Chapter 10 Land Use Controls and Property Taxes

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Chapter 10Land Use Controls and Property Taxes
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Major Topics

• Origin, purpose and types of local land use
  controls
• Uses and process of determining property taxation
• Impact of property taxes on property values
• Political and economic perspectives of land use
  controls
• Rationale and impact of subsidies to private
  developers
• Federal government involvement in environmental
  regulation
• CERCLA and the superfund

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Role of Government in Influencing Real Estate
Markets

• The inherent stewardship of public lands, to
  maintain and protect these lands for both current
  and future generations
• The provision of infrastructure and public goods
  that benefit all local residents and visitors
• The land use that affect, limit or influence
  private property owners or tenants

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When Free Markets Dont Work

• Externalities
• Imperfect/Incomplete Information
• Construction quality hidden
• Buyers unaware of structural risks
• Monopolies
• Utilities
• Holdouts in land assembly efforts

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Traditional Land Use ControlsZoning

• Features of traditional zoning
• Use classifications Residential, commercial,
  industrial, automotive
• Use districts (zoning map)
• Setback requirements
• Bulk or density limits (minimum lot size,
  height limits, maximum floor area ratios)
• Special use districts Service stations,
  hospitals, churches, private schools, cemeteries
• http//www.ci.san-marcos.tx.us/departments/plannin
  g/comprehensive_planning.htm?menuDP6

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Zoning in Texas

• Cities have optional zoning power
• Counties have no zoning authority
• Exceptions ? Padre Island
• SB 873 (2001)
• Certain counties may adopt rules governing plats
  and subdivisions in unincorporated areas to
  promote public health, safety, morals, and
  welfare, and the safe, orderly, and healthful
  development of the area.
• May not regulate the purposes for which a
  building or property is used, nor the size,
  number, or density of buildings on a tract.

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Zoning Issues and Concepts

• Legality of zoning Village of Euclid vs. Ambler
  Realty - 1926
• Exclusionary zoning (unreasonable lot size
  inadequate provision for low- and moderate-income
  housing)

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Zoning Issues and Concepts

• Nonconforming use Use inconsistent with and
  precedent to zoning map
• Cannot be substantially changed
• Must be continuous
• Can be amortized away, (e.g. billboards)
• Variance Exception to requirements due to
  hardship

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Traditional Land Use ControlsSubdivision
Regulations

• Standards for streets, sewers, and water systems
• Adequate water supply for fire safety
• Adequate drainage and run-off retention
• Open spaces
• Lot layout
• Easements for utilities
• Traffic and pedestrian safety

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More New Land Use Controls

• Impact fees
• http//www.cityofcarrollton.com/development/bldgin
  spection/feesched.asp
• Growth restrictions
• Temporary moratoriums
• USSC refuses to review Petaluma, Ca. limit on the
  number of new housing units.

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Building Codes

• Older than zoning (circa 1900)
• Issues of safety
• Fire Materials, alarms, electrical and gas
  systems
• Sanitation Plumbing, water, and HVAC
  requirements
• Injury Design and strength

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Power of Eminent Domain

• Eminent domain Right of government to acquire
  private land, without the owners consent, for
  public use, with due process and just
  compensation
• Condemnation Legal procedure for exercising the
  right of eminent domain
• Public use vs. public purpose
• Just compensation based on highest and best use
• Problems of excessive use
• Inverse condemnation

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Public Assistance to Private Business

• Local/ state governments can encourage or
  directly support private development through
• Property tax abatement for many years
• Land buy downs
• Industrial revenue financing municipal bond
  financing
• Tax increment financing (read)
• Infrastructure improvements

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Property Taxes

• Primary source of local government revenue
• Many taxing authorities
• - City - Improvement districts- County -
  Transportation authorities- Schools - Water
  management districts
• Property Tax Exemptions
• - Religious organizations - State Property-
  Nonprofit organizations - Homestead- Educational
  institutions - Ag/Wildlife

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Texas laws

• Each county has an appraisal district
• Law ? Appraisals done within 3 years
• Law ? Maximum yearly increase on homestead 10
• Appraisal review board
• Budget needs / Sum of all appraisals ? tax rate
  (millage), ie 3.12 per hundred

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Computing Tax Liability
Harris County, Travis County, Bexar County
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Voluntary Taxes

• Special Assessments
• Street lights, curbs, sewer lines
• Improvement district area receiving benefit
• Created by petition by property owners or
  legislative authority
• Amount of assessment determined by
• Estimated benefit to property or
• Front footage
• Paid in yearly installments

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Environmental Land Use Regulation

• Environmental activism officially began at the
  Federal level in 1969 with the passage of the
  National Environmental Policy Act
• Environmental Impact Statement assessment of the
  impact of any proposed federal development
• Clean Air Act
• Endangered Species Act

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CERCLA, the Superfund

• CERCLA Comprehensive Environmental Response,
  Compensation, and Liability Act of 1980
• Identify, investigate, analyze and remediate
  Brownfields -- property contaminated with
  hazardous waste
• Who is liable Current/ past owners, generators/
  possessors and transporters of hazardous
  substances
• CERCLA liability is strictly retroactive, all
  costs and damages

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CERCLA, Potential Liabilities and Site Assessment

• Phase 1 Evidence of past or current
  environmental problems on the subject site?
• Phase 2 Test and verify extent of the actual
  contamination
• Phase 3 Actual action plan that usually includes
  remedial cleanup efforts
• Additional reading

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