I have a business background and think I have a respectable grasp on economic principles. There is a problem I can't solve.
As Walmart increases in scale, the prices come down to reflect economies of scale. The logic is understandable and straight-forward.
With the City of Champaign, the economic development over the past 10 years has been staggering and there looks to be no end in sight. I'm looking at all this believing it is a good thing. At the same time, I only see increases in taxes and fees. I don't understand this. For many, the average increase in property tax liability is MUCH great than the inflation rate. MUCH greater.
Can someone explain where all the economic development proceeds are going? I would think that by now, the city would be able to subsidize infrastructure like parking without having to charge $.75/hr. I would think that property taxes would go down with such growth if we are seeing any benefit to all this development. Maybe a decrease in sales tax? Not even discounted parking? With all that development, the tax rate is pretty much the same as Urbana? That's good?
Perhaps the economic development "proceeds" are hidden from your view. Take a drive through Downtown Danville. That's what a town looks like when property values go down. Those folks are enjoying the lower home values that make property taxes go down. Cities and retailers are not both producing widgets. At the end of the day it still takes four persons to make a string quartet. And labor, the city's biggest expense rises at a rate greater than the average consumer price index of inflation, while retail goods drop in cost compared to the CPI. A washing machine today sells for fewer actual dollars than it did 30 years ago. Same for a television set. So to compare Wal-Mart's ability to sell retail goods for less when number increase to the City's ability to hire more cops at a decreasing wage rate is a false analysis.
My opinion is that comparing one bureaucratic entity to another and saying we're good because we're not them is probably the root cause of many of our problems.
This argument does not answer why government entities are exempt from the same basic principles that businesses and common individuals work through everyday?
There may be a good explanation, but I haven't heard it yet.
I doubt there is a good explanation. My sense is that "incentives" are to blame for what you are seeing. The average city council member tends to be swayed by developers with expensive presentations, and common-sense (yet completely illogical) arguments about "Creative Class" this-or-that. They don't run the numbers because the game is already rigged. Higher property taxes are a GOOD thing. $.75 an hour parking meters are a GOOD thing. etc. etc. etc.
Just remember this the next time they want to slap up a big box out in a corn field, or another "luxury condo" building for the select few. Be wary. Be very wary. Your taxes will NOT go down because of this development and your overall "take" from the project will be minimal, if not negative. The folks who profit from this development are a small, select group of people who have little interest in the health and well-being of this town outside of the profits that they can make here. This is why downtown Champaign is becoming more-and-more specialized for upper middle class white people. They have the money, you don't, so you don't really matter.
It's America. It's been like this for years.
Simple then,,,,,,,,cut city staff by one third,,,,,,,start with Carter and work down the list. Then quit trying to recoup all of the give aways on the backs of the homeowners. The steets are in bad shape,,,,,they cannot clear the snow,,,violent crime seems to be in the accendency,,,,,,,,,more cops??? Or better use of the one's we have. Then quit giving better benefits to employees than we the people are paying for them enjoy. Lets all share the pain of growth. :)
Financially speaking, I would think incentives would be a good thing. If the taxpayers give $1000 in incentives and it nets the equivalent of $2000 in net present value, easy financial decision. It certainly gets controversial when you give subsidies to out-of-town developers to build a creative class building that is marketing to college students. It is controversial when the city is skewing supply and demand. Controversy aside, we (in theory) netted a positive gain.
After more than a decade of strong economic development, property tax rates are still the same as Urbana. I understand that you don't "cash flow" on your investments for some time. This is understandable. We've experienced a long run of booming economic development, so can someone just explain to me why Champaign taxpayers are any better off than those in Urbana? Schools? Roads? Better Infrastructure? I would think there would be some tangible benefit by now. Is there? If not, when we will we see it?
If the argument is that we have to continue growing at a staggering rate to preserve the current state, we better start building some wider roads.
economies of scale are countered by the sloppiness and lavishness that goes with the bigger budget. The small little pet project giveaways are more easily passed thru bigger budgets. "Look, now that we are pulling in so much in tax dollars, we can finally do ....."
This thread so far contains generalized laments, but no specifics concerning Champaign's misuse of taxpayer funds--such would be helpful.
Simple then,,,,,,,,cut city staff by one third,,,,,,,start with Carter and work down the list.
One of the recent additions to Champaign's city staff is former Urbana Chief Administrative Officer Bruce Walden, who was fired by Mayor Prussing. The last newspaper account of Mr. Walden's Champaign employment which I read was that Mr. Walden is on an hourly or other short term contract.
