Downtown Parking Tax

[Hermod]

See, that's what other metroplexes are doing right now. While we sit here talking, other cities are growing geographically, enhancing the amount of revenue they can collect, pouring it into services that knit the region together, sharing a collective vision, putting in greenbelts to encourage density, etc.

Among the places that I have lived

1. Ft Lauderdale and Miami in Florida

2. Richmond, Norfolk, Arlington, and Alexandria in Virginia

All of these cities are hemmed in by non-annexable political entities None are "growing geographically".

Washington, DC is completely hemmed in by state lines.

I believe that San Francisco is in the same fix.

When was the last time that New York expanded its borders?

[ghettopalmetto]

Exactly my point. We have made the Detroit area completely non competitive. The taxes are too high and the services delivered for those High taxes are pathetic. We need to downsize government and make Detroit and Michigan competitive again.

The people who are leaving Michigan are, in many cases, relocating to places with even higher taxes. Something tells me that your singular focus on taxes is misplaced. Otherwise, Mississippi would be an economic powerhouse [[It isn't.).

The areas of the country with the highest traxes are shedding the most jobs. The areas with the lowest costs are recruiting new businesses and growing.

According to BLS, the following are the states with unemployment rates at or above 10% [[May 21, 2010):

In order of increasing unemployment:

Indiana - 10.0%
Georgia - 10.4%
Tennessee - 10.5%
Kentucky - 10.6%
Oregon - 10.6%
North Carolina - 10.8%
Ohio - 10.9%
Alabama - 11.0%
District of Columbia - 11.2%
Illinois - 11.2%
Mississippi - 11.5%
South Carolina - 11.6%
Florida - 12.0%
Rhode Island - 12.5%
California - 12.6%
Nevada - 13.7%
Michigan - 14.0%

http://www.bls.gov/web/laus/laumstrk.htm

Certainly, these high rates of unemployment are not strictly attributed to taxation or costs. If your claim was true, we would expect to see New York, Maryland, Connecticut, Pennsylvania, and Massachusetts near the bottom end of this list instead of EVERY SINGLE SOUTHEASTERN STATE.

[Detroitnerd]

Among the places that I have lived

1. Ft Lauderdale and Miami in Florida

2. Richmond, Norfolk, Arlington, and Alexandria in Virginia

All of these cities are hemmed in by non-annexable political entities None are "growing geographically".

Washington, DC is completely hemmed in by state lines.

I believe that San Francisco is in the same fix.

When was the last time that New York expanded its borders?

Ah, Hermod. What a talent you have for taking a fine point and running with it. My hat's off to you, kind sir. Enjoy the thread.

[ndavies]

[quote]
So you are saying that the taxes are so high that businesses leave and then there is less revenue so the city services suffer? That's interesting. Where'd you learn that? Sim City?
[\quote]

That's exactly what I'm saying. It doesn't come from the Sim city models you seem to be playing with. This comes from Real life. It also comes from just looking around the city and asking why business and people left. It comes from the fact that NEZs, renaisance zones and OBRAs actually brought people and businesses back into the city.

What part of your serious proposal doesn't include rasing taxes? And What part of Taxing parking lots is not about taxes.

You talk about biking dowtown. It would be a 3-4 hour bike ride for me to bike downtown. I can do it in a car in 30 minutes. Biking is not a reasonable option for me. There aren't any buses or trains that can take me from my house downtown, No bus service where I live and no trains at all. So no there is no other way for me to get downtown other than by car. Most people who work downtown have the same problem I have.

But the bigger problem is I have no need to go downtown. I go downtown Because I choose to.
Adding a tax to surface lots would be another deterrent to that choice.

I didn't bring up the fear of taxes Someone else brought up the fear of taxes to this argument. I just tried to show why that fear is and should be real. The problem with the government shall fix all group, is they ignore the great harm government can do with misguided social and tax policies. Just because you turn it into law and try to tax it doesn't mean the people are going to happily follow along.

[fryar]

Exactly my point. We have made the Detroit area completely non competitive. The taxes are too high and the services delivered for those High taxes are pathetic. We need to downsize government and make Detroit and Michigan competitive again.

