The Value of Placemaking- The Cost and Impact of Development Patterns of the Tri-County Region

THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

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THE VALUE OF

What must happen

PLACEMAKING Xxxxx

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The Cost and Impact of Development Patterns on the Tri-County Region

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BERKELEY | CHARLESTON | DORCHESTER 1

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THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

Placemaking is a people-centered approach to planning, designing and managing a community.

Placemaking occurs when local governments consider the efficiency of new development proposals and the taxable land value per acre.

Inefficient development farther from urban centers requires municipalities to extend services beyond a revenue-positive boundary – which in turn increases property tax rates and reduces the value of land per acre.

It is the end result of government, developer, resident and planner collaboration around a common vision for an area or place. Placemaking catalyzes smarter, more valuable growth in towns, cities and counties, and appropriate spending of public funds.

Placemaking is good business for local governments – an economically viable model for running a local government. But more than that, the end result of the process is a well-planned community that people and businesses like to call home.

It is the biggest bang for the public buck.

To reap the rewards of placemaking, entities involved in planning a community need to consider the potential benefit, value and cost of possible land uses (per acre). For example, public services like transit, sewer, water and trash collection can increase the value of a place, but if those services are not coupled with efficient land development patterns, it will cost a local government more to provide the services than any money they receive from taxes. In other words, spending will begin to exceed revenue if placemaking is not paired with efficient development and street grid patterns.

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This document is a local government’s users guide to placemaking that expands on a regional value-per-acre analysis conducted by Joe Minicozzi of Urban3. tinyurl.com/y7uglj99

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What is Placemaking?

THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

What must happen

Understanding How Local Governments Generate Revenue

»» Counties and municipalities should consider the taxable land value per acre to determine the efficiency of each new development proposal.

Property taxes are the backbone of local government revenue. Property taxes are calculated using the assessed property value. Analyzing the taxable land value per acre allows a county or municipality to view properties in terms of efficient use of land. Think ‘miles per gallon’ rather than ‘miles per tank’ to understand a car’s productivity. Efficient property tax production has a direct impact on the availability of funds to repair roads, provide quality education and maintain adequate public services. Identifying development that packs a financial punch is critical to cultivating community wealth. 3D visualization of development and property values illustrates the spatial manifestation of public policy.

»» Local governments should prioritize new development in places where municipal services already exist.

»» To increase the value per acre of taxable land, new development should

45+25+30

account for higher density and multiple uses.

Sources of revenue

Property taxes produce the majority of the taxes for the metro region. Though sales taxes do create 25% of the area’s revenue, the most potent area is old Charleston, which is able to produce 3% of the entire state’s sales tax revenue on just over 2,000 acres of land.

The value productivity of land is greater as buildings get larger, but that is only part of the story. It is really a story of land coverage, density and design. Put simply, the cheaper the building, the lower the value; the more land committed to parking, the lower the overall productivity. In essence, the tax system rewards low-productivity structures as the municipal cost is not connected to the taxable value.

Other

Taxable Land Value Per Acre | Charleston MSA

Sales Tax

Property Tax

30%

Charleston MSA

45%

25%

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Generational value The development pattern of land does have an effect on land value itself. The image to the right demonstrates the land value per acre without any improvements (for example: buildings) considered.

One would expect waterfront land to be valuable, but the land in the walkable old town (both the old town neighborhoods, Hampton Park Terrace, North Central, etc.) and new developments like I’on are just as productive as land found on the beach. The older neighborhoods have not only provided a high level of tax productivity, but they’ve done so for centuries.

Land Value Per Acre $ 0 < 50,000 50,000 - 100,000 100,000 - 250,000 250,000 - 400,000 400,000 - 600,000 600,000 - 1,000,000 1,000,000 - 3,000,000 3,000,000 - 7,500,000 > 7,500,000

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Calculating Land Value and Municipal Wealth

THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

Understanding How Local Governments Pay for Infrastructure and Services At the heart of understanding the relationship between patterns of development and fiscal health is understanding how local governments pay for the infrastructure and services. Infrastructure and services include roads, sewer, water, school busing, police, fire and trash service. If development occurs (or already developed land is annexed) outside of urban centers where these types of infrastructure and services do not exist, the county or municipality is generally responsible for providing these services. Extending infrastructure and providing services to rural areas drains local government resources because the tax revenues produced do not offset the cost.

What must happen? »» Counties and municipalities should assess the cost of low-density, single-use development where infrastructure does not currently exist. Approval of the developments should be contingent on a cost-benefit analysis.

»» Local governments should prioritize new development in existing urban centers before considering extending services where they do not currently exist.

»» To provide transparency and information to taxpayers, counties and municipalities should require a cost-of-service analysis of new developments during the public review process.

Charleston County Value Profile

$88,083,200

Mixed-Use

18 Broad St.

79 Church St.

$18,919,894

Downtown Park Circle N. Char.

120 East Bay St.

I’on Infill

I’on Town Center

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The Boulevard Mt. Pleasant

Tanger Outlet Mall

Kiawah Resort

Town Centre Mount Pleasant

Northwoods Mall

Citadel Mall

City S.F.

Standard Apartments

Walmart (Tanger Outlet)

$564,085 $866,760 $913,584 $1,166,134 $1,690,900 $1,768,880 $2,297,100 $2,374,710 $2,719,680 Walmart (Mt. P.)

$82,276

$12,095,273 $13,032,092 $13,394,436 $7,817,510 $8,197,890 $10,447,100 2 Story Strip

Commercial

Historic Mt. Pleasant Dtwn.

