389 replies to this topic

[bnickle]

Baltimore isn't getting an NBA or NHL team. Unfortunate.

[BSLMikeLowe]

Um, not really... it could definitely hurt..

 

I completely agree that it makes perfect sense to do things that encourage development of housing instead of having dilapidated buildings... and there are various of ways to encourage that... 

 

But this is a bad way to do it... because to "restructure" property taxes in that way means that either (a) you're gonna dramatically reduce revenue, which in turn means further cuts in stuff the community needs, or else (b) you're gonna be cutting property taxes for wealthy people while dramatically increasing property taxes for average folks and for folks who can barely afford a home... it's a classic smokescreen for shifting the tax burden from those who can most afford it to those who can least afford it... doing that will chase normal folks out to where the property taxes are based on the market value of the total property, not just the land... and chasing even more regular people out of the City is not a good strategy...

 

Property taxes is tricky business... but AFAIK, we're not supposed to talk about that here...

 

ps: Property taxes aren't based on the perceived value of the structure... they're based on the market value of the property as a whole, including both the land and the improvements on the land... (at least in theory, anyway...)

 

The main aspect of determining the value of the land is its location. Of course the land value in a poorer neighborhood will be much less than a richer one. I do believe getting the initial "restructure" correct so that you start out with even revenues from before is crucial. But after that I really don't see the issue. Gentrification is happening everywhere now. I'm not saying that's a good or bad thing, nor will this do anything to prevent it. But what this could do is allow someone, whether it's an owner/occupier or investor, to invest in their property, while borrowing money is still cheap (though that may not be the case much longer) without fear of a big tax bill.

[RShack]

I do believe getting the initial "restructure" correct so that you start out with even revenues from before is crucial. But after that I really don't see the issue. 

 

By definition and simple arithmetic, that means you're ramping up taxes on regular people to cut taxes for people with expensive houses... there's no way around that... to say "after that" there's no issue misses the whole point...

 

When you do that, the "after that" part is that it costs regular people with regular houses, plus poor people with lousy houses, much more to live in the City... not just once, but year after year after year... all you're really doing is shifting the tax burden from those who can most afford it to those who can least afford it, and you're doing it so that developers will be happy... which means rich people and developers would love it, while regular folks and poor folks get screwed...  I don't see how can you cannot see the problem...  

 

The whole reason you're doing this is to make developers happy... and developers are precisely the folks who take the money and run... they don't stick around and make a community work... ordinary people do that, and they're precisely the ones you'd be chasing out...

[BSLMikeLowe]

By definition and simple arithmetic, that means you're ramping up taxes on regular people to cut taxes for people with expensive houses... there's no way around that... to say "after that" there's no issue misses the whole point...

 

When you do that, the "after that" part is that it costs regular people with regular houses, plus poor people with lousy houses, much more to live in the City... not just once, but year after year after year... all you're really doing is shifting the tax burden from those who can most afford it to those who can least afford it, and you're doing it so that developers will be happy... which means rich people and developers would love it, while regular folks and poor folks get screwed...  I don't see how can you cannot see the problem...  

 

The whole reason you're doing this is to make developers happy... and developers are precisely the folks who take the money and run... they don't stick around and make a community work... ordinary people do that, and they're precisely the ones you'd be chasing out...

 

So the status quo is the answer? How is that currently working out for Baltimore? And I don't see how you get to the conclusion that you reach in your second paragraph, that the poor and middle class would bear the burden....yeah, the developers would make money (they wouldn't develop if they didn't) but by pumping more investment money into city properties (especially the ones that are either unoccupied shells or vacant land, which aren't doing anyone any good right now) logic dictates a chunk of that will find its way into the city coffers....not necessarily through property taxes, but the taxes (like income and sales) paid by the new residents living in those homes.

 

If a low income resident, in a very modest rowhouse, is the only home on a block full of overgrown weeds and trash, and they end up paying the same in taxes under a new system, how is it bad for them if someone comes along and builds decent homes on the rest of the block?

[BSLMikeLowe]

BTW.....Chris, I know this is straying away from an arena and there is a separate thread for Baltimore development, so I'll move it over there if you want to relocate these posts.