I fundamentally disagree. Detroit is the reason the Detroit area is noncompetitive. People graduate from the many high-profile universities in the area and see either blight or suburbia, both populated by a bunch of depressed people who have spent the last 30 years losing their shirts, as their local options, so they leave. Not all of them, but structurally, that's the big issue, not the tax environment. Young, upwardly mobile, creative class, various-buzzwords-you-know-what-I'm-talking-about people choose where they want to live, and then find a job in that city. They do not do a tax projection, they look at being able to walk home from bars, the cultural scene, diversity, so on.

The areas of the country with the highest traxes are shedding the most jobs. The areas with the lowest costs are recruiting new businesses and growing.

The coolest cities and urban areas are recruiting new business and growing. Low-tax bottom feeders are attracting crappy jobs.

The tax environment is an important factor, sure, but it's not the only one, and it can be outweighed by other factors. New York and California have punitiviley high state & local income taxes, as does DC. [[Metro) Detroit has a huge untapped menial labor pool because it has been tied, structurally, to manufacturing. Its pool of knowledge workers is perpetually being siphoned off by a brain drain to cool cities [[not, mind you, to low-tax jurisdictions). Lowering taxes alone is not a sustainable forward-looking approach; what are you going to to bet the local economy on, cardboard box assembly? Meatpacking? If you want to assemble cars from foreign components like they do in Alabama, by all means, compete with Alabama. If you want thinkers who develop the newest methods of diagnosing some kind of heart disease, who invent new ways of structuring the purchasing of aircraft, who develop new and lasting uses for technology, then you've got to improve the city.

You've got to make Detroit attractive in order to keep more of those smart, well educated people from Michigan's universities here in order to bring in and keep thriving businesses that go where they need to go in order to find the talent they need to innovate and drive progress.

Off the top of my head, and nothing more than that, was my idea to announce an impending 20% tax on surface lot parking, maybe to be instituted in 2.5 years. By raising the price of monthly commuter surface lot parking above $150, do you raise the incentive for new garages to supplant the surface lots, and provide enough time to actually invest in the garages? Again, the downtown detroit partnership/business improvement district/what-have-you could invest in large, intuitive signs located in strategic places that convey the information that you can go straight for a municipal underground garage or left for a privately-held above-ground garage that's open 24 hours and has additional services like a police station. This idea may be flawed in some ways, but it does try to attack the issues you referenced.

[ghettopalmetto]

[quote=ndavies;153395]

So you are saying that the taxes are so high that businesses leave and then there is less revenue so the city services suffer? That's interesting. Where'd you learn that? Sim City?
[\quote]

That's exactly what I'm saying. It doesn't come from the Sim city models you seem to be playing with. This comes from Real life.

Then please explain the Real Life numbers from BLS that I posted above. As far as I can tell, it looks like a whole bunch of poor, low-tax, undereducated states with a weak tradition of industrialization are the ones that are suffering the highest unemployment.

[Detroitnerd]

"So you are saying that the taxes are so high that businesses leave and then there is less revenue so the city services suffer? That's interesting. Where'd you learn that? Sim City?"

That's exactly what I'm saying. It doesn't come from the Sim city models you seem to be playing with.

I haven't played Sim City in years and years. But that statement doesn't make sense, because Sim City is a game that adheres to strict Reaganomics. Actually, it's more in line with your way of thinking, and that's why I brought it up. So what's up with accusing me of playing Sim City anyway? Is that supposed to be a dig?

This comes from Real life. It also comes from just looking around the city and asking why business and people left.

Ah, yes. Why did all those businesses and people leave? Could it be a combination of factors? I'll lay it out again: Detroit couldn't grow geographically, so instead of moving to a more rural or suburban part of Detroit, they LEFT Detroit. Why? Because of a variety of things. First, there were the things that helped the non-Detroit part of metro Detroit: The interstate highway program, low gas costs, subsidized construction, the draw of greenfield development, broad-brush zoning, larger industrial sites, the industrial dispersal program, the GI Bill. Then there were the things that undermined Detroit: Housing acts that funded demolition over construction, redlining, racism, blockbusting, the dismantling of Detroit's mass transit system, railway congestion, small industrial sites, and finally, disinvestment, crime and safety concerns.

See, you only want to look at taxes as the problem. The actual problem in metro Detroit is tax dodging. A collection of short-sighted people who have zero vision for the region all trying to pay as little as possible. And what you get is the clusterfuck that is Detroit.

