On Monday, March 13th, Urban3’s Joe Minicozzi gave an hour-long presentation of his company’s assessment of the value of Shreveport’s land, our ailing road and water infrastructure, and the ability of our local tax system to pay for repairs. It can all be a bit nerdy, but the future of Shreveport will depend on our ability to understand and act on this new information.
Urban3’s study was commissioned by the City of Shreveport and funded by the federal government and Downtown Shreveport Development Corporation (DSDC). The team analyzed every property in Shreveport and collected property tax numbers (provided by Caddo Assessor’s Office) and sales tax information for every business in the city. With this data, Urban3 was able, for the first time ever, to determine which building types and neighborhoods are most valuable to our city’s revenue stream.
After running through the numbers, it was found that dense urban development, particularly multi-story, multipurpose buildings, resulted in the highest real estate values. Of course, sales tax is incurred where most sales are made – be it retail or business-to-business. The striking value of dense, multipurpose buildings and the power of a centralized business district is evident in the giant blue spire in downtown Shreveport. This set of spikes is huge even if most of downtown is unused.
Combined property and sales tax chart. Courtesy of Urban3.
As you can see almost every district is lifted off the map showing the tax value it brings to the city. However, this value is only half the truth. The second half is how much tax it takes to service each piece of land — that is, how much road, sidewalk, water, sewer, and other public services we need to make that land usable. Urban3 compared property tax values and sales taxes to the infrastructure costs required to service land each acre. Taking into account tax receipts and expenses, the map looks like this:
Shreveport net street cost per acre. Courtesy of Urban3.
This chart shows that almost all of Shreveport is upside down in terms of public infrastructure (shown in red) versus tax revenue (shown in black). This shows that we are putting more infrastructure into our city than we are getting in return, suggesting an unsustainable revenue model for Shreveport. This is the answer we were looking for. That’s why we can’t afford our infrastructure. We don’t earn enough taxes to pay for what we built.
The natural follow-up question is, “How did this happen?” Also, “What can we do to fix this?”. The answers are layered, so let’s start unpacking them.
1. We have too much land and infrastructure responsibility for the number of taxpayers in Shreveport. First, it’s important to know that Shreveport is not alone in this challenge. Cities in the United States grew after World War II, largely by expanding their presence with homes that favored large, expansive private lawns over parks and public squares. These neighborhoods were also often built without shops, except for the occasional nearby grocery store or gas station, reducing the sales tax levied in a given area. The further we go, the less commercial and more home ownership there is.
Part of the problem with sprawl (and I can’t stress enough that it’s only part of the problem) is that Shreveport’s tax system was designed for dense urban development with low per-property infrastructure requirements and a focus on sales tax collection , not so much property tax. Without changing our development practices to focus on the dense, mixed-use residential and commercial redevelopment of the downtown core, Shreveport’s tax system will do so always come up short. This is evident in the infrastructure system cost chart below, which shows that we are nearly $100 million short of infrastructure spending annually, mostly on roads.
Infrastructure stream for needed spending deficits. Courtesy of Urban3.
2. Our tax system doesn’t fit the city we have (or want). Shreveport’s tax system, while primarily dependent on sales tax, also fails on the property tax side of the equation. Because we base wealth taxes on what is built on the land rather than that market value of the property itselfour current system favors speculation and vacancies.
The historic Humpfrees building is on fire from neglect.
This means it’s cheaper for someone to hold an empty lot to speculate on its future selling price, or to pave a parking lot, than to construct a productive building. It also discourages property owners with existing buildings from making improvements, or worse, rewards them for letting buildings fall into disrepair, as has happened time and time again, causing damage and security risks.
If we taxed a property based on what the market determined the value of that land to be, rather than the value of the buildings on it, land would be more expensive to speculate on and hold and cheaper to go for build. This type of tax environment, also known as a land value tax or LVT, would drive the redevelopment of “old” neighborhoods.
3. We have redlined and separated core, legacy communities. In the 1930s, the United States added parameters to government-backed mortgages that rated properties to determine which would qualify. They used color-coded maps with four rating levels: “A” for most desirable properties (in green), “B” and “C” for medium to low quality properties (blue and yellow, respectively), and “D”-rated properties (in red) for the least desirable lands. A “D” grade has almost always been given to communities composed primarily of blacks and immigrants. This process became known as “redlining” (here is a brief history of redlining).
Shreveport Redline map. Courtesy University of Richmond, HOLC.
The notes accompanying Shreveport’s Redline map specifically included percentages of “Negro” to “White” residents as factors in how neighborhoods were rated. For example, a note for Section D-3, the northern part of the Highland district, south of present-day I-20, read: “White residents of this section who are moving out as soon as possible [are] Alienation of their property due to adverse influences of the Negro population…” while Section D-3 notes “to contain a small area of white population, older citizens of the city of the better class who still maintain their homes.”
Of course, it’s no secret that black Shreveport residents suffered severely from the social and economic impact of Jim Crow, hampering their ability to achieve wealth gains that would provide for property improvements, business investment, and political representation that better achieved would have degree.
Not a trace of it, these redlining notes and others like it throw Shreveport’s white flight into sharp relief and reveal a key reason why core communities have been abandoned: outright racism and a dash of classism for all low-wage earners. Rather than stay in core neighborhoods and work to improve the education system, parks, institutions, and bureaucracy that could unite the city, middle-class and affluent whites fled, taking their money and businesses with them. This ultimately led to an undermining of the city core, the city’s urban sprawl to the south, and has led to the city’s current state.
Allendale redevelopment project. Courtesy of the Fuller Center for Housing.
4. We make it difficult for individuals and developers to rebuild the core. Our zoning regulations and permitting procedures could be more conducive to redevelopment. For example, we avoid building types such as multi-family dwellings, small/tiny houses, and mixed-use through written rules or zoning permitting preferences. We also have minimum parking requirements that force developers to allocate a certain number of parking spaces that often go unused. Also, parking lots are extremely unproductive from a tax perspective, as our current system is based on what’s on the property, not the market value of the lot itself. A land value tax would make building parking lots even less desirable for developers, so we should Eliminate or significantly reduce requirement.
We also have a history of overzoning our city. Rules to protect residents and property values, such as Proximity of industrial sites or noisy shops to residential areas is a valuable concept. However, there is a limit to its usefulness beyond which zoning can become detrimental to redevelopment. To counteract this, we need to reconsider our zoning codes (again) and direct our Planning Commission to learn how to say “yes” without being “yes-men” through sensible and expedient compromises, especially on regulations that conflicting with the ability of historic buildings to meet without expensive retrofits. The goal should be to get properties ready for occupancy and income quickly and securely, allowing for exceptions or gradual compliance where appropriate.
In the author’s opinion, Urban3’s analysis and the issues it highlights are a sharp critique of Shreveport’s development and governance strategies. To be fair, they were widely accepted when they were implemented. Its failures were masked by the explosive growth of the post-war period and the delayed infrastructure replacement schedule that became due when Shreveport’s population growth faltered in the 1980s. The Urban3 analysis revelations are strong evidence that our approach of “chasing the tax base” by continuing to annex land and abandon the urban core is a losing proposition. No amount of borrowing or new developments on the outskirts will save us from this approach – they will only push us further into the debt trap.
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