Summary of Omnibus Bill Circuit Breaker. http://omnibustaxsolution.org/overview.html
Significant Features of the Property Tax. 2010. Residential property tax relief programs. www.lincolninst.edu/subcenters/significant-features-property-tax/Report_ResidentialRelief.aspx
U.S. Government Accountability Office. 2007. State and local governments: Persistent fiscal challenges will likely emerge within the next decade. July 18. GAO-07-1080SP.
Editor’s note: The Lincoln Institute published a new report on tax increment financing in September, 2018.
Tax increment financing (TIF) is an alluring tool that allows municipalities to promote economic development by earmarking property tax revenue from increases in assessed values within a designated TIF district. Proponents point to evidence that assessed property value within TIF districts generally grows much faster than in the rest of the municipality and infer that TIF benefits the entire municipality. Our own empirical analysis, using data from Illinois, suggests to the contrary that the non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF. An important finding is that TIF has different impacts when land use is considered. For example, commercial TIF districts tend to decrease commercial development in the non-TIF portion of the municipality.
Designating a TIF District
The rules for tax increment financing, and even its name, vary across the 48 states in which the practice is authorized. The designation usually requires a finding that an area is “blighted” or “underdeveloped” and that development would not take place “but for” the public expenditure or subsidy. It is only a bit of an overstatement to characterize the “blight” and “but for” findings as merely pro forma exercises, since specialized consultants can produce the needed evidence in almost all cases. In most states, the requirement for these findings does little to restrict the location of TIF districts.
TIF expenditures are often debt financed in anticipation of future tax revenues. The practice dates to California in 1952, where it started as an innovative way of raising local matching funds for federal grants. TIF became increasingly popular in the 1980s and 1990s, when there were declines in subsidies for local economic development from federal grants, state grants, and federal tax subsidies (especially industrial development bonds). In many cases TIF is “the only game in town” for financing local economic development.
The basic rules of the game are illustrated in Figure 1. The top panel shows a land area view of a hypothetical municipality. The area on the western border is designated a TIF district and its assessed value is measured. The lower panel of Figure 1 shows the base-year property values in the TIF (B) and the non-TIF (N) areas. At a later point in time, assessed property values have grown to include the increment (I) in the TIF district and growth (G) in the non-TIF area of the municipality.
Tax increment financing carves out the increment (I) and reserves it for the exclusive use of the economic development authority, while the base-year assessed value (B) stays in the local government tax base. Thus,
Impacts on Overlapping Governments and Non-TIF Areas
The value increment (I) is the tax base of the TIF district. In most states (like Illinois, but unlike Massachusetts) there are multiple overlapping local governments, e.g., the municipality, school district, community college district, county, township, park district, library district, and other special districts. Figure 2 illustrates this situation with the school district representing all the nonmunicipal governments. To understand the economics and politics of TIF, it is crucial to note that while the municipality makes the TIF adoption decision, the TIF area value is part of the tax base of the school district and other local governments as well. Moreover, the TIF district gets revenues from the increment times the combined tax rate for all local governments together. The following hypothetical tax rates for a group of local governments overlapping a TIF district are close to the average proportions in Illinois.
Municipal tax rate = 0.15 %
School district tax rate = 0.60 %
Other governments’ tax rate = 0.25 %
Combined tax rate = 1.00 %
For each 15 cents of its own would-be tax revenues the municipality puts on the line, the school district and other local governments contribute another 85 cents. Thus, there may be an incentive for municipalities to “capture” revenue from growth that would have occurred in the absence of TIF (to collect taxes that would have gone to school districts). Or, municipal decision makers may favor inefficient economic development strategies that do not result in public benefits worth the full cost, since their own cost is only 15 cents on the dollar. TIF proponents would counter that nothing is captured, because the increment to the tax base would not exist “but for” the TIF authority expenditure. That argument, of course, turns on what would have happened to property values in the absence of TIF.
If, as municipalities are often required to assert when they adopt TIF, all of the increment is attributable to the activities of the TIF development authority, then TIF is fair, in that the school district is not giving up any would-be revenues. If, as critics of TIF sometimes assert or assume, none of the increment is attributable to the TIF and all of the new property value growth would have occurred anyway, then the result is just a reallocation of tax revenues by which municipalities win and school districts lose.
The impact of TIF on growth in property values requires a careful reading of the evidence. It is wrong, as those who look only at growth within the TIF district in effect do, to assume to know the answer. Part of the solution is to use appropriate tools to statistically control for other determinants of growth.
It is also necessary to take into account the potential for reverse causality. We want to know the extent to which TIF adoption causes growth. But the causation could go the other way; anticipated growth in property values could lead to TIF adoption if municipalities attempt to capture revenues from overlapping governments. Or there could be reverse causation bias if TIF is adopted in desperation by municipal decision makers in areas where low growth is anticipated. Either way we should ask: Are the municipalities that adopt TIF systematically different from those that do not? If the municipalities are systematically different, we must statistically disentangle the effect of that difference from the effect of the TIF using a technique that corrects for what economists call “sample selection bias.”
Impacts on Growth and Property Values
There are two sides to any government budget: revenues and expenditures. As a revenue-side mechanism, TIF is a way of earmarking tax revenues for a particular purpose, in this case local economic development. The effectiveness of economic development expenditures depends on opportunities, incentives, and planning skills that are specific to each local area and each project. By combining data from a large number of TIF and non-TIF municipalities, we can ask: On average and overall, is TIF adoption associated with increased growth in municipal property values? We have addressed this question in two research studies, both of which use statistical controls for the other determinants of growth and for reverse causation due to sample selection bias.
The first study (Dye and Merriman 2000) uses data from 235 Chicago area municipalities and covers preadoption, TIF adoption (or not), and postadoption time periods. We control for the selection bias (reverse causation) problem by first predicting which municipalities adopt TIF and then using that information (a statistic called the inverse Mills ratio) when estimating the effect of TIF adoption on property values in a second stage. Use of selection bias correction was first applied to the study of TIF by John Anderson (1990) and is now standard practice.
Our estimates of the impact of TIF have a number of additional variables controlling for home-rule status, the combined tax rate, population, income per capita, poverty rate, nonresidential share of equalized assessed value (EAV), EAV per square mile, distance to the Chicago loop, and county of location. We found that property values in TIF-adopting municipalities grew at the same rate as or even less rapidly than in nonadopting municipalities. The study design did not get at this directly, but the offset seemed to come from smaller growth in non-TIF area of the municipality (lower G).
Our findings were a surprise to those, especially nonacademics, who naively had inferred TIF caused growth by observing growth within a TIF district (I) without any statistical controls for the other determinants of growth (in I or G). Our findings were quite threatening to those with an interest in TIF, such as local economic development officers who spend the earmarked funds or TIF consultants who are paid for documenting findings of “blight” or “but for.” Our findings were also at odds with an Indiana study that found a positive effect of TIF adoption on housing values (Man and Rosentraub 1998).
Because our findings were controversial, because the effect of TIF was unsettled in the academic literature, and particularly because we wanted to pursue the possibility of a negative cross relationship between growth in the TIF district (I) and growth outside the TIF district (G), we undertook a second study (Dye and Merriman 2003). In addition we wanted to look at whether there are different TIF effects when more municipalities are included and different types of land uses are considered. We used three different data sets: property value data for 246 municipalities in the six-county Chicago area; less complete property value data for 1,242 municipalities in all 102 Illinois counties; and property value data for 247 TIF districts in the six-county Chicago area.
For the six-county sample (similar to our earlier study, but with more years and more municipalities), Table 1 presents the pre- and postadoption growth rates for the TIF-adopting and nonadopting municipalities. These calculations are from raw data, before any statistical controls for other growth determinants or corrections for selection bias. The first row compares EAV growth rates of the TIF-adopting and nonadopting municipalities in the period before any of them adopted TIF. EAV grew slightly faster for municipalities that would later adopt TIF.
The second row shows that in the period after TIF adoptions took place, gross-of-TIF EAV grew less rapidly for TIF adopters. The last row shows that the net-of-TIF EAV growth rate for TIF adopters was even lower, suggesting that growth (I) in the TIF district may come at the expense of property values outside the development area (G). In summary, if we make no statistical adjustment for the effects of other determinants, TIF adopters grew more slowly than nonadopters.
When we use the more recent six-county data in a multivariate regression model with statistical controls for local characteristics and sample selection, we no longer get the earlier provocative result of a significantly negative impact of TIF adoption on growth, but we still find no positive impact of TIF adoption on the growth in citywide property values. Any growth in the TIF district is offset by declines elsewhere.
The second study was designed with particular attention to land use. The property value data is broken into three land use types: residential, commercial, and industrial. Each TIF district also is identified by one of five development purpose types: central business district (CBD), commercial, industrial, housing, and other or mixed purpose. Thus, we can look separately at growth in municipal EAV by type of land use and type of TIF. Unfortunately, the data do not record EAV by land use within TIF districts, so we must settle for the growth in the tax base that is available to local governments. Most of the estimates of effects by land use type are not significantly different than zero. However, commercial and industrial TIF districts both show a significantly negative impact on growth in commercial assessed values outside the district.
The second study also extends the analysis to all 102 Illinois counties, which results in a much larger sample of municipalities (see Table 2). The TIF-base EAV (B) is unavailable, so we look at growth in available EAV. The simple means from the larger sample again suggest a negative effect of TIF on growth in property values. When we use this all-county sample to estimate the impact of TIF in a multivariate regression with statistical controls for other growth determinants and for TIF selection, there is a significantly negative impact of TIF adoption on growth in overall available (non-TIF) property values. This revives the earlier hypothesis that TIF adoption actually reduces property values in the larger community.