[BSLChrisStoner]

Re: The NBA (or NHL or that matter)...   if you do build a new Arena at some point, you don't build an Arena which would never be capable of being the home for one of those teams. You have to have the requisite amount of skyboxes, and overall seats. Ideally it would typically have less seats, but room for more if ever needed.

(Point being that if you are building something for the next 40 years you don't eliminate your chances of one day because it isn't a fit today.)

The primary issue Baltimore would face with attracting an NBA or NHL team to move, would not be selling the seats... but filling out the corporate boxes.

 

 

I'd love to see a new Arena. I think the city needs it, and that it would help be a catalyst for further investment and development. Most importantly, I believe a new Arena would go hand-in-hand with convention center expansion and help Baltimore in luring larger conventions which are extremely profitable.

 

That said... there are lots of things the city needs, and there are only so many dollars to go around. Mike mentioned a couple of good options.

 

If the masses think those are better options... I can get behind ideas like that  as well...  but a collective effort is needed (with the State doing their share) to help foster improvements from the public which spur further private investment.

There have been significant gains in Baltimore over the past 20 years, but obviously tremendously huge issues remain.

 

The worst thing which can occur is apathy, and people believing that trying to improve what needs to be improved is pointless.

[BSLMikeLowe]

(Point being that if you are building something for the next 40 years you don't eliminate your chances of one day because it isn't a fit today.)

 

Bingo. Just because the chances today of an NBA/NHL team in Baltimore look minuscule at best, doesn't mean that will automatically be the case 5-10 years from now. Things change. But the one thing that will guarantee you never have a chance of getting a team is opting to either keep the current arena or building one that can never meet current/future specifications.

 

And it shouldn't be out of the question that a new arena can be built today to more modest standards, but also be designed in such a way that it can be expanded and have amenities added without having to tear it down and start over, thus saving a good chunk of money until you know you will have a regular tenant. OKC did just that, and they got the Sonics/Thunder.

[mweb08]

With only upgrading the convention center and not building a new arena, what conventions does Baltimore miss out on? Political party conventions? What else?

[BSLChrisStoner]

With only upgrading the convention center and not building a new arena, what conventions does Baltimore miss out on? Political party conventions? What else?

 

IDK what conventions Mike. My understanding is that they go together. Being in the 70s now nationally, and in jeopardy of falling into the 100s in the near-term in overall convention space is an issue which has to be addressed.

That the larger National conventions require a lot of space... beyond what would be available via convention center expansion alone.

If I'm wrong, and you could satisfactorily upgrade the convention space without a new Arena... and it was agreed that investment in other areas aside from a new Arena was better... than I'm cool with that.

 

Again, sucks being in a position to pick and choose.   Actually what sucks is that there isn't even a scenario of picking and choosing...   the City lacks the means to move on anything, and the State doesn't seem to have a lot of desire to help facilitate new development.

 

Seemingly left on private development alone, and if that is the case... the least that could be done from the City and State would be bringing the major private parties together and trying to spur some collective action that way.

[mweb08]

I could also be wrong, but I don't think that many conventions require an arena. Especially NBA/NHL size arenas.

Ultimately, I would need to see a cost analysis of all this, but it just doesn't seem like it makes much fiscal sense. Even with a major pro team involved it likely wouldn't make fiscal sense.

[DJ MC]

There's a reason the original name for the Arena was the Civic Center. That's really what we're talking about here: a large, indoor space that can be used for any large gathering of people. That includes sporting events and conventions which would draw both local and out-of-town patrons. But it also includes any number of generally-local events. Concerts, of course. Some colleges (UMBC, for example) hold their graduations at the Arena. It could be used for things like large funerals, or political events beyond the DNC.

 

I tend to believe an arena is different from any kind of outdoor facility because of being both multiuse and weatherproof. Make it part of a convention center upgrade. Sell that damn hotel to pay for part of the cost. This is something the city really should have.

[RShack]

So the status quo is the answer? 

 

The very first thing said is that I completely agree with you that encouraging the development of good housing is way better than having dilapidated housing.  I also said there are various ways to do that.  I'm not in any way disagreeing with your goal.  To the contrary, I support your goal.

