Why should Wichita subsidize apartments for the wealthy? | Opinion

Wichitans have been pretty much up in arms about developer giveaways since last week, when Eagle business writer Carrie Rengers broke the news that the former owners of the Wind Surge baseball team made $2.2 million selling about two acres of land that they got from City Hall for a dollar an acre.

My surprise was, only $2.2 million?

That’s bush league, by Wichita standards.

An item on Tuesday’s City Council agenda proposes to give more than $15 million in tax breaks to subsidize development of another round of high-tone, high-rent apartments downtown.

The developer, Vantage Point Properties, proposes to bless our city with 370 new “Class A” apartments at Waterman and Washington.

To help them along, City Hall proposes giving the project a 10-year, 100% property tax abatement worth $1.3 million a year, plus an additional $2.5 million in sales tax exemptions.

Problem is, we really don’t need 370 more upper-income apartments. We have plenty, thanks.

What we need is 370 affordable apartments.

I’d probably go to the council meeting, but if I have to listen to one more city official saying projects like this will help lower rents and alleviate Wichita’s housing shortage, I’d probably end up barfing in the trash can.

It represents a grade-school-level understanding of how the law of supply and demand really works.

Let’s use pickup trucks for an analogy.

A new full-size pickup now costs about $50,000 and they make millions of them each year.

So does increasing the supply of top-end trucks reduce the cost of used ones?

Not really, because most people can’t afford a $50,000 pickup in the first place. They just end up bidding up the prices on the finite supply of older pickups that they actually can afford.

Much the same is happening with Wichita rent. Landlords across the city see the rents that building owners are getting downtown, and they raise their rents, too.

Subsidizing housing for the wealthy is not helping the housing situation — it’s making it worse.

But the city staff report sets the stage for approval with these findings from one of City Hall’s seemingly endless army of consultants:

“Zimmerman/Volk Associates … has suggested that downtown Wichita could support between 383 to 460 new residential rental units per year. A May 2023 Memorandum from ZVA suggests that the new biomedical campus proposed for downtown Wichita would increase the demand to 575 to 767 new rental units over the same period.”

I’d suggest that Zimmerman/Volk Associates should go suggest something else to somebody else. Or maybe make themselves useful and figure out how many of those medical college students you’d have to cram into each apartment to make it affordable for them.

The agreement for the new apartment building does include a provision for the owners to keep paying the taxes they pay now on the vacant land, about $14,000 a year.

That’s something, I guess. But against the $15 million-plus that they’ll be getting in tax breaks on their new building, it’s not a lot.

And when the building does come on the tax rolls, it will be 10 years old and probably valued for tax purposes at substantially less than the $100 million they’re claiming it will cost to build it.

I can’t help thinking if the developers can’t afford to build a $100 million apartment building for themselves without $15 million of our money, maybe they ought to build an $85 million building instead.