Quite simply, parking equals tax loss.
On a recent charrette in Bethel, CT, a small town of 18,000, residents we performed a tax analysis of property tax paid by property owners in the town’s retail center, a charming New England street with many shops packed tightly together in typical 2-story buildings.
We analyzed one of the tightly-packed 2-story buildings with no parking (the building basically covers its entire .16 acre lot), which pays what we calculated to be $133,000/acre, while an adjacent grocer with off street parking on 4 acres in the same tightly-packed location pays what we calculated to be $37,000/acre.
In other words, in a location which could easily accommodate a continuation of building types it already has, building types that generate significantly higher tax yield/acre, the town’s taxpayers are forced to make up the difference in their own taxes to the amount of approximately $384,000 per year just to the advantage of the one grocer for the privilege of the grocer’s customers to have free and convenient parking in an otherwise high tax-yield/acre location.
A CVS at the other end of the shopping street with off street parking pays what we calculated to be $20,000/acre, meaning the town’s taxpayers make up the difference (pay higher taxes) even more to the advantage of that single property owner for the parking convenience of its customers in an otherwise high tax-yield location.
In this small town, as with any town or city, where residential property owners pay a fraction of what downtown property owners pay, one can easily see how maximizing reasonable productivity of the economic engine of downtown tax-yield is to the direct advantage of all. Squandering tax-yield is to the direct disadvantage of all.
Meanwhile, in downtown New Haven, CT, where a tightly-packed building sitting on .13 acres (our own building) pays what we calculate to be $290,400/acre, the accounting detailed above more than doubles, meaning parking and empty lots in New Haven, as well as anything not tightly-packed, are EXTREMELY expensive for other taxpayers who have to make up the difference for each one of the low to no tax-yield properties in the city’s highest tax-yield areas.
People may be angry about losing their downtown parking, especially their free parking, but with ±2/3 of otherwise high tax-yield/acre land in downtown New Haven taken off the tax rolls in the interest of low or no tax-yield parking in the most fertile tax-yield areas, along with the fact that city services, city government, and construction/maintenance of infrastructure are the SAME whether properties have buildings or not, explains why taxes are so extraordinarily high for remaining properties with buildings downtown, AND in the residential neighborhoods.
In other words, in most every case in the US, property tax does NOT rise in response to rising values. Property tax rises in response to lowering values.
Quite simply, parking acreage equals tax loss, made up for by extraordinary tax increases for everyone else. It’s actually extraordinary that all these decades no one has ever considered the possibility their significantly increased taxes (adding up to billions) on account of parking for for-profit private concerns could amount to a taking, something not blamed on bad luck in the economy, but something directly resulting from imposed policies of a municipality without any public vetting. Even eminent domain requires a vetting process, a process never initiated by the institution of parking standards, let lone ALL the other DOT standards, which INVARIABLY lower property values.