It comes from the fact that NEZs, renaisance zones and OBRAs actually brought people and businesses back into the city.

But then they don't pay taxes. And then everybody else has to make up for the taxes they don't pay. This doesn't make a whole lot of sense to me. Detroit is going to grow by allowing big businesses to pay no taxes, by courting massive nonprofits who won't pay taxes, and then what? You have city inspectors hassling small businesses in a shakedown for the money they're not getting from the big players.

Would be much better if we had revenue sharing and didn't pit 100-odd "communities" against each other, all trying to offer low-low taxes that can't fund anything but the bare necessities. Woo-hoo! Michissippi here we come!

What part of your serious proposal doesn't include rasing taxes? And What part of Taxing parking lots is not about taxes.

I just loath this turning into a boo-hurrah argument about taxes, which is evidently all you care about discussing. OK, fine, let's turn this into a big boo-hurrah thread about taxes. [[The unspoken code being that you're talking about taxes on business, which you care deeply about. Taxes on individuals or mom-and-pop businesses, meh, not so much, I imagine.

It's not extraordinary for governments to raise taxes on things it wants to see less of. Billboards, tobacco, skybridges and fast food, for instance. Are you saying that's weird and extraordinary? It isn't.

You talk about biking dowtown. It would be a 3-4 hour bike ride for me to bike downtown. I can do it in a car in 30 minutes. Biking is not a reasonable option for me. There aren't any buses or trains that can take me from my house downtown, No bus service where I live and no trains at all. So no there is no other way for me to get downtown other than by car. Most people who work downtown have the same problem I have.

So when you say that "Currently, there is no other way to get downtown," you mean, "Currently, there is no other way [for me] to get downtown." Yes, that's a problem. I'd like us to have a real mass transit system so that a good percentage of Detroiters who work downtown could use light rail. Or could park at a station and use light rail. That would take a lot of cars off the streets of downtown, while adding more people. And the garage capacity would probably be enough, thanks to the 20,000 fewer cars in downtown. And then the land would be so valuable, thanks to the transit links, that developers could step in and buy them for the surface lot owners, who would make a handsome profit and happily walk away from what has essentially been a vacant lots for decades. If taxes help them make that call, so be it.

But the bigger problem is I have no need to go downtown. I go downtown Because I choose to.
Adding a tax to surface lots would be another deterrent to that choice.

Why can't you use a garage again? Is there some problem with parking your car in a garage? Did I miss something here?

Well, man, at some point Detroit has to stop trying to be Troy. Hasn't worked in 50 years. We need fewer cars in Detroit, more transit options, and more foot traffic. And surface lots don't help much. The biggest of them park about as many people as can fill a light rail vehicle. So, again, here are the priorities, as I see it, a list of things you could do.

1) Implement and expand light rail access to downtown. [[Subsidize a new way to go downtown carless.)

2) Find a way to make surface parking lots less lucrative. [[Taxes, fees, inspections, etc.)

3) Once the parking garages start to fill up, offer people amenities for using transit instead of driving. [[Massage the market.)

I didn't bring up the fear of taxes Someone else brought up the fear of taxes to this argument. I just tried to show why that fear is and should be real.

I find it interesting that you hewed to that terminology, then. This subject may be too emotional for you to debate clearly.

The problem with the government shall fix all group, is they ignore the great harm government can do with misguided social and tax policies. Just because you turn it into law and try to tax it doesn't mean the people are going to happily follow along.

Ah, yes. The old straw man again.

I am proposing a sensible policy of shared responsibilities, regional vision, good services and solid sources of revenue. Nowhere have I said that government will fix everything. This is just a way of name-calling or distorting somebody's argument. And it usually means that the real argument looks a little too formidable to take on. Go ahead. Rip straw. Play. Have fun.

[fryar]

I don't think anyone is seriously suggesting you should bike all the way down to the city. I think talk of biking in Detroit is similar top talk of walking in Detroit.

[Bearinabox]

I don't think anyone is seriously suggesting you should bike all the way down to the city. I think talk of biking in Detroit is similar top talk of walking in Detroit.

Depends where you're starting from.

[fryar]

Depends where you're starting from.

True. And how much of a biker you are. My brother might bike into the city from a place like Ferndale, 10 miles are about up his alley.

