Planning Commission

AGENDA Meeting Location: Harris Hall Lane County Public Service Building Phone: 541-682-5481 125 East 8th Avenue www.eugene-or.gov/pc Eugene, OR 97401 The Eugene Planning Commission welcomes your interest in these agenda items. Feel free to come and go as you please at any of the meetings. This meeting location is wheelchair-accessible. For the hearing impaired, FM assistive-listening devices are available, or an interpreter can be provided with 48 hour notice prior to the meeting. Spanish-language interpretation will also be provided with 48 hour notice. To arrange for these services, contact the Planning Division at 541-682-5675. TUESDAY, May 14, 2019 - (6:00 p.m. to 8:00 p.m.) A. Presentation and Discussion: Economic Cartography Presenter: Joe Minicozzi, Urban 3 Staff: Chad Cramer, 541-682-5561, CCramer@eugene-or.gov Anne Fifield, 541-682-5451, AFifield@eugene-or.gov Commissioners: Steven Baker; John Barofsky; Tiffany Edwards (Vice Chair); Lisa Fragala; Chris Ramey; William Randall; Kristen Taylor (Chair)  AGENDA ITEM SUMMARY May 14, 2019 To: Eugene Planning Commission From: Chad Cramer, Urban Designer, Planning Division Anne Fifield, Economic Strategies Manager, Community Development Division Subject: Mapping Value Phase 2 Presentation ACTION REQUESTED The Planning Commission will receive a presentation from Joe Minicozzi of Urban 3, which will cover the results of Phase 2 of the Mapping Value analysis. This analysis will assist policy makers, city staff and the community of Eugene in understanding the role development patterns play in infrastructure cost and their relationship to city finances. No action is requested. OVERVIEW Envision Eugene is about managing growth in a way that protects and enhances our quality of life and reflects our shared values. As part of a Triple Bottom Line approach to city building, we strive to understand how different patterns of development relate to the economic, environmental, and social aspects of sustainability. In 2017, staff completed Phase 1 of Economic Cartography, which included presenting to the City Council a visual display of property tax revenue across the City of Eugene. The analysis used maps to show tax revenue on a per-acre basis and provided a baseline for showing how developing land should be viewed from both its revenue side (the taxable value of the new buildings) and its cost side (constructing and maintaining roads and pipes and providing emergency services, for example). This Phase 1 work analyzed the revenue side of the equation as the first step in our efforts to gather reliable and relevant data that help our community understand fiscal impacts of development. The consulting firm Urban 3, which has supported cities across the US with similar analyses, was retained by the City to assist with this work. Urban 3 is nationally recognized for its groundbreaking work in land value economics, property and retail tax analysis, and community design. In 2018, staff contracted with Urban 3 for Phase 2 of this project to understand the role in which density and development patterns relate to municipal fiscal sustainability. This phase explores the cost side of the equation by adding infrastructure construction and maintenance costs to the analysis of property tax revenues completed by city staff during Phase 1. NEXT STEPS This presentation is informational only. No formal action is requested at this time. In the future, the Planning Commission, City Council, Budget Committee, Envision Eugene Technical Advisory Committee, and others will have opportunities to discuss how this work relates to ongoing projects such as urban reserves, area and corridor plans, and development incentive programs. FOR MORE INFORMATION Chad Cramer, Urban Designer: 541-682-5561, chad.r.cramer@ci.eugene.or.us ATTACHMENTS A. Mapping Value in Eugene booklet from Phase 1  2017 ATTACHMENT A DRAFT Mapping Value in Eugene,Oregon A practical guide to understanding taxes, land use and quality of life in a great city in the Northwest. May 2017 Chances are, city government Ready? finances aren’t 1 The Fundamentals your thing... Money in, money out. The basics of how cities operate. 2 You’d probably prefer to Understanding “Value” be hiking the Ridgeline, This section takes a complicated topic—property taxes enjoying a concert, or and assessment in Oregon—and whittles it down to a few meeting friends. And who essentials. could blame you? In Eugene, we cherish our exceptional 3 quality of life, and we love to share it with friends and family living out of town. So here’s the challenge: what preserves our A New Way to Think about Property Value quality of life for generations to come? You may Most of us think about property value as a ‘lump sum’. But if have realized (or not) that one of the factors you really want to understand property value, you need to contributing to our quality of life is money—the City of make sure it’s an apples-to-apples comparison. Eugene’s