Kansas City, KS
1) Introduction
The Unified Governments of Kansas City, Kansas and Wyandotte County faces many challenges that other cities will rarely experience. Its location across the river from one of the largest cities in the Midwest has had an outsized effect on its development. Kansas City is in the position of being both one of the largest urban centers in Kansas, but also an urban satellite of Kansas City Missouri. Proximity to Kansas City, MO leads to increased industrial and commercial opportunities, but also comes with issues associated with larger cities like increased traffic and unchecked urban sprawl.
Figure 1.1 - A completed model of the Unified Government's tax productivity per acre
Urban3’s work in Kansas City, KS is focused on looking at the city both as its own entity and as part of a larger metropolitan region. By examining various taxation methods, existing urban design, and local policy decisions we will tell the story of the City’s current economic condition. By law ( U.S. Code Title 28: Part VI, Chapter 176, Subchapter A: §302(15)A ), cities and counties are defined as land management corporations. Land is an important and finite resource for every city and county, and how that land is used has a direct effect the community. In this story map we look at how city wealth and design are connected from Minnesota Avenue to the Metro Area, and beyond.
Table of Contents
2) Kansas's Property Tax System
3) Value Per Acre: Why
4) Value Per Acre: Kansas City, KS Results
5) Building Typologies: Residential
6) Building Typologies: Commercial
7) Sales Tax
8) The Long Term Effects of Redlining
9) Vacancy in Kansas City, KS
Conclusion
2) Kansas's Property Tax System
- Property taxes are one of the key revenue sources for nearly all local governments in the United States. The following chart depicts total state government revenue by source. Local governments in Kansas rely heavily upon property taxes for funding. The charts below show the significant role property tax and sales tax play in Wyandotte County’s budget.
Real property, land and buildings subject to property tax, has value commensurate with the municipal services provided. This simple point has important implications for the way we think about government spending.
Mapping property tax production is tantamount to mapping how Wyandotte County pays for municipal services and infrastructure. When government revenue generation varies geographically, we can draw comparisons to other spatially relevant factors such as patterns of development, demographics, and public investment. Put simply, how land is used directly affects its tax productivity.
As such, analyzing the source of government revenues is critical to planning a strong financial future. Like a business, local governments have revenues as well as expenses. Collecting sales tax from consumer expenditures and property tax from real property enables municipalities to provide basic public services like police and fire protection, and education, to name a few.
(Right) Figure 2.1
Property taxes in Kansas are calculated using the formula shown to the right. Appraised value is multiplied by the taxable value percentage to reach an assessed value. The assessed value is then multiplied by the millage rate. The result is the individual tax bill, minus $46 if the property is worth more than $20,000.
(Right) Figure 2.2
The State of Kansas has a tax system that ultimately taxes commercial real estate at a higher rate than residential properties. Kansas sets tax assessment rates at 25% for commercial property but only 11.5% for residential property. As a result, two properties, one commercial and one residential, appraised at the same value, will end up with two different tax bills.
(Right) Figure 2.3
Wyandotte Co Taxable Property
(Above) Figure 2.4 - Taxable Percentage of Wyandotte County, KS
Wyandotte County is in good standing and above average at 83% taxable despite the presence of several large non-taxable tracts. These large non-taxable properties include the area around Wyandotte County Lake, the Theodore Naish Scout Reservation, and the Kansas Speedway.
(Right) Figure 2.5 - Taxable Properties in Wyandotte County, KS
Downtown Kansas City, KS Taxable Property
(Above) Figure 2.6 - Taxable Percentage of Downtown Kansas City, KS
At 60% taxable, Downtown Kansas City, KS does well, but has a significant amount of land dedicated to government buildings and nontaxable parking lots, reducing its overall productivity. Although nontaxable properties lower the amount of revenue generated for the City, many of these properties are assets in other ways. Huron Park, Big Eleven Park, and the public library are not taxable, but they bring people downtown and these folks spend time and money in restaurants and shops. Similarly, the various downtown schools are not taxable, but they do encourage families to live closer to downtown, which increases density and walkability.
