WASHINGTON, DC (BBN) — Post pandemic work-from-home options have decimated the urban core. To what extent varies city to city, but a common thread is vacancies, closed businesses, and less foot traffic.

Cities hit the worst have ceded once vibrant areas to open air drug markets and homeless encampments. Much of the focus has been on office vacancy rates, which is 18%, 20%, and 29%, in New York City, Washington, D.C., and San Francisco, respectfully.

[Amazon, Whole Foods and Washington Post owner CEO Jeff Bezos filmed by Capitol Intelligence/BBN using CI Glass ahead of US CEO Summit with Indian PM Narendra Modi ahead of Oval Office meeting President Donald Trump at The Willard Hotel in Washington DC. June 24, 2017]

The situation is much the same everywhere..The most obvious solution is to end work from home options, but that is backwards looking.

The pandemic may have ended.  However, AI is on the horizon.

The elephant in the room is office spaces filled with office workers, does not seem to be what is in store for the future and it has nothing to do with employer/employee preferences.

Currently, large swaths of land located in urban cores are underutilized. Municipalities have proposed solutions, including tax breaks, incentivizing conversion of office space into retail and residential space, and further subsidizing commercial/retail tenants in mixed use office spaces.

Once a boon for cities, downtown has become a drain on city resources as governments find ways to creatively finance life support systems for downtown landowners and somehow re-attract “desirable” residents that the city lost.

As a land use and zoning attorney whose practice is based on the legal issues that are ancillary to gentrification and the development of Black communities, I have seen how government typically handles land considered underutilized many times before.

In fact, urban cores are encountering the same circumstances which gave rise to modern urban renewal policies in black neighborhoods all over the country.

From South Bend, Indiana to Washington DC, when land is vacant the government tack has been to increase taxes on the owners accused of allowing vacancies to fester, not create tax breaks.

[US Transportation Department Secretary and former South Bend, Indiana Mayor Pete Buttigieg speaks to Capitol Intelligence/BBN using CI Glass in Washington DC at the US House of Representatives  on March 10, 2021]

Historically, this has served multiple purposes. Landowners that can pay the increased taxes on vacant property, which are sometimes 10x more than normal, increase city revenue and make up for any revenue loss caused by land underutilization.

Second, for landowners that cannot pay the increased taxes, the government would temporarily take ownership of the property, before essentially giving it away for free to developers willing to build to government specification.

Finally, faced with the choice of tax foreclosure many landlords would simply lower rents making way for a whole new class of urban core occupant.

In the past, these methods of land value capture have also been used to change out the “types” of people that have been accused of underutilizing land.

In Washington D.C., city planners provided TIF subsidies and 99-year one-dollar leases to developers who eagerly designed retail, residential, and commercial environments for young professionals and “creatives”, while phasing out environments for working class residents.

The former Director of the District of Columbia Office of Planning, Harriet Tregonig, openly boasted that government policies led to a neighborhood in DC replacing a low income, family oriented, bulk item food store, named Murrays, with a Whole Foods, which is known for bachelor bread loaves and for being nicknamed “Whole Paycheck”.

[Venture House Group CEO and part owner of the Washington Commanders Mark D. Ein speaks to Capitol Intelligence/BBN using CI Glass on making DC competitive against NYC at Urban Institute forum on DC tax reform]

In the college courses I teach I have long referenced creative financing utilized by governments as instruments of hope.

They are cultural proof of when it is appropriate to forgo a bird in the hand for two or three in the bush. These instruments of hope are normally reserved for predominately white men, their ideas, visions, and dreams.

Notwithstanding, for every urban dweller’s well-being, government should shelve creatively financing Downtown Landowners.

Government should use traditional tax schemes to force downtown Landowners to fish or cut bait, instead of propping them up for some future gambit involving the usual suspects, who have shown no indication they are ready to return to cities.

There are populations with untapped potential waiting to make the most of downtown, right now.

Instead of continuing down the path of making urban cores playgrounds for the rich and striving to be rich, governments should aim to open the urban core to the working and service class, as well.

Developers should be able to build the affordable housing needed for healthy cities with the combination of tax auction fire sales and 99-year one-dollar leases, which both remove the cost basis of acquiring land.

There will still be plenty of room for both the rich and striving to be rich. In fact, we are at a tipping point where a more inclusive city is the low-lying fruit. Whereas any plan to maintain the recent state of affairs is simply throwing good money after bad.

By Aristotle Theresa in Washington,DC. For more information, email pks@capitolintelgroup.com