Opening Doors

Searching for affordable-housing compromise

Madison finds it, Milwaukee's still looking

By Sean Ryan

Compromise is a tough business.

It requires people to be adversarial and cooperative at the same time. It's a game where the players simultaneously shake hands and squash toes. Compromise means agreement on the goals is stronger than disagreement on the particulars. Common goals are the foundation for cooperation. Without them, it's an argument, not a compromise.

With compromise in mind, Wisconsin's two biggest cities, Madison and Milwaukee, spent the past year hashing through new laws requiring affordable housing in new private developments.

In Madison, a fundamental agreement that affordable housing could work in the city helped build a compromise for a new law. Madison Mayor Dave Cieslewicz and a developer organization, Smart Growth Madison, spent nine months last year shaking hands and squashing toes before coming up with an inclusionary-zoning ordinance that both sides could live with. The City Council approved the law in January.

In Milwaukee, the debate has left a lot more broken toes than shaking hands, and there's a little more confusion as to the various sides of the discussion.

Milwaukee's business community, labor unions, community groups, government agents and elected officials have been working on a community benefits agreement.

It's changed a lot during the discussion, but it would mandate prevailing wages, affordable housing, resident hiring and minority-business participation programs. It focuses on projects in the 26-acre Park East corridor that receive city funds. Located immediately north of downtown Milwaukee, the site has the potential to spawn hundreds of millions of dollars in new development.

Milwaukee's Department of City Development's Park East corridor model shows what the agency sees in the 26-acre area's future. The city is expecting the redevelopment to start rolling this summer when Milwaukee County assumes ownership of 16 acres where the freeway spur formerly stood.

Milwaukee's Good Jobs and Livable Neighborhoods Coalition proposed community benefits a year ago to create job and residential opportunities for low-income and unemployed Milwaukee residents. Everyone working around the issue agrees it's a good goal. The sticking point is if placing prevailing-wage and affordable-housing mandates on the Park East market will achieve the goal.

The coalition argues that affordable housing can work in the Park East. Milwaukee's Department of City Development and business community think the mandates would make any development unworkable. No new developments means no new job opportunities or housing.

The discussions in Madison and Milwaukee date back to December 2002 when Smart Growth Madison and the Milwaukee coalition began drafting their proposals.

The coalition released its proposal in February 2003 but didn't receive a written counterproposal from Milwaukee's development community until September.

Smart Growth, on the other hand, released its inclusionary zoning proposal in July 2003 on the same day Cieslewicz announced his office's related proposal.

Inclusionary zoning was a hot issue in the mayoral election that Cieslewicz won, so Madison's developers saw the discussion coming and organized Smart Growth to draft their own ordinance. Delora Newton, Smart Growth executive director, said the simultaneous release of the competing proposals helped define the boundaries of the playing field before the game of compromise started (see Table 1).

"Cieslewicz knew that when he released his proposal back in July that he made it a really, really strong ordinance," Newton said. "He knew it wouldn't work."

Cieslewicz's Communications Director Melanie Conklin said the mayor's aides referred to the draft as either the "Blue Sky" or "Whole Enchilada" proposal. They called the final version the "Blue Enchilada."

On the east side of the state, the coalition formed when Kathleen Mulligan-Hansel, working families project coordinator at the policy research center Institute for Wisconsin's Future, connected with Milwaukee County Labor Council President John Goldstein. The two called in a number of Milwaukee's community organizations to work on the community benefits proposal.

The coalition's first proposal (see Table 2) sent to the Milwaukee Common Council followed the same haggling protocol of shooting for the moon with the initial offer. That's where the similarities between Madison and Milwaukee ended.

"We thought it was important to have our best-case scenario out there, kind of what's our dream of what would happen in the Park East," Mulligan-Hansel said.

"We expected a negotiation, certainly, which actually has not really happened in part because the other side has failed to ever provide a counterproposal that we could work from."

The Common Council adopted the coalition's dream proposal as its working model. The Steering and Rules Committee approved Alderman Mike D'Amato's suggestion to have Marvin Pratt, Common Council president and now acting mayor, create a task force to find the best way to implement the coalition's proposal through the Department of City Development's Park East Redevelopment Plan. The committee charged Pratt with organizing the task force, and he picked himself as its chairman.

The task force met six times between May and September 2003. Given that city aldermen, coalition members and development officials are still in disagreement, it appears the task force failed in its mission to find a way to implement a community benefits agreement.

Minutes from those meetings include lots of discussion over the issues but no recorded votes, and most disagreements were dropped before they were settled. That includes consideration of the Real Estate Development Advisory Committee's community benefits recommendations.

Task force member and Milwaukee Redevelopment Corp. President John Wellhoefer helped organize the committee to represent Milwaukee's business and development community in the discussion (see Table 2). It recommended emerging-business-enterprise participation goals, city and county resident hiring goals and an apprenticeship program to target city residents. It rejected the idea of affordable-housing and prevailing-wage mandates.

The minutes open and close the discussion over the committee's recommendations with one sentence: "There does not seem to be agreement among committee members, so all the recommendations will be forwarded to the Steering and Rules Committee."

The task force disbanded after that meeting and left behind a fundamental disagreement over prevailing wages and affordable housing that has remained. The discussion became as frozen in distrust and mutual frustration as Madison's was warmed by agreement and cooperative compromise.

In Madison, Cieslewicz's office spent the summer and fall of 2003 trying to reconcile its Blue Enchilada plan with Smart Growth Madison's proposal. Madison started from a very different point than Milwaukee because developers and affordable-housing advocates agreed that an inclusionary-zoning ordinance could work there.

