Since the 1960s, historic preservationists have been arguing that older, denser buildings should be conserved and reused and that tearing down these buildings to create parking lots was doing damage to the fabric of the city. They also argued that the big box stores built out in the sprawling suburbs lacked character and sense of place. Plus you needed a car to get to them.
But recent studies have shown that those densely built, mixed-use, historic buildings downtown have even more going for them than character, walk and bikeability, and a positive environmental impact. They make a lot of economic sense as well.
A recent article on the Strong Towns website entitled, “Five Ways Federal Infrastructure Spending Makes Cities Poorer,” by Charles Marohn (3 Jan 2017), includes a pretty shocking graphic comparing the value of a historic, densely built downtown building to a sprawling big box store in Asheville, NC.
Graphic from a Smart Towns article by Charles Marohn.
Marohn takes the view that we should be judging tax revenue on a per acre basis. We don’t judge gas mileage per tank because that wouldn’t really give us very useful data given that tanks come in various sizes. Likewise, we shouldn’t be comparing property tax values per lot because lots also come in various sizes. We judge gas mileage at a rate of miles per gallon because that’s a data point that can be used no matter which vehicles are being compared. Likewise, when comparing property taxes, we should look at tax revenue per acre.
In the example Marohn gives in his article, not only does the historic downtown building pay substantially more tax on a per acre basis, but it also houses more people, employs more people, and pays more retail tax when compared at that same per acre rate.
While the numbers blow me away, I don’t really know Asheville and I don’t know how it compares to Fort Collins. So I decided to pull together whatever data I could (which turned out to only be property tax data) and do a similar comparison for two properties here in Fort Collins.
I decided to use the Walmart on the north end of town (since Marohn had used a Walmart in his example). I tried to think of a locally owned, small shop that might be kinda close to Walmart in terms of use, so I decided to go with City Drug (which just happens to be one of the oldest businesses in town, though it’s moved a few times since its founding in 1873).
When looking at property tax, there’s an assessment on real property (the building) and there’s an assessment on personal property (equipment, etc.). I decided to include both types of tax, which meant that the property tax from the Walmart lot includes not only the tax on the building, but also on the property of each business on that lot (including a hair salon, Subway, two banks, an investment company, an eye care place, and what looks like a management office for some apartments). For the downtown building, that meant looking at both City Drug and BeauJo’s.
Blows. A. Way.
Like… by an order of magnitude.
The example from Asheville compared a six story building to a one story Walmart, but even comparing our local one-story downtown building to a one-story Walmart resulted in a substantial difference in tax revenue on a per acre basis.
What’s going on? What makes this difference? A lot of it has to do with the sea of parking that surrounds Walmart. None of that land is generating taxes. Nor can it be used for any purpose other than to occasionally host a car for a little while.
The downtown buildings were constructed at a time when there were no parking minimums. Where BeauJo’s is now located was once an auto repair shop, but additional cars were expected to park on the street. A lot of people visiting these two downtown businesses today either walk or bike. And if they do drive downtown, they’re probably parking on street or in a parking garage.
The Downtown Plan that’s going to be presented to City Council in February for approval includes a finding regarding the negative effect of minimum parking requirements on building design. The additional cost to include parking (and the loss of that space for other uses) encourages builders to cut expenses in other ways (by using cheaper materials, blander designs, etc).
So we currently have rules that require property owners to include parking in their building plans, whether or not that level of parking is needed. We end up with space (whether it’s in the building or around it) that’s being used for car storage but that’s not generating any tax revenue (nor is it providing space for people to live, work, or shop). We’re reducing the amount of money in City coffers and consigning ourselves to a car-centric life. (And the car-centric life has been associated with worse mental and physical health among other negative effects.)
Though land is privately owned, its development affects everyone in proximity to it. We need to be building, and infilling, our city smartly. We’ve got to take a hard look at parking. How much do we really need? And how can we encourage more people to shift to other forms of transportation more often?
Fort Collins is growing by leaps and bounds. Let’s be wise about how we develop, encouraging new projects that have character, create a walkable and bikeable community, honor our natural surroundings, and that make good economic sense.
You can read more about the interplay between historic preservation, sustainable transportation, and building a strong community in my four (almost five) part series entitled Creating a Vibrant Local Economy.