Map Monday: Taxable Value per Acre for Hennepin County

Via Minneapolis Clerk’s Twitter, here’s a map from a recent presentation by land use analysis group Urban3. they were in town a few weeks ago to share some data and thoughts about trends in Hennepin County.

This map shows the taxable value generated for different parts of the city on a per-acre basis, rather than a per-parcel basis. The (small) scale is at right: dark green = <$500,000 / acre, orange = $4M / acre, purple = > $200M / acre.

You can see a clear pattern:

I’ve written about the importance of these “per-acre” lens before regarding industrial land near downtown Saint Paul. The Urban3 analyses are a great way to understand the opportunity costs of different land use choices for a city like Minneapolis.

Here’s how they describe this relationship, from a Strong Towns article that came out last week:

We tend to focus on the total value of real estate and the total tax production while ignoring land consumption and space.

This is tantamount to buying a car based on its range, or assuming that land is an infinite resource. Developable land, like petroleum, is not infinite. It is limited by municipal boundaries, and more importantly, by the cost to make it developable.

The resulting map shows which properties are generating the maximum amount of value for the space and resources they consume, and which are not. By analyzing this pattern, we can see how mixed-use, traditional development close to the city center produces the most value for the county.

We should talk about productivity in our buildings the same way we talk about productivity in our cars. Gasoline is non-renewable, and if anything, land is even more scarce. If we’re try to get the most bang for our buck with a $4 commodity, shouldn’t we be even more concerned about this metric for a $40,000 commodity?

The takeaway here is that downtown density is lucrative and efficient when viewed from a per-acre efficiency lens. Meanwhile, sprawling properties like a big box store, a corporate campus, or an industrial park might generate a lot of taxable value overall, but because of their very low densities and large parking and open space footprint, on a per-acre basis they are very wasteful types of development.

In short,  nothing can match traditional grid-based urban density when it comes to generating tax-base for a city. These differences are huge and often underestimated because of how we think about land value.

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11 Responses to Map Monday: Taxable Value per Acre for Hennepin County

  1. Cobo R June 25, 2018 at 10:44 am #

    This map is really cool. Is there anyway to get a higher resolution image?, and maybe one where there is consistent shading across the county.

    I would even pay a small sum for one.

    • Bill Lindeke
      Bill Lindeke June 25, 2018 at 1:16 pm #

      If anyone has the slides from the presentation, please do share! I would also like to see it.

  2. Eric Anondson
    Eric Anondson June 25, 2018 at 7:56 pm #

    The slides that have the entire county using the same color scheme is my favorite. After downtown Minneapolis, it shows a nice spike in Wayzata, the Soudale area shows up with the actual Southdale Center as a pretty low value per acre use, MOA show up nicely but is far shorts than I bet anyone would expect.

    Stadium Village and Dinkytown are quite visible too. As the UofM expands out that’s some petty productive land that gets permanently removed from the tax rolls.

    • Bill Lindeke
      Bill Lindeke June 26, 2018 at 9:17 am #

      I’ll add it when I get a chance.

  3. Trent June 26, 2018 at 8:47 am #

    Interesting if narrow way to look at these things. Continuing the analogy, people chose what car to buy for reasons beyond one metric (e.g. fuel efficiency). Cargo capacity, fun, foul weather performance – all criteria that may work against a pure productivity MPG metric. so my minivan may not be as productive as a Prius by that metric, but a Prius doesn’t work for my family.

    Similarly there is real value to land that doesn’t peak at the tax generation per acre graph. We need some green space. We need less dense areas of the city with trees that are not simply block after block of multi-use mid rise developments.

    While you may find a region with low “productivity” you need to look at the effect it has on the area, such as a corporate HQ that employs thousands of people who drive the need for more housing and commercial developments. At the other extreme the U of M would be a zero productivity area by this math as it’s tax exempt, yet it has huge value and contribution to the city.

    • Eric Anondson
      Eric Anondson June 26, 2018 at 9:00 am #

      “We need some green space. We need less dense areas of the city with trees that are not simply block after block of multi-use mid rise developments.”

      As it turns out, Minneapolis does not have a shortage of public green space. Indeed, the Trust for Public Land’s parkscore rates Minneapolis as first in the nation. http://parkscore.tpl.org/rankings.php

      It is entirely achievable to have tree-lined streets in neighborhoods of low rise and mid rise buildings. And if zoning made perimeter block construction possible, we could also have tree-filled courtyards with the tree-lined streets.

    • Bill Lindeke
      Bill Lindeke June 26, 2018 at 9:17 am #

      Thinking about tax-base is probably one of the main ways to look at city budgets and spending. Ignoring that aspect of city government is surely folly!

    • Matt Steele June 26, 2018 at 10:15 am #

      We don’t need to maximize tax generation per acre. Nor does tax generation per acre correlate to public expenditure per acre. But generally the areas the generate the most per acre have the best shot of breaking even or producing wealth for a city. Urban3 has also done some excellent work on this relationship. Check out their work in Lafayette, Louisiana for that type of analysis.

      Another related topic is the work by Missing Middle developers who are not necessarily interested in maxing out their footprint. A Portland developer was just in town talking about this. https://www.minnpost.com/politics-policy/2018/03/one-crazy-idea-developing-better-projects-minneapolis-build-smaller

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