Encouraging Growth within the Boundaries · Encouraging Growth within the Boundaries ESP 171 Urban...
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Encouraging Growth within the Boundaries
ESP 171 Urban and Regional PlanningProfessor Susan Handy
5/10/16
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Recap:Growth Management Challenges
• To what degree can a city determine what kinds of growth it gets – and how?
• To what degree can a city determine its rate of growth – and how?
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Recap: How does it work?
• Step 1: Draw a boundary around city• Step 2: Direct location and design
– Use land within boundary wisely– Avoid using land outside of boundary
InfillDevt
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Recap:ISSUES and QUESTIONS
about INFILL development
NIMBYism Gentrification Open Space Demand Traffic
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Question: How can a city make
infill happen?
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3 Kinds of Strategies to…
Regulation Incentive Action
Encourage within boundaries
e.g. “up-zoning” e.g. density bonus;CEQA exemption for infill development
e.g. capital investments; redevelopment
Discourage outside of boundaries
e.g. “down-zoning”
e.g. tax breaks for keeping land in agriculture
e.g. purchase of conservation easements
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Differences in Strategies
Reactive ProactiveRegulation Incentive ActionEnable or require certain features if and when development happens
Encouragedevelop to happen
Make development happen
Economic Development
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Economic Development
“A process by which local governments seek to use planning to guide private investment and business activity toward the goals it wants to achieve.” - Fulton & Shigley
Using planning to bring economic activity to a community
i.e. jobs
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Economic Development Approaches
Approach Example
Targeted public improvements
Repair streets
Location of public facilities
Build government agency offices
Subsidies for businesses and developers
Build infrastructure or provide land
Tax breaks and regulatory streamlining
Give breaks from CEQAReduce development fees
Public $$ to attract Private $$
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Question: Is the increase in economic activity enough to
justify the cost to the city in terms of investments and tax breaks…?
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World Logistics Center – Moreno Valley
“What more local jobs? A stronger economic base?... $22 million every year for schools and colleges”
See http://theworldlogisticscenter.com/
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Economic Development in CA…
But in California, economic development is often defined in practice as land use policy in pursuit of tax revenues…
“fiscalization of land use”
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Where does local government get money to provide services?
http://worcesterherald.com/category/property-taxes/
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In CA, property taxes limited by…Prop 13
Tax bill = tax rate x assessed value of property
Fixed at 1% Can only go up by 2% per year if ownership does not change
Taxes to city = 15% of total tax revenues
Set by state
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In CA, sales taxes limited by…Voters
Increase in local sales tax requires 50% approval by voters for general purpose, 2/3 approval for special purpose
0%
2%
4%
6%
8%
10%
Yolo County Davis Albany
Sales Tax Breakdown
State General Fund State Fiscal Recovery FundLocal Public Safety Fund State Education Protection AccountLocal Revenue Fund County transportation fundsCity or county operations City transactions and useCounty health care County transportationBART
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“fiscalization of land use”
Can’t increase tax rates but can increase tax base – tax-generation of development:
– Sales tax: Encourage businesses with big sales– Property tax: Encourage more valuable
development…
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“fiscalization of land use”Tax revenues vs. cost of providing property with public services…
– e.g. shopping center: lots of property tax, sales tax – but few service demands
– e.g. residential subdivision: little property tax, no sales tax – but lots of service demands
vs.
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Development Types
Infill Development
Greenfield Development
“Smart Growth” design
“Sprawl” design
Best but hard!
Worst but easy!
?
?
Redevelopment
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Redevelopment“A financial tool designed to facilitate real estate investment in targeted areas”
- Fulton & Shigley
economic development vs. growth management
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Redevelopment ∈ Economic Devt
Economic Development = encourage growth
Redevelopment = encourage growth
in old places
growth management application = encourage growth inward rather than outward
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CA Community Redevelopment Law (CRL)
• Enacted in 1945 to eliminate “urban blight” conditions created by decades of depression, war, and neglect
• Enabled city (or county) to create a “Redevelopment Agency” for specified redevelopment area:– Tool 1: Acquire property by eminent domain – Tool 2: Create tax-increment financing districts
• Eliminated February 1, 2012 (AB 1 X 26 of 2011, + court decision, + “clean-up” legislation)
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Urban BlightMust focus on neighborhoods were blight is so bad that “it constitutes a serious physical or economic burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment.”