Michael Fuerst
"economies of scale are countered by the sloppiness and lavishness that goes with the bigger budget"
WELL SAID! I COULDN'T AGREE MORE!
Public officials are only interested in their little self-perpetuating external validation loops.
Walden in Champaign? That is awesome. When does the inert and useless Steve Carter get the axe?
"This thread so far contains generalized laments, but no specifics concerning Champaign's misuse of taxpayer funds--such would be helpful."
No one is claiming "misuse".
Many people like Danielle Chenywyth in Urbana agree very candidly that more money for the city to spend is a good thing.
It appears that the Chapaign city council is pretty much the same, even though it is comprised of "conservatives". Have money will spend money. Nothing new to see here.
Have money will spend money. Nothing new to see here.
Welcome to a concept called "government" my friend. Spending other peoples money on pet projects is always easy. Heck some people find it downright fun!
I just hope some republicans step up and do something about it. I doubt that Al Gore is going to do a documentary on responsible spending making it cool and hip to be fiscally conservative. I don't expect the University of Illinois president to hold a press conference on a new exciting initiative to contain tuition costs. Urbana is just Urbana. Toni Fabri is the financial watchdog for the county. But we actually have a conservative influence on the Champaign City Council that keeps on spending money like it not theirs.
economies of scale are countered by the sloppiness and lavishness that goes with the bigger budget.
Yeah, but that's exactly what he was asking about. Wal-Mart and other companies get bigger, and their economies of scale don't (immediately) lead to sloppiness and lavishness, so perhaps that's not really the explanation. Anyway, I don't see much lavishness in Champaign, that's for sure, and they are far less sloppy than what you see in bigger cities, where sloppiness (corruption, nepotism, etc.) is entrenched and endemic. In fact, Champaign is the most efficiently run city I have ever lived in as an adult.
The first explanation for the difference, in my opinion, is that corporations and municipalities are simply not the same, and therefore difficult to compare. That's not to say that governmental organizations aren't players in a free market, or that they are immune to laws of economics, but they still have to do things that would not make much sense to someone only concerned about maximizing profit. This is why when someone tells me that they are big private sector successes, and that I should elect them so that they can bring that same success to government, I'm usually a little suspicious.
Secondly, there is a little sloppiness and lavishness, so to speak, that is going to accrue to the Wal-Marts of the world when they get large enough. You get nice economies of scale up to a point, and then you run into diminishing marginal returns when your organization gets too large.
Finally, as cities get larger, they also get big city problems, which cost money - crime, drug abuse, homelessness, vandalism, etc. These things are all more prevalent in larger cities, and as Champaign grows it will see more of this, and have to pay to contain it. That's not to say to say that this is a bad tradeoff (in my opinion, perhaps not in others').
One thing it's not is a problem of craven city councilmen kowtowing to fancy-pants out-of-town creative class hucksters. If folks are making that argument, they should at least let us know how much the city loses in TIF deals every year as a proportion of their budget. I'm betting that it's not much, but like any populist rallying point, facts have little to do with it.
"The first explanation for the difference, in my opinion, is that corporations and municipalities are simply not the same, and therefore difficult to compare."
They are difficult to compare. How can all this development not yield positive cash flow if it was well managed? If it is yielding the cash flow and it reinvested, how is the city measuring return on investment? What are the performance measures that the city council uses to make investment decisions? It has to be out there, but I just can't find it. In a well-managed city, all the key decision makers would be able to easily be able to reference this information. These measurements promote accountability, maybe that is why I'm having trouble finding this information.
"In fact, Champaign is the most efficiently run city I have ever lived in as an adult."
Is that determined by tax rate?
I agree totally with B is for Business about the need for some measurable goals on issuing TIFs and expected outcomes, as well as for public access to that info. Perhaps that is what is really sticking in people's craws - that councilmen seem to be making decisions haphazardly. Nonetheless, by offering TIFs to downtown businesses, we are offering tax breaks for businesses to do something that we want - create a more economically viable, interesting downtown area. When you strip away all the city planning lingo of the day (like "creative class"), that doesn't seem like such a bad thing to me.
As for Champaign being more efficient, I mean that in every way possible. In large old cities like Chicago and the cities in the Northeast, you pay much higher taxes, there is less info available online, cops don't care about anything but the most serious crimes, you deal with rude city officials who are safe from being fired or even disciplined in any real way, they act like they are doing you a big favor to help you, they generate fix-it men who set up consultancies whose only job is to help you navigate the system to get the permits that you should be able to get on your own - a whole host of problems. Coming to Champaign is like a governmental Eden. I know - it's funny, but true.
