Teardown discussion offers new perspectives


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Carl Nyberg

There aren't many meetings or presentations that significantly affect my view of public policy issues. When I change my mind about a policy, it's usually from personal experience or a one-on-one conversation.

The recent CUinFP sponsored meeting on teardowns changed my understanding of property taxes and development.

Before the meeting I thought development-mania was driven by municipalities striving to shoehorn as much taxable real estate into their borders as possible. Further, I thought that this made sense given the constraints on local government.

I now doubt that aggressively using development to increase the property tax base works.

Glencoe Trustee Ellen Shubart pointed out at the meeting that for every condominium that gets added, the government has to provide services for the people that live there. Peculiarities of Cook County property taxes mean that there is a lag of 12-24 months between when a parcel is developed and when the government gets the initial property tax revenue.

If Shubart's observation is taken to the extreme in the opposite direction, it makes sense. If no one lived in Forest Park there would be any need to provide government services. And therefore there would be no need to charge any taxes.

I asked a follow-up question about municipalities recruiting an ideal resident. Would it make sense from a cynical cost-benefit analysis to court certain types of people? A person that has no children (since 60+ percent of property taxes go to schools) and shops close to home would seem ideal. S/he'd pay taxes and consume few services. The "ideal" taxpayer sounds like a senior citizen, but seniors aren't quite the model citizens this suggests. Seniors use more ambulance services. And seniors pay property taxes at a lower rate than non-seniors.

Lake Forest Village Manager Robert Kiely made a case that it all comes out in a wash. Citizens consume services, so a community might as well give up on the notion of developing its way to an increased tax base. The only net revenue assets Kiely could identify were car dealerships and Wal-Mart. And he said Wal-Mart probably wasn't really an asset because of the parking and traffic issues.

Kiely said the best thing a community could do is to develop in a way that complements the existing aesthetic and the desires of the residents. This was comforting. It had a Zen quality of letting go of economic considerations and focusing on aesthetics. And well-managed aesthetics would take care of the economic considerations.

Earlier Kiely had made an analogy to collecting baseball cards. He said a Mickey Mantle card becomes more valuable as the other Mickey Mantle cards get lost or destroyed.

Kiely made the case that those rare communities that maintain their quaint charm through managing development increased in value faster than communities that liberally allowed teardown development. Lake Forest was on the cutting edge of managed development. It started in 1962 so they have a snobbish attitude that they had more foresight than the rest of us.

Kiely seemed to imply that it was better to govern a community where the average home cost $500,000 than a community where the average home cost $400,000. As Cyndi Lauper sang, "Money changes everything".

While Kiely and Shubart wouldn't say it explicitly, they seemed to be saying the communities should be courting more affluent residents. While liberally allowing teardowns would seem to bring more affluent residents, it actually depresses values of the surrounding community.

Forest Park is a tricky community to manage. While it has some attractive homes it has much that is tacky and impractical. What aesthetic should Forest Park try to achieve?

Shubart also spoke in favor of high-density in the right circumstances. Near train stations and downtown areas it makes sense to have high density because more people lead to more vibrant business districts. How much of Forest Park qualifies as being near a train station or a commercial district?

CUinFP succeeded in holding a truly educational forum. If I understood the panelists correctly the message is that Forest Park should use its power to keep development as tasteful as possible and the economics will take care of themselves. This of course leaves us with the question, what is tasteful for Forest Park?

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