More Urban Destruction

The continued destruction of our precious urban fabric despite widespread public opposition to it has been a puzzle to me for a long time. It was with little surprise and much dismay that I found the remains of this building at 1733 McGee Street. Who's to blame for this? Having spent the last year researching and thinking about this issue, I've come up with what I think are two contributing factors of which the general public has very little awareness.

The first, which I've talked about before, is the requirement in our codes that a business have one off-street parking space for every thousand square feet of business space. In the case of 1733 McGee, the culprit is'nt hard to find. This now empty lot is owned by the same paper corporation as the four story building immediately to the South. Whatever the owner of these properties thinks of tearing down old buildings, city code nearly forces their hand. Their only other options are to buy an existing empty lot somewhere in the area, if there is one available, or the lengthy bureaucratic process of the asking the Board of Zoning Adjustment to grant a variance.

A second problem, of which the public is even less aware may be our taxing laws. Although I don't know the full history of the change, I've read that decades ago, urban property was assessed and sold by the amount of street frontage. Essentially, assessment was related to the amount of infrastructure required to service that property. A 50-foot frontage paid higher taxes than a 25-foot frontage. This is a very sensible way to assess real estate. The cost to the city in infrastructure maintenance is higher for the 50-foot frontage than the 25-foot frontage.

Let's assume these two hypothetical pieces of real-state have comparable square footage. If these houses are in declining or blighted neighborhoods, the property with the 50-foot frontage is more of a drag on city services than the one with the 25-foot frontage. Consider this hypothetical. A house in an old midtown neighborhood burns and is torn down. The next door neighbor buys the vacant lot and builds a garage.

The neighbor has just doubled the amount of infrastructure required to service his property. Astonishingly, he's still paying taxes at a comparable rate as everyone on his street. Sure, he got a slight bump in his taxes from building a garage. Is the new double-wide property generating as much revenue as two houses? Maybe it's generating as much as before the fire. It would generate more if someone would build a new house on the vacant lot.

What about commercial property? In our current system of assessing property taxes, a property owner is faced with a peculiar dilemma if he or she owns a piece of urban commercial property. First, the cost of rehabbing is itself burdensome. As rehabbing progresses, the property owner's real-estate taxes go up. What alternative does an urban property owner have? He could demolish the building, thereby lowering his assessment. If he then turns the vacant lot into a parking lot, he can now make money off the property.