“Blighted” incremental development without parking generates 41% more property tax

Brainerd371_1From Strong Towns writer Charles Marohn: “The Taco John’s versus the ‘old and blighted’ story is one of the most compelling that we share in our Curbside Chat. Here you have two blocks that are identical in every way, except one: the pattern of development.”

“The old and blighted block is a remnant of the incremental, historical development pattern. It represents one of the first increments of growth that cities experienced on their periphery; a small investment in a pop up box. This is the cheapest, credible investment that someone could have made in a commercial property here in my hometown back in 1920. In their comprehensive plan, the city has indicated that this block is a redevelopment opportunity that would, to use their language, ultimately become ‘auto oriented’.

Old Brainerd

“This is exactly what happened two blocks away, which used to look like the ‘old and blighted’ block but now contains a new Taco John’s.  Definitely auto-oriented with a large off-street parking lot, two drive through lanes, a large sign and a setback/orientation consistent with highway development.

Brainerd Taco Johns

“In this case, that run down block that the city and others would like to see replaced is actually 41% more valuable than the brand new Taco John’s.  In a property tax system like we have here in Brainerd, that means the city gets 41% more taxes from the old and blighted block than it is getting from the exact same sized block with the brand new drive through restaurant.

“And that assumes the drive through restaurant holds its value.  Let’s examine that assumption.  There are eleven properties on the ‘old and blighted’ block.  In the three years since we last looked, five of them have lost value while six of them have increased in value.  The net is a $32,000 decline, which is a 3% loss from the starting value.  Given the market conditions, that’s a pretty stable block.

“That stability is in sharp contrast to what has happened at the Taco John’s. In that same period of time, it has lost $184,700 in value, a full 23%.”  Full post here, and really just read every Strong Towns post ever.

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