I'm betting that it's not much, but like any populist rallying point, facts have little to do with it.
Oh, sweet response. Yes us "populists" with our lack of facts. And stuff.
Did you know the City of Champaign spent close to $3 million of your tax dollars to "fix" the intersection at the corner of Church and Neil so One Main could go in? This is the same general time when a referendum for rebuilding things like Dr. Howard failed to pass muster. Why did they do this? Because they were convinced by wealthy developers that what downtown really needed was a restaurant that charges $50 for a steak, a hipster record store, a video game developer and luxury condos. The argument was laid out quite plainly that "if you build it, they will come" – meaning dropping that kind of dime (and that was only the start of the incentives) will bring higher tax rates from the business that will happen in downtown. Yes, you read that right. The IDEA was that a hipster record store and an upscale restaurant will be the catalyst for economic development. It still makes me giggle.
Perhaps you could go ahead and fill us in on the bounty of tax dollars that have flowed into the coffers since this investment in One Main? Surely someone so willing to dismiss "populists" without facts must have several at his fingertips which demonstrate the wisdom of giving hipster developers to keys to a major corner of downtown Champaign. Do tell!
Please lets not forget that the videogame developer is going to offer over a 100 , 9 (DOLLAR), and hour jobs,, with a chance some of them may get to 15 dollars someday,,,,,,,what a deal for the tax buck that is:)
Oh, sweet response.
Thank you, Boon. I believe that I had your post in mind when I put in that little barb.
As for the facts, ok, so they spent $3 million. In the current budget, the city has approved an operating budget of $126.73 million, and capital improvements of $44.6 million...http://www.ci.champaign.il.us/government/gvbudget.php...and if they were to spend $3 million for something today it would be 1.75% of the budget - wow, 1.75% - grab the torches and pitchforks, Martha! TIFs obviously cost money over time too, but they did infrastructure improvements that gave them a bucket-load of overpriced condos (which will generate overpriced tax bills) and jobs. What's not to like? I agree that it would be nice if they had some sort of target goals, as stated earlier, but we can hardly ask businesses to do their own road work at Main and Neil. If a company opens by a highway and asks for the state to add an exit at that point, they will usually do it, because it has been shown that the jobs and economic activity pay for the roadwork plus more over time - plus it's the state's (or city's) road.
The IDEA was that a hipster record store and an upscale restaurant will be the catalyst for economic development. It still makes me giggle.
Giggle all you want - if these things didn't work, then people wouldn't do them. It's not like Champaign was the first town to ever think of something called "gentrification," and somehow came up with the wild theory that if they brought in, um, "creative class" types, and restaurants and bars, then they would soon attract wealthy professionals and businesses. Look at any major city like New York or Chicago or Boston - lots of neighborhoods have picked up because of the process, and it often takes a little kickstart of tax breaks. The process may seem mysterious to you, but it's a very well trodden path for other places.
And it's not like the city gave the "keys" to prime real estate to "hipster developers" - those hipsters got out their checkbooks and bought the land themselves, then paid to put up the building with their own money - it was only the future revenue stream of tax money that was affected. I'm not sure how much money it has brought in - my guess is not much - that's how development works - slowly. If you like the way downtown used to be before the onset of the hipster developers, move to Danville.
As for Bruce's bit about $9/hr jobs, those are for video game testers - paying people to play video games all day. I'm sure there's more involved than just getting paid to do what most people do for free, but I still have to think that they are pretty well paid. When you have your own software company, then you can pay your video game testers $75,000 a year if you want. 100 x $9/hr jobs > 0 x $9/hr jobs.
D-man I fully understand you're point,,,,,,,but the story did not merit a N-G front page, in my opinion,,,,,and those kind of jobs are not going to create an economic boom for this city, I thought the idea was to attract high paying jobs,,,,,and skilled jobs,,,,,,,and people that could afford to rent/buy downtown housing,,,,,not barely make the lot rent up on north Market Street,, of course they can offer and pay what they wish,,,,,but it was played up like Moses coming down from the mountain top with two tablets,,,,,it was more like the History of the World version,,,first there were 15 , then WHOOPS!! dropped one,,,now there are ten. Call a spade a spade :) NO pc violation intended there:)
Heh heh, you got that right, Bruce - but I think that it has more to do with the rank boosterism of the N-G. Everything is great! There's gonna be a cupcake bar coming to downtown (no foolin')! Wow! Those are the sorts of things they have in Los Angeles! And then a trading floor (maybe)! So exciting!
