Before I get to the point of this post, let me be clear that I totally and enthusiastically support all the development that has occurred in and around the Central Platte Valley. From the Riverfront Park and Union Station districts to the powerhouse that is Lower Downtown, the scale and quality of development that has occurred over the past decade to the northwest of Denver’s Central Business District has been nothing short of phenomenal.
However, having said that, I am concerned that the attractiveness of these areas and the intensity with which they are drawing new development is resulting in what I call CBD Sprawl. A Central Business District is generally defined as the place where primarily office and commercial uses concentrate, supplemented by residential, hotel, and other uses, at a scale unmatched in the city. The definition of sprawl is generally considered to include, among other things, new development occurring in outer areas while good sites are still available in inner areas.
Denver has, to our good fortune, a strong and sizable CBD, commonly defined as being bounded by Speer, Colfax, Sherman, 20th Street, and Larimer. I argue that the development taking place in Lower Downtown and Union Station represents the expansion of the CBD into these areas. The fact that Gates, IMA Financial, DaVita, Van Gilder, and other firms have chosen LoDo/Union Station for their corporate headquarters and that LoDo/Union Station is the new hotspot for traditional 17th Street-type firms in general, is evidence of this trend, and given the public investments being made in these areas, that trend is likely to continue and accelerate. In fact, the appeal of the Union Station district is so strong that it may capture an overwhelming percentage of whatever commercial development Downtown Denver is likely to see for the next decade or more. Then there is Arapahoe Square, the 30-square-block annex to Downtown that is so ripe for redevelopment, it hurts. Planning is underway for Arapahoe Square that will position it to be the next Central Platte Valley.
Meanwhile, our existing Central Business District has no shortage of development opportunities. Because of the parkinglotification of Downtown that occurred during the last half of the 20th Century, by my count, there are at least 40 sites within Denver’s CBD (as defined above) that are vacant and suitable for high-rise development. Depending on the footprint of a project, that number could be closer to 60. The checkerboard distribution of parking lots in Downtown Denver results in a Central Business District that is remarkably vibrant and successful notwithstanding, but lacking a single cluster of blocks where there is an uninterrupted and cohesive fabric of development. With the exception of the half-block-long Cheyenne Place, there is not a single named or numbered street in Downtown Denver that doesn’t have at least one vacant lot fronting it.
It’s not that our CBD didn’t see a decent share of development activity during the recent boom. Spire, Four Seasons, 1800 Larimer, Solera, Embassy Suites… they all greatly added to the cohesiveness of Downtown. There were many others, like 1401 Lawrence, 999 17th Street, 1501 Tremont, Makovsky’s Block 162, Two Tabor Center, and the DAC Hotel & Residences, that fell victim to the economy or, for whatever reason, failed to materialize. But my concern is for the dozens of other parcels in our Central Business District that have not been proposed for development in decades. Just to name a few:
- The corner of 17th and Welton (Block 174), where the old Kenmark Hotel once stood, that has been sitting vacant since the mid-1990s. Owned by Gary Cook, infamous for his refusal to do anything with his properties, ever, the weedy gravel lot sits smack-dab in the middle of the “Wall Street of the Rockies”.
- Block 176 (the “Shelby’s block”) located one block from a light rail station. Nothing.
- 16th and Lincoln (Block 029-B) located one block north of the state capitol, owned by the Dikeou family (the other infamous family known for their unwillingness to do anything with their properties). Zilch.
- The depressing Block 207, owned by a half dozen different property owners, across the street from the Webb Building. Nada.
- Block 159, also a block from the 20th & Welton light rail station. TOD anyone?
I could go on as there are dozens more to choose from, but I won’t. My point is… we need to have a strategic plan for where private sector development occurs in Downtown. I’m not saying we need to delay the development of areas like Union Station and Arapahoe Square until the CBD is complete, or to usurp the entire free market system but, on our current trajectory, 30 years from now we will end up with a Central Business District twice the area of the one we have today, but it will still be a fragmented checkerboard of buildings and parking lots. We need to target key parcels in our historic CBD and do whatever we need to do to get them developed so that the positive impact of development is spread strategically across the entire CBD to maximize the overall vitality and success of Downtown. It just doesn’t make sense for parcels at prime locations in our historic CBD to sit fallow for decades and hinder the fulfillment of Downtown’s promise while billions of dollars are spent to create what are essentially new extensions to the CBD. With some calculated thinking and political fortitude, we can simultaneously complete the infill of our historic CBD to allow it to finally achieve the greatness to which it is so close, while still giving new life to places like Arapahoe Square.