 

All I'm saying is that the particular idea you read about is a bad way to do it, that's all.  If you want to use the tax code to encourage development, that's fine with me.  But there are sound ways to do that which don't involve raising property taxes on regular people and poor people so you can cut property taxes for rich people who have expensive houses.

[RShack]

And I don't see how you get to the conclusion that you reach in your second paragraph, that the poor and middle class would bear the burden....

 

Well, it's arithmetic... if you're gonna restructure property taxes such that overall revenue remains the same, and if the restructuring involves not taxing people on the value of the structures, then people who have expensive structures are gonna pay a lot less.... which means that people who don't have expensive structures are gonna pay more, just to make up for the tax cuts the richer folks get.  

 

If we assume that expensive houses are owned by well-off people, and if we assume that inexpensive houses are owned by people who aren't, then the plan you came across shifts the property tax burden from those who are well-off to those who are not.

 

Bottom line:  If one group of people pays less, then other people are gonna pay more. There's just no way around that... unless you wanna reduce overall revenue, which you said you don't want to do.

[BSLMikeLowe]

Well, it's arithmetic... if you're gonna restructure property taxes such that overall revenue remains the same, and if the restructuring involves not taxing people on the value of the structures, then people who have expensive structures are gonna pay a lot less.... which means that people who don't have expensive structures are gonna pay more, just to make up for the tax cuts the richer folks get.  

 

If we assume that expensive houses are owned by well-off people, and if we assume that inexpensive houses are owned by people who aren't, then the plan you came across shifts the property tax burden from those who are well-off to those who are not.

 

Bottom line:  If one group of people pays less, then other people are gonna pay more. There's just no way around that... unless you wanna reduce overall revenue, which you said you don't want to do.

 

It sounds like your arithmetic assumes full capacity in housing throughout the city though. As we all know, Baltimore is a much different case....there are thousands of empty houses and lots right now. What I'm saying is if you tax the land of an empty lot or an unoccupied dilapidated structure that a developer is sitting on because he doesn't want to improve it, he's going to pay a lot more than if you taxed him based on the current property tax method....and again, with borrowing still cheap he now has every reason to build or renovate, to either sell it or get renters in there to earn income. And again, getting more occupied houses in the city, and hence more citizens, stimulates other economic activity that the city generates increased revenues from, like sales and income taxes.

[RShack]

It sounds like your arithmetic assumes full capacity in housing throughout the city though. As we all know, Baltimore is a much different case....there are thousands of empty houses and lots right now. What I'm saying is if you tax the land of an empty lot or an unoccupied dilapidated structure that a developer is sitting on because he doesn't want to improve it, he's going to pay a lot more than if you taxed him based on the current property tax method....and again, with borrowing still cheap he now has every reason to build or renovate, to either sell it or get renters in there to earn income. And again, getting more occupied houses in the city, and hence more citizens, stimulates other economic activity that the city generates increased revenues from, like sales and income taxes.

 

Correct me if I misunderstand... I'm not trying to put words in your mouth... it sounds to me like you think this scheme will cut taxes for rich folks who have expensive houses, not raise taxes for regular people, and yet still be revenue neutral because of increased revenue from empty-house owners paying more... do I have that right (more or less)?

 

In general, tax cuts don't pay for themselves.  They're often sold that way, but it almost never works out that way... which makes me dubious about the arithmetic actually working out such that rich people pay less while regular people don't pay more.  Seems like too much magic in there for me to trust. 

 

Plus, I don't see why you'd need to do that.  You can have punitive property tax rates for guys who are sitting on unoccupied dilapidated structures... you can also give property tax holidays for X-years to people who take empty crappy houses and fix them properly...  you can do those things, plus other things, and get the benefit you seek for the City without creating the problems that are inherent in restructuring the entire property tax schema in ways that give tax breaks to rich people in the hope it will pay for itself. .  

 

It seems to me that you could leave the property tax rates the same as they are now, add punitive property taxes for those who sit on empty places, and wind up with increased revenues that could be used in various ways to encourage the good things you're after...