I don't mind the N-G, and certainly not like some people on this blog hate it, but I definitely look at it as a factory for reproducing people's breathless press releases word for word. Still, good on 'em for their civic pride.
Just because there are low paying jobs doesn't mean that there are not high paying jobs. If there are indeed $50 steaks being served at Jim Gould, that nets a hefty tip at the end of the meal, so someone's getting well paid - but it ain't the dishwasher. But no one wants to eat off a dirty plate, or play buggy video game.
Look at any major city like New York or Chicago or Boston - lots of neighborhoods have picked up because of the process, and it often takes a little kickstart of tax breaks.
Well, there's a bit of a difference there, eh? It's not like Chicago or Boston is COUNTING ON the restaurants and record stores to develop the economy. The record stores and restaurants thrive because people move to the city for high paying jobs. It's those high paying jobs that are missing in the Champaign development scheme. Well, not missing really. The idea is that the restaurants and the record stores will bring businesses who will apparently bring high paying jobs with them. That is the idea, and if that doesn't make you giggle then maybe you've checked your sense of humor at the door.
And it's not like the city gave the "keys" to prime real estate to "hipster developers" - those hipsters got out their checkbooks and bought the land themselves
Um ... that was city owned land. If they paid for it, the sale was a decision made by the council. The decision to sell the people's property to a group of developers so they can put up a building and make a mint. There are other things that could have been done with that piece of property (parking anyone?). Other ways to develop downtown so it is not so exclusive. But when there are dollars on the table, then suddenly the needs of the people get set aside.
Of course the idea (that you have restated) is that the development will help taxpayers by bringing in more tax dollars from the condos. Where's the beef? All we've gotten so far is overpriced steaks, increased parking meters, and a booming video game business that looks as stable as an ice cube in a bowl of soup.
If you like the way downtown used to be before the onset of the hipster developers, move to Danville.
This is a ridiculous statement. The reason Danville has problems is it's LACK of solid businesses. We have the U of I and we will always have the U of I. Our downtown has never been on the level of Danville and it never will be.
Well, there's a bit of a difference there, eh? It's not like Chicago or Boston is COUNTING ON the restaurants and record stores to develop the economy.
No, they actually are. They have a developed economy across the board, just as Champaign has (although less so), but they actively look to have these sorts of businesses to set up in former industrial areas, neighborhoods that have fallen on hard times, and so on. They realized that you don't go from being a slum to being a mecca of high tech companies, financial services, and so on in one go. First you bring in the hipsters (think of NYC's Bowery or Alphabet City, or Washington's Dupont Circle, or Philadelphia's Old City), then the area develops with more restaurants, nightlife, and development - often with tax breaks - then the professionals come, and then their businesses come. They don't come on the first day - and the fact that there's a video game designer already in downtown Champaign, as well as other tech businesses moving in, is quite an accomplishment - usually the first stage of gentrification is almost entirely entertainment business driven.
The idea is that the restaurants and the record stores will bring businesses who will apparently bring high paying jobs with them. That is the idea, and if that doesn't make you giggle then maybe you've checked your sense of humor at the door.
Oh my, I never check my sense of humor at the door! But let's take a look at these businesses. A record store is entirely in keeping with the first stages of gentrification. It may not be paying its employees lavish salaries, but it brings in the hipster element, which despite all of the sneering (mine as well as yours) is important to the process. As for Jim Gould, I went to the online menus, and first of all, there are no $50 steaks, alas, but the items tended to be about $8 for an appetizer, $20 for an entree (steaks were about $30), and the wine ran the gamut. So if a couple goes there and has a full dinner with wine and dessert, they are looking at $100 - $120 at the least. The tip on that is $20, multiplied by 10-20 tables a night, multiplied by a five night schedule, multiplied by 48 weeks working, and you are looking at over $70,000 a year for a waiter - or $50,000 if you really low-ball everything. That's not even considering that Jim Gould is obviously the place to take clients if you have an expense account, and to run up a $500 - $1,000 tab. So there's your high paying job right there, multiplied by the number of waiters. You may dis' Jim Gould for being "exclusive," but the tips are a lot better than if they had put something cheaper there and generated no high paying jobs.
If they paid for it, the sale was a decision made by the council.