?
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http://bombit-themovie.com/blog/?p=149&akst_action=share-this; http://www.danhagerman.com/images/Bronx%20Ghetto.jpg
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Blight=?• existence of buildings that are unsafe or unhealthy to live or work in, • factors that prevent economically viable use of buildings, • subdivided lots that are irregularly shaped and undersized and under
multiple ownership, • depreciated or stagnant property values, • abnormally high business vacancies, • abnormally low lease rates, • high turnover, • abandoned buildings or excessive vacant lots, • the lack of necessary commercial facilities (e.g., grocery stores), • residential overcrowding, • an excess of bars and liquor stores • a high crime rate that constitutes a serious threat to public safety and
welfare.
Source: http://www.msandr.com/resource_article.php?articleID=24
Room for interpretation…
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San Jose Redevelopment AgencyWhat counts as blight?
“The SJRA's Downtown program is modeled after the San Jose of 1900-1950 - a 24-hour city where people lived, worked, and shopped. Today's Downtown is a thriving urban center, offering an amalgamation of cultural, professional, and residential amenities.”
Source: http://www.sjredevelopment.org/downtown.htm
2005 court case ruled that 30 acres declared “blighted” without sufficient evidence
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Question: Any blight in Davis?
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Why would cities do this?
• Tool 1: Eminent Domain• Tool 2: Tax-Increment Financing
Abolishment of redevelopment agencies makes this harder to do,
but not impossible.
Misuse of these tools helps to explain why Brown wanted to
abolish redevelopment agencies
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Tool 1. Eminent Domain
• Power of government to appropriate private property for its own use without owner’s consent, based on 5th Amendment:– “Just compensation”– “Public use”
• “Condemnation” is act of government exercising its right of eminent domain
physical taking (vs. regulatory taking)
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Eminent Domain Use
Traditional Use: acquire land for public projects like freeways…
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Eminent Domain Proceedings
• Notifications• Appraisals• Case filed in court• Settlements, or trial
http://www.eminentdomainlaw.net/procedures.php
King’s Arena in Sacramento
Court approved use of eminent domain
April 2014
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http://www.wired.com/wiredscience/2009/05/how-pixars-up-house-could-really-fly/
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http://www.nytimes.com/2015/04/12/us/house-that-wouldnt-budge-or-float-away-faces-a-last-stand.html?_r=0
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“Chinese developers are said to call such properties nail houses, as they liken them to stubborn nails that can't easily be hammered into wood. People in the country have had stronger property ownership protections since 2007, increasing the potential for conflict.”
http://www.bbc.com/news/magazine-32900601
A partially demolished nail house in Rui'an, China
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A nail house sits in the middle of a road under construction in Nanning, China
http://www.bbc.com/news/magazine-32900601
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A three-storey nail house in the middle of a road in Luoyang, China...
http://www.bbc.com/news/magazine-32900601
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Before and after -
excavators tear down a
five-story apartment
block in the middle of a newly-built
road in Wenling, in
eastern China
http://www.bbc.com/news/magazine-32900601
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Eminent Domain Use
Use in Redevelopment:– Reassemble multiple parcels of land under
single ownership– Sell new larger parcel to private developer at a
loss as incentive for development
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Fort Trumbull Work Plan“One of the biggest and most exciting developments in New London’s history is well underway in the Fort Trumbull area of the city. The 90-acre peninsula surrounding the historic Fort Trumbull on the Thames River shoreline is being redeveloped into a vibrant commercial and residential area that will be an ‘anchor’ for a new and improved New London. The successful completion of the Fort Trumbull Project will lead the way for the New London Development Corporation to achieve our goals of a higher tax base, more jobs, and a higher quality of life for all who live and work in New London.“
Source: http://www.nldc.org/business/fttrmbll.htm
New London, CT
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Kelo vs. New London what constitutes “public use”?
Susette Keloreceived notice of
condemnation from the NLDC (New
London Development
Corporation) the day before
Thanksgiving 2000.
