Thursday, June 26, 2014
No one is more surprised than I with how much time I spend reading about tax law these days, but I wanted to alert folks to another case regarding the valuation of historic conservation easements. This time, we are talking about Maison Blanche - a fancy former department store now an even fancier Ritz Carlton on Canal Street in New Orleans.
In 1997, the Whitehouse Hotel Ltd. (owner of the property) donated an historic preservation conservation easement to protect the facade to the Preservation Resource Center. Whitehouse's appraiser estimated the value of the conservation easement at $7.445 million (not $7,445 million as the 5th Circuit opinion mistates). The IRS cried foul and valued the conservation easement at $1.15 million and also dinged Whitehouse for an extra 40% for underpaying by more than 400%.
Unsurprisingly, litigation ensued. Whitehouse v. CIR, 2014 WL 2609866 (5th Cir. 2014), decided on June 11th is the second time the case has made it up to the 5th Circuit. The disputes have generally been battles of appraisals and valuation methods. I am not going to express any opinion about the appraisal methods but thought I'd point out a few things.
What does the conservation easement allow?
There was a big dispute here as to whether the conservation easement actually had any value. One of the appraisers suggested that because the conservation easement would not actually prevent Ritz Carlton from building what it want to build, the value should be zero. The highest and best use of the property is unchanged by the conservation easement. This conclusion turned in part on the language of the conservation easement and whether it actually prohibited the potential building of 60 additional rooms on part of the hotel complex. The Tax Court agreed with the appraiser that the conservation easement did not have such a prohibition. Whitehouse I, 131 T.C. 112 (Tax Ct. 2010). The Fifth Circuit disagreed. Whitehouse II, 615 F.3d 321 (5th Cir. 2010). On remand to the same judge, the Tax Court reviewed Louisiana servitude law and again stated its belief that the conservation easement did not restrict the additional building and should not have value BUT the Tax Court acknowledged that it was bound by the 5th Circuit's precedent and estimated the conservation easement value based on that assumption (coming up with as the 5th Circuit said "merely $1,867,716"). Whitehouse III, 139 T.C. 304 (Tax Ct. 2012).
Undoubtedly feeling that it got a raw deal from an unbiased judge, Whitehouse appealed but the 5th Circuit upheld the Tax Court stating that even though the Tax Court went out of its way to voice its disagreement with the 5th Circuit that was allowed as long as it actually followed the 5th Circuit.
Can you rely on tax professionals' assessments of your conservation easements?
Well, at first blush the answer to this question looks like "no" because the appraiser was so wrong. But the key question to consider for this case is whether Whitehouse's reliance on its appraiser and other professional should protect it from the penalty for gross underpayment (the 400% thing I mention above). There is a reasonable cause exception that allows taxpayers to get out from under this rather steep penalty. This issue is important for people interested in conservation easements because we see over and over again how far apart the private appraisals can be from those the IRS calculates. How much should we penalize landowners for their underpayments made in reliance on qualified professionals? The Tax Court imposed a 40% gross underpayment penalty, holding that Whitehouse had not done enough to demonstrate that it had reasonable cause to believe the appraisal. The court may have been particularly persuaded by the fact that the appraisal of the conservation easement exceeded the price actually paid for the property. The 5th Circuit reversed on this issue because Whitehouse had consulted with more than one appraiser and consulted other tax professionals. The 5th Circuit found this to be adequate.
I am really torn on this one. We want landowners to be able to rely on qualified appraisers and to impose a 40% tax penalty could be particularly painful to small landowners. But there have been repeated examples of bad appraisals around and it seems like there has got to be some type of smell test. Where a conservation easement is valued so much higher than the purchase price of the property, I hesitate too. Of course, I understand that the purchase price doesn't really tell you the value of the property and the value of what an entity like Ritz Carlton can get out of a property, but at the end of the day as a taxpayer, I don't even like the fact that the landowners here got a $1.8 million dollar charitable tax credit to build a big fancy hotel and condo complex that will make them oodles of dollars. Arguing that they lost $1.8 million because they couldn't make it as absolutely big as they might have just leaves a bad taste in my mouth.
June 26, 2014 in Architecture, Caselaw, Conservation Easements, Development, Economic Development, Federal Government, Historic Preservation, Land Trust, Real Estate Transactions | Permalink | Comments (1)
Monday, June 23, 2014
As long-time readers know, I have an obsession with interest in conservation easements. In particular, I have been intrigued with a category I call "exacted conservation easements," which I view as any conservation easements that have been created in exchange for some type of land-use permit or development benefit.
Many conservation easements are donated to land trusts and government entities. Those landowners are then able to seek deductions for charitable contributions on their federal tax returns based on the fair market value of the conservation easement. Of course, calculating the fair market value of a conservation easement may not be a simple task, but we can leave that discussion for another day. Today, I want to talk about the potential for tax deductions on exacted conservation easements.