To accomplish this effort, to purposefully direct where some of the private sector development goes in Downtown Denver, strong leadership will be necessary. While that leadership will certainly come from a variety of sources, at the top of that leadership chain must be the mayor of Denver. That is one of the characteristics I’m looking for in our next mayor: to express the political will to do what it takes to capitalize on the huge investments made in Downtown Denver and to realize the great opportunity that our Downtown holds by ensuring that infill development occurs where we need it. This is not the only initiative our next mayor will need to take to move Downtown Denver up a notch on the urbanity scale, but it is an important one.
What is the incentive for the owners of the lots “not” to develop them? I would imagine that they’re paying hefty property taxes each year for an asset that isn’t returning much – aside from parking fees. Is that a profitable venture? Seems like they could do much better – assuming someone wanted to put up a building. I’d be curious to see the world through their accountant’s eyes.
It’s the incentive that all the undeveloped property owners are hoping for: a hefty buyout when a major developer comes calling. In the meantime, they make their money by using the property as surface parking lots. Unfortunately, there’s no incentive for them to do anything otherwise at this point. Until we create some sort of penalty for speculators and non-developers, we’ll continue to see the push of the CBD into surrounding areas.
Much as I hate to say it, a much more strict downtown height limit would solve this problem.
….by limiting the heights of downtown buildings you’re hoping to encourage development of empty lots? I’m not following the logic here….
I think it’s referring to restricting the height of developments in areas surrounding the CBD, thus forcing big projects back into CBD. At least that’s a logic that works in my mind, though I’m not sure I agree with it or not.
I think what BeyondDC is saying is that if we lower the height limit in downtown it will do two things: it reduces the expectations of property owners for what their property is worth (you can’t ask as much for your land if the highest you can build on it is 15 stories instead of 50 stories), and it forces consumption of the land at a faster rate. If there’s the demand for, say, 2 million SF in new commercial construction in Downtown per decade, it would be better to put that square footage in ten 200,000 SF buildings (removing ten parking lots in the process) than to put that square footage in two or three skyscrapers.
Right on both counts. Way to read my mind, Ken.
Part of the reason downtown lots don’t develop is that every parking lot owner is holding out to build a 50-story skyscraper. If we imposed a height limit, more of them would just go ahead and build up to the limit, because there would be no possibility of a bigger pay day further down the road.
A true transportation system is the real incentive to live downtown. Whats the point if you are surrounded by vibrant neighborhoods that have as much or more going on.
I’m of the understanding that property taxes charge for the value of structures rather than the value of the land. (It may be a combination of structures and land that calculates the tax.) This is an issue I’ve seen often on this site and other forums.
So property owners that get small but steady income from parking are inclined to keep the parking lots, which have almost no structural value, as they are, rather than put up a building that would increase the value and therefore the tax rate. There might be some risk if the building does not become profitable right away – in the case of families and if the owner is older, he or she might not expect to ever see a more extended benefit.
Obviously there is still much more to profit from having a utilized structure there, but if land owners are lazy or just hesitant about committing to a specific building and would rather wait years for some elusive golden opportunity (and I’m sure there are lots of people like that), they can still get a small and steady stream of income from a parking lot.
Most urbanists would hate this idea… but I wonder if city-owned parking structures could help decrease demand for parking and the value of surface lots and encourage development. That is probably not a great solution when we are trying to change the culture, but it may help in a few areas in addition to spurring growth in large-scale retailers who are reluctant to build without parking. The city could also buy some of the lots to build smallish parks or spaces for street vendors and festivals, to re-sell the land later when a developer can improve it. The city could put a cap on parking fees (similar to rent control) to decrease the profitability of surface lots but that would also not be politically popular or legally possible.
The city can also make deals to waive or freeze property taxes on specific lots for the first couple years after a site is developed, which I know a lot of suburban municipalities do to attract projects away from adjacent municipalities.