Fair enough - if you think that they got a bad deal on the sale, you can vote against those that approved the sale. Cities that have it written into their charters that they can't sell any property (like Philadelphia) stagnate because of it. I'm thrilled that Champaign is smart enough to not go down that road, and can see the wisdom of letting hipster developers do the gentrification work that the squares on city council are unable to do.
...parking anyone?...
Yikes! If there is one thing that Champaign does poorly, it's parking. They are finally getting into the act with a multilevel garage, but for years city parking meant a big empty surface lot. That's the most acceptable form of urban blight, but it's still blight. Take a look at the block north of the Virginia Theater - two buildings and acres of asphalt. Or the N-G block. Or the block east of the Virginia. Or the M2 block before they got smart and brought in hipster developers. Champaign - parking aplenty, but not much reason to do so.
Where's the beef? All we've gotten so far is overpriced steaks...
Heh heh - doesn't that answer your own question? ;-) But seriously, are you expecting the city to wave a wand and have a downtown, hollowed out by the flight of retail to big boxes, to just magically be a thriving retail area again with lots of high-paying tech jobs as well? I'm still trying to wrap my head around how you want high paying jobs, but don't want high priced restaurants for those highly paid people to eat at, or high priced apartments where they can live. You think that a record store won't bring in high wage workers (and you're right, at least in the short term), but I get the feeling like you wouldn't be much happier with the highly paid workers that would come if the trading floor thing takes off - because then there would be more call for "exclusive" restaurants, "luxury condos," and dickensian urchins being used as soccer balls by capitalist fat cats (ok, I may have gone too far on that last one). Gentrification is a process, not an event.
The reason Danville has problems is it's LACK of solid businesses. We have the U of I and we will always have the U of I. Our downtown has never been on the level of Danville and it never will be.
Let us hope so. But don't lean too much on UI - take a look at New Haven, Conn to see just how having a great university doesn't guarantee a healthy local economy - or West Philadelphia and Morningside Heights during the 1960s-1980s for that matter (Penn and Columbia, respectively). Danville doesn't have solid businesses, but we could just as easily be in that position too, and there's nothing about UI that guarantees that disappearing manufacturing jobs get replaced with tech jobs. UI may employ a large number of people, but so does Yale, and New Haven is a dump. Austin TX has taken off because of UT (and Dell and other spin off companies), while University Park, Penna is a sleepy little college town. Sometimes the stars just align and things happen on their own, but often it takes some intentional work - like tax breaks for hipster developers.
Damn, I talk a lot.
You do. And you've had a hearty drink of Richard Florida's potion. The spell will wear off eventually but there is little hope for you at present.
Eh...Richard Florida has a lot more faith in the "creative class" (a term that I never liked very much), and he always had a snake oil salesmen aura about him. Plus, there's plenty of room for non-creative types in the gentrification process - accountants, insurance actuaries, financial analysts, and other grey personalities. I think that what really happened is that I drank the Glock potion, and that is responsible for the long post. ;-)
College student housing is being built at Burnham when several local developers are willing to develop student housing without subsidies. Let's call student housing what it is - student housing. The only thing creative thing about that deal was the spin they put on the project so they can ignore the zoning rules that they impose on the local developers who do not ask for subsidies.
All of these professions are in the creative class as defined by Richard Florida: "accountants, insurance actuaries, financial analysts"
But folks don't want to be bothered reading the book, so they settle for a misunderstanding of what Florida was talking about
He was making the distinction between "brain workers" and persons who do not work with their brain.
Sure, the creative class includes poets and artists, but it also includes proctologists and CPA's.
I am curious, B for business, just what are the subsidies to which you alude?
I stand corrected, Anon. And I would agree that these are all folks that we would want to attract (and who have more purchasing power than poets). I am guilty as charged in that I didn't read the book - like many on this list, I think that the term "creative class" is a little gimmicky, but on the whole I agree with many of his basic assumptions (as near as I can guess from interviews that I have read with him). I think that he may overstate the case a bit much, but that probably has to do with people (um, like me?) that figure that "creative class" is more a barista with tattoos and piercings than a tax lawyer.
As for Burnham, that has a long history that I don't know much about - some damn fool idea about bringing yuppies to live in Campustown. (Who above the age of 25 wants to live there?) I would conceed that his may be one of those situations that Boon was talking about - the council being carried away on a wave of enthusiasm.
I think that it all gets back to the need for someone to think these things out a little more clearly - goals, strategies, outcomes, and targeted areas (downtown, not Campustown), and not just going along with anyone saying "knowledge workers," "creative class," or whatever it is that gets the city council to open its wallet.