Well, man, at some point Detroit has to stop trying to be Troy.

+1
Troy is not something Detroit should try to be.

[Hermod]

Young, upwardly mobile, creative class, various-buzzwords-you-know-what-I'm-talking-about people choose where they want to live, and then find a job in that city. They do not do a tax projection, they look at being able to walk home from bars, the cultural scene, diversity, so on.

Diversity???? Detroit is not diverse and loses more diversity by the day.

Here are the racial breakdowns of two cities:

City One: 82.3%--13.3%--2.1%--1.5%--0.2%

City Two: 81.6%--12.3%--5.0%--1.0%--0.3%


Does their diversity seem about the same to you?

City One is Troy and City Two is Detroit

The tax environment is an important factor, sure, but it's not the only one, and it can be outweighed by other factors. New York and California have punitiviley high state & local income taxes, as does DC.

And the best and the brightest and the most creative do not live in DC, they live across the river in Arlington, Alexandria, Falls Church, Vienna, Springfield, McLean, Dunn Loring, etc. Most of their offices are along the beltway and not in DC either.

Troy is not something Detroit should try to be.

Not sure of the measurement metrics, but Wiki says Troy is the 5th safest city in the US and the safest in Michigan. Maybe Detroit should try to be that.

[Detroitnerd]

Diversity???? Detroit is not diverse and loses more diversity by the day.

Confusing the point. I don't believe the poster was saying that Detroit was diverse, but that young creative people value diversity. I should point out, however, the diversity along Woodward between I-94 and downtown ...

And the best and the brightest and the most creative do not live in DC, they live across the river in Arlington, Alexandria, Falls Church, Vienna, Springfield, McLean, Dunn Loring, etc. Most of their offices are along the beltway and not in DC either.

Not as true as it was 10 or 20 years ago. Washington DC is all built out now, having filled in its last vacant parcel and posting a surplus. On the other side of the river, they're beginning to see shortfalls. Tysons Corners is in a last-ditch effort to become more pedestrian- and transit-oriented. This has been discussed before on the forum.

Not sure of the measurement metrics, but Wiki says Troy is the 5th safest city in the US and the safest in Michigan. Maybe Detroit should try to be that.

The point, Hermod, as you well know, that Detroit should not try to emulate a car-oriented, freeway-crossed, parking-lot-infested, strip-mall-having, park-in-front, mid-20th-century ideal. It should try to be, you know, a city. Quality of life indicators are important, yes, but we ain't gonna get there by trying to turn Detroit into the beet fields Troy was in 1950.

[fryar]

I recently spent a little over a year living in DC and working in Tysons Corner. Tysons is a great example of what you want to avoid. It is incredibly, unbelievably clogged with cars, and completely unwalkable. It's functional, but nobody likes it.

Adams Morgan, Dupont Circle, and to a lesser extent Columbia Heights already are desireable neighborhoods, and what passes as urban pioneers there is busy gentrifying [[a separate issue) Shaw, for example. Am I thinking of M Street in Georgetown as a superb template for downtown's stretch of Woodward up to Grand Circus Park?

Arlington's also a good model, those first few stops on the Metro's orange line are really developed and walkable, and really desireable, judging by the rents. McClean is a leafy suburb that has a little bit of a town-ish area, but it's still more of a car-driven [[yuk, yuk) model.

I don't begrudge Troy anything. And in the terms you referenced, Troy is indeed a place to emulate. I was speaking from the perspective of the urban or regional planner. The whole Superblock layout is not responsible for the low crime rates. More to my point, that and variations of it are already in plentiful supply in metro Detroit. What's missing is the city, which is a key element in a frankly-not-so-new paradigm of, what, urban planning? economic development?

Troy is a highly desirable place for many people, and that's perfectly fine.

[Detroitnerd]

I recently spent a little over a year living in DC and working in Tysons Corner. Tysons is a great example of what you want to avoid. It is incredibly, unbelievably clogged with cars, and completely unwalkable. It's functional, but nobody likes it.

Adams Morgan, Dupont Circle, and to a lesser extent Columbia Heights already are desireable neighborhoods, and what passes as urban pioneers there is busy gentrifying [[a separate issue) Shaw, for example. Am I thinking of M Street in Georgetown as a superb template for downtown's stretch of Woodward up to Grand Circus Park?