Exacted conservation easements exist because a landowner is seeking the right to develop or change her land in a way currently restricted by law. For example, where a landowner wants to convert endangered species habitat into a residential development, the landowner often agrees to burden other land with conservation easements in exchange for an incidental take permit. Now, in what I hope is an uncontroversial statement, I often assert that such conservation easements should not garner landowners any charitable tax benefits. Unfortunately, I heard many stories of landowners seeking and obtaining tax deductions for such properties.
In a recent tax court opinion, we see an example from Colorado. In Seventeen Seventy Sherman Street, LLC [SSSS] v. CIR, T.C. Memo 2014-124, the Tax Court examined the deductibility of historic facade and interior conservation easements. SSSS wanted to develop an historic site (the Mosque of the El Jebel Shrine of the Ancient Arabic Order of Nobles of the Mystic Shrine) in Denver into condos. Because the property is a designated landmark, the architect proposed building in the parking lot and preserving the shrine "as leverage to induce the city of Denver to modify the zoning restrictions governing the use and development of the [property,]" which at that time was not zoned for residential development (T.C. Memo at 5-6). SSSS then entered into negotiations with the city's Community Planning and Development Agency regarding changes to the Planned Unit Development (PUD) for the area, the conservation easements, height variance, etc. The Agency asserted that it would not recommend any changes to the PUD or granting of the height variances without the conservation easements.
Hopefully, you see quickly why I label these exacted conservation easements (or I sometimes call them "coerced conservation easements") and why they differ from the vision most folks have of conservation easements protecting the family homestead and helping farmers keep the property in the family. Here, we have a developer with no emotional connection to the property simply making a deal to obtain the development rights that the developer sets as its goal. This doesn't mean that the developer doesn't value the historic, scenic, and cultural benefits of this property. Indeed, a developer may purchase an important or beautiful site exactly because it believes those features are important, BUT we may not have the same ideas of freedom of contract or donative intent involved. We might want to view such conservation easements differently, more critically.
So what kind of tax break should SSSS be able to get here? My initial take on these has always just been zero. The conservation easements were exchanged for a varaince and favorable development measures; they are not donations. But as the Tax Court points out, we may be able to find some instances where some of an exacted conservation easement was done in exchange for a permit or some other benefit, but the value of the restriction actually exceeds the value of the permit. Frankly, while I agree generally with that sentiment, I have trouble picturing where that might occur. How do we calculate that? Without the conservation easements here, we know there would have been no permit. So can we really say that the value of the conservation easements exceeds the value of the permit? If so, are there ways to confine the conservation easement to bring it in line with the value of the permit? They have to be perpetual, so we could only change other characteristics. Suddenly I feel like we are immersed in some Dolan-like analysis of value and proportionality.
The conservation easements in this case were first valued at over $7 million. On its tax forms, SSSS did not indicate that it had received anything of value in exchange for the conveyance of the conservation easements (to Historic Denver). The IRS responded that SSSS had failed to meet some filing and appraisal requirements and asserted that the conservation easements should only be valued at a little over $2 million but claimed that the interior CEs were not deductible at all, leaving the potentially deductible amount at $400,000. Here, the Tax Court did not need to determine the value of the conservation easements or the value of the development benefits SSSS received in exchange for them because SSSS failed to identify that it received consideration for the CEs as required by the Tax Code. The court continued to explain that the exchange sure looked like a quid pro quo one with SSSS agreeing to the CEs (whatever their value) in exchange for the Planning Agency's support (whatever its value).
I am glad to see the IRS taking a careful look at these conservation easements. Generally, I think we should be wary of any conservation easements emerging from development schemes.
Thursday, June 19, 2014
Many of the exciting conservation easement cases (yes I did say "exciting conservation easement cases") come up in the context of facade easements. I think facade easements just sound sketchy questionable to many of us. Someone with a beautiful historic building gets a tax deduction for agreeing not to destroy the facade of that beautiful home. My gut reaction is to object that the landowners unlikely had any plan to mar one of the aspects that likely drew them to purchasing the building. In fact, I have heard more than one landowner brag that they just got a tax deduction for doing what they were already doing. On further consideration though, we can see that there might be value to the public here. This is particularly so in an area where (1) landowner are having trouble affording the upkeep on the homes or (2) where economic pressures or a lack of other protection mechanisms put the buildings at risk. Some have argued that such restrictions always have value. That is, even if we have a landowner who was already planning to protect the building and the home is in a district where local laws prevent destruction (or require upkeep), you never know what the future holds in terms of other landowners or changing government whims so a facade easement may end up saying the parcel one day. Personally, such speculative value doesn't seem the best use of public funds when we can confidently identify so many places where conservation yields immediate results.
