Housing Complex

The Development-Political Complex

Want a crash course in the cozy financial relationship between developers and elected city officials? You could do a lot worse than the story out today from WAMU's Julie Patel and Patrick Madden. The first installment of a five-part series, the piece, titled "Developers Fund Campaigns, Score Subsidies," highlights the alleged pay-to-play culture that leads the city to subsidize development projects that aren't necessarily in need of any subsidy. Patel and Madden find that the city has given $1.7 billion in subsidies to 133 development groups over the past 10 years, with more than a third of that money going to the 10 developers who contributed the most campaign donations over that time.

The story is full of great data and information, and well worth a read. It shows just how much of a role money plays in the city's development-political complex—so much so that developers in the piece complain about how much campaign money they have to give.

But is there really a direct relationship between the amount of money given and the number of projects subsidized? Not really. Here's a chart I threw together of the 10 developers who donated the most, and the number of subsidies they received:

If anything, there's an inverse correlation here, although it's really just statistical noise. But of course, not all subsidies are made equal. So here's a graph plotting a developer's total donations against the total value of subsidies the developer received for projects:

That's still not exactly a perfect correlation, but the trend line shows a weak but nonetheless apparent relationship between the amount donated and the amount received—all the more so if you ignore the major outlier, representing the whopping $293 million subsidy of PN Hoffman's The Wharf development. It should be noted that this is still an inexact science. For one thing, many of these projects have multiple developers, and each subsidy is listed as going to all of them, regardless of their share of the work. For another, developers can also be helped in ways other than subsidies, like being selected in bids to develop on public land.

Even if there isn't an exact one-t0-one relationship between campaign donations and subsidies, money can still have a corrupting influence. So give the story a read, and stop back at WAMU later this week for stories on the timing of donations, the contracts to develop on city land, developers' track records, and more.

  • name

    It looks like 0.1% is the kickback rate. How does this compare to taxi bribery kickbacks and lottery kickbacks?

    Other than I assume both of the latter have negative returns for the more public datapoints.

  • Bac

    Your column needs to move to the classifieds, under real estate.

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