[Vision2020] The Wal-Mart Effect on Moscow
Donovan Arnold
donovanjarnold2005 at yahoo.com
Sun Feb 12 16:40:47 PST 2006
"If you could find one individual who says they will not attend UI unless it gets a Super Wal-Mart as opposed to a mere Wal-Mart, or one person at UI who has heard such a conversation, then I'll consider you to be more of a realist than I am."-JC
So Joe, your answer to an illogical thought to to present to me another illogical question?
Whether or not the Super Wal-Mart maintains or bringing in new students is not dependent upon the principles of simple economics but that Donovan Arnold be able to know and identify to Joe Campbell 1 individuals that will testify to the fact that they will not return to Moscow in Fall 06 if a Super Wal-Mart is not built.
Perhaps we can use the same logic for other decision making. How many people will leave Moscow if we reduce the number of police by 1/2, or eliminate a fire station? Can you name one person that would leave Moscow if that happened? I don't know anybody being born in China, does that mean nobody is being born in China, Joe? Can you find anyone that would not travel the current I-95 if we do not build a new one? How many people were going to leave New York is the statue wasn't built?
Simple statistics show that as the affordability of attending UI goes down, students enrollment goes down. I am not claiming that someone will leave solely because of a Super Wal_Mart not being added. What I am contenting is that a lack of Super Wal-Mart will reduce the overall number of students attending UI.
If Wal-Mart keeps 100 students here, and helps sway 100 more students they can afford UI, that is 4 million a year being brought into the Moscow economy. Can you name any locally owned businesses in Moscow that would be wiped out by a Super Wal-Mart that produce $4 million worth of revenue for the city?
As far as reducing the cost of housing in Moscow, the only way to do that is to produce more housing to reduce the tax burden. Low income housing units operate on about a 5% profit margin. So even if you, or the city council, could persuade the owners of such properties to reduce their gross earnings to 50% you would be saving low income families about $10 a month. It wouldn't do jack for 90% of college students who do not qualify for low income housing being dependents on their parents of being full-time students.
_DJA
joekc at adelphia.net wrote: Donovan,
If you could find one individual who says they will not attend UI unless it gets a Super Wal-Mart as opposed to a mere Wal-Mart, or one person at UI who has heard such a conversation, then I'll consider you to be more of a realist than I am.
Maybe I'm wrong but I don't think that the town council has had a member in recent years who is more supportive of affordable housing than Bob Stout. I'm interested to see what he does! Hopefully we'll be able to continue this conversation after he's been given some time to do some work.
--
Joe Campbell
---- Donovan Arnold wrote:
=============
Joe,
You wrote:
"I did not deny that many students "make a determination on where to go
to college based on the affordability of the college and town." I
denied that whether a town had a Super Wal-Mart as opposed to a mere
Wal-Mart had anything to do with their decision making."
Let us follow this logic;
IF A) Wal-Mart increases the affordability of attending college.
IF B) Super Wal-Mart increases the affordability of attending a college even more.
IF C) Affordability of attending a college is a factor.
.
Then . . Even greater affordability is not a factor in attending college.
Does not seem to follow my understanding of the economic model or logic.
I believe that when prices goes down, affordability goes up. When
prices goes up, affordability goes down, assuming we are using constant
dollars.
"I will add that I am not a fatalist. I think that something can be done
about the affordable housing problem in Moscow and that Bob Stout and
the other council members will do something significant over the next
few years provided that they work together on this issue. There are
plenty of other factors besides taxes that play a role in housing prices."
You are obviously not a realist either. The city has had
been saying that for 25 years, yet nothing. Governments cannot
raise taxes and oppose the expansion of businesses and housing
and expect housing prices to decline.
If the city of Moscow wanted to decrease housing prices, and
property taxes, it could do so by pushing for mass housing
construction. That would slow down property value increases
reducing property tax increases, and reduce demand, reducing
rent. But the city would never do that. Moscow leaders want a
0% growth rate, and they pretty much have it.
Take Care,
_DJA
joekc at adelphia.net wrote: Donovan,
I did not deny that many students "make a determination on where to go to college based on the affordability of the college and town." I denied that whether a town had a Super Wal-Mart as opposed to a mere Wal-Mart had anything to do with their decision making. Issues like affordable housing have much more to do with their decision making when it comes to matters of "the affrodability of the college and town." That is all I said.
I will add that I am not a fatalist. I think that something can be done about the affordable housing problem in Moscow and that Bob Stout and the other council members will do something significant over the next few years provided that they work together on this issue. There are plenty of other factors besides taxes that play a role in housing prices.