One opportunity for increasing value and enhancing the character of downtown is the surface parking lot located between 5th and 6th St. and just south of Minnesota Avenue. This property is across the street from the most productive building in the county (Hilton Garden Inn) and within a block of three parking garages. If this block were to be built out to the same density as other blocks along Minnesota Ave., it could represent millions of dollars per acre of property value. This parking lot is too well situated to be dedicated solely to surface parking.
(Right) Figure 2.7 - Taxable Properties in Downtown Kansas City, KS
3) Value Per Acre
Urban3’s analysis focuses on the per acre metric as a unit of productivity. After all, cities and counties are, at their simplest, finite areas of land, and how that land is used has a direct effect on municipal coffers. This metric normalizes total revenues and tax values into a direct “apples-to-apples” comparison, utilizing land consumed as a unit of productivity.
"We will neglect our cities to our peril, for in neglecting them we neglect the nation." - John F Kennedy
Total Value
Put another way, different cars have different-sized gas tanks, so the gallon is used as a standardized measure, not the tank. Therefore, “miles per gallon,” not “miles per tank,” is common practice to gauge efficiency. We apply the same principle to measure the financial productivity of various development types across a community.
(Above) Figure 3.1 - Legend for Total Taxable Value map
(Left) Figure 3.2 - Total Taxable Value Map
Value Per Acre
Expansive developments with large, low-density footprints (like a sprawling subdivision) are typically more expensive to service with public utilities (streets, water, and sewer). Thus, examining a development’s total tax production overlooks the amount of land and other public resources consumed in order to produce revenue. Nevertheless, many cities use a total value map, like the one above of Wyandotte County, to inform land use decisions.
(Above) Figure 3.3 - Legend for Taxable Value Per Acre map
(Left) Figure 3.4 - Taxable Value Per Acre map
Drag the white bar below to compare Total Value to Value Per Acre
4) Value Per Acre: Kansas City Results
Urban3 visualizes property value in 3D to quickly communicate information. Our work makes relative comparisons of values all across the city possible. 3D visualization of development and property values also illustrates how public policy affects the areas in which we live.
Wyandotte County
(Above) Figure 4.1 - Legend for Taxable Value Per Acre map
(Right) Figure 4.2 - Taxable Value Per Acre map
In 3D it is easier to see how much more productive some areas are than others. The above 2D maps showed us that Downtown, the speedway area, and the area around the university and hospital are the most economically productive areas. However, the model to the right shows us that these areas are actually several times more tax productive. The pie charts below compare the Unified City/County and the entire county on the measures of area and value.
(Above) Figure 4.4 - Percent of land taken up by the unified government and the county
(Above) Figure 4.5 - Percent of value in the unified government and the county
Downtown Kansas City, KS
(Above) Figure 4.6 - Legend for Taxable Value Per Acre map
(Right) Figure 4.7 - Taxable Value Per Acre map
Though small in comparison to other downtowns, Downtown Kansas City, KS packs in a surprising amount of taxable value. Many of the most productive buildings within the city are found here.
(Above) Figure 4.8 - Percent of land taken up by the downtown and the county
The pie charts below show us that even though downtown Kansas City, KS takes up only 2% of the county’s land, it is responsible for 17% of the taxable property value. This makes for a productivity ratio of 1 to 8.5. This ratio means that relative to its size, Downton Kansas City is 8.5 times more productive than the county as a whole.
(Above) Figure 4.9 - Percent of value in the downtown and the county
5) Building Typologies: Residential
Single family housing is one of the lowest value buildings types found in Wyandotte County.
"The single most important thing a city can do is provide a community where interesting, smart people want to live with their families." -Malcolm Gladwell
County Residential
Single-family housing is one of the lowest-value buildings types found in Wyandotte County.
A primary cause of the low citywide average value per acre of single-family housing is the prevalence of vacant properties. With thousands of vacant residential properties, Kansas City, KS has a significant amount of vacant properties. This will be discussed in chapter 9.
(Left) Figure 5.1 - Average single-family value per acre within the city limits
(Above) Figure 5.2 - Both of these properties are above the county average
County Multifamily
At almost $50k per acre, multifamily is nearly twice as productive as single-family across the County. Unfortunately, very little of the county is dedicated to multifamily, versus thousands of acres dedicated to single family. Multifamily housing is usually more productive than single-family because it often incorporates proportionally larger buildings on smaller lots compared to single-family homes with a large yard.