Scheidelman v. C.I.R. (2014 WL 2748623) decided yesterday by the Second Circuit is the latest in a saga over the deduction of a Brooklyn townhouse. In 1997, Huda Scheidelman paid $255,000 for this house in the designated Fort Greene Historic District. The district is designated as a historic district by the National Park Service and by NYC's Landmarks Preservation Commission. Under these protections, it is illegal to alter the facade without the consent of the Landmarks Preservation Commission.
In 2003, Scheidelman donated a facade conservation easement to the National Arhcitectural Trust, now renamed the Trust for Architectural Easements. The Trust's recommended appraiser valued the conservation easement at $115,000 and Scheidelman claimed a charitable deduction for that amount on her 2004 tax return.
After an audit the IRS rejected her claimed deduction as not being accompanied by a "qualified appraisal" as required by statute. The Tax Court agreed, but the Second Circuit vacated and sent the case back for a de novo review of the fair market value of the conservation easement. After doing so, the Tax Court determined that the value of the conservation easement should be $0 because it did not diminish the property value of Scheidelman's townhouse. Using the standard before and after method of appraisal, this calculation makes sense. Because other laws already restrict the property, the presence of the conservation easement doesn't change the value of the property. Of course, some may argue that the before and after method isn't appropriate and perhaps instead we should do some calculation based on value to the public but well... that's a harder number to crunch and more open to abuse. The Second Circuit just upheld the tax court's finding that the deduction had no value.
My favorite line of the Second Circuit (per curiam) opinion is the statement that conservation easements do not represent a per se reduction in fair market value and in fact may even serve to enhance property value.
Tuesday, January 22, 2013
For those of you interested in conservation easements (particularly historic façade easements), you may have been following the Scheidelman saga.The next installment is now out.
In Scheidelman v. Comissioner, T.C. Memo. 2010-151 [Scheidelman I], the landowner sought a deduction for a façade easement burdening her Brooklyn brownstone. The Tax Court disqualified an appraisal because it viewed the method of calculating the easement’s value inadequate. Appraisals must include the method of valuation used as well as the specific basis for the valuation. The appraiser applied a percentage to the fair market value of the property before conveyance of the conservation easement. The Tax Court found that the appraiser had insufficiently explained the method (i.e., the percentage approach) and basis of the valuation (i.e., the specific data used).
The landowner appealed to the Second Circuit. The Second Circuit [Scheidelman II, 682 F.3d 189 (2d Cir. 2012)] reversed the Tax Court, saying that the shortcomings of the approach should not disqualify the appraisal.
On remand [Scheidelman III, T.C. Memo. 2013-18 ], the Tax Court accepted the Second Circuit's assessment that the appraisal was “qualified” but still thought it was crappy was not credible. You can check out the case if you want to delve into the nitty gritty of appraisal methods. The most problematic issue appeared to be the fact that the appraisal just picked a number between 10 and 12% of the fair market value of the home when trying to determine the value of the conservation easement. The appraiser's reasoned that those are the numbers that courts and the IRS seem to like instead of actually looking at the property and making an assessment.
I am enamored of this case though because in the end the Tax Court said no tax deduction is warranted. The evidence demonstrates that façade easements actually increase the value of homes in this area. Additionally, the landowner herself admitted that she was seeking a tax deduction for something she would have done anyway. Here is my favorite quote from the landowner:
"Well, I was primarily interested in preserving my house itself in light of the dramatic development that was occurring in and around Fort Greene during those years and still is. I was also intrigued by the tax benefit of preserving the facade which I had intended to do anyway. …I also wanted to benefit tax wise. I didn't know how much I would benefit, but I wanted to benefit from what I was already intended to be committed to doing."
I have been disturbed fascinated by conservation easement tax deductions that pay owners not to do things they never planned on doing. In understand that there can be some value to the conservation easements becuase perhaps future landowners would have other desires, but it is hard for me to reconcile that worth with the high value of tax deductions current landowners receive. I am glad to see the IRS and Tax Court calling these landowners out. Maybe if a landowner seeks to claim a tax decuction for a conservation easement and we see that the conservation easement increased the value of their land, they should have to pay that difference to the treasury.
Wednesday, January 2, 2013
Here's a story out of Arizona, where apparently a historic Frank Lloyd Wright house was under dispute. From the New York Times story by Fernanda Santos and Michael Kimmelman:
The conservancy and other organizations petitioned the city in June to consider giving the house landmark status, after they learned of the former owners’ plans to split the lot to build the new homes. Three local government bodies approved the landmark designation, but the Council, which has the final say, postponed its vote twice, in part to give the parties more time to strike some type of compromise. There was also uncertainty over how some of its members would vote, given the homeowners’ lack of consent for the landmark process.
“If ever there was a case to balance private property rights versus the public good, to save something historically important to the cultural legacy of the city, this was it,” Larry Woodin, the president of the conservancy, said in an interview.