Source: http://www.ij.org/private_property/connecticut/ and http://www.usatoday.com/news/nation/2004-09-28-justices-property_x.htm
"concern for the economic welfare of New London."
NLDC- PurposeThe New London Development Corporation (NLDC) is committed to creating public-private partnerships that act as an engine for economic development in New London. The goals of this private, not-for-profit organization are to increase the city's tax base, to promote an increase in the number of jobs available in the city and to enhance the quality of life for New London's residents.
“stop the use of eminent domain to take away their most sacred and important of possessions: their homes."
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Kelo vs. New London what constitutes “public use”?
2005 Supreme Court Decision
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How do planners feel about Kelo?
• Importance of planning as basis for use of eminent domain, BUT…
• Challenge of protecting the little guy from big business…
• Potential backlash from property rights groups…
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"Eminent domain is an absolute necessity for a country, for our country. Without it, you wouldn't have roads, you wouldn't have hospitals, you wouldn't have anything. You wouldn't have schools, you wouldn't have bridges. You need eminent domain," Trump said.
Source: http://www.eenews.net/eedaily/2016/02/08/stories/1060031937
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http://liz-goodwin.tumblr.com/post/136938034939/will-trumps-use-of-eminent-domain-come-back-to
“Cities have the right to condemn for the good of the city,” Trump told ABC News. “Everybody coming into Atlantic City sees this terrible house instead of staring at beautiful fountains and beautiful other things that would be good.” Trump wanted to build a limousine parking lot — not fountains — on Coking’s lot.
Playing Trump
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Eminent Domain Use
Use in Redevelopment:– Reassemble multiple parcels of land under
single ownership– Sell new larger parcel to private developer at a
loss as incentive for development
But where to get the $$$!!!
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Tool 2. Tax Increment Financing
A way for redevelopment to pay for itself:Future growth in property tax revenues generated within redevelopment area used to finance redevelopment program itself, through bonds.
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Bonds…?A way for governments to borrow money:
a “loan” from investors, paid back at the end of the loan period with interest payments along the way.
See: http://www.investopedia.com/terms/m/municipalbond.asp for a helpful video explanation!
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Tax-Increment Financing
1.City sells bonds, gets $$$
2.City spends $$$ in redevt area
4.City uses new tax $$ to pay off bonds
3.Property values go up, tax $$ go up
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Tax Increment Financing Implications
In CA, city gained control of property tax revenues otherwise split with other jurisdictions: Normally: 15% to city, 25% to county
Most goes to school districts, special districts
Redevelopment: originally 100% to city 1993 legislation established new requirements: 25% pass through to county and school districts 20% set aside for low- and moderate-income
housing (on-site or 2x off-site)
55% vs. 15% for city BUT less for school districts, others…
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Rationale for Killing Redevelopment
Up to 12% of property tax revenues diverted to redevelopment agencies -$1.7 billion each year State had to compensate
schools for money diverted
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http://www.jacksonfuller.com/2011/01/20/what-is-a-california-redevelopment-agency/
Will tax revenues grow as much if we don’t make these investments?
Will anyone still want to
build affordable
housing?
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Davis Redevelopment Agency in 2011:$14.07 million = property taxes paid within RDA’s boundaries$7.58 million = amount kept by city$2.61 million = amount city would have kept without RDA
http://www.davisenterprise.com/forum/opinion-columns/redevelopment-agency-is-good-for-davis/
Pole Line overcrossingRichards Boulevard improvements5th and G theater/office/parking structure1st and F theater/parking structure
Hundreds of affordable apartmentsHistoric City Hall (Bistro 33) improvements)Tank House relocation and Mishka’s Café site2nd and 3rd Street pedestrian improvements
Bike tunnel Train station
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Importance of Redevelopment
“There is simply no other planning tool in California that gives local governments such sweeping power to operate pro-actively.”
- Fulton, 1999
417 Redevelopment agencies in California!772 Redevelopment projects!
Dissolved as of February 2012
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Importance of Redevelopment
“In all of California planning, there is no more controversial tool than redevelopment. There is also no tool whose future is cloudier.” - Fulton & Shigley, 2013
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Redevelopment Now?