When we run separate regressions for available EAV growth by type of land use for the all-county sample, we see more evidence of a zero or negative impact of TIF on property value growth. Again, there is a significant “cannibalization” of commercial EAV outside the TIF district from commercial development within the TIF district.
The TIF district sample of the second study includes 247 TIF districts in 100 different municipalities in the six-county Chicago area. We match TIF base (B) and TIF increment (I) in each year to information for the host municipality. The key results are:
Conclusion
Tax increment financing is an alluring tool. TIF districts grow much faster than other areas in their host municipalities. TIF boosters or naive analysts might point to this as evidence of the success of tax increment financing, but they would be wrong. Observing high growth in an area targeted for development is unremarkable. The issues we have studied are (1) whether the targeting causes the growth or merely signals that growth is coming; and (2) whether the growth in the targeted area comes at the expense of other parts of the same municipality. We find evidence that the non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF.
Policy makers should use TIF with caution. It is, after all, merely a way of financing economic development and does not change the opportunities for development or the skills of those doing the development planning. Moreover, policy makers should pay careful attention to land use when TIF is being considered. Our evidence shows that commercial TIF districts reduce commercial property value growth in the non-TIF part of the same municipality. This is not terribly surprising, given that much of commercial property is retailing and most retail trade needs to be located close to its customer base. That is, if you subsidize a store in one location there will be less demand to have a store in a nearby location. Industrial land use, in theory, is different. Industrial goods are mostly exported and sold outside the local area, so a local offset would not be expected. Our evidence is generally consistent with this prediction of no offset in industrial property growth in non-TIF areas of the same municipality.
Richard F. Dye is a visiting fellow at the Lincoln Institute of Land Policy in 2005–2006. He is also the Ernest A. Johnson Professor of Economics at Lake Forest College, Lake Forest, Illinois, and adjunct professor at the Institute of Government and Public Affairs, University of Illinois.
David F. Merriman is professor of economics at Loyola University of Chicago and adjunct professor at the Institute of Government and Public Affairs, University of Illinois.
References
Anderson, John E. 1990. Tax increment financing: Municipal adoption and growth. National Tax Journal 43: 155–163.
Dye, Richard F., and David F. Merriman. 2000. The effects of tax increment financing on economic development. Journal of Urban Economics 47: 306–328.
———. 2003. The effect of tax increment financing on land use, in Dick Netzer (ed.), The property tax, land use, and land-use regulation. Cheltenham, UK: Edward Elgar, 37–61.
Dye, Richard F., and Jeffrey O. Sundberg. 1998. A model of tax increment financing adoption incentives. Growth and Change 29: 90–110.
Johnson, Craig L., and Joyce Y. Man (eds.). 2001. Tax increment financing and economic development: Uses, structures and impact. Albany: State University of New York Press.
Man, Joyce Y., and Mark S. Rosentraub. 1998. Tax increment financing: Municipal adoption and effects on property value growth. Public Finance Review 26: 523–547.
SHARE
In the United States we are used to thinking about the university within the context of its host city. The University of Wisconsin in Madison, the University of North Carolina in Chapel Hill and the University of Illinois in Urbana play major roles in driving the economies of those traditional college towns. Stanford University and Massachusetts Institute of Technology are examples of research universities that have served as incubators for new industries that have had significant economic and industrial impacts in Silicon Valley, California, and metropolitan Boston. The Julliard School in New York City, the Chicago Art Institute, and the film departments at the University of California (UCLA) and University of Southern California (USC) in Los Angeles also have had a significant effect on their local cultural landscapes.
After more than five years of focusing on the real estate development activities of U.S. colleges and universities, Lincoln Institute researchers are now investigating the roles that universities play in their host cities around the world. Will the National Autonomous University of Mexico (UNAM), a 733-hectare campus in the middle of one of the world’s largest cities, be able to maintain autonomy from the federal government through its land policies? Can a university that serves Northern Ireland’s Catholics and Protestants succeed in building a new campus in an area known for poverty and intractable political violence? What lessons can we learn from the redevelopment of a German military barracks by the University of Lueneburg that might be applicable to other universities’ development efforts?
Universities are major players in many activities not traditionally associated with the ivory tower. They are employers, purchasers, engines of economic growth, innovators, cultural meccas, branders of place and, increasingly, major real estate developers. This last role creates a web of opportunities and challenges that are not only important to the future of universities but also extend throughout the politics and economics of cities.
Formal examinations of the university’s role in acquiring, managing, selling and developing real estate have not been a topic of academic and professional inquiry in the U.S. until recently, but these issues are even less frequently discussed in international circles. There are few comprehensive case studies and literally no multi-continent examinations of how urban universities operate in real estate and land development, even though there is widespread agreement over its growing importance. The contributions of universities to their cities, the nature of state higher education policy and the increasing role of private market actors in university expansion are all important features of urban land development today, although they are realized differently in various places.
To facilitate further exploration and comparison of these issues, a dozen international scholars from Europe, South America, Asia and Africa gathered at the Lincoln Institute in March 2004 to present papers and engage in a critique of their work. They quickly moved the discussion beyond the case studies into a broader conversation about the role of the university in the history and the future of national policy toward cities and how such policy is affecting and is affected by the global economy.
The Role of the State
Outside the U.S., the university is almost always a public institution; therefore university land development is closely intertwined with and often an integral part of local and/or national planning and development policies. The levels of autonomy in real estate development decision making experienced by international universities are also dramatically different from those of U.S. universities, because of their relative attachment to the state as both an agency and public institution.
Anne Haila of the University of Helsinki pointed out the strong history of planning in Finland, for example, where plans are laws that carry great weight and supply clear direction to university land use planning. All university real estate in Finland is owned and managed by the national real estate company, which strives for efficiency in all of its real estate strategies. Conflicts between universities and the property manager became especially prevalent after 1999, when university departments were ordered to pay the full price of rent for their premises; if departments increased their space they had to pay more, but if they decreased it they were compensated. The reasoning behind the policy was to abolish the idea of “free space” and to make university departments aware that bringing in new research and other revenue-generating projects would help them pay for additional space.
Carlos Morales-Schechinger presented another example of the relationship between university land policies and the state in his review of UNAM in Mexico City. UNAM has been autonomous from the federal government for more than 50 years and has “abandoned any intention of becoming a developer.” Instead, UNAM considers the land’s use value as a sanctuary, an area secure from government intervention, and a place for study, natural spaces and public art. Approximately 29 percent (212 ha) of the land has been declared an ecological zone due to its unique flora and fauna.
Morales-Schechinger suggests that UNAM’s reluctance to engage in current real estate development is related to its past history, when some of its land was acquired from the territory granted to the peasants after the 1910 Revolution. The university serves nearly 260,000 students from all socioeconomic groups and thus views itself as an independent and often vocal critic of the federal government.
Shifting City Growth Patterns
Changes in the nature and structure of the nation-state brought on by economic restructuring, new political alliances, changing demographics, and the decentralization of governmental responsibilities and mandates can bring about radical changes in the real estate development policies of universities. Three participants focusing on universities in Portugal, Germany and Finland described the conditions of student demand and changes in the technology of work that were forcing both expansions and relocations of universities (or parts of them) in an increasingly decentralized urban environment.
Isabel Breda-Vazquez, speaking about the University of Porto (UP), noted the demographic shift in the city center, where UP was originally located, when it decided to expand and relocate its engineering and science facilities outside of the city, due to increasing demand for those courses of study and changing employment patterns. Problems associated with the subsequent decline of the city center included physical degradation, social vulnerability problems, functional obsolescence of buildings and spaces, reduced economic activity and consumption, and relocated student housing.
Changes in political alliances and the fall of the Iron Curtain reduced Germany’s need for military barracks, according to Katrin Anacker, and this has resulted in the large-scale conversion of one such facility to university property in Lueneberg. Increased student enrollment, a shortage of classrooms and the fact that university buildings were scattered throughout the city were important factors in the University of Lueneburg’s decision to take advantage of the military’s abandonment of a nearby barracks. Although dealing specifically with the conversion of military property into university buildings, Anacker’s paper may be read for its insights into the reuse of other types of obsolete or abandoned industrial buildings.
The growth demands on public universities and the decentralization of governance are occurring in the face of competing issues of demographic shift out of the city and revitalization efforts focusing on older parts of cities. Many workshop attendees identified the theme of abandonment during these discussions, in the contexts of either the state or local government or the university abandoning the city. Universities almost everywhere are placed in critical positions as they actively develop land themselves, and thus can be seen as agents of urban change—to both the benefit and the detriment of the city.
David Perry argued that to discuss the university as an engine of growth may be only part of the picture. The modern university may be an engine of the city’s development by dint of attrition, becoming even more important to central city renewal by filling the vacuum created by the withdrawal of once dominant agents in both the public and private sectors.
University Development Zones
Several papers addressed universities that are their own “zones of development” or “cities unto themselves.” Abner Colmenares presented the case of the Central University of Venezuela, a public institution in Caracas, and its Rental Zone (Zona Rental) Plaza Venezuela project dating from the 1940s. The notion of the Zona Rental dates back to 1827, when Venezuelan President Simon Bolivar granted real estate properties and farms to the university, to support its faculty and provide for its upkeep.