(Left) Figure 5.3 - Average multi-family value per acre within the city limits
(Above) Figure 5.4 - Examples of multi-family in Kansas City
Downtown Single Family
At almost $57k, single-family housing in Downtown is more than twice as productive as citywide single-family (avg $25k per acre). For the most part, this is due to smaller lot sizes rather than higher value homes.
(Left) Figure 5.5 - Average single-family value per acre within the downtown limits
(Above) Figure 5.6 - Examples of single-family in downtown Kansas City
Downtown Multifamily
On average, multi-family housing located downtown is the most productive housing type. Downtown multi-family is on average four times as productive as county single-family housing.
(Left) Figure 5.7 - Average multi-family value per acre within the downtown limits
(Above) Figure 5.8 - Example of multi-family in downtown Kansas City
6) Building Typologies: Commercial
Commercial properties in Kansas City, KS are clustered in three places; Downtown, Village West, and 78th & State. We'll be looking at sales tax revenue for these three districts later in this report. For now, we'll focus on property values in Downtown and the Speedway Plaza.
Village West
Speedway Plaza, located just north of world-famous Kansas Speedway, is the site of most of the recent commercial development in Wyandotte County.
(Right) Figure 6.1 - Value Per Acre, Western Wyandotte County
Cabela's
(Above) Figure 6.2 - Cabela's, Value Per Acre: $81,191
Shown on the right in black, Cabela’s is a good example of the cost of parking. Though the retail building is worth $3.4m in assessed taxable value, the 22-acre parking lot drops the value per acre to an incredibly low $81,191. As the model to the right shows, this overabundance of parking makes Cabela’s one of the least productive parcels in the Speedway area.
Sam's & Target
(Above) Figure 6.3 - Sams Club, Value Per Acre: $136,274 Target, Value Per Acre: $205,525
The graphic above depicts the Sam’s Club and Target stores located in the KC Speedway area. Sam’s Club is on the low end of Kansas City retail productivity at $136k in property value per acre, though this is still more productive than Cabela's. Target is more productive at $205k per acre, but still ranks on the low end of retail property productivity.
JCPenny & Walmart
(Above) Figure 6.4 - JC Penny, Value Per Acre: $220,104 Walmart, Value Per Acre: $229,284
The Speedway Walmart and JCPenney sites at $229k and $220k per acre respectively, are a bit more productive than some of the big box stores we've seen. It is worth noting, however, that these values are as high as they are ever likely to be.
Legends Outlet Mall
(Above) Figure 6.5 - Legends, Value Per Acre: $533,250
The most productive large parcel in the speedway area is the Legends Outlet Mall. Legends provides an admirably walkable environment within its borders. Unfortunately, it does not connect to nearby retailers, preventing it from being a truly walkable place.
"The great city is that which has the greatest man or woman; if it be a few ragged huts, it is still the greatest city in the world." -Walt Whitman
Downtown
Downtown Kansas City has a collection of pre-war buildings that many American cities crave. As the postcard to the left shows, Downtown Kansas City, KS once had a thriving local economy and served as a hub for community happenings.
This section will focus on individual buildings and typologies. It is worth noting how many of the most productive buildings in the county are pre-war. Even vacant and underused, these buildings contribute a surprising amount of tax value, often more than much larger buildings built further out from the city center.
Compare the most productive property from the speedway area's value - $533k per acre - with the buildings along just two blocks of Minnesota Ave. Three of these buildings are worth more, and several others are moderately close.
(Left) Figure 6.6 - Value Per Acre for properties along Minnesota Ave.
This model shows just how productive Downtown, with its purple spikes, is compared to the rest of the eastern side of the county.
The following slides will feature values for different buildings Downtown. The building will be highlighted in black on the left.
(Left) Figure 6.7 - Value Per Acre for downtown Kansas City, KS
Ray's Downtown Styling
(Above) Figure 6.8 - Rays' Downtown Styling, Value Per Acre: $868,046
One of the biggest surprises in the model for Downtown was Ray's Downtown Styling. On a parcel of 0.008 acres, Ray's produces $606,897 taxable value per acre.
If you're having trouble seeing Ray's on the map to the left, that's because Ray's occupies a minuscule footprint. Look to the left of the clearing in the middle of the downtown purple spires.