Seems like a good result here, while communities across the nation continue to struggle with how to strike that balance.
January 2, 2013 in Aesthetic Regulation, Architecture, Historic Preservation, History, Homeowners Associations, Housing, Local Government, Planning, Property Rights | Permalink | Comments (0) | TrackBack (0)
Wednesday, October 17, 2012
In Places, a former graduate school colleague of mine has a fascinating essay on the use of public spaces. The essay is drawn from a chapter in the forthcoming book Beyond Zuccotti Park: The Freedom of Assembly and the Occupation of Public Space.
Hou provides examples of public transformation of places into sites of action, meaning and possibility. Challenging us to rethink our notion of “public” in public space. The essay is accompanied by photos of public appropriation and use of public spaces from across the globe.
For those of you unfamiliar with Places, it is an interdisciplinary journal on architecture, landscape, and urbanism. It has been an online journal since 2009, which is a superior format as it allows images and discussion of the articles. Check it out.
Tuesday, October 2, 2012
Robert C. Ellickson (Yale) has posted The Law and Economics of Street Layouts: How a Grid Pattern Benefits a Downtown, forthcoming in the Alabama Law Review from its lecture series on boundaries. The abstract:
People congregate in cities to improve their prospects for social and economic interactions. As Jane Jacobs recognized, the layout of streets in a city’s central business district can significantly affect individuals’ ability to obtain the agglomeration benefits that they seek. The costs and benefits of alternative street designs are capitalized into the value of abutting lots. A planner of a street layout, as a rule of thumb, should seek to maximize the market value of the private lots within the layout. By this criterion, the street grid characteristic of the downtowns of most U.S. cities is largely successful. Although a grid layout has aesthetic shortcomings, it helps those who frequent a downtown to orient themselves and move about. A grid also is conducive to the creation of rectangular lots, which are ideal for siting structures and minimizing disputes between abutting landowners. Major changes in street layouts, such as those accomplished by Baron Haussmann in Paris and Robert Moses in New York City, are unusual and typically occur in bursts. Surprisingly, the aftermath of a disaster that has destroyed much of a city is not a propitious occasion for the revamping of street locations.
Highly recommended, with lots of interesting planning-type details in addition to the larger importance to land use theories and approaches.
Wednesday, August 15, 2012
The New York Observer has a list of the 15 Most Fascinating NY Real Estate Cases of the 21st Century, based on a survey of NYC real estate lawyers. Although most involve contracts or financing gone awry, a few involve zoning and land use disputes. They also make use of Sherlock Holmes-esque titles, like "The Case of the Mischievous Mall Developer."
Of particular interest are "The Case of the Masterpiece & The Condo Ad," involving a dispute over advertising, public art, and landmarking. The "Case of the Museum and the Architect" involves a building designed by Jean Nouvel next to MOMA, as well as zoning, landmarking and air rights issues. "The Case of the Brooklyn Basketball Arena" gives a very truncated summary of the series of legal battles over eminent domain and the construction of a new arena for the Brooklyn Nets. (For a more detailed account in response from critics of the development see the Atlantic Yards Report). And "The Case of the Abused J-51" details the legal battles over rent regulation following the $5.4 billion purchase of Stuyvesant Town.
Tuesday, August 7, 2012
I just can't enough of Buffalo these days. Yesterday, I posted about our "zombieness" and today I learned of something fun being done with some of our vacant land (up to 20% of the land in the city of Buffalo is vacant -- no that is not the same thing as open space). Some Brooklyn-based architects are suggesting we turn the land into artfarms. Never heard of artfarms? Me neither. The architects describe them as sculptures that serve as agricultural grow structures. Urban farming meets local artists.
"These above-ground, vertically designed sculptures will provide a means to produce fruits, vegetables and flowers for the surrounding community, but they will also provide a creative basis for expansion. In essence, the concept of Artfarms is to create and erect devices that are not just aesthetically appealing, but that will serve a greater purpose by triggering redevelopment."
I hope they find some funding and support to make these happen. Nothing tastes better than a local ogranic tomato grown on a structure that belongs at Burning Man.
Thursday, July 26, 2012
As Jessie noted in her post on the Olympic Villages, there are many land use issues involved when a city hosts the Olympic Games. For a fantastic overview of these issues, with numerous in-depth stories, there's no better place to start than The Atlantic Cities' "Special Report" Olympics 2012: London Gets Ready for the Summer Games. Feargus O'Sullivan has been reporting from London for months, and in the past couple of weeks many of their other writers have contributed excellent stories on a slew of land-use-related Olympic issues. Here are just a few examples of the wide range of topics they've addressed:
Whether hosting the Olypmic "boondoggle" is good or bad for your city; homelessness and tourism; security issues; public attitudes--politicians telling "whingers" to "put a sock in it"; transportation concerns; architecture; planning for post-Games facilities use; affordable housing; the always-controversial of building new stadiums (stadia?); and many, many other important issues that come up when a big city offers to play host to the world.