Adopting as its model Columbia University’s approach to the development of Rockefeller Center in New York City, Central University created and transferred the land to an independent foundation (Andrés Bello Fund Foundation for Scientific Development of the Central University of Venezuela–FFABUCV), which was mandated to promote scientific research by generating financial resources through the development of rental zone properties. By late 2004, more than 40 million square feet of construction had been completed, creating public spaces for the city, a subway center and numerous rental income sites, including a mall.
Wilmar Salim presented a similarly expansive project, the relocation of four universities in Indonesia to rural land formerly occupied by a rubber plantation. The government’s decision to relocate the universities from the capital city of Bandung to the Jatinangor area 23 kilometers distant resulted in the development of a new town to service the large campus. While the planning for the university was carefully conceived, such was not the case for the town that grew up alongside it. Salim notes several serious problems resulting from this relocation: environmental deterioration of the rural area due to the increased population and construction; lack of adequate planning in terms of infrastructure; and negative effects on community institutions caused by the influx of a population much larger than and culturally different from the indigenous residents.
Contested Space
The topic of the university as a contested space was addressed by Haim Yacobi of Israel and Frank Gaffikin of Northern Ireland, both of whom spoke of the challenges for urban universities located in places of conflict. In the Northern Ireland case, an attempt was made to set up a branch of the University of Ulster in an embattled area of Protestant-Catholic conflict and economic deprivation in Belfast. Although U.S. President Bill Clinton and British Prime Minister Tony Blair were present at the groundbreaking, the project faltered due to the lengthy development time and turnover of leadership, coupled with the existing problems associated with a historically contested space. The result was a distinct loss of credibility for the university in the community. Gaffikin stressed that when universities enter into these kinds of situations, they have to see the projects through with strong civic leadership.
Yacobi discussed the siting of Hebrew University on Mount Scopus in Jerusalem, a decision made by the government rather than the university, as was the case in Belfast. According to Yacobi, relocating the university after the 1967 war had a fundamental role in judaizing Jerusalem.
Fabio Todeschini of South Africa also examined the roles and responsibilities of the university in shaping urban space in a place that was already contested. He noted that the University of Cape Town has undergone enormous change since the apartheid era; currently more than one-half of the student population is black, although the majority of professors are white. The development and real estate practices of these and other universities have both created and been affected by significant symbolic, economic and cultural changes in their countries.
The workshop participants agreed about the seeming contradiction between the importance of universities to their cities and political economies and the lack of formal study of this phenomenon. The meeting confirmed that, both locally and globally, universities have enduring, indeed even increasing, levels of importance in their cities and regions. It is also clear that land development policies are equally important to the universities, to the development futures of cities and to the policy relationship with the private market.
Barbara Sherry is a doctoral candidate at the University of Illinois at Chicago in the Department of Urban Planning, a research assistant at its Great Cities Institute (GCI), and an attorney.
The City and the University Project
The Lincoln Institute of Land Policy launched The City and the University Project five years ago, to study the changing relationships between universities and their immediate neighborhoods, cities and the society at large. The Lincoln Institute shares this interest in the role that universities play in their cities with many other organizations. However, our attempt to understand this role is motivated by questions regarding urban assets and the use of those assets.
According to the currently dominant paradigm of enlightened self-interest, universities engage the city with the realization that the economic well-being of the abutting community is directly correlated to its own health. Through this project we are attempting to articulate a philosophy that universities should serve society as a whole, not just their abutters. Our goal is to extend the thinking, conversation and actions of university-community-city relations beyond this paradigm.
Under the leadership of Rosalind Greenstein of the Lincoln Institute, David Perry of the Great Cities Institute (GCI) of the University of Illinois at Chicago, and Wim Wiewel of the University of Baltimore, key actors from every conceivable side of university real estate development practices (including university administrators and faculty, developers, city planners and managers, journalists, nonprofit groups, and members of federal and state agencies) have been invited to participate in workshops sponsored by the Lincoln Institute. Perry and Wiewel have edited a book of U.S. and Canadian case studies contributed by some of these participants. Titled The University as Urban Developer: Case Studies and Analysis, this book is being published this spring by M.E. Sharpe, Inc., in association with the Lincoln Institute.
As a natural outgrowth of their work in North America, Perry, Wiewel and Greenstein expanded their research collaboration with an international seminar built on case studies from several continents. The workshop in March 2004 generated papers that will become part of a new edited volume, tentatively titled The University, the City and the State: Comparative Studies of University Real Estate Development.
In 2005 the Institute will convene a roundtable of practitioners and scholars to examine the university-city relationship in a variety of dimensions, including political, historical and philosophical. Another course is intended for neighborhood groups located near universities that face impressive challenges because of the particular role universities play in their district and their city. The course offers such groups the opportunity to learn how to best use their resources, relative to their university neighbors, to improve their urban environment.
The Institute will also offer a professional training opportunity for private-sector developers who work with and for universities that are extending their boundaries as demand increases for new laboratories, residential spaces, athletic facilities and other amenities. In addition, we are developing a special Web site for the urban university project that will facilitate communication among and between practitioners, policy makers and scholars.
SHARE
This article is adapted from a keynote address delivered by President Gregory S. Prince Jr. of Hampshire College in Amherst, Massachusetts, at a Lincoln Institute–sponsored conference in May 2003 at Lincoln House. Focusing on the topic “Universities as Developers,” the conference brought together some 40 college and university presidents and administrators who deal with real estate and development issues for their institutions.
“How do you build a relationship between an institution and the community in which it lives, in all of its forms?” This is a topic that I have struggled with for more than the 14 years I’ve been at Hampshire; building these relationships is an incredibly interesting process. I’m going to describe some of the salient points that have influenced the way I work on Hampshire’s community relations. It is not coherent. It does not start with a grand design. Rather, it’s inductive, based on my experiences and my observations. In addition, this interaction, this back and forth between thoughts and actions, between the college and the community, has been an important part of my own ongoing education about this critical topic.
This process for me began when I worked at Dartmouth College for 19 years. One of the things I found extraordinary at Dartmouth, which is so different from Hampshire, is that Dartmouth is taxed like any other institution, for profit or not, in the state. Because New Hampshire does not have the income tax or the sales tax, the town of Hanover is permitted to impose a property tax on all nonacademic facilities at the college. This tax policy has been in effect for decades, so it is an accepted part of life. People struggle over all the same issues that any academic community faces, but the conversation in town meetings is quite different when the college is paying just like anybody else. Granted, in Hanover tax dollars go to the schools where the faculty send their own children, so they have a vested interest. But, I saw a relationship between the college and the community that I found very healthy.
When I came to Hampshire College in 1989, everyone was talking about PILOTS (payments in lieu of taxes). I hadn’t thought much about PILOTS until I found out that the University of Massachusetts was making these payments to the town, and the town manager wanted Hampshire and Amherst College to start paying as well. So I learned to talk about PILOTS, but I felt there was something intrinsically shortsighted about the arrangement because it was based on a very narrow conversation about money and not about needs. Both Hampshire and Amherst colleges have made contributions to the town of Amherst for certain items, but we have not called them PILOTS, and we have not made them on a regular basis. Now, I am not saying that when a college or university does make a payment in lieu of taxes to a city it is necessarily a sign of an unhealthy relationship. All too often, however, the negotiations about what universities and colleges ought to pay to their host communities focus on the cost of police protection or snow removal, for example, rather than what it means to be part of a community with the rights and obligations that accompany citizenship, what are some of the critical needs of the community, and which ones could the institution most effectively address.
As I tried to figure out how to change the conversation, I wanted all of us to understand that we were having a dialogue. That is, when I’m having a conversation at Hampshire about the town, or with the town about Hampshire, I need to acknowledge that UMass and Amherst College are also part of the conversation. Wherever possible, we try to make sure that all three of us are communicating with the town; admittedly, this four-way conversation is complicated. I found in the process that the real discussion was about how to build sustainable communities. At Amherst College or UMass, sustainability is viewed differently than at Hampshire, a 33-year-old institution with little endowment. We need to figure out how to sustain our college over the long term within these different, complicated relationships. The PILOT conversation never seemed to quite get at that issue, so we’ve tried to expand it.
Broadening the Conversation
Two very different sets of experiences influenced my thinking about how to broaden and enrich the conversation with the community.
Urban Conferences
When I first arrived at Hampshire, I received a phone call from the chief counsel for the Transit Police in New York City, whom I had taught years before. He asked if Hampshire College would host a conference in association with the International Association of Chiefs of Police, bringing together representatives from several large urban communities. My first question was, “Great, but why Hampshire?” The response was that at that time, in 1989, people like Lee Brown (former police commissioner in New York City and now mayor of Houston) and Bill Bratton (former police chief of Boston and New York City, and now police chief of Los Angeles) felt that America had lost its cities but didn’t know it, and they were trying to figure out how to talk about it. They wanted to meet at Hampshire because it was the last place in the United States one would think would work directly with the police. The partnership that emerged between Hampshire and the International Association of Chiefs of Police did send a signal, and people noticed.
The conference brought together not just law enforcement officials but also the heads of all the major departments of ten major U.S. cities. Los Angeles dropped out at the last minute because of the Rodney King incident, but Atlanta, Boston, Chicago, New Haven, New York City, Phoenix, Seattle, Springfield and Tulsa were involved in the first group; other cities attended subsequent meetings. The police chiefs did not want mayors to come, because they wanted free and open discussion across professions and across cities. Because Hampshire paid for the conference, we were able to bring students into the process.
