Tuesday, February 3, 2015

Can Property Taxes Discourage Demolition By Neglect?

By Jason Yots

Buffalo Rising recently reported about the ongoing preservation battle at 110 - 118 South Park Avenue, in Buffalo's Cobblestone Historic District (1).  In short, the owner would like to demolish the building and replace it with a multi-story tower.  Having been denied a demolition permit in 2011, the owner now is ignoring code enforcement directives and allowing the building to rapidly deteriorate.  Efforts by surrounding business owners to buy-out the owner have been rebuffed.

Our city's building code enforcement process can and should do more to discourage demolition by neglect.  But tougher code enforcement alone will not eradicate DBN tendencies.  Hitting owners in the wallet, however, might be effective.  One such measure that's been considered in other states is land value taxation, through which the land beneath the building - rather than the building itself - is allocated most of the property's value.  Under our current property tax system, as an owner disinvests in his/her property, the market value drops and, eventually, so will the property tax assessment, making it easier for a DBN-owner to stay in title without reinvesting.  Under a land value taxation system, DBN is discouraged because an owner's taxes are based on the value of the land (which generally is not negatively affected by DBN), requiring an owner to maintain his/her building to keep it cash-flowing.

Coupled with a receivership-based code enforcement process, land value taxation can be a valuable tool for communities battling DBN.

1. The People vs. Darryl Carr (February 2, 2015, http://buffalorising.com/2015/02/the-people-vs-darryl-carr/)

2.  Photo credit: Buffalo Rising

No comments: