April 01–Anaheim isn't going to "Let the People Vote" after the City Council voted down a proposed ballot measure by Mayor Tom Tait that "would have required a vote by Anaheim's electorate anytime a developer requested subsidies to build hotels that meet AAA's four-diamond standards," the Register reported.
But while we question whether voting on what is effectively a targeted tax credit is a proper use of the democratic process, Anaheim's luxury hotel subsidy program remains a distortionary giveaway to hoteliers who likely need it least.
"Under a policy adopted 3-2 by the council in June, developers requesting subsidies would get to keep 70 percent of the taxes collected on their room rates for up to 20 years," the Register reported.
Proponents seem to remain committed to the notion that four-diamond hotels can't be built without subsidies. Yet, Newport Beach and Dana Point didn't need bed-tax subsidies to support their luxury hotel developments.
If the city wants more development, it should adopt a blanket policy that encourages growth and reduces taxes and red tape for all projects, not just for the loftiest and most desirable of them. Instead, what the program is really creating is an artificial market that places one class of hoteliers above others, opening the public purse to luxury hotel owners of the sort the city has tried unsuccessfully to attract for more than a decade.
If the market hasn't been there for these luxury brands, a few Anaheim leaders shouldn't try to conjure that demand into existence with other people's money.
After all, if the market wasn't there to build luxury accommodations without subsidies, once built, will there be enough of a market to sustain them without subsidies? If projects pushed by government incentives eventually fail because they lack market demand, then what happens?