The British media, of course, have lots of excellent coverage. But for a more specific focus on land use, local government, and urban planning issues, I highly recommend starting with The Atlantic Cities' Olympics 2012 page. They're posting several new stories each day.
In the meantime, I hope you all enjoy watching that important land use event known as the Olympic Games!
July 26, 2012 in Affordable Housing, Architecture, Comparative Land Use, History, Housing, Local Government, Planning, Politics, Redevelopment, Transportation, Urbanism | Permalink | Comments (0) | TrackBack (0)
Thursday, July 12, 2012
I’ve just returned from several weeks of travel, and thought I’d post on several items I saw along the way. The first of these was a utopian community in Copenhagen, Denmark, called Christiana. Christiana is on an island, Christianhavn, adjacent to the central city of Copenhagen that had been used for military purposes for centuries. When the Danish military closed a base on the island in the Sixties, some freedom-loving hippies and other radicals set up shop by squatting on the land, declared their independence from the Danish state (adverse possession is for sissies, apparently), refused to pay taxes, and otherwise have engaged in community- and ganja-based decision-making ever since. About 1,000 residents now call Christiana home.
There are several aspects of Christiana that I think land use folks will find interesting. First, after four decades of tolerating open rebellion in its midsts, the Danish government finally decided that it needed to do something about Christiana. You might be anticipating a “throw the bums out” approach; but remember, this is Denmark, not Rudy Giuliani’s New York City. Instead of mounting riot troops at Christiana’s borders, the Danish government sent in their lawyers with an ultimatum: Christiana’s residents could stay, but they would have to buy the land from the Danish government. But the Danish government did not demand the market price for the property; instead, they offered the property to Christiana’s residents for a song. In a sense, all the Danish government is seeking to do is to legitimate the ownership of the land; in other words, if Christian’s residents “own” the land, there is some acknowledgment of the government’s control and sovereignty over that land. But, of course, the Christiana residents disdain this idea of ownership even though they need to raise capital to purchase the land.
The result has been one of the most peculiar of solutions: a stock offering of nominal ownership that investors can purchase.
As the New York Times described it:
[Christiana's residents] decided to start selling shares in Christiania. Pieces of paper, hand-printed on site, the shares can be had for amounts from $3.50 to $1,750. Shareholders are entitled to a symbolic sense of ownership in Christiania and the promise of an invitation to a planned annual shareholder party. “Christiania belongs to everyone,” Mr. Manghezi said. “We’re trying to put ownership in an abstract form.”
Since the shares were first offered in the fall, about $1.25 million worth have been sold in Denmark and abroad. The money raised will go toward the purchase of the land from the government.
I found this struggle over the idea of ownership to be fascinating. After all, the amount the Danish government is seeking from Christiana is far below the market price of the land in the now trendy area of Christianhavn. However, what the government is doing is forcing the utopian community out of its stance of declaring “independence” from the Danish state, while Christiana’s residents attempt to use arcane legal structures to avoid sullying their hands with the prospect of “ownership.” Am I the only one who thinks of Johnson v. M'Intosh on these facts?
The second interesting issue in Christiana was a poster located on the community’s main meeting room, which establishes the community’s “common law.” A picture is to the right. Now, at first blush, this will not look much like common law, but rather a visual statutory scheme, or maybe even something like the Ten Commandments if written for a biker gang. But it was the kind of rules that interested me: they speak, I think, to the kinds of problems that must have evolved in Christiana over time: hard drugs, biker’s colors, firearms, and so on. Each of these rules, you can imagine, resulted from a particular incident, and so a “common law” evolved in this place where all decisions are made collectively. Such a common law speaks to the potentially rough nature of standing as a state independent from the protection of the sovereign. It made me think of the devolution of all of the United States’ utopian communities, from New Harmony on down. Is such a slide into anarchy, or the fight against anarchy, inevitable in such utopian movements? I don’t know, but Christiana remains, and it seems to continue to thrive despite its troubles. It eeks out a living on the sale of rasta trinkets and “green light district” paraphernalia. And even in this space where there is supposedly no sovereign, there is still some law, borne of hard experience, common to all. Its future, cast somewhere between lawfully-abiding property owner and anti-property ownership crusaders, between freedom and the "common law's" protections, will be interesting to watch in the coming decades.
July 12, 2012 in Aesthetic Regulation, Architecture, Community Economic Development, Comparative Land Use, Constitutional Law, Development, Economic Development, Eminent Domain, Globalism, Planning, Property, Property Rights | Permalink | Comments (0) | TrackBack (0)
Monday, June 4, 2012
Recently I came across the following cluster of five houses in an otherwise standard subdivision of front-
facing houses with their usual (yawn) front setbacks, side setbacks, and usual suburban land use controls that created the dominant suburban urban form.