Among the most important outcomes of these conferences over several years was the creation of a forum for people involved in community schools, community policing, community health and other areas who never had a chance to converse, and that included the Hampshire students who contributed to an intergenerational discourse. In the first conference, we divided all the participants into groups, mixing professions and cities, and we gave them a four-block area of a fictitious city. Each group had three hours to write a proposal to a foundation on how they would use those city blocks to restore or revive the most problematic part of the city. They had access to unlimited funds, but out of the process came two critical principles that actually had very little to do with money and had everything to do with how people talk to one another and collaborate: (1) the need to have conversations across professions and across community boundaries; and (2) the need for every older adult committee or commission to have a younger counterpart organization. Guess who thought that one up? The students wanted to find a way to generate networks and initiate conversations in which common plans could be developed; they understood that no plan was going to succeed without that kind of cross-generational ownership. They came away with the realization that there is no single answer to what gets done; what is most important is how it gets done. Having conversations across boundaries, be they professional, historic, generational or institutional, may be the core value and core practice of community building.
We had three of these conferences over three years, and I think they had a profound effect on the strategic ways that people like Bratton and Brown and other law enforcement officers and community leaders changed their communities. These same principles of open conversation should be built back into relationships between colleges and universities and their communities. It’s not just about PILOTS or taxes. It’s about how you generate a conversation so that everybody is part of the process, respects the outcome and is committed to the sustainability of the community.
Cultural Village
The second set of experiences also began in my first year at Hampshire, a lovely campus of 1,200 students surrounded by 800 acres of farmland in Amherst, a small New England town in the western part of the state. Amherst also hosts the University of Massachusetts, a major state land-grant university with over 20,000 students, and Amherst College, with 1,600 students. A bus system links the colleges with the town, but many students complained that they were “in a little teenage encampment.” They wanted older adults and more activity around them so they could feel more connected to the community.
As I talked with people in the town and attended meetings on economic development issues, I learned that Amherst was fairly hostile to development. Lack of development intensified the feeling among town leaders that PILOTS were the possible recourse. As I began to understand that perceptions, strategies and concerns about development underlay the conversation about PILOTS, I began to look at land. Could land possibly help the community, since Hampshire had an abundance of land relative to available cash? Our land actually held the seeds for new possibilities in the form of creating a “cultural village.”
After many years of planning and negotiating, the grounds of Hampshire College are now being transformed into a center for nonprofit cultural and educational institutions that create more activity for the students and more economic activity for the town. The National Yiddish Book Center became the first new development when, in the early 1990s, it was looking for a new home. The center’s director, Aaron Lansky, is a Hampshire alumnus and he wanted to stay in Amherst where he had started the center. It took six years to persuade the boards of the college and the center to agree, but the center now has an absolutely gorgeous building with 40,000 volumes in the library. It runs tremendous events, bringing people together from all over the world. Hampshire College didn’t pay for it; the Book Center paid for it. But its building, its facilities, its activities and its staff are on our campus, enriching our life, putting people into our dining room, creating a more interesting intellectual environment for our students, creating economic activity for the town, and not using land that could otherwise be taxed.
The second member of the cultural village, the Eric Carle Museum of Picture Book Art, opened in the fall of 2002. One may well ask, “What does it do for Hampshire College to be the site of the first picture-book art museum in the U.S.?” The 40,000-square-foot building sits on land that Hampshire donated, but Eric Carle, the author of The Very Hungry Caterpillar, endowed the museum. It employs 18 people, including some of our students. So we’re enriching the faculty and cultural resources for our students, and the town of Amherst gets a large museum to sustain its economic base while limiting environmental impact on its land resources. Only 25,000 museum-goers were expected in the first year, but more than 40,000 attended in the first four months, bringing vitality to both the town and the college.
Intergenerational Viewpoints
These two experiences—developing the cultural village and learning from the urban conferences years before—make me feel that even though Hampshire is in a rural area, the principles that have guided community outreach are replicable even for large universities in urban environments. The key is to generate a conversation that crosses boundaries and in so doing weakens those boundaries. The process is ongoing and has led to many interesting new conversations.
Recently the town of Amherst approached me about developing open space on the edge of the campus for a commercial village center. The area now houses a well-known farm stand, but the town wanted to expand the amount of commercial activity. Through open conversation with the community, college trustees, students and residents, the land was purchased and given to Hampshire with the proviso that it be used to generate income to support the college. At the first public hearing on what to do with the land, we invited the entire community. All ages were present. A group of Hampshire students came to the meeting intending to argue against development; they wanted the area kept as open space. However, the first citizens to speak were in their 70s and 80s; they tore us apart about how terrible it would be to develop this area and how they had bought their apartments nearby because of this open beautiful land. In truth, their retirement community had been built while I was the president of the college, so I knew it, too, had been built on open land. Their attitude was, “we’re here and now we don’t want any more development.” The students understood these arguments, but found themselves thinking about how they wanted to behave when they were 75 years old. They didn’t want to imagine themselves as being opposed to growth and change, so this intergenerational conversation made a difference in their attitudes. Talks have continued and the plan is still in development, with a target date of spring 2004 to present it at town meeting.
Principles of Sustainability
Developing the cultural village and new developments in academic curricula converged to make sustainability an increasingly important issue. Suddenly, the cultural village was also becoming a laboratory. When the faculty, in response to issues in the cultural village, proposed seeking funds to do a sustainable campus plan focusing on the natural environment, I suggested that the most important principle in the plan be sustaining Hampshire College. My statement generated a very constructive conversation about what sustainability should mean for Hampshire. Let me summarize the principles that we developed.
1. The core goal in planning for the college must be the school’s long-term sustainability as an educational institution committed to providing students with the most constructively transforming liberal arts education possible.
2. In pursuing the first goal, the college must strive for human sustainability—for maintaining and enriching our capacity to live well together, for providing for the economic well-being of those who work at the college, and for nurturing their creative spirit and sense of fulfillment that comes from working at the college.
3. In pursuing the educational and social goals, we must recognize the fundamental relationship between the goals and the physical environment, and strive to achieve the sustainability of that physical environment to the greatest extent possible.
4. In pursuing the core goals of sustaining the college as an educational institution, we must strive to ensure that as an institution, independent of what its graduates accomplish, what we do makes a difference locally, nationally and internationally. Success in achieving the first three goals will ensure that we take a significant step in achieving the fourth goal. In effect, our primary aim is to provide the best education we can. We must model the behavior we expect of our graduates.
5. In pursuing educational and social sustainability, we must encourage entrepreneurial activity, invention and innovation, even if it entails the risk of failure.
6. In sustaining the human spirit of the college community, economic needs must be met, but with the recognition that we must also offer a meaningful mission, a stimulating and creative intellectual environment, and a supportive and enriching physical environment.
7. In seeking to create a sustainable, healthy and enriching social environment, the practical must be balanced with the artistic, the physical and rational with the contemplative, the values of individualism with those of community, and the needs of the college with those of the larger community.
8. In seeking to create a sustainable physical environment, efficient use of energy should be the highest priority, followed by other resource uses and resource disposal. Appropriate land use must be made another high priority. In maintaining the physical plant, we should consider the ease and efficiency of maintenance in terms of those who perform the work, as well as the level of resources needed to carry it out.
9. Wherever possible, physical infrastructure changes should include visible demonstration or interactive educational displays designed to educate about sustainability.
10. The cost of innovations in programs or in the physical environment should include the endowment required to ensure that those who follow us will not be burdened with their maintenance. The projects should be designed so they can be converted to other uses, removed or terminated.
The Board of Trustees reviewed the ten principles of sustainability, then challenged us on how we will interpret and implement them. In the process of working on these tasks, additional guidelines began to emerge:
1. Process is important: conversation and explorations can uncover interests as opposed to positions.
2. Geography matters. It may not be destiny, but it has a great deal to do with it and how you have to build and grow.
3. Focus on the culture, the economy and the environment comprehensively, not as separate subjects in conversations and plans, and involve them early.
4. Involve the community.
5. Involve young people, especially high school students, in any community planning.
6. Promote interdependence.
While these guidelines answer some questions, I struggle with other questions. One of particular importance to me currently is the issue of contiguity. Do our endeavors need to be within our current campus or town or can we successfully move into other communities? The five colleges in the region (Amherst, Hampshire, Mt. Holyoke, Smith and UMass) already work together on many joint programs and all of us have done a great deal of work in Holyoke, a small city about 15 miles south of Amherst that exemplifies all the problems of urban America.
We spent a lot of time trying to encourage UMass to move its art department to an old warehouse in Holyoke. We felt it would be a major boost to the community, but it looks as though it will not happen for equally legitimate reasons. Moving an academic department geographically from the rest of the academic community will increase intellectual isolation and fragmentation. Other ideas include building a five-college dormitory in Holyoke, and that possibility raises equally complex questions related to contiguity and community citizenship.
In both projects the issue is contiguity. Must you always maintain your place as a central, unbroken whole, or can you move outside of your special place? That’s the challenge. I think Hampshire has to somehow build a presence in Holyoke. We have made a huge investment there already, and I believe the city has incredible potential. I think we have to face the issue of opening ourselves up physically, not just maintaining the boundaries of our space but carrying ourselves outside of the institution as well. But others resist. What is exciting is the conversation and the process of engaging all of the related communities in that dialogue.
Gregory S. Prince Jr. is president of Hampshire College in Amherst, Massachusetts.
SHARE
Although property taxes continue to be a fundamental and important revenue source for local government, they also remain exceptionally controversial. Still, the topic of property taxation seems to be one for which improved education and understanding is especially necessary.
