Expert urges officials
‘do the math’ on development
Infill. It’s a dirty
word among Southern Nevada developers who have raced for decades to sate demand
for housing by building master-planned communities along the perimeter of the
valley, even as parcels in the core stand vacant for decades.
“I’ve been here my
entire life and every time that we build, we always think about building
outwards versus looking at what’s around us,” says Cinthia Moore of the Nevada
Environmental Justice Coalition. “I think part of the Las Vegas culture, in
general, is to look outward versus inwards.”
“We are so used to the
American dream of having a home and a backyard and a white picket fence,” says
Moore, who is also a real estate agent. With a climate crisis gripping the
planet and a local water shortage on tap, she says it’s time to “start looking
into walkable communities.”
But neighborhoods
uniquely suited for walkability, such as the Historic Westside, a
once-predominantly African-American neighborhood, are blighted and overlooked by developers. The City of Las
Vegas owns more than two dozen vacant parcels in the heart of the Westside.
Some have languished for a quarter of a century.
Additionally, Moore
says, commute times are on the rise “and we don’t really have a reliable source
of public transportation. It just makes it harder and harder for people to get
around the city, and we’re adding more single-occupancy vehicles on the road.”
Now, a proposal in Congress,
the Southern Nevada Economic Development Act, known as
the Lands Bill, would extend the sprawl south on I-15 to Hidden Valley, an
environmentally-sensitive area near Sloan that is rich in wildlife and
petroglyphs. The measure, championed by Sen. Catherine Cortez Masto, rewards
developers while setting aside acreage for wilderness.
It would also generate
an estimated $8.5 billion from the sale of 30,000 acres of public lands through
the Southern Nevada Public Lands Management Act, which funds a
variety of services and has been wildly successful auctioning parcels to
developers.
Environmentalists
divided
“When it comes to
infill, if every acre were made available for development, there’s still a
shortage of 34,000 acres,” to meet the demand of inevitable growth, Paul
Selberg of the Nevada Conservation League told the Current last year.
“I will say that we
are here because of an elephant in the room – the Lands bills,” Kyle Roerink of
the Great Basin Water Networks said Wednesday during an online panel on smart
growth. “But we’re not here to cast aspersions or place blame or call people
out. We are here to ask a very simple question: Are we doing the math? Are we
looking at our long-term costs for ratepayers and taxpayers? Are we looking at
equity in our communities?”
Critics suggest sprawl
results in the phenomenon known as “white flight,” in which white, middle-class
families flee the inner-cities in favor of suburbia and new schools.
Joe Minicozzi, founder
of Urban3, a North Carolina economic consulting company that provides clients a
three-dimensional map of their city’s profitability acre by acre, says most
municipalities are failing to do the math, favoring expensive,
maintenance-intensive sprawl over less-expensive dense development.
The factors that
determine land profitability, he says, are the basics of the game Monopoly –
assemble properties in a good location and build.
Suburban shopping
malls, essentially a sea of undeveloped acreage for parking surrounding an
island of big box stores, are less valuable to local governments because they
pay a fraction in property taxes per acre compared with ‘mom and pop’ stores on
a downtown block, Minicozzi says.
In the same vein,
services for sprawling suburban neighborhoods, which require lots of expensive
infrastructure but produce relatively little via property tax revenue per acre,
are being subsidized by mixed-use residential developments, which generate far
more tax revenue.
Property taxes make up
20 to 60 percent of revenue in Nevada counties, according to officials.
Caps imposed on Nevada
property taxes in 2005, as pre-recession land and home values skyrocketed, have
since saved tens of thousands of dollars for individual property owners while
costing the state’s cities and counties billions. Efforts to revise the formula
have failed.
Experts have long
acknowledged racial disparities in property tax assessments in which less
valuable homes are assessed at higher rates than more valuable homes, meaning
low-income homeowners pay a higher share of their income.
A study of property
tax assessments in Clark County between 2009 and 2018 found that the most
expensive homes sold were assessed at 33.7% of their value, while the least
expensive were assessed at 43.4%, which is 1.29 times the rate applied to the
most expensive homes.
The study, performed by the University of Chicago, found that
60% of the lowest value homes in Clark County are overassessed while 46% of the
highest value homes are overassessed.
“There’s a way out of
this,” says Minicozzi. “You want to start analyzing this stuff. You want to
start seeing how things operate and be honest with your citizens to show them
what’s happening.”
Minicozzi says tax
codes determine the climate for development. He suggested that Nevada officials
“establish a two-drink minimum” from developers by extracting commitments in
exchange for building rights.
He says developer
contributions to police and fire services usually “get the attention” because
they make up a big chunk of municipal budgets, while exorbitant costs such as
replacing roads go unmentioned.
Residential
property. Commercial use.
As the line between
residential and commercial use becomes blurred, Minicozzi says properly
categorizing properties for tax purposes is critical.
Clark County is
currently home to an estimated 10,000 to 12,000 unregulated short-term vacation
rentals. A legislatively-mandated ordinance to regulate them must be on the
books by July 1.
Minicozzi urged
municipalities that regulate short-term rentals to view them as the commercial
endeavors they are and “don’t undertax them.”
Investors are gobbling
up short-term rentals and taking housing stock off the market, Minicozzi said.
“And that’s going to change and distort what the price of a house is in the
marketplace if you’ve got that kind of buyer.”
When it comes to doing the math of sustainable growth, a vacation rental, he says, “is a hotel room” and should be taxed accordingly.
DANA GENTRY
Dana Gentry is a native Las Vegan and award-winning
investigative journalist. She is a graduate of Bishop Gorman High School and
holds a Bachelor's degree in Communications from the University of Nevada, Las
Vegas. Gentry began her career in broadcasting as an intern at Channel 8,
KLAS-TV. She later became a reporter at Channel 8, working with Las Vegas TV
news legends Bob Stoldal and the late Ned Day. Gentry left her reporting job in
1985 to focus on motherhood. She returned to TV news in 2001 to launch "Face
to Face with Jon Ralston" and the weekly business programs In Business Las
Vegas and Vegas Inc, which she co-anchored with Jeff Gillan. Dana has four
adult children, two grandsons, three dogs, three cats and a cockatoo named
Casper.
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