(Above) Figure 6.9 - Downtown Buildings, Value Per Acre: $606,897 & $699,935
These two buildings also caught our eye when we visited Kansas City. Though both are likely partially vacant, they rank among the top 25 most productive properties. Both buildings are multistory and appear to be pre-war. These are crucial factors for cultivating long-term value in a downtown because more stories using more of a parcel equates to more value, and pre-war buildings were built using long-lasting materials, so they have continued to provide value for decades.
(Above) Figure 6.10 - Downtown Buildings, Value Per Acre: $735,023 & $885,664
The two buildings featured on this slide are good examples of the potential financial opportunities that exist within Downtown Kansas City, KS. The first building, the Kansas City Kansan, is partially vacant, yet is the 16th most productive building in the city. It is well situated near central downtown and would work well as rehabbed loft apartments or office space.
The second building, the Brotherhood Building, is an excellent example of the value that mixed-use and good urban design can create. Containing both office space and services, this building is worth almost $900k per acre.
7) Sales Tax
Sales tax is responsible for 30% of the Unified Government's annual revenue. We mapped taxable sales value because that is the value to which the sales tax rate is applied. Using taxable sales value allowed us to make fair comparisons between taxable sales value and assessed property value. Taxable sales value is spatially relevant and mapping it identifies core commercial areas. Privacy concerns require displaying sales information in groups instead of individually like property values. We grouped taxable sales values into sections that generally correspond to commercial areas and city neighborhoods. At this scale, our maps lack granularity, but shows the general spatial distribution of taxable sales value.
Sales Tax in Kansas City, KS
The model to the right shows total taxable sales per acre grouped into general areas. While it is clear that much of the city’s taxable sales value comes from the Speedway, Downtown Kansas City actually generates more taxable sales value per acre. Downtown’s productivity demonstrates how much more efficient downtowns are than suburban areas even when specifically engineered to bolster sales tax revenue, like the Speedway.
(Right) Figure 7.1 - Taxable Sales Per Acre, Wyandott Co
Overall Kansas City Sales & Property Tax
The image to the right shows taxable sales per acre stacked on top of property value per acre for both Kansas City, KS and Kansas City, MO. This image is helpful for understanding what proportion of revenue comes from property tax versus sales tax for each area.
(Right) Figure 7.2 - Taxable Sales Per Acre and Property Value Per Acre, Kansas City, KS & Kansas City, MO
(Above) Figure 7.3 - Taxable Sales Per Acre, Kansas City, KS & Kansas City, MO
The model above shows taxable sales per acre for both Kansas City, Kansas and Kansas City, MO. The tallest spikes are an artifact of the way the data is accessible. In Kansas City, MO, taxable sales data areas are made available in different geographic units including Community Improvement Districts (CID) and ZIP codes. The CIDs contain small commercially focused areas of land and this accounts for the tallest spikes.
(Above) Figure 7.4 - Property Value Per Acre, Kansas City, KS & Kansas City, MO
8) Long-Term Effects of Redlining
(Above) Figure 8.1 - Original 1939 Redlining Insurance map
The map to the left is the redlining map of Kansas City from 1939. In the 1930s and 1940s, the Home Owners’ Loan Corporation, a federal government agency, mapped cities around the United States according to the level of financial risk associated with a neighborhood. The cities in these maps were generally color-coded by neighborhood as green for “best,” blue for “still desirable,” yellow for “definitely declining,” and red for “hazardous.” These classifications were based on the condition of housing, access to amenities, proximity to pollution, the economic class of residents, and the ethnic and racial make-up of residents. The marking of areas in red (redlining) was a racist practice that denied people of color access to credit from lending institutions. This exclusion from capital had a significant and long-lasting consequences for the people and properties affected. Use the slider bar on the image below to see how the redlining map from 1939 corresponds to the 2010 map of where people of different races live.
(Above) Figure 8.2 - Original 1939 Redlining Insurance map superimposed onto a race distribution map. Use the slider in the center of the map to compare the two maps.
Redlining in Kansas
A history of redlining also affects the monetary value of properties. The map to the left shows today’s parcels color coded by the redlining map classifications and extruded in height by their current value per acre. Overall, red areas have lower value per acre than yellow areas.