• “Dissolution” of redevelopment agencies… many projects left in limbo
• Search for other sources of funding… more next time
Santa Barbara Plaza in South LAhttp://www.nytimes.com/2012/04/11/realestate/commercial/
an-uncertain-fate-for-urban-projects-in-california.html?pagewanted=all
Enhanced Infrastructure Financing Districts (EIFDs)
Community Redevelopment Investment Authorities (CRIAs)
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Some examples…
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http://www.sunnyvale.ca.gov/community-dev/planning/draftdowntowneir/4.5.jpg
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Downtown Pasadena
Source: http://www.cityofpasadena.net/planninganddevelopment/development/redevelopment.asp
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Fresno’s Fulton Mall
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Lancaster BLVD
See http://www.theblvdlancaster.com/index.php
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Some other related concepts…
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Source: http://www.mainstreet.org/
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Community Development Corporations (CDCs)
• What they are:– Non-profit organizations formed by residents, small business
owners, congregations and other local stakeholders in low income communities
– Goal is to affordable housing and job creation for community residents; may provide social services
• What impact they’ve had:– 4,600 CDCs across the United States in 2010– 96,000 units of affordable housing per year– 75,000 jobs per year
http://community-wealth.org/strategies/panel/cdcs/index.html
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Seattle’s Rainier Valley
Source: http://www.seedseattle.org/development/current/index.htm
Rainier Court Project3700 Rainier Avenue SouthSeattle WA
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Suburban blight?
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Paris Rive Gauche
http://webarchive.nationalarchives.gov.uk/20110118095356/http://www.cabe.org.uk/case-studies/paris-rive-gauche?photos=true
“Regeneration” in Europe
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http://www.google.com/imgres?hl=en&sa=X&biw=1376&bih=866&tbm=isch&prmd=imvns&tbnid=8w9BI3su4_Yr9M:&imgrefurl=http://geobytesgcse.blogspot.com/2007/03/inner-cities-case-study-regeneration-of.html&docid=7yOP4x_FpAvaDM&imgurl=http://cgz.e2bn.net/e2bn/leas/c99/schools/cgz/accounts/staff/rchambers/GeoBytes%252520GCSE%252520Blog%252520Resources/Images/Settlement/gallery_Urban_settlement_London_Docklands_1994_IDMLON29.jpg&w=700&h=455&ei=P5uyT_zGBqjTiAK8g4CBBA&zoom=1&iact=hc&vpx=188&vpy=515&dur=25&hovh=181&hovw=279&tx=173&ty=115&sig=117576688580738434489&page=1&tbnh=151&tbnw=218&start=0&ndsp=20&ved=1t:429,r:10,s:0,i:162
http://geobytesgcse.blogspot.com/2007/03/inner-cities-case-study-regeneration-of.html
London Docklands
“Regeneration” in Europe
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Hammerby in Stockholm
“Regeneration” in Europe
https://www.wien.gv.at/stadtentwicklung/veranstaltungen/ausstellungen/2012/stadtbauen/20120223-stockholm.html; https://www.flickr.com/photos/bessmert/3606496403
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Review: Key Concepts
• Economic Development– Fiscalization of land use
• Redevelopment– Blight– Eminent domain– Tax-increment financing
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For Thursday
• Next up: Matching growth and infrastructure• Do your readings!• Start thinking about your white paper topic!
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White PapersA problem/challenge cities are currently facingA strategy that cities are currently considering/adopting
Greenhouse gas emissionsReliance on fossil fuelsClimate change impactsPoor pedestrian environmentPoor bicycling environmentToo much school-area trafficMore big box storesEmpty big box storesPop-up businessesFood “deserts”Food trucksProliferation of chain storesDecaying strip mallsToo much impervious coverToo little tree canopyAbandoned industrial sitesLots of vacant lots
Abandoned houses Monster homesDesire for cul-de-sacsUnaffordable housingDecaying housing stockUrban gentrificationRacial segregationIncome segregationAging populationGrowing immigrant populationInadequate parks and open-spacePersistent crime problemsUrban challenges for womenUrban challenges for persons with disabilitiesTraffic impacts in low-income areasEnvironmental hazards in low-income areasMany others!