St. Petersburg needs affordable housing. Let me start there.
I spent more than 30 years chairing the Raymond James Affordable Housing Investment Committee. I know these deals are complicated — tax credits, subsidies, land costs, construction costs, financing structures. Sometimes the numbers make your eyes glaze over.
But every once in a while, the numbers are simple enough that they get your attention.
$12 million for 24 townhomes
The City of St. Petersburg has agreed to provide a $12 million subsidy for Deuces Rising, a development of 24 affordable townhomes. That’s $500,000 of City subsidy for each home.
According to Graham Brink, the Viewpoints editor of the Tampa Bay Times, the entire project is estimated to cost about $19.1 million — almost $800,000 per townhome.
Brink’s headline said it plainly:
“The bad math behind a St. Pete affordable housing project.”
About a mile away, Habitat for Humanity is building 40 townhomes at approximately $400,000 each.
One project: about $400,000 per home.
The other: almost $800,000.
Twice the cost.
At almost $800,000 per townhome, the numbers simply don’t make sense.
Who independently challenged the assumptions?
Two City Council members, Ed Montanari and Richie Floyd, questioned the economics. The other five voted to approve it.
City staff recommended the project. The people proposing it supported it. Consultants were paid to help make it work.
But who independently challenged the assumptions?
Most Council members don’t have the time — or necessarily the specialized expertise — to fully dissect a complex $19 million transaction on their own. When only two members raise red flags and the majority is prepared to move forward, the need for an independent second look becomes obvious.
Brink did exactly what good independent analysis does: he examined the numbers, compared the project to a nearby alternative, and asked whether taxpayers were getting a reasonable deal for $12 million.
But Brink is a newspaper editor, not part of the City’s decision-making process. His column came almost two years after the City Council approved the project.
The question is why this kind of independent financial analysis wasn’t part of the process before the City committed the money.
Why not ask before we decide?
Before the City spends $12 million — or $100 million — why not have someone independent look at the economics and tell us whether they make sense?
Then the Mayor and City Council can make the decision.
I’ve previously suggested creating an independent Advisory Council that could bring financial, real estate, construction, and professional expertise into major City decisions before they are made.
Maybe that’s the right structure. Maybe there’s a better one. I’m less concerned about what we call it than what it does:
Establish the facts. Test the assumptions. Understand the economics. Look at the alternatives. Then make the decision.
The same question at the Historic Gas Plant District
The same principle applies to much larger decisions — the Municipal Marina, major infrastructure, and especially the 86-acre Historic Gas Plant District.
Mayor Ken Welch wants the City to negotiate with a single developer working from that developer’s plan. I’ve repeatedly asked why we wouldn’t first decide what the City wants — streets, parks, public spaces, heights, densities — and then let developers compete for individual parcels.
I’ve never heard a convincing explanation.
I’d suggest the reason is pretty simple: there isn’t one. I don’t think there is any explanation that could make it make sense.
Now imagine if the city had an independent Advisory Council in place when the Gas Plant process began. Would we be where we are today?
St. Petersburg already has the expertise
St. Petersburg has people who have spent their careers in finance, real estate, construction, engineering, law, planning, and business. Many would be willing to contribute that expertise to the City they live in.
Why wouldn’t we ask them?
The elected officials should still make the decisions. That’s their job. Independent analysis shouldn’t replace their judgment — it should strengthen it.
The goal isn’t to make it harder for the City to make decisions.
It’s to make it harder for the City to make expensive mistakes.
Should St. Petersburg bring more independent financial and professional expertise into major decisions before they are made?
I think so.
After all, if we’re prepared to spend almost $800,000 to produce an affordable townhome, spending a little more time asking the right questions beforehand seems…
well, affordable.