The image of these five houses in Teton County, Idaho, however, will immediately induce a land use lawyer's headache. Inevitably, everyone knows, that if there is the will to make something like this work as a "one off" experiment, someone will call it a "planned unit development," or something like that, and there will quickly be a retreat from the strictures of the dominant code and a run for the relief provisions, whatever they may be locally. Maybe its a conditional use, maybe it's a special use district, a planned unit development. [Insert your local jurisdiction's relief provision here.]
But I began to wonder... what if you wanted to build a whole community, or thinking big--a whole city--built upon the premise of this five-house approach? As readers of this blog know, I have recently been somewhat infatuated with the idea of how attention to our smallest living units--neighborhoods--can be an impetus to solving our larger land use and environmental challenges. And so, I find this particular model of five units intriguing. Think about the density of these single-family houses (quite high), and think about the livability of an environment like this (also quite high, I believe). This approach will not appeal to everybody--nothing does--but if it can appeal to people in big-sky country of eastern Idaho, I think it could appeal to lots of other people, too. The combination of density and appealability seems to me a potentially winning combination in efforts to try to build more dense, environmentally sustainable communities.
Now, the question is, how could we make experiments in suburban neighborhood design like this easier from a land use law perspective? One person who has thought about the issue significantly is Ross Chapin, whose book Pocket Neighborhoods, addresses urban design of small neighborhood units in suburban reaches. Chapin's dominant proposal clusters 8 to 12 houses, rather than five, around a central "common," as shown in the graphic here. In addition, the Municipal Research and Services Center of Washington has compiled codes from places that have adopted this style of housing, which the Center calls cottage housing. For those interested in pursuing this, a review of the codes the Center has compiled is well worth it. These model and enacted codes provide approaches to neighborhood design that I believe could prove valuable to re-thinking what it means to live in a suburb, and maybe even in quasi-urban, environments.
Stephen R. Miller
Monday, May 28, 2012
Yesterday I took my kids to see The Avengers, the ensemble superhero movie featuring Ironman, Thor, Captain America, and The Hulk. But before all the world-saving action started up, I caught a throwaway line from the Gwyneth Paltrow character who plays Robert Downey Jr.'s assistant/girlfriend-- referring to their "Stark Tower" skyscraper in midtown Manhattan (powered by some futuristic sustainable energy source, natch) and their plans to build several more, she notes that she was planning to spend the next day "working on the zoning" for the other towers. I made a mental note that this could be a humorous, quick blog post reaffirming my theory that there is a land use angle to everything, and then proceeded to watch the superheroes smash it out with the bad guys to my son's delight.
But just now, the majesty of the Internet has shown me how badly I've been beaten to the punch. Via our Network colleagues at the Administrative Law Prof Blog, I found a link to a blog called Law and the Multiverse: Superheroes, Supervillans, and the Law, which has a blog post--nay, a 1,500+ word essay!--on this very subject called The Avengers: Arc Reactors and NYC Zoning Laws. This is unbelievable--from the same offhand script line that set off my land-use radar, the author delves deep into the New York City zoning code, citing chapter and verse of the regulations; identifies where Stark Tower is on the maps (all with copious linkage); and then explains the legal options available to our developer/hero:
I. Stark Tower’s Zoning District
As it happens, we know exactly where Stark Tower is meant to be located within New York: it’s built on the site of the MetLife building at 200 Park Ave.
(Update: Early on some sources indicated that it was built on the site of the MetLife building and now others indicate that Stark built the tower on top of the preexisting building. This doesn’t change the analysis. Whatever the zoning status of the MetLife building, the construction of Stark Tower was likely a “structural alteration” of the building that would disallow a grandfathered nonconforming use. It certainly exceeded the kind of “repair or incidental alteration” that would preserve the nonconforming use.)
Here’s a zoning map of the area. As you can see, it’s in a C5-3 commercial district in the Special Midtown District, which means Stark Tower has a maximum Floor Area Ratio of 18 (3 of that comes from the special district). Basically this means that if the building takes up its entire lot then it can only have 18 full-size floors (or the equivalent). There are various ways to increase the FAR, such as having a public plaza on the lot. The sloped, tapering structure of Stark Tower means that it can have more floors without exceeding its FAR because the upper floors are much smaller than the lower ones. Given the size of the 200 Park Ave lot, it’s believable that Stark Tower could be that tall, given its shape and the various means of increasing the FAR.
Stark mentions that the top ten floors (excluding his personal penthouse, presumably) are “all R&D.” Is that allowed in a C5-3?
Apart from residential uses, the permitted commercial uses in a C5 are use groups 5 (hotels), 6, 9 and 10 (retail shops and business services) and 11 (custom manufacturing). Unfortunately, research and development is not allowed as a permitted or conditional use in this district. In fact, scientific research and development is specifically allowed in a C6 as a conditional use, which requires a special permit and approval from the City Planning Commission.
