Stop Domain Subsidies' proposed Charter amendment to ban retail subsidies is fraught with unintended consequences.
Here's one: The Charter amendment likely will shunt low-income residents away from mixed-use developments and into stand-alone residential developments. Why? Because the proposed amendment bars subsidies to developments that merely include a retail use, even if the retail use itself receives no subsidy. The City thus will be unable to "buy down" the affordability of units in mixed-use developments that include a retail use.
A concrete example:
Back in 2006, the City gave Ardent Residential a zoning change to redevelop the Stoneridge Apartments on South Lamar into a 300-unit mixed-use development. The developer agreed to make 10% of the units affordable at 80% MFI. But the units being replaced rented for a lot less. To quell the furor over the rezoning, Betty Dunkerly proposed using some of the City's affordable housing bond money to "buy down" 10% of the units to 50% MFI, a genuinely affordable level. The developer and the City are squabbling over the "buy down's" price tag, but the City appears ready to honor its pledge. (It has to spend its $50 million in affordable housing bond money somehow.)
I don't know whether Ardent has filed a site plan yet, but it has talked all along about including retail as part of the mixed use. That was part of the development's attraction.
Assuming Ardent still intends to include a retail use, then, the Charter amendment will keep the City from honoring its pledge to buy "deep" affordability for these units. The Charter amendment will keep the City from buying deep affordability in any mixed-use development that includes retail. The City will be forced to spend its affordable housing dollars on stand-alone residential developments, or perhaps "live-work" developments.
I don't see how this protects local merchants. The mixed-use development will still be built, and it will still have retail; the developer simply will rent the units at the market rate (or 80% or 60% of MFI if it takes advantage of the VMU incentives).
One could argue, perhaps, that purchasing affordability in mixed-use developments is an expensive, inefficient way to provide affordable housing. (I'm ambivalent about it myself.) But it doesn't seem wise to me to silence that debate by Charter amendment.