He was making the distinction between "brain workers" and persons who do not work with their brain.
Exactly. People who do not work with their brain are not desirable in the creative class realm. They are to be ignored. This, in essence, is the fundamental problem with creative class theory. It is not about workers, it is about a select group of workers that are deemed superior to others, mainly because of their tastes and their disposable income. Union workers, for the most part, have no place in a creative class development. Families, for the most part, have no place in creative class theory. Most of the African-American and Latino communities have no place in creative class theory. The developed areas become appealing only to a select group of individuals, the rest of the town (the MAJORITY of the town) is ignored.
It makes me sick.
Poor people? But are there no orphanages? Are there no workhouses? (heh heh...it's almost Xmas and I had to get my favorite Scrooge quote in somewhere.)
Besides the point about unionized workers not being knowledge workers (uh, teachers?), I take your point. Still, during the first stages of gentrification, there is plenty of room for low income people. The run down area gets filled with artists looking for cheap studios, bands looking for places to practice, grad students, and of course many of the poor people that live there originally. As it gets more entertainment, restaurants, etc., rents go up, galleries open, the chichi set moves in, and those folks move on to a different place. The challenge of the "creative class" idea, or any other similar idea, is that they are trying to bottle the process - to make a pattern that can be replicated and speeded along.
You're right, though, as areas become nicer, poor people can't afford them. So what? It's not like there's a lack of cheap housing in Champaign for people to move to - everything here is cheap - hell, even the overpriced M1 places are cheap compared to something similar in Chicago. Should we strive to keep shuttered shoe shops and hardware stores preserved in formaldehyde, so that the area remains affordable to everyone? I can see that you don't like gentrification, because you don't seem to like the gentry - which is fine for you, but I am unapologetic about wanting fancy restaurants and bars and record stores and places selling $5 cups of coffee. Some see that as business that will generate more income, but as a yuppie scumbag, I see it as an end in itself. As I alluded to before, once I avail myself of Champaign's acres of surface parking, I want something to do after I close the car door - and going to a union rally ain't it. Give me martinis or give me death!
"I think that what really happened is that I drank the Glock potion, and that is responsible for the long post. ;-)"
Now I'm getting blamed for other people's long posts! I'm doomed! :-)
--
Glock21 Op/Ed
"I am curious, B for business, just what are the subsidies to which you alude?"
From http://www.ci.champaign.il.us/business/page.php?pn=business_burnham_faq of Jan 05, it mentions $8,000,000. It also mentions the willingness to rezone. That was three years ago.
I wish I can answer the question better. I see master plans referencing burnham on the city website, but no easy way for me quickly tell how much money was spent, no project plan, no scorecard measuring milestones, no scorecard measuring return on investment. I only looked for about 10 minutes, so maybe it's out there somewhere.
With such a large investment of taxpayers dollars, I would think this information would be public and very easily accessible. If it is, please point me to it. I assume that city council members can access this extremely quickly so that we can analyze these projects and determine the costs vs. benefit and apply this learning to future decisions.
If anyone can find a better answer to anon's question, please let me know how long it took you to dig it up and where you found it.
D-Man,
while I don't dispute your math, do you have direct, personal knowledge of any waiters at Jim Gould's making $50-70,000/year? Most restaurant owners in town would be happy if they could take home that amount after paying all their bills. Most waiters/waitresses are doing it as a part-time gig (20-30 hrs./week) and make $12-15,000/year (not a bad gig, I agree), but it's a rare one who has the physical and emotional stamina to work 40 hrs. weekly in that job, and most of the folks I knew who worked full-time as waiter/waitresses made closer to $30,000/year. Still not bad for a job you can get even if you are a high school dropout, but a long way from $50-70,000/year.
As far as everything here being "cheap", I suppose that viewpoint depends on where you start from. I moved here from southern Illinois and I am continually outraged by how overpriced real estate (both houses and apartments) is here. When you come here from New York or LA or Chicago, everything may seem "cheap", but the landlords and real estate agents have caught on to the comments from those coming from the coasts or up North, and they are attempting to raise their prices accordingly. (Please note I didn't say they are always succeeding, nasty things like a 20% vacancy rate and a credit market meltdown have a way of impacting their dreams.) If you want to see really cheap real estate, try pricing a house in Mattoon or Decatur or Cerro Gordo or Weldon! Or Danville, which now refuses to participate in a National Association of Realtors survey about housing prices, because they didn't like the news they had some of the lowest prices.