Residential

The Walmart at Wando Crossing in Mount Pleasant, left, only reaches a taxable value of $564,085 per acre, whereas the home at 79 Church St. in Charleston, right, has a taxable value of $88 million per acre; which is 156 times the productivity of the Walmart.

County Res. S.F.

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2016 Tax Value per Acre

$103,732,000

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Counting the Cost of Providing Services

THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

What must happen

Understanding The Full Cost of Local Government Land-Use Decisions

»» Protect agricultural and rural land, which is essential for local food

Cities and counties are finite areas of land, and how that land is used has a direct effect on municipal coffers. The cost of low-density, single-use development where infrastructure does not currently exist should be taken into account when making public policy decisions. New development should be encouraged in existing urban centers. By establishing a boundary whereby services will not be extended, the demand for new infrastructure is mitigated, which can result in a savings on cost of community services and promote better fiscal policies and management of public resources.

production, clean air and water, wildlife habitat and residential quality of life.

»» Mitigate sprawl and speculative property values by concentrating development and services.

»» Ease demand for new infrastructure, resulting in better management of public resources and avoiding high costs associated with construction and the extension of county or municipal services.

Bird’s-eye view of land-use showing parking and building patterns. This map gives an ‘X-ray’ view into the patterns that determine value. As you add more parking and spread buildings out, it dilutes the value and municipal revenue productivity while doubling down on expensive infrastructure costs.

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Land-Use Patterns

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Deciding Where We Will Grow

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Buildings

Roads

Parking

THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

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Building for the Future What must happen

Why Local Governments Should Support Development Diversity for Tomorrow

»» Local municipalities should encourage housing diversification by increasing

High-density, mixed-use development in existing urban areas that mimics Charleston’s historic district produces the greatest monetary value to our community and therefore the best utilization of land. The City of Charleston has had the ability to flexibly grow to absorb market pressure. This is present within the high density cores in the peninsula. Not only was density absorbed, it has maintained value for generations.

the types of housing (apartments, townhomes, row houses) featured in communities.

»» Counties and cities should prioritize mixed-use development by co-locating housing with employment, retail and transit.

»» To achieve development diversity, communities should increase the number of residential, office and retail options within a given area. Diversity lessens costs associated with transportation, services and infrastructure. Lower costs equal lower taxes and more affordability.

Affordable housing for the existing and future workforce is a great need in the region, but it must be compact, walkable, transit-oriented and valuable to local governments. High-density, mixed-use development (residential and commercial) with safe and efficient modes of transportation to jobs pays for itself in long-term tax value to a community.

Taxable Value Per Acre, by ZIP Code

Taxable Value Per Acre, by Parcel

Charleston, SC MSA

Charleston, SC MSA

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Peninsula

Property Tax Value per Acre $ < 3,000 3,000 - 6,000 6,000 - 20,000

20,000 - 50,000 50,000 - 100,000 100,000 - 250,000

Property Tax Value per Acre $ No Tax Value < 100,000 100,000 - 200,000 200,000 - 300,000 300,000 - 600,000

250,000 - 500,000 500,000 - 1,000,000 > 1,000,000

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600,000 - 1,000,000 1,000,000 - 2,000,000 2,000,000 - 3,000,000 3,000,000 - 4,000,000 4,000,000 - 5,000,000

5,000,000 - 10,000,000 10,000,000 - 50,000,000 >50,000,000

THE VALUE OF PLACEMAKING

BERKELEY | CHARLESTON | DORCHESTER

What must happen

Why Local Governments Must Focus on Transit-Oriented Development Today

»» Local governments should incentivize TOD by identifying potential

The tri-county region has been developed for automotive dependency with an overabundance of roads and parking, and must now intentionally develop for a shift to transit, walkability and bikeability.

locations for new developments near existing and planned transit routes.

»» Transit routes should be planned near existing population centers with possible infill properties identified for mixed-use TOD sites.

Transit-Oriented Development (TOD) is an approach to development that focuses land uses around transit stations or within a transit corridor. TOD is characterized by a mix of uses, moderate to high density, pedestrian orientation and connectivity, transportation choices, reduced parking and high-quality design. Typically, TOD occurs within a quarter mile (or a five- to seven-minute walk or bike) of a transit station or destination.

»» Local governments should encourage redevelopment and infill as well as new transit-oriented development.

»» The below map illustrates the preferred route and stop locations (or best TOD sites) for the future Bus Rapid Transit system.

»» Our goal is to work collaboratively as a region to further enhance the

TODs use existing infrastructure and reduce dependence on automobiles, and therefore demands on roads, which reduces costs to municipalities. TODs have also been reported to have a positive impact on property values. Research consistently shows that both residential and commercial property values rise with proximity to transit stations.

economy through advancements in talent, infrastructure and other assets characteristic of a globally competitive metro. Learn more by visiting One Region Strategy online at www.OneRegionStrategy.com

A CLOSER LOOK

Bus Rapid Transit

By separating the city into simplified categories, we can identify distinctly urban and distinctly auto-oriented patterns of development. Buildings are shown in black, roads in gray and parking in red.

Roads

Parking

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Buildings

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Moving Forward

THE VALUE OF

PLACEMAKING

The Cost and Impact of Development Patterns on the Tri-County Region

Produced for the Community by Berkeley-Charleston-Dorchester Council of Governments Charleston Metro Chamber of Commerce Charleston Regional Development Alliance Charleston Trident Association of Realtors City of Charleston Coastal Conservation League Greater Summerville/Dorchester County Chamber of Commerce Lowcountry Local First Seamon Whiteside South Carolina Community Loan Fund Thomas and Hutton

Research and Analysis by Urban3 tinyurl.com/y7uglj99

Designed and Published by SC Biz News, publishers of the Charleston Regional Business Journal