SHARE
The property tax is, in my view, a good local tax, though it is far from perfect. Relative to the other tax bases available to local government, I think the property tax gets high marks, in spite of some telling but, in part, misplaced criticism.
Traditional Tax Theory
Public finance economists have historically evaluated taxes in terms of their efficiency properties, their incidence and their ease of administration. From the perspective of economic efficiency, the basic issue is the extent to which a tax introduces distortions into the economic system, thereby creating an “excess burden” in addition to the basic burden of payment of the tax. On this matter, there is currently a lively controversy. On one side, Bruce Hamilton, William Fischel and others argue (persuasively, I believe) that local property taxation, in conjunction with local zoning ordinances, produces what is effectively a system of benefit taxation that promotes efficient location and fiscal decisions on the part of households. On the opposing side, Peter Mieszkwoski and George Zodrow view local tax differentials much like excise taxes, which have a distorting effect on local decisions and tend to discourage the use of capital. Thus, the case for property taxation purely on efficiency grounds is not altogether clear (although it probably gets better marks than other available tax bases aside from user charges).
As to the incidence of the tax, the older view of the property tax, which saw it simply as an excise tax on housing and business structures, suggested that it was a regressive tax: housing expenditure, it was claimed, took a larger fraction of income from poorer rather than from wealthier households. Later studies of the income elasticity of demand for housing cast some doubt on this proposition. The finding that housing expenditure is roughly proportional to permanent income suggested that property taxation was something more akin to a proportional tax relative to income.
The more recent and so-called “new view” of the property tax sees the average tax rate across communities as essentially a tax on capital; as such, it is likely to be quite progressive in its incidence. The differentials across communities are another matter: they may function like excise taxes on specific factors, but overall this approach suggests that the property tax is likely to be a good deal more progressive than, say, a sales tax. The third issue, the administration of the property tax, raises one troublesome matter. Since housing units are sold only infrequently, tax liabilities must be based on an estimated or “assessed” value. The vagaries of assessment practices have been the source of some unhappiness with the tax, as the ratio of assessed value to true market value can sometimes vary widely within a single taxing jurisdiction. Reforms and improvement of assessment practices, however, have gone some distance in mitigating this problem.
A Public-Choice Perspective
The public-choice approach to issues in public finance has focused attention on another dimension of tax systems: their role in promoting effective decision making in the public sector. In this framework, a critical function of a tax system is to provide an accurate set of signals, or “tax-prices,” that make clear to local taxpayer-voters the costs of public programs on which they must make decisions. In a local context, this implies that the local tax system should generate tax bills that are highly visible and that provide a reasonable indication of costs so that individuals have a clear sense of the financial commitment implied by proposed programs of public expenditure. If taxes are largely hidden or don’t reflect the cost of local services, they are unlikely to provide the information needed for good fiscal decisions. For example, if a local government were to finance its budget through a local corporation income tax, the residents would have little idea of the true cost of local public programs to their household. Hidden taxes with uncertain incidence are not conducive to good fiscal choices. From this vantage point, the local property tax comes off quite well as a source of local revenues. Property tax bills are highly visible and they promote a high degree of voter awareness of the cost of local programs. In fact, local property tax rates are often tied directly to proposed programs on which the voters must decide in a local referendum. It is this high degree of visibility that, I think, explains much of the unpopularity of the tax!
The local property tax thus appears to function well in its public-choice role of providing a reasonably accurate set of tax-prices to residents. There is, however, one important reservation here: renters. Owner-occupants receive regular property tax bills that indicate the cost to them of the local services they receive, but occupants of rental dwellings receive no such tax bills. Under the present administration of the property tax, tax bills go to the owner of the unit, not the occupant, so that renters never see the exact amount of property tax assessed on their residence. This does not, of course, mean that renters avoid the burden of the property tax. There is good reason to believe that property taxes on rental units are (eventually at least) shifted onto tenants. The point is that renters do not face the same visible tax-prices that confront owner-occupants.
Moreover, there is considerable evidence to suggest that renters behave as if they think they pay no local property taxes. They appear to provide much more support for public expenditure programs than they would if they owned their own homes and knew exactly what they paid in property taxes. The impact of this “renter illusion” on local public budgets needs to be studied further. If it is large, there may be a strong case for reforming the administration of the tax so that property tax bills go directly to occupants rather than to landlords.
Interjurisdictional Fiscal Inequality
Over the past three decades, systems of local property taxation have been the subject of intense public attack accompanied in some instances by court decisions requiring their replacement or reform. The basis for these attacks is primarily an equity issue arising from disparities in the size of the tax base across different localities. In several states, the system of school finance, based on local property taxes, has been declared unconstitutional because of the sometimes large differences in the property tax base per pupil across local school districts; this can result in large differences in per-pupil expenditure. A little reflection, however, suggests that this problem of disparities is not a problem intrinsic to the property tax per se. It is really a result of virtually any system that relies heavily on local taxation. A system of local sales or income taxes, for example, would surely involve major disparities in tax bases across local jurisdictions-probably at least as large as those associated with local property taxes.
The basic point is that fiscal and other economic conditions vary across local areas. (This, incidentally, is a major rationale for local finance: to cater to these differences!) Thus, taxable resources at the local level are bound to vary significantly across jurisdictions. We may well wish to provide additional support to fiscally weak jurisdictions through some kind of intergovernmental fiscal assistance, but this will be true whether local tax systems rely on property taxation or some other local tax base.
Alternative Local Tax Bases
Two major tax bases offer themselves as alternatives: sales taxes and income taxes. Both, however, have serious shortcomings as the primary source of tax revenues in a nation of many small local governments.
The base of a local sales tax is likely to vary dramatically across local jurisdictions. Communities that are largely residential would have small bases and would have to set a relatively high rate to generate the requisite revenues. Significant sales tax differentials would give rise to costly trips among jurisdictions, as consumers seek to purchase goods and services in jurisdictions with low tax rates. Moreover, sales taxes do not get very good marks on a fairness or ability-to-pay criterion. In addition, they do not stack up at all well on the public-choice criterion of providing the electorate with accurate and visible signals of the costs of public programs. Income taxes have a good deal more appeal on equity grounds, although most state and local income taxes are not very progressive. They also have the advantage of visibility. But, like sales taxes, they encounter the mobility problem to some extent. A jurisdiction that opts for relatively high income tax rates runs the risk of deterring the entry of new households, especially those with above-average incomes that would face relatively large tax payments.
More generally, there is something to be said for avoiding excessive reliance in the economy as a whole on a single tax instrument. The federal and many state governments rely on income taxation as a primary source of revenue, and there is considerable concern that marginal tax rates on income have become sufficiently high to discourage various sorts of productive activity. From this perspective, local government may contribute to an improved overall tax system by avoiding heavy use of income taxation and staying instead with the revenue source that has been historically its own-the property tax.
The other appealing source of local revenues is user fees, which represent a form of benefit taxation and provide almost a kind of market test for the provision of the service. The problem is that they are limited in their application. It may be possible to charge for the use of certain public services like refuse collection, but it is much more difficult to employ charges for collectively consumed services like police protection and local roads. Fees can be used to finance a limited number of local services, but they cannot supplant the need for a major local tax.
For local fiscal choice to have real meaning, it is essential that local residents bear the costs of their decisions to adjust levels of local services. The populace must be in a position to weigh the benefits of public programs against their costs. For this to occur, local governments must have their own revenue systems with some discretion over tax rates. There is surely some scope for mitigating fiscal disparities across jurisdictions with an appropriately designed system of equalizing intergovernmental grants. However, the grants must not be so large as to undermine local fiscal autonomy, and they should, in principle, be lump-sum in form so that localities bear the cost of their fiscal decisions at the margin.
The question here is which of the available tax bases offers the greatest promise for effective local fiscal decision making. In my view, it is the property tax.
Wallace E. Oates is professor of economics at the University of Maryland and University Fellow at Resources for the Future in Washington, D.C. He is also a member of the Lincoln Institute Board of Directors. This article is adapted from a longer paper that he prepared for the Institute’s Fall 1998 Chairman’s Roundtable on property taxation and that he also presented as the Founder’s Day Lecture in January 1999. The original paper will be published in the Institute’s 1999 Annual Review.
References
Fischel, William. “Property Taxation and the Tiebout Model: Evidence for the Benefit View from Zoning and Voting,” Journal of Economic Literature 30 (March 1992): 171-7.
Hamilton, Bruce W. “Capitalization of Intrajurisdictional Differences in Local Tax Prices,” American Economic Review 66 (Dec. 1976): 743-53.
Mieszkowski, Peter, and Zodrow, George R. “Taxation and the Tiebout Model: The Differential Effects of Head Taxes, Taxes on Land, Rents, and Property Taxes,” Journal of Economic Literature 27 (Sept. 1989): 1098-1146.
Oates, Wallace E. “On the Nature and Measurement of Fiscal Illusion: A Survey,” in G. Brennan et al., eds., Taxation and Fiscal Federalism (Sydney: Australian National University Press, 1988): 65-83.
—. “The Theory and Rationale of Local Property Taxation,” in Therese J. McGuire and Dana Wolfe Naimark, eds., State and Local Finance for the 1990’s: A Case Study of Arizona (Tempe, Arizona: School of Public Affairs, Arizona State University, 1991): 407-24.
