New Urbanism’s ace in the hole

A well-designed public realm has potential to boost property values and tax revenues. n suburbia, where the public realm serves automobiles rather than pedestri ans, protection of property values depends on strict separation of uses, landscape buffers and long setbacks from the street. In towns, villages and urban neighborhoods, property value is closely related to the quality of the public realm. A drive through any old town or city will reveal that where the public realm suffers from streets engineered for high-speed traffic, deteriorated urban fabric or crime, property values also are low. On the other hand, look at neighborhoods with high quality public realm — not just in terms of infrastructure and pavement, but also human-scale streets, interesting streetscapes, good architecture, well-formed spaces and lively street-level shopping. Chances are, property values will be the highest in these locations. The above represents an important “ace in the hole” for New Urbanism. Not only does it have the potential to increase property values, but it can do so at higher densities — without the buffers, setbacks and rigid separation required in suburbia. That means higher tax revenues in both cities and suburbs where new urbanist projects are developed. Tax increment financing One way that municipalities can play that card is through tax increment financing (TIF). This strategy has worked well in Dallas, where the city has formed public-private partnerships with developers, most notably Post Properties (formerly Columbus Realty Trust), to revitalize the St. Thomas neighborhood in the Uptown area. The city pays for improvements to make streets more pedestrian friendly — e.g. on-street parking defined by bulbouts, wide sidewalks, trees and tasteful lighting fixtures. Post has provided most of the well-designed mixed-use infill development which completes the public realm. The city anticipates that increased tax revenues will pay for its investment. This TIF has worked beautifully, transforming a once-moribund area into Dallas’ liveliest residential area in less than one decade. Milwaukee is using TIF in conjunction with new urbanist principles to develop its CityHomes project, consisting of 44 single homes on three blocks. In this case, the area is so depressed (average household income of $10,000, average assessed property value of $15,000) the city is serving as both the developer and the investor in the public realm. The homes, based on traditional types and some on alleys, have sold better than expected. The original estimated market value was $65,000; the actual sales prices are in the $80,000 to $110,000 range. Benefits in suburbia The potential tax benefits of New Urbanism are not confined to inner cities. The higher density of typical traditional neighborhood development (TND) means that these types of projects have the potential to increase tax revenues from a given piece of land, compared to conventional suburban development. Moreover, TNDs include amenities like parks, community centers and civic sites, which are not found in typical suburban projects but are routinely provided by new urbanist developers. TNDs therefore offer significant benefits to the public sector, but this message has not sunk in to officials in most municipalities, where laws still present significant barriers to New Urbanism. Not only is regulatory reform needed to level the playing field, but municipalities ought to consider joining with TND developers to invest in a high-quality, human-scale public realm. Such a policy makes financial sense and would help to bring about better development.