Joe Campbell
---- Donovan Arnold wrote:
=============
Joe,
Believe it or not, most students and their parents do make a determination on where to go to college based on the affordability of the college and town. Having a large discount retail store and a large discount grocery store available to them does impact affordability. If you don't believe college students depend on discount retail, go to the Wal-Mart and ShopKo parking lot and count the number of student cars. Go down to Lewiston and count the student cars there. Go to the Super Wal-Mart near BSU and look for the student cars. You will find plenty near any publicly funded university or college.
Wal-Mart wants to expand because it is responding to student and other consumer demands for increased availability of goods and services. That is the way supply and demand works. Wal-Mart would not want to be expanding if consumers did not want it.
For every 50 students the UI fails to retain or does not attract to UI, Moscow loses about $1 million in federal and state dollars per year. $1 million that will not be going to local businesses and establishments in Moscow but some other town like Boise that can meet or better meet student needs and demands.
Regarding the other issue of affordable housing, the reason housing is unaffordable is because of heavy property taxes and housing units with overinflated market values. Moscow has a slew of vacant affordable housing units because students do not qualify for them because you cannot be a single college student and be in most subsidized housing in Moscow. Second, the subsidized housing units in Moscow are still higher than unsubsidized housing units in most other cities in Idaho including Boise. If you are a non-college student, why rent a subsidized apartment in Moscow for $450 when you can buy a house in Potlatch or Deary for $475 a month? If people want to make housing affordable in Moscow they need to reduce the property tax rate, that is the only way aside from building more housing units then we need. Moscow has no control over the property tax values.
Take Care,
Donovan J Arnold
joekc at adelphia.net wrote:It is just incorrect to think that ANY student makes a decision about where to go to school based on whether or not there is a Super Wal-Mart in the town, as opposed to just a regular, old Wal-Mart.
And if you think that your argument is correct, Donovan, why not work with Bob Stout and other council members to do something about affordable housing in Moscow? That would make a real difference.
--
Joe Campbell
---- Donovan Arnold wrote:
=============
The Wal-Mart Effect on Moscow
Many of Wal-Mart’s detractors erroneous like to make the claim that Moscow’s quality of life and economy is based upon the small number of locally owned and operated retail establishments. But any rational person understands that Moscow’s economy and job market is primarily based upon the University of Idaho. The survival of local businesses depends upon the wealth passed on from the University of Idaho.
The wealth of the University is dependent upon federal and state dollars allocated to it based on student enrollment. Enrollment is based on two factors, the number of students that stay at UI, or retention rate, and the number of new students. The retention rate, according to Michael Griffle, the Director of University Residents at UI, has dropped from 90% to below 77%. The primary reason is because of the lack of affordability of living in Moscow. In addition, according to a recent report put out by UI President Tim White, the new students being obtained by the University are increasingly minority, non-traditional, and first generation students, or students with generally less means and wealth.
A lower student enrollment will reduce the amount of money and resources to Moscow from the federal and state government. This in turn will reduce the amount of money that will be spent on local businesses. It will also reduce the number of jobs at the University and in turn the local private business sector of the community.
While many can successfully argue that tuition and fees at UI remains among the lowest, they would be fighting a losing battle to claim that Moscow is an inexpensive to live. Rent in Moscow is one the highest in the state. Gas and utilities are also very prohibitive. When other costs are added in, such as few public transportation options, increases on food, video rentals, and a $5.15 an minimum wage, Moscow becomes truly prohibitive and inhospitable for many poor college students.
Wal-Mart provides at least some relief from the unaffordable Moscow. College students need the $99 futon, the $40 microwave, the $35 DVD player, and the $5 lamp. They depend upon it. They do not care if the thing breaks within two years; they only need it till May. They do not have the money to buy the $250 bed, the $100 microwave or the nice DVD player, nor do they have the resources and time to haul it all home in nine months and back again in two and 1/2 months.
Moscow businesses are not in competition with a Wal-Mart just at 185 Warbonnet Drive. They are also in competition with a Super Wal-Mart near BSU, a Super Wal-Mart near ISU, and a Super Wal-Mart near every community college and university that caters to lower and middle income students. Ignoring this fact does not make it untrue. The best survival for local businesses is to allow Wal-Mart to meet the basic needs of college students so enrollment stays up while they provide services and goods Wal-Mart does not provide. Not providing goods and services to students that fits the student budget in the hopes that it will force them to pay a higher amount of money at a local shop is a poor long term strategy and is obviously failing as UI students opt to finish their education in a more affordable town.
Local citizens concerned about local businesses need to turn their energy towards retention and recruitment for UI and reducing the costs of living for college students as well as buying locally when they can afford it. $1000 a month for rent and $5 for a pound a beef in a town that pays $5.55 an hour will kill your local economy more quickly then any Super Wal-Mart. Killing competition inside Moscow’s boarders kills Moscow’s competitiveness outside its boarders. UI and Moscow need a Super Wal-Mart to remain competitive with other universities and colleges.
-Donovan J Arnold
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