A coalition of residents, activists, and students is conducting a public shakedown on Rice University because of its Ion technology development building in Houston’s Third Ward. Rice has already given tentative approval to an agreement with the city that would have the university establish a venture fund to provide financing for black and Latino entrepreneurs, as well as pay to preserve and build more affordable housing in the area. The coalition argues that this isn’t enough.
The group is concerned that the technology center will spur gentrification in the neighborhood. The coalition wants to be a party to a Community Benefits Agreement (CBA) with Rice. As a part of that agreement, they want the university to ensure that no affordable housing is lost because of the Ion building. The group also wants the university to repair and maintain historic properties in the neighborhood, as well as sponsor Juneteenth and Kwanzaa celebrations.
CBAs are being used by coalitions of activists and community groups in cities across the nation. In many instances, a developer must sign a CBA before he will receive government approval to proceed with a project. Backers of CBAs argue that the residents of a community should have a voice in any development that occurs within that community. If this argument sounds familiar, that is because it is the same argument used to defend zoning for nearly 100 years.
Aspects of zoning—and particularly exclusionary provisions—are coming under increasing attack. A growing number of cities are eliminating or considering the elimination of single-family zoning to give developers the freedom to increase housing density. These exclusionary provisions have become an integral part of zoning because such land-use regulations give the community a voice in development. Giving the community a voice in development didn’t work well with zoning, and it won’t work well with CBAs.
There is nothing inherently improper with CBAs, so long as a developer enters such an agreement voluntarily—i.e., without the government forcing him to do so for permission to build. However, it is doubtful that many developers would voluntarily sign CBAs. These agreements impose significant costs upon the developer and offer virtually no benefits.
Rice has already completed renovations on the Ion building (it was previously a Sear’s department store), so the school does not need to sign a CBA with the city or the coalition in exchange for permission to proceed with the project. Consequently, it appears that Rice’s motivation to enter into a CBA is to silence activists and community groups. But such silence will come with a heavy price.
Rice estimates its agreement with the city will cost about $15 million. But that number will pale in comparison to the demands that emboldened activists and community groups will assert in the future. Seeing that they can intimidate developers to buy their approval, activists and community groups will make increasingly expensive and more outrageous demands.
The proper way to respond to this shakedown is for Rice announce that it has no valid reason to enter into a CBA with anyone. Rice brought a $100 million investment to a neighborhood that has seen little development in decades. The university has done more for that neighborhood than the current residents and businesses have done in years, and it has no reason to buy anyone’s approval. Rice did a good thing for the Third Ward, and it should state that fact proudly and righteously.