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Thread: Zoning - strictness differences residential vs. commercial based on potential sales tax?

  1. #1
    Jun 2007
    Oklahoma City

    Zoning - strictness differences residential vs. commercial based on potential sales tax?

    My city (fast-growing 17,000-resident [1,250 as of the 2000 Census] fringe suburb [not quite exurb]) is currently putting together a Unified Development Code. A part of the UDC is increasing the standards for residential development. We've had a lot of lower and middle-end single family residential development, and we're trying to incorporate housing types that allow for complete socio-economic mobility within town. We need affordable, multifamily, and upscale housing options, but it is imperative that they are all of a higher design standards than our current development, so we've addressed this issue and the rest of city staff (including the City Manager's office) is supportive of these increases in standards. The local homebuilder's association threw a fit with arguments they viewed as not matching their market projections, such as: "Y'all aren't [insert upscale community here] or [central metro city]... y'all are just [our city]. [Our city] doesn't deserve higher quality residential development", despite our design workshops and charrettes that show residents desire it.

    Today, we began discussing applying similar higher standards for commercial development. Planning staff wanted to apply similar higher standards for design and construction as we did for residential to ensure quality development from the get-go. The City Manager's office was adamantly opposed to this. They were okay with increasing standards slightly but not trying to get a fully sustainable and reusable product from the get-go. Rather, the City Manager said that the community doesn't care about what certain commercial endeavors seen as amenities look like at this point, they just want them present in the city limits. According to the City Manager, we can address higher standards in 15-20 years (basically after most of the city is built out and then we'll have to constantly address inner blight and redevelopment). I realize this is a pretty standard economic development vs. planning argument. But the City Manager began using arguments similar to the local HBA's arguments against our increased residential standards against our increased commercial standards. He also began using arguments about decreased potential sales tax and that we're in competition with surrounding cities for development. We acknowledged both of these as short-term issues, and cited examples of other cities who have and have not done similar issues in the region and state. Generalized outcomes have been that cities that adopt stricter commercial standards from the outset might have problems with development bypassing them for surrounding cities, and then when the demographics are there, higher quality development [side note - higher quality does not necessarily equal high-end] comes in while surrounding cities who "won" the competition for low-end development were struggling with the new competition to meet the new demographics. Cities that did what the City Manager advocated wound up with blight in the center parts of town (perhaps not downtown), and the nicer development was forced to the periphery of the city limits or surrounding cities where demographics and standards of living are higher.

    Anyway, after all of this background, I have a question for Texas planners: is there a provision in state law that prevents cities from using the possibility of increased sales taxes (this was the language used, not increasing economic diversity, etc) into City coffers as a basis for policy decisions?

  2. #2
    moderator in moderation Suburb Repairman's avatar
    Jun 2003
    at the neighboring pub
    Nope. That is a perfectly acceptable justification. You might take a look at some of College Station's recent stuff--I think they included findings in their design standards chapter of the UDC. And don't forget that aesthetics is a valid justification on its own, though economic potential has broad appeal. You have results from a public participation process on your side to counteract the statements from the homebuilders. They went nuts at my former employer over a requirement to plant two trees, two ornamentals, 4 large or 8 small perenial shrubs, and a complete groundcover, saying we were pricing people out. What happened afterward? Building permits for entry & workforce housing actually increased while the upper & executive levels remained constant. The city added more square footage of retail space in the four years after the standards than it had in the previous four years.

    What you are discussing is a fight that I have fought before in Central Texas. You might point out that even socio-economically disadvantaged San Marcos has adopted commercial design standards, and it is probably the prime example of attracting rediculous amounts of sales tax revenue through retail development. San Marcos also has examples of crappy old stuff (Springtown Mall) that has reached a point that it can't compete with the retail centers that have higher quality design (Red Oak Village and Stone Creek).

    In your case, I don't know where the development would bypass you to. The next city down the highway from you is awfully far from the main population center for real leapfrogging, plus I don't see the rooftops further out to support it.

    "Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country."

    - Herman Göring at the Nuremburg trials (thoughts on democracy)

  3. #3
    Apr 2009
    I'm not a Texas planner but if the state succeeds I'll be headed that way.

    I understand your desires for quality control on both residential and non-residential developments and have had similar discussions with elected officials about not wanting to make development standards too high for commercial developments but can tell you it is possible to enact higher standards for all types of development.

    It is obvious that your fringe area has experienced a higher than normal influx of residential development due to the land prices compared to more urban areas near you and now your tax base is off balanced. More households who use up the services and not enough commercial or industrial to off-set that balance by paying more.

    In 2006 we did something very bold, although in my opinion it was too little too late as we are now the poster child for the urban sprawl bedroom community, we adopted design standards for the enitre county for both residential and non-residential areas. Our commissioners were finally tired of upscale developments of all kinds going to other jurisdictions so they listened to staff and the residents and prohibited some of the cheaper (price and quality) materials and required larger home sizes. This, of course, came as the market started declining but quite a few developments have been built to these standards and are the ones in which people occupy first. The old addage, "sex sells," applies to structures as well evidently.

    The HBA griped and complained as with any change but eventually piped down and adjusted their prices to match their products.

    You may hear people talking "affordability" so keep in mind that "affordable" doesn't have to mean new. If you have a significant stock of older, smaller houses those can be labeled affordable depending upon your average median income.

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