TERRA INCOGNITA: Vacant Land and Urban Policy

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TERRA INCOGNITAVacant Land and Urban Policy

• 27 August 2008
• Cleveland Federal Reserve
• Columbus, Ohio
• Michael A. Pagano
• Dean, College of Urban Planning and Public
  Affairs
• University of Illinois at Chicago
• MAPagano_at_UIC.edu

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Vacant Land/Abandoned Structures

• Motivation to undertake the study some 10 years
  ago
• Few comprehensive analyses of vacant land.
• Vacant land inventories are not state mandated
  and therefore only exist on an ad hoc basis.
• Little contemporary empirical evidence to inform
  our understanding of vacant land.
• No agreed upon definitions of vacant land
• good and bad vacant land

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Study Methodology

• Survey mailed to planning directors in all 198
  U.S. cities with 1990 populations of gt100,000.
• Response rate 50.3
• Site visits to three metropolitan areas with
  different concerns about vacant land

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Quantity of Vacant Land
Vacant land survey (1963) of 48 cities
20.7 1998 Survey, 71 cities 18.1 Cities with
fixed boundaries (1963), 12 cities 12.9 1998
Survey, 20 cities 13.1 Cities gt 250,000
population (1968), 40 cities 12.5 1998 Survey,
20 cities 15.4
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a Other conditions include land that is vacant
due to real estate speculation, perceived (or
real) contamination, steep slopes, infrastructure
problems, or wetlands.
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Figure 1.2 Causes of Increased Vacant Land
During the Past Decade
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Figure 1.3 Causes of Decreased Vacant Land
During the Past Decade
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Table 2.2 Vacant Land in Cities with Growing
Populations
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Table 2.3 Vacant Land in Cities with Declining
Populations
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Table 2.4 Vacant Land in Expanding Cities
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Table 2.5 Vacant Land in Cities with Fixed
Boundaries
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Policies for City-Owned Vacant Land and Abandoned
Structures

• 16 cities allow the disposition of city-owned
  land or buildings below fair-market value.
• 31 cities offer other subsidies or inducements as
  an incentive to private individuals to purchase
  city-owned vacant land.
• 17 cities have an infill policy.
• 11 cities have policies specifically designed for
  the reuse of abandoned structures.

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Hypothesized Causal Factors of Vacant Land and
Abandoned Structures

• Change in Economic growth
• Fiscal condition
• Regional location
• Change in Land Area
• Change in Population
• Elasticity (the Rusk index)

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Findings

• The more elastic cities have higher proportions
  of vacant land vis-à-vis the total land area. The
  more elastic the city, the more vacant land it
  has.
• The slower a citys population growth from 1980
  to 1995, the higher its number of abandoned
  buildings per 1,000 population.

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Cities strategic behavior to maximize individual
and community well-being derives from three
principal imperatives of municipalities in a
federal system
First, because cities must pursue policies that
augment or, at a minimum, maintain the economic
vitality of the community, policy officials are
induced to use land to its highest and best use.
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Second, because cities must pursue policies that
minimize social disruption and protect property
values, policy officials are encouraged to
assemble, zone, and dedicate land for the purpose
of simulating natural barriers and protecting
property values.
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Third, because cities must pursue policies that
enhance their fiscal condition, policy officials
are motivated to consider development options
that either maximize revenues or minimize costs.
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A 3-Dimensional Model of Strategic Behavior

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Vacant Land and Cities General Taxing Authority
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Spatialization of Revenue Structures
Why promote development or a certain type of
development at a particular location? Given a
choice, parcels will be identified for
development that maximize revenues or minimize
costs. The mini-max incentive embedded within
the context of a citys revenue structure
manifests itself spatially in the design,
land-use designations and development patterns of
the city, or the spatialization of revenue
structure.
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Figure 1 Idealized Urban Form of Property Tax
Cities
STRATEGIC BEHAVIOR OF PROPERTY-TAX
CITIES   Property-tax cities think strategically
about development based on the market value of
the development and on the possibility of
shifting service-delivery costs to other
jurisdictions (fiscal externalities).
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Figure 2a Idealized Urban Form of Sales Tax
Cities
STRATEGIC BEHAVIOR OF SALES-TAX
CITIES   Sales-tax cities think strategically
about development based on their mental
constructs of shopping sheds and on which
market transactions are taxable.
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Figure 2b Idealized Urban Form of Sales Tax
Cities (with expansion capacity)
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Figure 3 Idealized Urban Form of Income Tax
Cities
STRATEGIC BEHAVIOR OF INCOME-TAX
CITIES   Income-tax cities think strategically
about development based on their assessment of
the income growth potential of the individual or
firm.
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Figure 4 Idealized Urban Form of Site-Value Tax
Cities
City A
Commercial
STRATEGIC BEHAVIOR OF SITE-VALUE TAX
CITIES   Site-value-tax cities think
strategically about development based on the
possibility of shifting service-delivery costs to
other jurisdictions (fiscal externalities).
Density determined by market forces
Industrial
High Density
City B
City C
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Policy Questions?
  1. Sprawl and transportation. Low density
growth is caused by numerous factors (e.g.,
transportation and land costs), but might sprawl
also be encouraged because of cities pursuit of
revenues. For example, if sprawl is an outgrowth
of sales-tax cities demand for resources, would
a different revenue mix curb or diminish sprawl?
 
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• Regional cooperation.
• Do revenue structures influence cooperative
  behavior among local governments? What immediate
  gains to a municipality with undeveloped land
  near it would cooperation with a neighboring
  municipality generate? Unless forced by the state
  to adopt a cooperative face, the revenue logic of
  cities, especially sales-tax cities, might
  discourage cooperation.

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• 3. Revenue Structures and Land Use.
• If land use/zoning follows the logic of
  spatialization of revenue structures, how could
  zoning and land use change with the introduction
  of a different revenue system?

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TERRA INCOGNITAVacant Land and Urban Policy

• 27 August 2008
• Cleveland Federal Reserve
• Columbus, Ohio
• Michael A. Pagano
• Dean, College of Urban Planning and Public
  Affairs
• University of Illinois at Chicago
• MAPagano_at_UIC.edu