I personally think that the city could get involved in creating parking structures, especially if we want to spur development of more-affordable/less-pricey housing for people of average incomes in Downtown. The city could build the garage and sell off the spaces at a discounted rate to new developers in lieu of parking on their property. If the developers did not have to build an extremely expensive structured parking space for each of their residents, they wouldn’t have to pass on that added cost on to the owners/renters of the building. Residents of these more affordable homes, could still claim a parking spot in a city garage if they so choose. Whatever parking isn’t claimed by residents could then be rented out daily or monthly to commuters.
Ken for Mayor!
How about changing the property tax structure so the owners of surface lot’s in the CBD are charged by potential value instead of existing value? Which would increase the costs of continued land speculation.
Theirs the risk that they will then try to pass that cost on to those utilizing the surface lots but I doubt they could fully recoup that cost from that as eventually that would lead to drivers using substitutes (garage parking, public transit etc.)
I am sure that potential value would be hard to pinpoint and would be inexact but most lots have buildings nearby so it would give some frame of reference.
Collecting revenue on something that is not there may reek of Wall Street like accounting but most of these undeveloped lots have existed my whole life and they are hurting downtown in terms of vibrancy and hurting the city in terms of tax revenue so some stick needs to exist to shake these land hoarders up a little.
I was just thinking of something similar, but less onerous: what if the property tax on undeveloped lots increased by 10% every year they sit empty? That gives owners some time to sit on a property in a bad economy, but provides a strong incentive to do something when the time is right. We’ve got lots in the CBD that have been empty since the 60s and 70s, which is simply unacceptable. Those lots hurt the value of every surrounding property.
I agree that whatever happens needs to happen gradually as if you just pass a huge tax increase right off the bat people might scramble for whatever development they can get approved by the city and get financing for. Right now as we all know it would be hard to secure financing for a well designed massive development so we may end up with a lot of bad looking parking garages with empty 1st floor retail like the Eastern corner of 15th and Stout. Which may actually be worse then a surface lot.
The gradual part as you noted would give them some leeway to wait out an economic storm and the ability to plan for the development as I am sure many of the lot owners haven’t even considered developing their lots.
Maybe a 10% annual increase with a cap at potential value or average CBD developed value or something like that.
I’m all for taxing vacant land at a higher rate…somehow. It’s be a challenge to do it with any sort of increasing rate, though, as Scott suggested. Either it’d be tied to the ownership (10% each year that the individual holds the property), which would present some legal hurdles and just encourage speculators to swap properties as their rates go up. Or else it would be tied to some base year, in which case I fear we’d eventually have a core of properties taxed at such a high rate that owners walk away and they become unsalable. We can not expect every vacant property to be developed immediately; the market can’t bear it. All we need to do is make it unattractive enough for speculators to hold a property long-term without even entertaining other options. A minor penalty – say, enough to overcome the revenue generated by surface parking (a use we want to discourage!).
Another thing to add to what Ken said in reply to BeyondDC’s comment about height restrictions. The current zoning allows virtually unlimited heights (there are FAR restrictions, yes, but enough bonuses, etc. that a speculator can still sit back and reasonably imagine nearly infinite buildable heights). What we need to eliminate is a situation where 40 property owners all bide their time, imagining they will be the lucky big dog who lands Denver’s next (or first) supertall. A height restriction wouldn’t have to be severe to bring expectations back to earth.
When the demand isn’t there it’s just hard to fill all of those lots with anything other than an empty property. Can we at least pass an ordinance that offers paking lot owners incentives to at least improve the lot with better sidewalks, trees, planters, and pavement? The next step would be to incentivize the replacement of those lots with parks or community gardens. I’d rather have an oversaturation of parkspace over lots while we wait for a structure to be built.
Instead of a height limit, I’d rather see a speculative land value limit. For example, a parking lot owner’s sale value cannot be more than x amount greater than the current appraisad value. This also helps incentivize better quality in the meantime, as a $5000 investment in some planters results in a $5000*x increase in sale value.
But don’t we want to encourage complacent land owners to sell? Sale price is partially determined by the amount of profit derived from land at current use. Most properties are sold right before they are developed. Limiting sale price would increase the incentive to hang on to the property.