SHARE
A las grandes instituciones, como universidades, hospitales y organizaciones sin fines de lucro, se les suele llamar “anclas”, debido a su permanencia y a los lazos estabilizadores que generan, tanto en lo físico como en lo social, con las comunidades circundantes. Más allá de cumplir con sus respectivas misiones de educar, sanar, cultivar las artes o brindar otros servicios, estas instituciones educativas y médicas han demostrado ser verdaderos motores económicos: emplean una gran cantidad de mano de obra, ocupan y administran inmuebles de grandes proporciones, compran grandes cantidades de bienes y servicios, atraen inversiones a través de proyectos de capital y actividades de investigación, y brindan a los residentes acceso a la comida, a los bienes minoristas y a otros servicios. En muchos casos, las instituciones “ancla” son los empleadores de mayor envergadura, fuera del ámbito público, en sus ciudades. De hecho, según estimaciones del Departamento de Vivienda y Desarrollo Urbano (HUD), las instituciones educativas y médicas dieron empleo a más de 7 millones de personas y generaron un billón de dólares en actividades económicas durante el año 2009 (Brophy y Godsil 2009).
En algunos casos, se genera una dinámica de beneficios mutuos entre la institución “ancla” y la comunidad en donde se encuentra, lo que da como resultado la creación de corredores comerciales económicamente sostenibles, calles llenas de vida y barrios con una población densa y diversa. Muchas de las grandes ciudades universitarias en los Estados Unidos muestran esta productiva interacción. Sin embargo, en muchos otros casos, especialmente en las áreas urbanas que carecen de servicios suficientes, el liderazgo institucional y civil debe ser más emprendedor, mediante el impulso activo de proyectos, programas y políticas con el fin de lograr estos objetivos. Dicho proceso, conocido como estrategia “ancla”, proporciona un marco guía para que las comunidades trabajen junto con las instituciones a fin de capitalizar y maximizar el impacto de su impronta.
En teoría, el valor de involucrar a las instituciones “ancla” para lograr resultados positivos en el barrio o la comunidad es evidente: todas las partes se benefician y, a la vez, es una forma inteligente de hacer negocios. No obstante, en la práctica, la comunidad y sus instituciones deben trabajar juntas para redefinir cómo alinear y apalancar sus objetivos, intereses económicos y actividades a fin de lograr un resultado que beneficie a todas las partes. En este artículo se analiza por qué resulta difícil llevar a cabo estrategias “ancla” significativas para lograr un cambio fundamental en la forma en que las instituciones “ancla” y sus comunidades se relacionan entre sí. También aprovechamos algunas de las lecciones aprendidas de medidas exitosas que se tomaron en lugares como Filadelfia, Detroit y Cleveland, en donde la participación civil integral se ha convertido en la norma a seguir de algunas de las instituciones médicas y educativas más importantes de la nación.
Parámetros para el éxito
Debe destacarse que las tácticas individuales son necesarias pero insuficientes para constituir una estrategia. Una estrategia implica una participación a largo plazo, que se implementa a través de tácticas que evolucionan a lo largo del tiempo. Además, las estrategias “ancla” implican asociarse con muchas organizaciones y personas en la comunidad circundante, y estas relaciones también deben evolucionar con el tiempo a fin de responder a las necesidades y objetivos de la comunidad diseñados para lograr que la zona sea más habitable.
Las estrategias “ancla” efectivas y transformadoras poseen tres características fundamentales: están basadas en el lugar, están incorporadas a las instituciones y son integrales.
La ventaja de los mediadores
Muchas estrategias “ancla” se ven beneficiadas con la posibilidad de tener socios en la comunidad que guíen su trabajo. Estos mediadores por lo general refuerzan la capacidad del personal de las instituciones “ancla” a fin de lograr una mayor participación de la comunidad y mayores beneficios para la misma. Algunos ejemplos de mediadores eficaces son las sociedades de desarrollo comunitario (CDC, por sus siglas en inglés) o las instituciones financieras de desarrollo comunitario (CDFI), que deben estar dirigidas por un representante de la comunidad.
Los mediadores son más ágiles que las grandes instituciones “ancla”, por lo que son capaces de negociar con diferentes socios y tomar medidas sin el peso de la burocracia. Los mediadores más exitosos son las organizaciones de la comunidad que poseen un extenso historial en la región, una credibilidad dentro de la comunidad (para que no sean consideradas como una herramienta manejada por la institución “ancla” o por las fuentes de financiación) y la capacidad de brindar un terreno neutral para debatir y llevar a cabo el trabajo “ancla”. Si la comunidad es escéptica ante un proyecto completamente impulsado por una institución “ancla”, trabajar en conjunto con un mediador de confianza puede proporcionar legitimidad a la tarea.
En Detroit podemos observar un buen ejemplo de la capacidad de una CDC de la comunidad para apalancar la iniciativa patrocinada por una institución “ancla”. Midtown Detroit Inc., o MDI, (midtowndetroitinc.org) administra Live Midtown (livemidtown.org), un programa de obtención de vivienda con apoyo de empleadores, que tiene el respaldo de la Universidad Estatal de Wayne, el Sistema de Salud Henry Ford y el Centro Médico de Detroit. Tal como señala Susan Mosey, presidente de MDI: “Es importante que haya gente de la comunidad que guíe este trabajo día a día. Esto genera familiaridad con las iniciativas, a la vez que produce credibilidad y aceptación para que las estrategias “ancla” tengan éxito”. De hecho, con la ayuda de MDI, el compromiso financiero de las instituciones “ancla”, que ascendió a 5 millones de dólares en cinco años, se vio igualado por fondos de contrapartida de fuentes de financiamiento de la comunidad, así como de la agencia estatal de financiamiento de la vivienda. Este éxito estimuló a los grandes empleadores del centro de la ciudad (Quicken Loans, DTE, Compuware y Blue Cross Blue Shield entre otros) a crear su propio programa Live Downtown de 5 millones de dólares. Entre ambos programas, más de 1.600 empleados se han mudado al centro y aledaños de la ciudad de Detroit, lo que ha reducido el índice de puestos vacantes en este corredor a menos del 3 por ciento (Welch 2014).
Basadas en el lugar
Las estrategias basadas en el lugar poseen una geografía específica y fácilmente identificable a la que la institución “ancla” afecta en forma directa, tales como edificios, espacios abiertos, entradas y redes viales que conectan una institución con la comunidad. Más allá de la orientación física de una institución, encontramos los lugares que las personas que forman parte de dicha institución (sean empleados, estudiantes, pacientes, clientes o visitantes) habitan y frecuentan. Los barrios que rodean a las instituciones y que presentan un alto nivel de usos múltiples son un apoyo al estilo de vida que define a todo distrito dinámico, promueven la actividad peatonal y generan la densidad residencial que, a su vez, crea comunidad.
Las actividades de placemaking de cualquier institución “ancla” (que dan forma a los espacios públicos de manera comunitaria a fin de intensificar su valor compartido) deben comprometer, desde el punto de vista táctico, a otras partes interesadas para poder ser consideradas como estratégicas. Estas tácticas pueden incluir: la reinversión en el barrio a través de la construcción y la rehabilitación de viviendas; el fomento del desarrollo comercial y minorista específicos; la mejora de los espacios públicos y la seguridad pública; y el fortalecimiento de los servicios locales, tales como escuelas, organizaciones sin fines de lucro y recursos comunitarios. Estas actividades benefician a la institución “ancla” de varias maneras y promueven un barrio más fortalecido, lo que aumenta el atractivo de la institución a posibles clientes (estudiantes, pacientes y personal) y genera un sentimiento de buena voluntad entre los residentes y los funcionarios municipales.
Incorporadas en las instituciones
La estrategia “ancla” debe formar parte del ADN de una institución. Dicha integración comienza cuando los líderes se comprometen con el papel que desempeña la organización a la que pertenecen como institución “ancla” y lo comunican a toda la organización. Luego, el liderazgo continúa cumpliendo esta tarea, dedicando importantes cantidades de tiempo y recursos en todas las funciones institucionales.
Para lograr la efectividad, el trabajo de una institución “ancla” requiere, por lo general, realizar ciertos cambios en la cultura de la organización, tales como modificar la estructura de recompensas, adoptar nuevas declaraciones de misión y mediciones del éxito, y examinar en forma crítica las comunicaciones, tanto internas como externas. Una vez que los programas internos, las unidades administrativas, el personal de gestión de las instalaciones y las juntas directivas logran trabajar juntos para alcanzar los objetivos colectivos, entonces la estrategia “ancla” puede comenzar a transformar la comunidad que rodea a la institución.
Integrales
Las instituciones educativas y médicas afectan a las comunidades que las rodean de muchas maneras: contratan a residentes del lugar, tienen una gran presencia física, educan o sanan a los miembros de la comunidad y producen desechos, entre otros impactos. Además de estar basada en el lugar, una estrategia “ancla” integral debe tratar los siguientes puntos de intersección:
Personal
En vista de que las instituciones “ancla” son, por lo general, el mayor empleador en una ciudad, las decisiones relativas a la contratación de personal y los beneficios de los empleados pueden tener un profundo impacto en la estructura social y económica de la comunidad. Al aumentar el porcentaje de trabajadores que provienen del lugar mismo donde la institución tiene presencia, esta puede, simultáneamente, elevar la economía de la comunidad, proporcionar empleos a aquellas personas desempleadas o subempleadas y generar un sentimiento de buena voluntad entre los vecinos. La posibilidad de conseguir viviendas con ayuda del empleador es otra inversión crucial tanto en el personal como en la comunidad circundante (Webber y Karlstrom 2009). Cuando los empleados pueden vivir cerca de la institución “ancla”, esta situación beneficia a todas las partes, ya que se reducen los costos de vivienda y transporte para los trabajadores y, a la vez, disminuye el nivel de absentismo laboral y de rotación de personal para los empleadores.