So Stark needs some kind of special dispensation. How can he get it? There are many possible ways.
The essay goes on to analyze the options for rezoning, variances, and the related issues of electrical power generation permits and FAA approval, again chock full o' links to the statutes, regs, and caselaw. The author, James Daily, concludes that "while Pepper Potts may indeed have to do some work to get the next few buildings approved, it’s not far-fetched from a legal perspective." Read the whole thing, it's wild, and quite sophisticated too.
But I will draw this even more compelling conclusion: Even the world's greatest Superheroes are no match for the awesome power of the Zoning Code and the Planning Commission.
Wednesday, May 16, 2012
Regular readers know that we love the National Building Museum. And any land use professional knows that we all love to talk about Jane Jacobs. So here's an event that might be of great interest: Urban Forum: What Would Jane Jacobs Do?
Fifty one years after Jane Jacobs published her seminal book The Death and Life of Great American Cities, her ideas on liveable, walkable, and diverse neighborhoods continue to impact how urban environments are designed. A panel discusses Jane Jacobs’ legacy, including urban renewal, historic preservation, mixed-use zoning, and public space. Light refreshments will be served.
- Bing Thom, Bing Thom Architects
- Harriet Tregoning, director, Washington D.C. Office of Planning
- Susan Szenasy, editor-in-chief, Metropolis Magazine (moderator)
- John Zuccotti, co-chairman of the board, Brookfield Properties Corporation and former Chairman of the New York City Planning Commission
Free (but required) registration is available for the event on Sunday, May 20, 2012 at 10:00-11:30. Check it out! If you are able to go to WWJJD, I'd love to hear about it.
Sunday, May 6, 2012
Sarah Schindler (Maine) has posted The Future of Abandoned Big Box Stores: Legal Solutions to the Legacies of Poor Planning Decisions, 83 Universtiy of Colorado Law Review 471 (2012). The abstract:
Big box stores, the defining retail shopping location for the majority of American suburbs, are being abandoned at alarming rates, due in part to the economic downturn. These empty stores impose numerous negative externalities on the communities in which they are located, including blight, reduced property values, loss of tax revenue, environmental problems, and a decrease in social capital. While scholars have generated and critiqued prospective solutions to prevent abandonment of big box stores, this Article asserts that local zoning ordinances can alleviate the harms imposed by the thousands of existing, vacant big boxes. Because local governments control land use decisions and thus made deliberate determinations allowing big box development, this Article argues that those same local governments now have both an economic incentive and a civic responsibility to find alternative uses for these “ghostboxes.” With an eye toward sustainable development, the Article proposes and evaluates four possible alternative uses: retail reuse, adaptive reuse, demolition and redevelopment, and demolition and regreening. It then devises a framework and a series of metrics that local governments can use in deciding which of the possible solutions would be best suited for their communities. The Article concludes by considering issues of property acquisition and management.
Prof. Schindler's article addresses an important problem in communities across the U.S., and offers some innovative solutions.
May 6, 2012 in Architecture, Development, Economic Development, Green Building, Local Government, Planning, Redevelopment, Scholarship, Suburbs, Sustainability, Zoning | Permalink | Comments (0) | TrackBack (0)
Wednesday, March 14, 2012
J. Peter Byrne (Georgetown) has posted Historic Preservation and its Cultured Despisers: Reflections on the Contemporary Role of Preservation Law in Urban Development, George Mason Law Review, Vol. 19 (2012). The abstract:
The past years have seen widely noticed critiques of historic preservation by “one of our leading urban economists,” Edward Glaeser, and by star architect Rem Koolhaas. Glaeser, an academic economist specializing in urban development, admits that preservation has value. But he argues in his invigorating book, Triumph of the City, and in a contemporaneous article, Preservation Follies, that historic preservation restricts too much development, raises prices, and undermines the vitality of the cities. Koolhaas is a Pritzker Prize-winning architect and oracular theorist of the relation between architecture and culture. In his New York exhibit, Cronocaos, he argued that preservation lacks an organizing theory, imposes inauthentic consumer-friendly glosses on older structures, and inhibits architectural creativity. Although these critiques are as different as the cultural spaces inhabited by their authors (although both are professors at Harvard), both seemed to strike nerves, suggesting an underlying unease about how large a role preservation has come to play in urban development. This article assesses these critiques as part of an ongoing effort to make sense of historic preservation law.
This article proceeds as follows: First, it presents Glaeser’s critique in detail, placing it within the context of his larger argument about what makes cities attractive and dynamic. Grappling with the strengths and weaknesses of Glaeser’s critique leads to a discussion of how preservation regulation actually works and clarification of some of the benefits it confers. Second, this Article will attempt to specify Koolhaas’s critique, connecting it to similar complaints about preservation by more linear thinkers. Weighing objections to the coherence or authenticity of preservation leads to further discussion of the role that preservation plays in the larger culture. This article concludes with a call for future research.