I don’t follow your logic. Land speculators are looking for a big sale. If a developer comes in looking to build a 10 story structure, they will only be able to pay so much, while a developer looking to build a 50 story structure will be able to pay more. Land owners will hold out for that 50 story developer, which may never come, meanwhile denying the sale to the smaller developer at a lower price.
Since they’re just land speculators in the first place, they will do the minimum required to keep up their properties. By capping sale price and basing it on the appraised value of their land gives them the incentive to sell to anyone willing to pay the capped price. This means that they no longer have the incentive to hold out for the magical 50 story developer. They also have an incentive to improve their property somewhat in the meantime, because it increases the cap. I’m not talking about applyng this to all properties – just parking lots. I assume that city government has the authority to do that.
I don’t see developers paying less to purchase the land for a smaller project just because it won’t be as profitable a larger project the land would also be zoned for. The land is worth what the land is appraised at. There are plenty of other parking lots so if a land owner holds out the developer could just move on to the next block, and if the project is so small that it doesn’t pay for the land acquisition they ought to build it in the Highlands.
Besides, don’t they tend to acquire the land before they announce the project in the first place?
Think about it this way. Say you own a rental property with no sentimental value. It would be like the wealthy neighbor saying, on one hand, “I’d like to buy your property to expand my home,” or, on the other hand, saying “I would like to buy your bulldoze to bulldoze it so I have better view of the park.” What difference does it make to you what the buyer does with it? Your land is worth to you what it is worth you, and since it’s just an investment property, it’s worth to you what it’s worth on the market. It doesn’t matter what the developer plans on doing with it and you have no reason to hold out.
I think you only apply this program to parking lot owners, you may run the risk of violating equal protection laws.
The big issue for Downtown Denver and it’s “sprawl” is the parking and mobility issue. If you bring everyone downtown in cars, how do you accommodate all those cars economically. Development at every highway interchange offers free surface parking, so downtown has to compete in this regard. If people come downtown in light rail or bus, how do they effectively move around. It would be interesting to know how far one can really develop from a light-rail stop and have it truly be accessible by that mode of transportation. People really don’t want to walk a quarter mile even though that is considered “walking distance”
Based on the suggestions above, I would love to see a combination of these things:
1. More urban parkland, created through a mixture of incentives and maybe even outright ownership by the city (this is needed regardless of the existence of empty lots, imo).
2. A mixture of tax incentives to encourage development, coupled with height restrictions along a certain corridor or an identified area (i.e. some lots within the CBD would be subject to height restrictions, and others not).
3. The city subsidizes our builds outright parking garages for residential developers.
I wholeheartedly agree with this post. I was just in St Louis that is far from an example of an amazing city but Denver could learn a few things.
Not as many dead empty parking lots and it looks like a few block were converted to parks.
Check out Citygarden – full of modern sculptures, green space and relative to other areas, people actually were there during the day.
The city should give some sort of tax break or something for building in these lots, it really is quite ridiculous. Probably the one thing about Denver that has bothered me the most since I’ve moved here.
I always saw Union Station as a way to attract corporations with higher salaried employees and an ability to pay more expensive rent than ever existed before in Denver. As the Denver attracts this new class of corporate interest, I see other areas of Denver that could cater to this upscale market with competitive rents (such as the Tabor Center and Republic Plaza/Pavillions area). The key is hoping Union Station becomes a major engine to double or triple the number of businesses and residents downtown. Otherwise it will just drop rents and be CBD sprawl.
The Union Station/RTD plan will increase demand in all surrounding areas, increase pedestrians on the 16th street mall, and encourage CBD investment that will attract pedestrians away from just the 16th street mall. Broadway from Civic Center to arapahoe square should get public investment to start serving as an anchor for developing downtown cross streets such as welton. 17th street will continue changing from a 9-5 only pedestrian zone by spreading out the banks and corporate delis across union station/16th street.
I think the most important thing for the CBD is public investment in transit around Denver, remove some lanes of roads, add a grocery store, improve/add local parks, and make a plan to attract families with Children. I would love to see union station as a Denver coming of age story that generates enough buzz to encourage tall buildings and owners to sell their lots.
Tax the unimproved value of land (not property). Improvements are tax free. Wikipedia land value taxation for a better explanation of this idea. Much more in keeping with the free market than height restrictions.