costs and revenues. But did you know that the 4 way we have built, and continue to build, our city and its neighborhoods is one of the biggest determinants This guide explains some basic concepts about our city’s of our city finances? Not only that, but as we look to the finances and then shows how different parts of Eugene— Mapping Value in Eugene future and consider what sort of legacy we leave to the and how they’re built—influence the city’s ability to pay This is where we put it all together and show you where the Eugeneans of tomorrow, how we as a community build for the things that affect our quality of life. taxable value and its associated property tax revenue really our city becomes even more important. are. The maps put Eugene in a whole new light. So, even if city government finances are not the most …but you might be glad to know gripping topic, we need our community to understand it, or else future generations may not be able to enjoy the famous Eugene quality of life of the early 21st century. Let’s start with some basics… 2 Economic Cartography some basics. Economic Cartography 3 Part 1: The Fundamentals The basics of how cities operate from a financial perspective, and a few key terms. Property taxes Does this really impact me? You’re probably aware that the residents and businesses of Eugene depend on our city government to provide key public services, such as streets and public safety. There are two primary revenue sources for these services: property Yes! Every Eugene household and business benefits from the city of Eugene’s services, even when we don’t notice it. $ taxes and fees. Here, we’ll focus on property taxes. • When you drive or ride your bike along a road, you are using the city’s services. • When you slide down a slide at a park, you are using the city’s services. • When firefighters put out a fire so it doesn’t spread, you are using the city’s services. Property Taxes It’s a & Fees pretty simple Just because there is no direct charge for the services, that doesn’t mean they are free. The streets need to be They are called ‘public services’ because they are available to the public. A city park is different from a bowling alley; concept! swept and the parks need to be mowed and weeded. The water needs to be delivered to fire hydrants and the the city park is available to all residents and visitors at no charge. firefighters need to be trained. Public Services A quick note: Understanding any city’s revenues is not a matter of partisan politics. The ability to have political disagree- ments over funding priorities is only possible if there are funds available in the first place. Regardless of any- one’s political ideologies, the basic process stays the 4 Economic Cartography same: taxes and fees enable a city to provide services Economic Cartography 5 to its residents and businesses. Part 2: Understanding “Value” This section takes a complicated topic—property taxes and assessment in Oregon—and whittles it down to a few key essentials that help the rest of this make sense. What gets taxed? Different kinds of value The land in the city of Eugene is divided into parcels, or lots. A house sits on a parcel, an office building sits on a parcel, Privately owned property has a “taxable value.” The annual property tax payment is the taxable value times the and a school sits on a parcel. Streets and alleys are known as public right-of-way, and they connect land parcels to the applicable tax rate. x rest of the community. = Taxable Tax Annual Value Rate Property Tax The total tax rate includes all the taxing districts that serve that property. Owners of privately owned land parcels pay property taxes, which are based on property value. Public property, such House School Office Building as parks, schools, and libraries, don’t pay property taxes. What gets the taxes? Every parcel sits inside multiple ‘taxing districts,’ which are Approximate Market Value $230,000 $3,800,000 $4,960,000 the different public agencies that serve that parcel, such Taxable Value $170,000 $0 $2,775,000 as the City of Eugene, Lane County, and school districts. Some properties don’t pay property The state gives these agencies the authority to collect taxes, or they have special exemptions. property taxes, all of which are combined into a single A quick note: Taxes $3,000 $0 $50,000 property tax bill each year sent out by Lane County. Total Taxes vary depending on which taxing Taxable value is related to, but is not equal to market value. Oregon’s tax laws require that a property’s districts the property is in, but they typically range from 1%-2% of Taxable Value. taxable value may not exceed its estimated market value, and in Eugene, most properties’ market value is higher than their taxable value. 