Arlington's also a good model, those first few stops on the Metro's orange line are really developed and walkable, and really desireable, judging by the rents. McClean is a leafy suburb that has a little bit of a town-ish area, but it's still more of a car-driven [[yuk, yuk) model.

I don't begrudge Troy anything. And in the terms you referenced, Troy is indeed a place to emulate. I was speaking from the perspective of the urban or regional planner. The whole Superblock layout is not responsible for the low crime rates. More to my point, that and variations of it are already in plentiful supply in metro Detroit. What's missing is the city, which is a key element in a frankly-not-so-new paradigm of, what, urban planning? economic development?

Troy is a highly desirable place for many people, and that's perfectly fine.

Class act, fryar.

[Novine]

While I agree with everything that's been said about the negative effects of parking lots, I'll suggest another approach. Let's not go the route of taxing parking lots. Instead, let's treat all properties in the CBD as having equal value. Own a 20 story office building? Your property will be valued the same as the vacant lot or the parking lot. Same if you own an apartment building, or restaurant and bar or any other use in that area. That does two things. First, it puts the productive uses, like offices, etc. on an equal playing field with the less productive uses like vacant lots or abandoned buildings. Two, it gives those who own vacant lots or abandoned building a big incentive to do something more with their property. Why sit on vacant property and pay the same amount in taxes as the guy bringing in rental income? It would also allow those who own buildings to attract new users downtown so that stealing tenants from each other as occurs today.

[fryar]

Interesting idea. Definitely food for thought.

What is the existing framework of incentives here? Do we somehow risk incentivizing the demolition of buildings for the sake of surface parking with this approach? For instance, say that the property is not reassessed after demolition for some reason. At present, you would end up with a parking lot that owes an amount of property tax calculated on the basis of the past value of the building that formerly occupied that space, which could have been prime property in the middle of boom times at the time of the last comprehensive assessment., whereas other surface lots were reassessed as surface lots because of some wrinkle, like maybe those buildings were seized and demolished by the government. In this admittedly convoluted scenario, the proposal puts those lots on an equal footing with existing surface lots, decreasing the disincentive.

Not shooting you down, Novine, on the contrary.

[ghettopalmetto]

While I agree with everything that's been said about the negative effects of parking lots, I'll suggest another approach. Let's not go the route of taxing parking lots. Instead, let's treat all properties in the CBD as having equal value. Own a 20 story office building? Your property will be valued the same as the vacant lot or the parking lot.

I believe Pennsylvania's property tax laws are written in this vein. The idea is that land is taxed based on location, and it will motivate the owner to make the most profitable use of that piece of property.

At the same time, taxing land based on location can keep farmers on the metropolitan periphery from being forced to sell their land and livelihood to builders of new subdivisions.

[Hermod]

While I agree with everything that's been said about the negative effects of parking lots, I'll suggest another approach. Let's not go the route of taxing parking lots. Instead, let's treat all properties in the CBD as having equal value. Own a 20 story office building? Your property will be valued the same as the vacant lot or the parking lot. Same if you own an apartment building, or restaurant and bar or any other use in that area. That does two things. First, it puts the productive uses, like offices, etc. on an equal playing field with the less productive uses like vacant lots or abandoned buildings. Two, it gives those who own vacant lots or abandoned building a big incentive to do something more with their property. Why sit on vacant property and pay the same amount in taxes as the guy bringing in rental income? It would also allow those who own buildings to attract new users downtown so that stealing tenants from each other as occurs today.

Reminds me of the "Single Tax" I learned about fifty years ago in sophomore Econ 201. The following from Wiki:

The Single Tax League was an Australian political party that flourished throughout the 1920s and 30s. Based upon the ideas of Henry George, who argued that all taxes should be abolished, save for a single tax on unimproved land values, the Single Tax League was founded shortly after World War I, and a newspaper, the People's Advocate was published. The League had pockets of support throughout Australia but none more than on the west coast of South Australia, whose farmers and graziers saw merit in single tax theory.
The League's sole parliamentary representative was Edward Craigie, who was elected to the South Australian House of Assembly Electoral district of Flinders [[covering the League's west coast power base) in 1930. The onset of the Great Depression in 1929 had led people to seek radical solutions and the manifesto of the League seemed as likely to solve their woes as any government devised plan.
Craigie worked tirelessly to have a single tax system instituted in South Australia but faced stiff opposition from the conservative Liberal Federation [[and their successors, the Liberal and Country League), which despised the idea of a single tax, and the Australian Labor Party, which was opposed to the League's Free trade stance.
Craigie was re-elected at the 1933 and 1938 South Australian elections before being defeated at the 1941 election, when the ideas of the Single Tax League already seemed an anachronism to most people. The League did not field any further candidates and drifted into obscurity.