 

Personally, the idea of ignoring the value of structures when determining property taxes strikes me as a gimmick... the reason I say that is because it ignores the actual value of property.  In other words, it's pretending something is true that's not really true.  As a general rule, I'm kinda dubious about basing public policy on gimmicks which rely on pretending things are true that aren't true... plus, as I already said, I'm very dubious of tax cuts that are sold as paying for themselves... because in reality they just don't, except in very special circumstances....

[RShack]

BTW, I think we're not supposed to be talking about this... it's Stoner's house, and he doesn't want us having conversations about this in his house...

 

Sorry, Chris... sometimes it takes me a while to realize what I'm doing... not trying to undermine anything... it's just that conversations take twists and turns, and I was doing back-and-forth with Birds'o'BAL without reflecting on what that implies...

[Matt_P]

Plus, I don't see why you'd need to do that.  You can have punitive property tax rates for guys who are sitting on unoccupied dilapidated structures... you can also give property tax holidays for X-years to people who take empty crappy houses and fix them properly...  you can do those things, plus other things, and get the benefit you seek for the City without creating the problems that are inherent in restructuring the entire property tax schema in ways that give tax breaks to rich people in the hope it will pay for itself. . 

 

I wouldn't want to do that. There are a number of houseowners who were unable to pay their loans and were told that they were going to be foreclosed on. The banks then decided that it wasn't worth their while to foreclose and let the original owners keep the house. Your plan would absolutely screw those people who moved out because they thought they were foreclosed on and then weren't.

 

http://www.reuters.c...E9090G920130111

[Matt_P]

If we assume that expensive houses are owned by well-off people, and if we assume that inexpensive houses are owned by people who aren't, then the plan you came across shifts the property tax burden from those who are well-off to those who are not.

 

That's the wrong assumption to make. If we assume that rich people live in expensive areas and poor people live in inexpensive areas than taxing people based on the value of land will have minimal impact on who pays higher taxes.

 

The problem is that it will also cause people that have cheap houses in expensive areas to pay considerably higher tax rates. Basically, encouraging improvements would cause gentrification. Someone needs to pay for them after all, right?

[BSLChrisStoner]

Because the existing one (in-conjunction with the size of the convention center) can't attract larger conventions which are extremely profitable for cities.

 

If OPACY had been built in Lansdowne as was the other option at the time, you'll never convince me that the redevelopment of Canton, Federal Hill take place... that Harbor East (and eventually Harbor Point) happen.

 

I don't know how those are accounted for. I agree there lots of studies out there pointing to what you mention. Our own Patrick Dougherty wrote about OPACY and Stadiums here:

http://baltimorespor...dium-economics/

 

Patrick certainly knows more about economics than I do or ever will... but I don't think I'll ever be able to accept those conclusions.

If that makes me an ostrich, so be it.

I'm going to break my own rule on discussion of social issues here, because I see now way around it.. and I do think this is a topic that makes sense here.

As I'm breaking the rule, you guys can do the same for this topic.

 

To me, one of the major issues Baltimore continually faces as a city is a limited tax base due to not be incorporated into the surrounding county. That has the City in a chicken / egg scenario where tax rates are higher in some instances because they aren't pulling from as many people as they should.

(One might argue that if rates were lower... at county levels, the might have more people moving into the city, thus increasing the base.. but that is debatable.)

 

So, the City has to continually find ways to attract people to come into the City.  A new Arena, which attracts larger conventions and holds the other multitude of events we've talked about (see page 1) would help. More people staying / visiting the city. Better for hotels, better for restaurants, etc.

 

Increased revenue city wide, thus creating more funds to be reinvested into the City.

 

Seems like a win/win.

 

If after you've increased the funds coming into the City, they are not allocated back correctly towards the existing social ills... well that becomes a different discussion.

 

Also if you think that instead of a stadium / arena expenditure, that funds could be better allocated directly.... perhaps there is truth there.

 

Shack, see bolded.

 

That said, the discussion has been very civil without delving too far into peoples personal politics... let's try and keep it that way.

[DuffMan]

I want Baltimore to build a new arena, they need to build a new convention center.