Further thoughts on rethinking comprehensive plan theory in terms of city planning and public finance
For a long time I have argued that (most) cities don't have what we might call a business or organizational plan, if a business plan is defined by the Business Dictionary website as:
Set of documents prepared by a firm's management to summarize its operational and financial objectives for the near future (usually one to three years) and to show how they will be achieved. It serves as a blueprint to guide the firm's policies and strategies, and is continually modified as conditions change and new opportunities and/or threats emerge. When prepared for external audience (lenders, prospective investors) it details the past, present, and forecasted performance of the firm. And usually also contains pro-forma balance sheet, income statement, and cash flow statement, to illustrate how the financing being sought will affect the firm's financial position.
As discussed in previously submitted amendments, the Citizens Planning Coalition suggests that the Comprehensive Plan in part be repositioned as the vision-business plan for the city as well as the land use plan, and therefore propose that the plan be set up in four sections:1. Framework and Leading Elements; 2. Citywide Elements; 3. Public Finance, Capital (or Public) Assets and Agency Management Elements; and 4. Area Elements Elements for each DC Government Agency.
From the Newsom article:
Sarasota County Director of Smart Growth Peter Katz, speaking to a meeting of Citistates Associates in Minnesota late last month, described a recent analysis of the county’s property tax revenue per acre. He pointed first to residential areas. Not surprisingly, when you work the numbers on a per-acre basis, residential property inside the county’s municipalities offered the biggest revenue per acre — a little more than $8,200 per acre for single family houses within the city of Sarasota. This makes sense, as in-town land values tend to be higher.
Next, Katz showed the results from retail properties. Here comes surprise No. 1.: Big box stores such as WalMart and Sam’s Club, when analyzed for county property tax revenue per acre, produce barely more than a single family house; maybe $150 to $200 more a year, Katz said. (Think of all those acres of parking lots.) “That hardly seems worth all the heat that elected officials take when they approve such development,” he noted in a related, written presentation.
Among retail properties, the biggest per-acre property tax revenue in his county, almost $22,000 per acre, comes from Southgate Mall, the county’s highest-end commercial property with Macy’s, Dillards and Saks Fifth Avenue department stores. That’s not so surprising.
But here’s the shocker: On a horizontal bar chart Katz showed, you see that zooming to the far right side, outpacing all the retail offerings, even the regional shopping mall, is the revenue from a high-rise mixed-use project in downtown Sarasota. It sits on less than an acre and contributes a hefty $800,000 in tax per acre. (Add in city property taxes and it’s $1.2 million.) “It takes a lot of WalMarts to equal the contribution of that one mixed-use building,” Katz noted.
DC's tax revenue stream is much different from a typical community, because the city retains all of the sales tax revenues (which normally are split between cities, counties, and the state) and all of the income tax revenue from residents (this may be split with the locality and the state as it is in Maryland, although it is subject to recission, or there may be no direct sharing of state income tax revenues with localities).
This slide from the presentation shows the revenue generated per acre for different types of development. It's not fully generalizable to DC not just because of the sales and income tax revenues, but also because of the height limit, which reduces the overall revenue from commercial property.
Slide, Smart Growth: Making the Financial Case, County Tax Yield Per Acre, Sarasota presentation
DC's Land Use Plan and the Zoning Regulations need to be written in order to encourage the best outcome for the city in terms of public finance, rather than their being written to encourage the simplest types of developments, with the lowest economic return to the city.