Guys, the city is broke. The state is broke. The country is broke! Who the hell is going to pay for parking garages or some of the other ideas you all like to float out there (one guy suggested a while ago we build a tunnel over I25 through central Denver- come on, get real!)?
How about letting free enterprise drive what is going to happen in downtown Denver?
The CBD will fill up when demand calls for it. Once the Union Station project builds out in the next few years we will see more development in the CBD.
Just be patient!
If you charge a fee for parking the parking garage would be tax-neutral and pay itself off with a 10 or 15 year bond. Not that city-owned parking is the best idea, but it isn’t economically unfeasible.
Free enterprise has not existed in Downtown Denver since DURA first reared it’s ugly head and demolished most of downtown. The actions in the 60’s and 70’s by DURA allowed for people to jump in and buy development primed properties on the cheap and that made it prime for speculators who had zero intention of developing the lots to step in and add some land assets to their portfolio.
The CBD will not fill up when demand calls for it as demand has called for it in the past and empty lots still persist. Although their may be some development during the next boom numerous lots have never had any plans whatsoever to be developed and have been surface parking lots for generations missing out on multiple building boom’s in the downtown area. The history of downtown booms is full of stories of multiple people/companies trying to buy those lots (at a substantial profit to the owner(s)) and develop them but the owner(s) won’t budge for various reasons either personal, financial or owned by a consortium who can’t get their act together. So theirs no reason to think that the next economic boom or series of boom’s will wipe out the surface lots.
So if economic incentive provided to these owners during a boom is not enough to get some of these speculators to sell then some economic disincentive needs to exist to stop people from endlessly speculating on a plot of land in a prime area.
I agree there are an awful lot of surface parking lots in the Downtown area, though they really seem to be on the edges – Arapahoe Square and heading into Uptown. Until the demand improves I think the City should focus on ways to screen and beautify the pedestrian experience around these lots, and more importantly, with the market being slow this is a perfect opportunity for Denver to focus its energies on creating a more LIVABLE Downtown. Work on attracting a grocery store (or 2), adding more corner stores, dry cleaners and other neighborhood-serving businesses. Downtown desperately needs more bike parking. The thing I’ve always found ironic about Downtown Denver is that there are thousands of residential units, more than a lot of other cities our size, and yet people who live downtown are totally car-dependent because there are very few basic services that residents need on a daily basis. This seems so simple and yet Denver has really missed the boat here and created vertical suburbs… Let’s work on fixing this before we start building more car-dependent, high-end housing.
I’m on the side of the free enterprise approach. A few economic and accounting items to consider: 1) a 14.5% and increasing office vacancy rate, 2) a 10% unemployment rate, 3) a massive public debt problem, including the hidden problem of unfunded government pensions, 4) the economic rise of the eastern hemisphere and the corresponding economic decline of the USA and Europe – you get the picture.
I hear Ken’s point and generally agree there is very apparent inequity, poor logic, etc. in the way the Denver core seems to re-develop. Most land owners are not developers. Instead they are speculators. They bought an asset and are waiting for a lucrative offer for their land. These offers only come if there is demand, and there is no demand right now. Meanwhile, they make a very lucrative living from operating low cost, highly profitable parking operations. Aside from the visual distraction, I find no sin in this any more than I find a sin in any individual bringing home more money than he needs to pay his bills. Much worse would be to create an artificial demand that is not based in any economic viability. We are paying the price for this now and will probably do so for decades to come. I cannot see how government competition in the parking business will somehow stimulate these landowners to build on their land or tenants to materialize out of thin air.
My peeve is more about the traditional definition of sprawl – the ‘burbs’. Metropolitan areas like Denver, Dallas, Houston, Atlanta LA, the Bay area, etc. have paved over and claimed productive farmland, esthetically valuable forest and grassland, and so on, all so individual Americans can pursue an unjustifiable dream of owning a piece of land on which they don’t grow food but instead grow something foreign and force it into compliance with a plethora of chemicals, small tools and equipment. Proof in Denver is the sprawl to the north over wonderful farmland and to the south over wonderful high plains and forest. The huge opportunity in Denver is the redevelopment of the vast defunct rail yards. We’ve only scratched the surface of this potential with probably less than 20% of it developed, especially when you consider the rail yards stretching from east of Coors Field almost to Colorado Boulevard.