6 Economic Cartography Economic Cartography 7 Part 3: A New Way to Think about Property Value Most of us think about property value as a ‘lump sum’ —a $100,000 house compared to a $300,000 house. But if you really want to understand property value, you need to make sure it’s an apples-to-apples comparison. We explain it here. Comparing apples to apples The conventional comparison of property values There’s a temptation to throw this out the window when values. Let’s look at real world examples of how this plays Everybody knows that if you’re going we look at property values and taxes. We tend to get out. Consider four types of properties in Eugene, and look to compare the values of two different fascinated by the really big price tags that go with large at how their taxable values compare: things, you need to know what you’re parcels and forget everything we know about comparing getting for your money. You expect a big • The single-family house, a ranch-style house on a bunch of bananas to cost more than a typical single-family lot. It’s a pretty average house for small bunch and a 3-scoop waffle cone to Eugene with an approximate market value of about cost more than a kiddie cone. $230,000, but its taxable value (which is what we’re focusing on here) is lower, at $170,000. • The coffee kiosk, a small building with a drive- through, located near commuter traffic, with a taxable value of $215,000. • The downtown office building, 4 stories, with a taxable value of $2,775,000. • The big box store, a large single-story retail center, with a taxable value of $11,495,000. You’ve probably noticed a couple of things: although the office building has over 16 times the value of the house, the big box store blows them all away. However, you Imagine owning a grocery store and may also have noticed that the big box store consumes saying that every bunch of bananas more than 30 times the land of the other buildings. If that should cost the same; your cus- caught your attention, then you’re already thinking about tomers would all want to buy the the apples-to-apples comparison of value. Let’s look at biggest bunch they could find. The that in more detail. same goes for an ice cream cone— and just about everything. 8 Economic Cartography Economic Cartography 9 Part 3: A New Way to Think about Property Value How much value can you get on 12.19 acres? A better comparison of property values Think of it as an opportunity If you look at the value per acre of these same properties—like looking at the price per pound of bananas—you see a Let’s think about the big box store’s 12.19 acres. The same land could hold 54 single-family houses, 28 coffee kiosks, or very different picture. 29 4-story buildings.* The value of 29 4-story buildings on 12.19 acres is 7 times the value of the big box store on the same amount of land. That big box store may have a high taxable value, but it requires a lot of land to generate that value. And if you don’t take that into consideration, it’s not a true comparison of value. In fact, the community could have the same taxable value created by the big box store with less than 2 acres (or about half a block) of office buildings. That means that for the same taxable value—which translates into tax revenue—a city would only have to provide roads, water lines, and sewer lines across a fraction of the area with downtown office buildings instead of the big box retail. i s like nas i s like nas s a s a Thi ng ban h Thi ng ban d i c i n pric he bun pric he pou by t by t *To calculate the number of houses, coffee kiosks, and office buildings, 10 Economic Cartography we assumed some of the parcel was dedicated for street right-of-way. Economic Cartography 11 Part 4: Mapping Value in Eugene This is where we take all of the concepts from the previous sections and show you where the Taxable Value and its associated property tax revenue really are. We use some 3D maps to show you Eugene in a whole new light. From 4 buildings to a whole city Imagine that the chart showing the Taxable Value per acre of those 4 buildings was expanded to include every building in the city. Now imagine that instead of lining up all of values on a chart, we put them all on a map of the city. This 3D map shows the per-acre Taxable Value for every land parcel in Eugene. So, what can you see? A vast majority of the city is single- family houses, like the one in the previous chart. Those properties mostly fall in the grey, tan, or green ranges ($20/acre to about $2.5 million/acre). As you might expect, much of the suburban-style commercial land, whether more like the coffee kiosk or the big box store, falls into that same range, with a handful of light blues marking the highest values. What really jumps out on this map, is downtown, with lots of light blue, dark blue and magenta. This is the part of Eugene where the “downtown building” from our example is, and that pattern is repeated block after block. If you look around the map, you can see some other places you recognize: a commercial center, a subdivision, an historic neighborhood, an apartment complex. Taxable Value per acre $9,395,800 - $22,736,898 $3,668,700 - $9,395,799 $1,983,400 - $3,668,699 $1,183,600 - $1,983,399 $613,600 - $1,183,599 N $1 - $613,599 12 Economic Cartography Economic Cartography 13 Part 4: Mapping Value in Eugene Taxable Value per acre $9,395,800 - $22,736,898 $3,668,700 - $9,395,799 $1,983,400 - $3,668,699 $1,183,600 - $1,983,399 $613,600 - $1,183,599 $1 - $613,599 N N From the northeast From the northwest 14 Economic Cartography Economic Cartography 15 Part 4: Mapping Value in Eugene Taxable Value per acre $9,395,800 - $22,736,898 $3,668,700 - $9,395,799 $1,983,400 - $3,668,699 $1,183,600 - $1,983,399 $613,600 - $1,183,599 $1 - $613,599 N From the southeast N From the east 16 Economic Cartography Economic Cartography 17 Part 4: Mapping Value in Eugene The grid: seeing the whole picture This map shows the same data—taxable value per acre— but instead of building by building, it consolidates the individual properties into a grid. The map shows the average value of all the property in each square, so that the parts of the community that have no taxable value— such as streets, parks, libraries, public parking garages— are blended with the surrounding properties with Taxable Value. This grid map is not quite as eye-catching as the previous one, because the high spikes aren’t quite as high. The high spikes are primarily made by tall buildings with a relatively small footprint. Many of these buildings are in the downtown, where there are also a large number of public buildings that have no Taxable Value. Taxable Value per acre $2,755,000 - $6,947,828 $1,450,700 - $2,754,999 $890,100 - $1,450,699 $558,500 - $890,099 $258,400 - $558,499 N $1 - $258,399 18 Economic Cartography Economic Cartography 19 Part 4: Mapping Value in Eugene What does it all mean? At the beginning, we talked about the role that city tax revenue has in maintaining the high quality of life that we love here in Eugene. And then we showed how different property development types create tax revenue. When you look at the map of Taxable Value from around the city, you see that—although everyone is contributing Ninkasi something—there are certain parts of the city that are Brewing providing financial support for city services at a much higher rate than other parts. University of • The highest value is in the city’s urban core: Downtown Oregon downtown, midtown (between 13th and 19th Avenues) and the area around the University of Oregon. • The value extends in the Whiteaker neighborhood, Franklin most notably at key industrial sites. • Outside of these areas, there are smaller spikes at Boulevard a variety of residential, commercial or industrial locations. These compact development types require the same Midtown roads, water lines, and sewer lines as other parts of the city, yet have substantially higher Taxable Value per acre. Downtown Eugene, with its combination of shops, offices and apartments, has a much higher per-acre Taxable Taxable Value per acre South Value than other parts of town. Yet it consumes less land, pavement, and pipes. $9,395,800 - $22,736,898 University $3,668,700 - $9,395,799 $1,983,400 - $3,668,699 $1,183,600 - $1,983,399 $613,600 - $1,183,599 West University $1 - $613,599 N 20 Economic Cartography Economic Cartography 21 Part 4: Mapping Value in Eugene A look to the future Every community has to have priorities about there’s a lot more to life— It should go without saying that how land is used: Does a surface parking lot get redeveloped as a new apartment building or stay and to our community—than money. as is? Should a parcel become a community park or be turned into new houses? Should land on the edge of town be annexed? The choice about However, as a community, we have a charge to provide developing and annexing land should be viewed for our future, to ensure that our children and their from both its revenue side (the Taxable Value of children can continue to live in a city with libraries and the new houses) and its cost side (building parks, police protection and emergency services, paved and maintaining roads and pipes and streets and street lights that turn on at night. All of providing emergency services). those things cost money. Thanks to the planning and hard work of past and current generations our city is The choices our community financially stable today. makes about the types and location of new development, and maintaining existing development, will determine if our community’s future is financially sustainable. Will we have adequate revenue in the future to provide at least the same services our community enjoys What the future holds will today? be, in large part, dependent on the decisions we make. Mapping Value in Eugene , Oregon has been inspired by work done by Joe Minicozzi at Urban3. For more information, visit them at urban-three.com Tax and property value data are from Lane County Assessment and Taxation, using tax year 2016. 22 Economic Cartography Economic Cartography 23  City of Eugene Planning and Development Department 99 W. 10th Avenue Eugene, Oregon 97401