A Word to Developers

There’s been a debate raging in Raleigh for over three years about developers: Are they responsible citizens or greedy villains?

But, so far, only one side has been debating: Mayor Meeker and his allies who say developers are villains.

The developers have a story to tell: They build shops, offices, homes, provide jobs and have helped make Raleigh one of the most attractive places to live in America. But instead of telling their story developers have let themselves be vilified until, today, they’re the political equivalent of Atilla the Hun – with polls showing 60% of the voters less likely to vote for a candidate supported by a developer.

The City Council’s fight on Impact Fees is a case study.

The way the Mayor tells it Impact Fees are just great. He says by taxing developers he will hold down property taxes on everyone else. But, in fact, after the developers pay the Impact Fees they pass those costs right along to people in Raleigh who buy a home. It costs more to build houses, offices, shops and developers pass the cost along to homeowners and shop owners who in turn pass them along to consumers. Impact Fees are a hidden tax that in the end is paid by people who buy and shop.

But when the Mayor proposed to raise Impact Fees 200% developers didn’t make that case. Instead they made what must have seemed like a clever deal.

They told the City Council they’d go along with a 72% increase, quietly, to avoid a higher tax. And that’s what happened. Maybe that sounded smart but it backfired because the message developers sent voters was that raising Impact Fees was fair. It was a good idea. They accepted it.

So, this election, the Mayor and his allies told voters, If raising Impact Fees 72% is a good idea – why not raise them more? So the developers’ clever deal turned out to be a trap and, as a result politically, there is hardly anyone left on the City Council for developers to deal with.

The second – more fatal – blow to developers’ political fortunes was John Kane’s proposal for the City to give North Hills a $75 million tax subsidy.

Now, no doubt, most developers didn’t like the idea of the City giving Mr. Kane $75 million. After all, they’re his competitors. But no one said so. And their silence was a mistake. As a result Mr. Kane became the face – and archetype – of developers in Raleigh. The problem was people only had to look at North Hills to see it wasn’t strapped for cash; so Mr. Kane’s idea sounded like a greedy developer grabbing for $75 million of taxpayers money – which seemed to verify a lot of what Mayor Meeker was saying about developers.

Raleigh’s developers are now in a pretty deep hole, politically. They’re villains. And voters sent them a pretty clear message on Election Day. The days of insider deals are coming to an end. Worse with 60% of the voters having an unfavorable opinion of developers, Mayor Meeker’s going to continue to use them as a political foil and no politician in his or her right mind is going to touch them with a ten-foot poll.

Unless homebuilders, realtors, businessmen and builders want to continue to be a political football they had better join in the political debate and tell people what they are doing right. And not a little. A lot.

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