"We weren't fighting over whether we were going to do inclusionary zoning; it was how to do it," Conklin said. "They introduced a proposal. They didn't jump up and down and go, 'No. No. No. No inclusionary zoning.'"

The Blue Enchilada and Smart Growth plans went before seven City Council committees, which worked through them as dialogue between Cieslewicz and city developers continued.

"It was a moving target, especially with different committees doing different things," Conklin said. "There was a lot of give and take. I don't know the number of drafts that went by."

Both Conklin and Newton said the compromises were tough and both were playing hardball to protect their interests. But at the same time, both parties knew inclusionary zoning was in Madison's future and the best way to make it workable was through cooperation.

"We expected a negotiation, certainly, which actually has not really happened in part because the other side has failed to ever provide a counterproposal that we could work from." Kathleen Mulligan-Hansel

"There's no point in doing this if it's going to drive developers out of our city because then you don't get any affordable housing," Conklin said. "It became a camaraderie. Come hell or high water, we were going to make this work."

There was no agreement that prevailing-wage or affordable-housing mandates could work in Milwaukee. The pivotal question in the debate is whether or not the Park East development market can sustain the added costs the mandates would entail.

Most anybody in the business of developing land in Milwaukee, including the Department of City Development, answer with an emphatic, "No." DCD agents on the Milwaukee task force estimated the prevailing-wage mandate would raise costs by 11 percent, and a 20 percent affordable-housing requirement would add $60,000 to $75,000 to the cost of each building unit. Supporters of community benefits say the development community is lying to protect the bottom line.

The general "you're wrong, look at the numbers" vs. "you're lying about the numbers" debate played through December in front of various council committees. At a time when most of the Common Council seats and the mayor's chair were up for election, the issue became increasingly politicized. Coalition members packed numerous meetings to tell aldermen that a vote against community benefits would be a spit in the eye of Milwaukee's inner city.

By February, both sides of the issue were accusing the other of using political influence to force through policy issues. The coalition argued developers used their money and relationships with government officials as leverage. People on the development side countered that the coalition turned community benefits into a populist issue and activated voters by saying Big Money is trying to take future opportunities away from them.

The first community benefits resolution, sponsored by Pratt, was tabled on Dec. 19 and never returned. Both coalition members and developers rejected it. Pratt's resolution, Substitute 1, mandated emerging-business and residency-hiring requirements but not prevailing wages or affordable housing. It covered the entire city and was triggered when projects got city funds.

Meanwhile, coalition members were working with supporters on Steering and Rules to introduce legislation that included prevailing wages and affordable housing.

The resolution, Substitute 3, went before Steering and Rules on Jan. 8.

That's about when negotiations broke down. When introducing Substitute 3, D'Amato gave what is probably the most-quoted moment of the debate. It is also the point when a line was drawn in the sand.

"You're either for community benefits or you are against community benefits," he said.

Steering and Rules approved Substitute 4 (see Table 2), a slightly amended version of Substitute 3, on a 5-3 vote and sent it to the Common Council.

ut the sides couldn't reach reconciliation. Instead of arguing with each other, the coalition and opposing developers took their arguments to City Hall to try and win aldermen to their side.

"There was a point when I personally felt like now our willingness to engage in this kind of feasibility and more policy wonk level of discussion is actually hurting us," Mulligan-Hansel said.

Before Substitute 4 hit the council floor on Jan. 20, City Council members Thomas Nardelli and Marlene Johnson-Odom switched their positive votes from Jan. 8 and signed a letter sending the resolution back to Steering and Rules.

So the coalition, which had arrived at City Hall to celebrate the upcoming vote, instead lobbied the Common Council to delay approval of the Park East Redevelop-ment Plan and effectively stop redevelopment at the site. The coalition succeeded.

If it wasn't dead beforehand, the prospect of community benefits cooperation died in Milwaukee on the morning of Jan. 20.

On the evening of Jan. 20, the Madison City Council granted final approval to the inclusionary-zoning ordinance.

Conklin said the meeting offered the height of drama and evidence of the tightness between Cieslewicz and Smart Growth Madison. A 10-10 City Council vote gave Cieslewicz the deciding vote on whether or not rental units should remain affordable for 99 years under the ordinance.

Earlier, a compromise was struck between Cieslewicz's proposed 99 years and Smart Growth's 15 years when the two parties agreed it should be 50 years. Faced with the chance to break the compromise and have his 99 years, the mayor voted down the measure and preserved the agreed-upon 50.

"I think it just needs to be voted on the way it is and just see where it is." Alderman Fred Gordon

"I have never seen such a pained look come over his face as when he voted against the 99 years, but that was in the deal," Conklin said. "There's no point in winning the political battle and losing the war."

Both Conklin and Smart Growth's Newton said the ordinance may create some problems, but both can rely on the other to be at the table to work through corrections.

In February, the Milwaukee Park East Redevelopment Plan and community benefits agreement were both tabled before Steering and Rules. The committee canceled its February meeting, which was supposed to focus on the agreement and plan.

Alderman Fred Gordon, chair of Steering and Rules and co-sponsor of the current benefits resolution, said he felt it was time to just put it up for vote to see who wins.

"We pretty much understand where the division is at this point between the developers, the nonunion advocates and the proponents of this plan," he said. "I think it just needs to be voted on the way it is and just see where it is."

As of mid-March, no new vote had been scheduled on the issue, and all of the sides in the Milwaukee debate remained without compromise.

In Madison, developer Randy Alexander, president of the Alexander Co., announced in late January the first project to use the inclusionary-zoning ordinance.