Adquisiciones
El poder de compra de las grandes instituciones “ancla” puede llegar a ser muy importante: por año, el gasto en concepto de bienes y servicios puede llegar a los cientos de millones de dólares. La captación por parte de las empresas locales de aunque sea una pequeña parte del flujo de compras puede tener un impacto significativo en la economía de la comunidad. Por ejemplo, la Universidad de Pensilvania inyectó 57 millones de dólares en la economía de la zona oeste de Filadelfia con sólo el 9 por ciento de sus compras anuales (ICIC y CEOs for Cities 2002).
Los beneficios derivados de las compras en la misma comunidad son evidentes; sin embargo, redirigir este proceso y reconocer dichos beneficios no es una tarea fácil. Por ejemplo, la institución “ancla” tal vez tenga que incurrir en costos indirectos significativos en concepto de sensibilización de la comunidad y capacitación para garantizar una continua disponibilidad de bienes y servicios producidos en el lugar. Por añadidura, nunca debe darse por sentada la existencia de proveedores confiables y competitivos en costos en la comunidad. Más aún, es posible que las instituciones de mayor envergadura tengan procesos de compra altamente descentralizados, por lo que lograr que cada departamento de la institución se adhiera a las nuevas políticas puede llevar tiempo y esfuerzo (ICIC y CEOs for Cities 2002). Es aquí cuando los mediadores de confianza de la comunidad pueden ayudar a facilitar la tendencia hacia los proveedores del lugar.
Políticas
La relación entre las instituciones “ancla” y los organismos gubernamentales municipales o regionales es, con frecuencia, complicada. En su calidad de organizaciones privadas, las instituciones “ancla” pueden creer que no necesitan responder ante el gobierno municipal. Aun más, es posible que consideren al gobierno municipal como un organismo ineficiente, ineficaz y generador de obstáculos a la hora de llevar a cabo sus óptimas estrategias de negocios. Por su parte, los gobiernos municipales y regionales pueden considerar a las instituciones “ancla” como oportunistas que consumen servicios públicos y otros beneficios públicos al tiempo que gozan de exenciones al impuesto sobre la propiedad (la mayor fuente de recaudación de los gobiernos municipales). A fin de aliviar estas tensiones, algunas instituciones han contribuido voluntariamente con “pagos en lugar de impuestos” (PILOT, por sus siglas en inglés) para compensar a los municipios por dicha pérdida de ingresos (Kenyon y Langley 2010). No obstante, una exitosa estrategia “ancla” puede establecer otras maneras de promover un trabajo mutuamente beneficioso que mejore el futuro de la institución y, a la vez, aborde problemas relacionados con las políticas municipales o regionales. Wim Wiewel, presidente de la Universidad Estatal de Portland, ha hecho especial hincapié en este sentido, al citar la adopción, por parte de la institución, de su lema “Que el conocimiento sirva a la ciudad” a principios de la década de los 90. Según sus palabras, “Servimos al área metropolitana y estamos orgullosos de ello”.
Planificación
Alguien debe coordinar estos elementos en una iniciativa coherente. Las grandes instituciones “ancla” poseen una gran capacidad de planificación interna y, con regularidad, se involucran en la planificación a largo plazo de sus emprendimientos. Cuando deciden llevar a cabo una estrategia, las instituciones “ancla” pueden utilizar esta capacidad para determinar cuál es la mejor forma de involucrarse en la comunidad y relacionarse con las partes interesadas, tanto del lugar como regionales. Además, trabajar en los procesos de planificación estratégica de las instituciones “ancla” es una forma de institucionalizar la estrategia “ancla” de manera que permanezca en el tiempo, aun después de que el presidente o director ejecutivo de la institución haya finalizado su gestión, y se convierta en la forma normal de hacer negocios.
Cómo funcionan las instituciones “ancla”
Una estrategia “ancla” exitosa ni se crea ni se implementa en un vacío. Para que cualquiera de las actividades mencionadas anteriormente sea parte de una genuina estrategia “ancla”, las instituciones “ancla” deben llevarlas a cabo de manera estratégica en sincronía con otras partes interesadas en el área. Por ejemplo, iniciar un programa de vivienda para trabajadores con ayuda del empleador o establecer objetivos de compra en el lugar puede beneficiar a los empleados o a los residentes de la comunidad, pero dichas medidas no se consideran parte de la estrategia “ancla” integral, a menos que estén conectadas a un enfoque general que abarca a toda la institución en cuanto a la participación e interacción comunitaria. Para lograr este tipo de interacción, es importante comprender cómo funcionan las instituciones “ancla”.
Las grandes instituciones sin fines de lucro, tales como las organizaciones educativas y médicas, son básicamente renuentes a correr riesgos y se toman su tiempo para realizar cambios o asumir nuevos roles. Por lo tanto, emprender una estrategia “ancla” implica un cambio fundamental en la forma en que los líderes de las instituciones “ancla” piensan y cómo funcionan sus organizaciones; esto puede llevar tiempo, implicar una serie de debates o negociaciones importantes y difíciles, y requerir un liderazgo sólido e incentivos, tanto internos como externos a la organización.
Las universidades y hospitales son instituciones “ancla” no sólo porque están enraizadas en el lugar y tienen un impacto crucial en la economía de la comunidad sino también porque son de gran envergadura. La cuestión del tamaño lleva implícita una serie de capas burocráticas, una gran cantidad de participantes que deben involucrarse en el trabajo derivado de las estrategias “ancla” y la incapacidad de moverse en forma ágil y rápida.
La figura 1 muestra la estructura típica de una universidad. En la parte superior se encuentra la junta directiva, formada por líderes del sector civil, industrial y científico, además de contar, en general, con exalumnos u otros afiliados académicos. Los miembros de esta junta interactúan con el campus de manera intermitente y se concentran en la gestión del riesgo financiero y de reputación de la universidad.
El presidente es, normalmente, un académico que puede o no tener formación en temas de administración. Los presidentes se centran en la recaudación de fondos y en la gestión de la reputación de la universidad. Los académicos, por lo general, consideran a las universidades como lugares donde reina el libre pensamiento, aislados de las fuerzas del mercado y de capital. Con frecuencia, su visión del sector administrativo es recelosa o escéptica. Por su lado, los administradores tienen, generalmente, formación en contabilidad o gestión y priorizan la seguridad del empleo. Todas estas prioridades y actitudes se combinan de manera tal que crean una cultura en la que el riesgo no se recompensa y los fracasos se castigan.
Los hospitales presentan, de manera similar, grandes estructuras burocráticas. Los organismos principales que toman decisiones son, por lo general, la junta directiva y el director ejecutivo, que se concentran en minimizar el riesgo institucional y gestionar las finanzas de manera responsable y rentable. Los administradores priorizan el hecho de cumplir con los requisitos de sus puestos y garantizar la seguridad del empleo a través de la protección institucional, mientras que es más probable que los profesionales de la salud, como médicos y enfermeros, se centren en atender a los pacientes o llevar a cabo investigaciones, sin mirar más allá de los límites de las instalaciones del hospital.
Estas culturas generan decisiones que pueden parecer lógicas para las instituciones en sí, pero que, con frecuencia, no se encuentran alineadas con los objetivos de la comunidad. Por ejemplo, la universidad puede construir zonas de estacionamiento alrededor de sus instalaciones, generalmente en los límites del campus, a fin de facilitar el acceso a la institución del cuerpo docente, el personal y los estudiantes. Sin embargo, con esta medida se incentiva a los empleados y a los estudiantes a ir a la universidad en automóvil, lo que reduce la probabilidad de que estas personas vivan en barrios desde los que se pueda llegar a pie y que visiten los comercios cercanos. Las zonas de estacionamiento generan, también, una barrera de asfalto que aísla al campus de la comunidad. De manera similar, las políticas de compra de la institución pueden fundamentarse en obtener el precio más bajo para obtener los resultados más predecibles, lo que significa que, para obtener los bienes y servicios que necesitan, recurren a los proveedores más grandes (que, por lo general, son de alcance nacional), en lugar de contratar a los proveedores del lugar. Finalmente, una universidad generalmente ubica el espacio abierto, las instalaciones destinadas a la recreación y otros servicios dentro de sus límites, lo que permite sólo una interacción limitada con los miembros de la comunidad. Para cambiar la forma en que se toman estas decisiones, resulta esencial modificar la visión que el liderazgo de las instituciones “ancla” tiene acerca de dichas instituciones en relación con su comunidad, así como también comprender la manera en que pueden cambiarse los hábitos y actitudes arraigadas.
Promover la participación de la comunidad
Existen varias maneras en las que los líderes de la comunidad, filántropos, grupos comunitarios y otras partes interesadas pueden movilizar a la institución “ancla” a asumir un nuevo rol en el barrio.
Identificar a los líderes
El liderazgo es, por lo general, un aspecto clave para una estrategia “ancla” exitosa. La filosofía y el enfoque que tenga el rector, el presidente o el director ejecutivo pueden determinar si una institución se ve a sí misma como un “ancla” y cómo actúa una vez que se define como tal, y si dichas acciones perdurarán en el tiempo. Tal como lo aconseja Benjamin Kennedy, de la Fundación Kresge: “¡Aprovechen la oportunidad! No es necesario que cada una de las personas que forma parte de la institución esté de acuerdo; sólo las personas clave. Los líderes son los que transformarán la institución y transmitirán la idea de las estrategias “ancla” a los demás”.