The idea was that all wealth was based on land and therefor, land should pay all of the taxes.

[Novine]

In Detroit's case, the city doesn't have to rely solely on what revenue is generated by property taxes. The city actually brings in more from the city income tax than it does in property taxes. If reducing the property values on buildings leads to more office users downtown, that's more people paying the income tax, helping to offset the property taxes lost.

[Novine]

"Do we somehow risk incentivizing the demolition of buildings for the sake of surface parking with this approach?"

Not likely. Few private property owners are going to take on the cost of demolition. Only the city through Geo. Jackson's Demolition Agency have spent money on tearing down buildings.

[Hermod]

I believe Pennsylvania's property tax laws are written in this vein. The idea is that land is taxed based on location, and it will motivate the owner to make the most profitable use of that piece of property.

At the same time, taxing land based on location can keep farmers on the metropolitan periphery from being forced to sell their land and livelihood to builders of new subdivisions.

Taxing land based on "highest possible use" rather than "current use" can also have undesirable consequences.

Here in Florida, Palm Beach County was taxing marinas [[docks with large amounts of grubby parking lot type space for storage and working on boats on land based on the value of the land for having a high rise luxury waterfront condo and was driving marinas out of business.

[ghettopalmetto]

Taxing land based on "highest possible use" rather than "current use" can also have undesirable consequences.

Here in Florida, Palm Beach County was taxing marinas [[docks with large amounts of grubby parking lot type space for storage and working on boats on land based on the value of the land for having a high rise luxury waterfront condo and was driving marinas out of business.

The idea is not to tax property based on "highest possible use". The idea is to tax property based on geographic location. To me, that makes sense, as property taxation could neatly tie-in with zoning regulations.

Admittedly, a challenge would be how such a structure would work in a city that already has high rates of taxation, an underdeveloped core, and a suburban donut that seems to expand without bound. I think there would need to be concomitant legislation that requires all new infrastructure beyond a designated "boundary" to pay for itself through new tax revenues [[similar to Tax Increment Financing). For example, if Walmart wants water and sewer service for a property they want to develop, and the road in front of that property widened to six lanes, then the tax revenue from that piece of property would, at a minimum, need to cover those capital and maintenance costs ad infinitum.

[Novine]

"Taxing land based on "highest possible use" rather than "current use" can also have undesirable consequences."

The idea would be to land somewhere in the middle. As ghettopalmetto said, the tax would be location-based and I would see the value derived from an average of all the properties in a defined area. In the CBD, that would give a tax break to those who have occupied buildings and a tax increase to those with parking lots, vacant lots or unoccupied buildings.

[ghettopalmetto]

"Taxing land based on "highest possible use" rather than "current use" can also have undesirable consequences."

The idea would be to land somewhere in the middle. As ghettopalmetto said, the tax would be location-based and I would see the value derived from an average of all the properties in a defined area. In the CBD, that would give a tax break to those who have occupied buildings and a tax increase to those with parking lots, vacant lots or unoccupied buildings.

Nonetheless, it would discourage slumlording of vacant high-rises downtown, as the owners would have every incentive to lease the space or sell the building to cover the tax liability. Such a restructuring changes the numbers game entirely as far as "feasibility" of renovation projects is concerned.

On the other hand, what happens in the case of say, a Lafayette Building, where the slumlord in question is the City itself???

[Novine]

"On the other hand, what happens in the case of say, a Lafayette Building, where the slumlord in question is the City itself???"

Fair question. But if the system was changed so that those owning buildings paid less in taxes than they do now, it would make a Lafayette renovation potentially more attractive to a private development group since the payback on an investment in the building wouldn't be offset by an increase in taxes. I'm sure someone can chime in with the pros and cons of such a plan and the kind of financial considerations that would come into play.