Thursday, January 5, 2012
Apparently Athens, Georgia isn't the only Georgia community facing controversy over a downtown Wal-Mart (see my previous posts here and here). The City of Sandy Springs, in metro Atlanta, just placed a moratorium on big box development in its downtown in light of rumors that Wal-Mart wants to place a store there. As Chad Emerson blogged last year, Wal-Mart has been eyeing the urban market for awhile. It seems now they're getting some pushback.
Jamie Baker Roskie
Saturday, December 31, 2011
As we head into the New Year, The Urban Land Institute has also been looking ahead at the future of land use. ULI recently issued its report What's Next? Real Estate in the New Economy. From the press release:
A new economy is unfolding over the course of this decade, driven by an extraordinary convergence of demographic, financial, technological and environmental trends. Taken together, these trends will dramatically change urban planning, design and development through 2020, according to a new report from the Urban Land Institute (ULI).
What’s Next? Real Estate in the New Economy outlines how every aspect of living, working and connecting will change in major ways, driven in large part by the values, preferences and work ethic of Generation Y, the largest generation in American history. . . .
Among the report’s findings:
- Technology will reshape work places. Office tenants will decrease space per employee, and new office environments will need to promote interaction and dialogue. Offices will be transforming into meeting places more than work places, with an emphasis on conference rooms, break areas and open configurations. Developers will craft attractive environments to attract young, talented workers.
- Major companies will value space that enables innovation. They will continue to pay more for space in a global gateway served by a major international airport, or in 24-hour urban centers. Hard-to-reach suburban work places will be less in demand.
- The influx of Generation Y, now in their teens through early thirties, will change housing demand. They are comfortable with smaller homes and will happily trade living space for an easier commute and better lifestyle. They will drive up the number of single households and prompt a surge in demand for rentals, causing rents to escalate.
- For most people, finances will still be constrained, leading to more shared housing and multi-generational households. Immigration will support that trend, as many immigrants come from places where it is common for extended families to share housing. This may be the one group that continues to drive demand for large, suburban homes.
- The senior population will grow fastest, but financial constraints could limit demand for adult housing developments. Many will age in place or move in with relatives to conserve money. Developers may want to recast retirement communities into amenity-laden “age friendly” residences. Homes near hospitals and medical offices will be popular, especially if integrated into mixed-use neighborhoods with shops, restaurants and services.
- Energy and infrastructure take on greater importance. Businesses cannot afford to have their network connections down, and more will consider self-generated power or onsite generator capacity. Developers, owners and investors are realizing that the slightly higher costs of energy- and water-saving technologies can pay for themselves quickly, creating more marketable and valuable assets. Ignoring sustainability issues speeds property obsolescence.
You can download the full report here.
December 31, 2011 in Architecture, Clean Energy, Density, Development, Downtown, Environmentalism, Finance, Green Building, Housing, Planning, Property, Real Estate Transactions, Redevelopment, Scholarship, Smart Growth, Suburbs, Sustainability, Transportation, Urbanism, Water | Permalink | Comments (0) | TrackBack (0)
Monday, November 28, 2011
DRIVE through any number of outer-ring suburbs in America, and you’ll see boarded-up and vacant strip malls, surrounded by vast seas of empty parking spaces. These forlorn monuments to the real estate crash are not going to come back to life, even when the economy recovers. And that’s because the demand for the housing that once supported commercial activity in many exurbs isn’t coming back, either.
The better news:
Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.
The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population.
Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors.
The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.
Wednesday, October 26, 2011
Among his favorite examples of all the standard real-estate products built ad nauseum across the country over the last half-century, Christopher Leinberger likes to point to the Grocery Anchored Neighborhood Center. This creation is generally about 12 to 15 acres in size on a plot of land that’s 80 percent covered in asphalt. It’s located on the going-home side of a major four-to-eight lane arterial road, where it catches people when they’re most likely to be thinking about what to buy for dinner. . .
Leinberger, an urban land-use strategist and professor at the University of Michigan, includes the Grocery Anchored Neighborhood Center on his list of the 19 standard real estate product types dominant in post-war America. Also on the list: suburban detached starter homes, big-box anchored power centers, multi-tenant bulk warehousing and self-storage facilities. All of these products are designed for drivable suburban communities. They reflect almost exclusively what investors have been willing to finance for the last 50 years. And as construction picks back up following the recession, Leinberger says we'll need to get away from every single one of them.
It's a slightly fancier way to say we must get away from sprawl, but it's certainly food for thought.
And when you're done with that, check out Richard Florida's article "2011's Best Cities for Trick-or-Treating."
Jamie Baker Roskie