I think we are beginning to prove the viability of residential density with the successful residential development immediately surrounding and inside the CBD. Few other big cities in America have CBD’s that people hang around, even flock to, after business hours like we have in Denver. Most of the cities mentioned are abandoned after business hours. Denver’s CBD is both a destination and a place to live and work. Clearly, I am for continuing and increasing that phenomenon through density – by private development building of new neighborhoods that are dense, active and diverse. This will have to be market driven, but we need to ensure we do everything possible to enable this development. I think it is inevitable this redevelopment will occur in an apparently uncoordinated way, with many weed infested or paved over parcels hanging around along the way. It’s the momentum we’re after, not forced, but encouraged. Would we rather turn into LA (like we are today), or NYC (arguably the greenest city in America)? Let’s continue to encourage high density (therefore high rise) development in Denver’s CBD and immediately surrounding area, and the rest will follow, including attracting more businesses into the area. Let’s not tax it – tax is not an attractor – rather it is a detractor.
For Denver to take a truly free enterprise approach to development in downtown their would have to be no zoning laws, no entities like the DDP and DURA, and no such thing as TIF financing (what is fueling the development at Union Station). Most people would find abandonment of all of those things as a bit extreme as they like the fact that a factory,shopping mall etc. is prevented from being built across the street from them through zoning laws and most people like the fact that the city is trying to improve areas that seem to lack hope of ever being improved by market forces.
When it comes to taxation Land Value Taxes and Property Taxes where one of the few taxes Adam Smith the father of free enterprise did not have an issue with as they did not appear to provide any inefficiency in the market place.
More modern economists have gone into detail on this whole issue of land speculation, property taxes, land value taxes, and inefficiency. The only economic value land speculation provides is the prevention of premature development of the land. Theirs argument amongst economists that premature development of land through tax disincentive of speculation leads to inefficiency but that’s a moot point when it comes to downtown because downtown is already an economically mature area.
Since downtown is economically mature area where land is of high value theirs general agreement amongst economists that non-development actually leads to inefficiency within the market place as that land is underutilized. If the marketplace has inefficiency some market failure has occurred and corrective action needs to be taken. It is my belief a tax disincentive to speculation is the best course for corrective action of that market failure.
As far as tax being a detractor rather then an attractor that’s the whole point. We need to detract the value of the land for speculators in order to get utilization of that land to appropriate levels.
Now may not be the best timing to pass such a disincentive but if it’s phased in the costs likely could be absorbed until the capital is their to build or they could even time the passage to when we are more economically sound.
I agree that we are witnessing, at least for now, “the economic rise of the eastern hemisphere and the corresponding economic decline of the USA and Europe.” But how does that support your case for exclusively free market solutions? Public investment — particularly in infrastructure, but also in other areas — has played an integral role in those East Asian cities that have prospered in recent years.
Dan – I had a hard time reconciling your perspectives on achieving density with your seemingly contorted viewpoints of market driven initiatives. I had a quick flash that I was listening to a Glenn Beck diatribe. Anyway, my points of contention is that your pet peeve of suburban sprawl, which you indicated, was almost entirely market driven by private investment. I agree with you that it stretch resources and created an inefficient landscape that seperated communities that made us dependent upon the automobile, but you said that you preferred to keep development under private hands. Apparently the wishes of the individual don’t always mean good things for the community. As we’ve seen, unless the “government” – meaning you and me – give some guidance to sustainable development opportunities and also provide incentives, then the lone developer isn’t going to be able to invest in a way that can achieve public works that are in accordance with strategic goals of the city. Things like city parks, working schools, transit options, and even “parking areas” can be classified under public interest, which is something that we can all fund to make the city more livable, which in turn makes private development more lucrative. We can’t just hope that individuals act benevolently and invest in ways that are beneficial for the community. Rather, the codes should set up to cajole, influence, and/or punish those that don’t manage their properties in relation to the development plans outlined by the city. As bad as “taxation” sounds, there is also the harmonous ring of “tax credits” that is music to the ears of developers.
More public garages downtown for the purpose of depressing the price of parking and encouraging the development of surface lots is probably more expensive than simply having the city buy each surface lot and give them away for free to prospective developers. Not to mention the fact that plentiful, cheap parking simply encourages more people to drive downtown, which would offset the lower parking rates to a large degree. In the end, you’d end up wasting public dollars and achieving nothing except a drop in transit riders, as well as yet more real estate downtown devoted to parking.
Given time and the fact that it is illegal nowadays to demolish structures and create surface lots, this problem will eventually solve itself. It has been happening for the past 20 years; many lots have been developed since 1990. As Ken said, the best thing we can do is grow our political support for redevelopment and develop strategies to reduce speculation and encourage development downtown without overtly meddling in the market.
Ken, Several people complimented your CBD Sprawl blog at today’s groundbreaking to turn 14th into an “Ambasador” Street. http://insiderealestatenews.com/2010/11/denvers-14th-street-takes-off/
Hi John. That’s cool that people mentioned it (I hope in a good way!). I unfortunately was out of town most of the day and couldn’t attend the groundbreaking.
Interesting discussion, which among other things continues an argument that has gone on since the late 19th Century. My grandfather’s generation was discussing the ideas of Henry George, who – over-simplified – favored a tax on land, rather than improvements. The concept that his supporters argued was that it would favor those who make productive use of land rather than those who sit on it.
To learn more about how that played out in a peer Western city read R. D. Johnston, Radical Middle Class: Populist Democracy and the Question of Capitalism in Progressive Era Portland. The idea was attacked as being almost Communist.
I have a much more personal complaint about the parking lot land sitters. Few bother to maintain their sidewalks. We’re headed into ice season, when passing their property becomes an Arctic ice flow adventure. I think about Henry George’s idea every time I slip or see someone else slip.
The complexities of any solution are equal to those that make a vibrant urban district; the concept of CBD sprawl is an excellent cautionary perspective looking down the road for downtown. I think it is easy to rest on laurels of success while not considering the lessons of the past, including suburbia’s. While I do not necessarily buy into free market enterprise coming up with solutions, I certainly am optimistic if enough innovative, educated, and concerned people put their heads together to address the problem. I hope that thought and effort is put into it.
Thanks Ken.
Thanks, Shay, and that’s why we’re here… to get people talking about a solution.
A land value tax is definitely one way to solve the problem. But it should be phased in gradually to be fair, because it will tend to drop values of vacant land.
The height limit idea just doesn’t make as much sense because that’s an overt taking of property rights.
City Council can make it happen, we just need to start calling and writing them to explain it. This type of “grass roots” lobbying effort will be perceived as a sincere effort to improve and complete the City, NOT a power play by “greedy developers”. Almost no one except their own highly paid lawyers will come to the defense of those few “infamous non-developing speculators”.
It’s an urbanization policy, so CPD staff would support it when they are pressed by Council.
This is exactly how a small group of architects, realtors, and gadflies got carriage houses to be legal again in the new zoning code: http://friendsofgranny.blogspot.com/
http://en.wikipedia.org/wiki/Land_value_tax
My concerns with replacing a property tax with a land value tax in a revenue neutral way is it would also shift the tax burden from the taller structures with a small land footprint to not as tall buildings with a large land footprint. Based on my understanding of that tax buildings like the Pavilions, the Brown Palace Hotel, Sheraton Hotel, etc. would likely see an increase in their tax burden while structures like the Spire, Four Seasosns, etc. would see a decrease.
Do we really want to provide disincentive for building structures that do provide value but aren’t as tall? I think over the long run it may be a good idea (except for historical buildings) but if we are just focused on eliminating surface lots it may be overkill.
A related concern is I would think with TABOR we would need to pass that Land Value Tax with a popular vote although I am not sure if the tax is revenue neutral we could bypass that. If it does require a popular vote and we are shifting the tax burden we could alienate enough people who would otherwise be supporters of a tax to eliminate surface lots to kill the bill because we are raising their taxes as well.
Basically, everyone who owns land with a performing building pays a little less tax than they do now, but those with vacant land pay quite a bit more. So it should be a hit with a large majority of property owners. Since the slate is clean right now, a well-conceived LVT could be tweaked as necessary to optimize voter support. It may also be a chance to repair the Gallagher amendment, which is a bit tough on business which slows job growth.
Built buildings wouldn’t see any tax increase.
It’s really time for an LVT. Our existing laissez-faire policy has rewarded us with an unacceptable patchwork CBD