Un líder sólido comprometido con una estrategia “ancla” puede poner el fundamento para una participación comunitaria y un impacto más significativos. El abordaje debe estar arraigado en los niveles altos de la administración, para luego filtrarse en toda la institución, a fin de que el personal directamente responsable de llevar a cabo partes específicas de la estrategia, como el personal de recursos humanos, funcionarios encargados de las compras y profesores involucrados en los proyectos de investigación en la comunidad, comprenda sus nuevas prioridades. Dicha transición puede lograrse, en parte, cambiando la estructura de recompensas y llevando a cabo una comunicación estratégica, modificando la declaración de visión y describiendo regularmente el trabajo y los logros de la estrategia “ancla” mediante mensajes de circulación interna.
Una estrategia “ancla” tiene mayores probabilidades de obtener el éxito si muchas partes interesadas expresan su apoyo a la misma. Dentro de la institución “ancla”, puede resultar muy útil identificar al personal que apoya la idea de participación comunitaria y trabaja con los grupos del lugar para definir estrategias que beneficien a todos. Fuera de la institución “ancla”, es útil contratar líderes de la comunidad que empujen a la institución a asumir un nuevo rol. Por ejemplo, la filantropía de la comunidad, tanto en Cleveland como en Detroit, desempeñó un papel significativo a la hora de persuadir a las instituciones a unirse para formular estrategias “ancla” destinadas a las comunidades que las rodean.
Analizar las oportunidades de participación de varias instituciones “ancla”
Si en un barrio existe más de una institución “ancla”, muchas organizaciones pueden participar en los proyectos. Este abordaje ha tenido mucho éxito en Cleveland, donde diferentes hospitales, universidades y organizaciones culturales, junto con organizaciones filantrópicas del lugar, instituciones financieras y el municipio de Cleveland, han aunado esfuerzos con el fin de implementar la Iniciativa del Gran Círculo Universitario.
Aunque una estrategia en la que participan muchas instituciones “ancla” implica cierto nivel de complejidad, en vista de que aumenta la cantidad de personas y organizaciones que deben estar de acuerdo con el trabajo, igualmente puede incrementar el impacto de la iniciativa, ya que se suman muchos otros recursos y se aumenta la cantidad de líderes. Asimismo, los líderes de cada institución “ancla” pueden animarse mutuamente y reforzar el trabajo de unos y otros, a la vez que distribuyen el peso de cualquier riesgo percibido.
Identificar el interés propio
En un nivel básico, un hospital o una universidad puede emprender una estrategia “ancla” porque sus líderes creen que las mejoras que se producirán en la comunidad circundante beneficiarían a la institución. Por ejemplo, el Dr. Wallace D. Loh, presidente de la Universidad de Maryland, en College Park, se ha centrado en mejorar la calidad de vida en el barrio porque estaba preocupado de que las condiciones del lugar restaban valor a la capacidad de la universidad de atraer y retener a docentes y personal.
Las estrategias “ancla” tienen otros beneficios más indirectos. Aunque una universidad u hospital puede tomar decisiones unilaterales sobre lo que ocurre en su propio terreno, también puede enfrentar problemas que requieren el apoyo de fuerzas externas a la institución, tales como el gobierno municipal y los residentes de la comunidad. Crear relaciones sólidas y perdurables con los líderes del lugar a través del trabajo en estrategias “ancla” puede ayudar a la organización a obtener apoyo para futuros planes. Al pensar en forma holística acerca de sus relaciones con la comunidad circundante, los líderes de las instituciones “ancla” por lo general tienen el incentivo de reconceptualizar sus objetivos básicos de educación y salud. La Dra. Lucy Kerman, vicerrectora de University and Community Partnerships, en la Universidad de Drexel, lo resume de la siguiente manera: “El trabajo en estrategias “ancla” debe estar alineado con los intereses propios de la universidad y estar cimentado en el rol apropiado que desempeña la institución. Tal vez no estemos generando viviendas económicas o dirigiendo una escuela en forma directa, pero somos socios en un sistema que crea oportunidades de ingresos mixtos y ofrece la posibilidad de una educación sólida”.
Aportar recursos
Por supuesto que todo puede resumirse en la disponibilidad de recursos. Los incentivos financieros animan a las instituciones y a sus socios a llevar a cabo trabajos “ancla”, desarrollar estrategias acerca del papel que desempeñan en la comunidad, reunirse con las partes interesadas regularmente e invertir en actividades “ancla”. Por su parte, las partes interesadas de la comunidad pueden ver la oportunidad de involucrar a la institución “ancla” pero carecen de la capacidad o las herramientas para participar si no tienen nuevos fondos.
En Detroit, por ejemplo, las instituciones “ancla” se sentaron a la mesa de negociaciones por muchas razones, pero uno de los factores principales fueron los recursos financieros que ofrecieron los dos socios convocantes, las fundaciones Hudson-Webber y Kresge. Este incentivo de capital permitió el inicio de las conversaciones y, al día de hoy, continúa apoyando el trabajo. Al ofrecer fondos de contrapartida destinados a tácticas específicas, las fundaciones incentivaron a las instituciones “ancla” a comprometer sus propios fondos. Hoy en día, las instituciones “ancla” no sólo apoyan iniciativas específicas sino que también proporcionan recursos operativos a Midtown Detroit Inc., la organización de planificación y desarrollo de la comunidad que apoya y brinda personal destinado a la mayor parte del trabajo “ancla”. De esta manera, los recursos provenientes de fuentes filantrópicas plantaron la semilla de la iniciativa, a la vez que ayudaron a crear la infraestructura necesaria para una implementación y una sostenibilidad exitosas.
Cómo conectar la estrategia con la comunidad
A primera vista, las necesidades y los objetivos de la comunidad, tales como buenas escuelas, calles seguras, servicios y comodidades, oportunidades de empleo, espacios públicos y vivienda, no guardan una correlación directa con los resultados de una institución “ancla”. De hecho, si una institución genera graduados exitosos, una atención médica de gran calidad y un alto nivel de investigaciones, concluirá que ha cumplido con su tarea como ciudadana, tanto de la comunidad como del mundo.
No obstante, al alinear los objetivos de la comunidad con los aportes de una institución (docentes, personal, pacientes, estudiantes, visitantes, inmuebles, bienes y servicios), las estrategias “ancla” pueden conectar la misión de la institución con las aspiraciones de la comunidad. La contratación de residentes de la comunidad para los empleos institucionales mejora el impacto económico de una institución “ancla” dentro de la comunidad y ayuda no sólo a las familias del lugar sino también al área en general. Cuando el personal de la institución hace las compras, vive y come en el barrio, estimula la economía de la comunidad. Utilizando el marco guía de las 5 Pes, el compromiso entre la comunidad y la institución “ancla” puede lograr que las aspiraciones de la comunidad pasen de ser objetivos a convertirse en resultados.
Conclusión
Una estrategia “ancla” integral, basada en el lugar e incorporada en la institución puede tener un impacto significativo en la economía, tanto municipal como regional. Sin embargo, desarrollar e implementar este tipo de estrategia focalizada requiere grandes dosis de tiempo y paciencia. Para poder unir todos los elementos necesarios (lograr la participación de los socios, convencerlos de que existe un interés propio al llevar a cabo el trabajo “ancla”, identificar a los líderes sólidos y utilizarlos para modificar los valores de sus instituciones, identificar a los mediadores y garantizar que estos poseen la capacidad para desempeñar su papel, y establecer incentivos financieros) debe existir el compromiso y la coordinación de muchas piezas móviles.
En muchos casos, el trabajo “ancla” se fundamenta en la confianza entre grupos que, con frecuencia, nunca han trabajado juntos anteriormente. Desarrollar estas relaciones implica el contacto personal y la construcción de alianzas sólidas. Además, estos esfuerzos deben darse dentro del contexto de un trabajo en conjunto con grandes instituciones “ancla”. Aquellos que desean trabajar con instituciones “ancla” para cambiar la forma en que hacen negocios deberán comprender de qué manera y por qué razón las instituciones actúan de la forma en que lo hacen, y cuál es el modo en que toman decisiones. Cuando se unen todos estos componentes, las estrategias “ancla” pueden transformar a la comunidad, a la región y a la misma institución “ancla”.
Sobre los autores
Beth Dever es una consultora independiente que trabaja para la Fundación Ford. Omar Blaik es director ejecutivo y George Smith es vicepresidente de U3 Advisors. George W. McCarthy es presidente y director ejecutivo del Instituto Lincoln de Políticas de Suelo.
Referencias
Brophy, P. y R. Godsil. 2009. “Retooling HUD for a Catalytic Government: A Report to Secretary Shaun Donovan.” Filadelfia: Penn Institute for Urban Research.
Initiative for a Competitive Inner City (ICIC) y CEOs for Cities. 2002. “Leveraging Colleges and Universities for Urban Economic Revitalization: An Action Agenda.” Boston: ICIC y CEOs for Cities.
Kenyon, Daphne A. y Adam H. Langley. 2010. Payments in Lieu of Taxes: Balancing Municipal and Nonprofit Interests. Cambridge: Instituto Lincoln de Políticas de Suelo.
Webber, H. y Mikael Karlström. 2009. “Why Community Investment is Good for Nonprofit Anchor Institutions: Understanding Costs, Benefits, and the Range of Strategic Options.” Chicago: Chapin Hall en la Universidad de Chicago.
Welch, Sherri. 2014. “Midtown Detroit Expands Boundaries for Housing Incentives.” Crain’s Detroit Business. 28 de abril.