One exception is along Minnesota Avenue through Downtown. There are several higher value per acre properties in red on the north side of the street. This anomaly can be explained by the fact that urban core areas go through change and redevelopment much faster than more residential areas. Additionally, commercial and industrial corridors have experienced a change in the amount of value-generating residential properties. These new residential developments have replaced industrial land use after industry moved out of the central city. What was once considered an undesirable neighborhood has transitioned into an area with more monetary value.
(Left) Figure 8.3 - Value per acre map of Kansas City colored by insurance grade
The image to the left highlights the disparity in today’s value amongst neighborhoods that were marked with different levels of financial risk in 1939. What is visually clear in the height of parcels of different colors, becomes concrete when we examine the average value per acre the classes those colors represent. The average value per acre ranges from $541k per acre in a red neighborhood to more than $5m per acre in a blue neighborhood. Again, the exception is the primary corridor of Minnesota Avenue. These current differences demonstrate that the practice of redlining established expectations and patterns that bolstered or suppressed values for generations after the end of official redlining. Understanding this history is vital to reconciling this wealth and racial disparity.
(Left) Figure 8.4 - Value per acre map of Kansas City colored by insurance grade
9) Vacancy in Kansas City, KS
(Above) Figure 9.1 - Redlining districts from 1939 in Kansas City, KS
"We must not build housing, we must build communities." - Mike Burton
Examining a Neighborhood
(Right) Figure 9.2 - Streetcar map from 1910
(Left) Figure 9.3 - Close up of neighborhood highlighted to the right
Redlining was a policy of organized disinvestment which has had long-lasting economic consequences on American cities. Taken together with wide demographic and macroeconomic trends, Kansas City has ended up with a considerable amount of vacant land. For the purposes of this study we’ll take a moment to define what we mean by vacant. We are most concerned with parcels that at one time had a building but are now just open land. We further isolated our study to parcels less than an acre in size to reflect residential lots that have been vacated. These lots are known colloquially as “broken teeth.” The 2,000 or so acres of these vacant lots are the tangible result of population loss in the city. Kansas City has about 15,000 fewer people than it did at its peak in 1960. When we consider the similar pattern of tax delinquencies as well, we start to see a destructive pattern of disinvestment, tax delinquency, abandonment, and finally vacancy. All of which corresponds to the areas rated badly in the insurance maps.
To gauge the fiscal implications of vacancy we’ll look at a neighborhood with a heavy concentration of vacant and delinquent parcels. There are 732 vacant lots in the area shown. Collectively they are appraised at just $293,000. It’s worth mentioning that they currently produce no tax revenue as they are held by a land bank. The lots with houses in this neighborhood have dramatically undervalued or suppressed appraised values. The average parcel is valued at just $17,000. Despite this low value for a developed parcel, it's still 40 times greater than a vacant lot.
(Right) Figure 9.4 - Map of vacant and tax delinquent properties
(Above) Figure 9.5 - Average values for the area highlighted in blue
This means that even small improvements would produce tremendous results. Putting a ($17,000) house on a single vacant lot would be equivalent to the tax production of 42 vacant lots. It would only take 17 to equal the appraised value of all 732 current vacant lots. Filling in all 732 lots would yield $12.4 million in new value. What this thought experiment tells us is the incredible financial value of preserving existing occupied houses and filling in vacant lots. In conjunction this could produce a critical mass of economic activity that rebuilds the baseline property value of the neighborhood. It also represents an opportunity for creativity. How can Kansas City use land as an incentive to solve other issues? What if access to housing was a benefit for public employees? Perhaps too it is an opportunity to connect people to homeownership and wealth-building who were historically and unjustly excluded from it.
(Above) Figure 9.6 - Average lot prices for parcels with homes is 40 times as much as a similar vacant lot.
Our analysis focuses on one of the most difficult real estate markets in the city. The city’s own vacant land analysis examines this same concept in a more robust market, Strawberry Hill, where the returns are even greater. One critical element that the city analysis considers is the relative cost of new greenfield development versus infill development. Greenfield development requires new infrastructure while infill development uses what is already built making it inherently more profitable. Strikingly, they concluded that even when new greenfield housing is 50% more valuable it is 10% less productive to the city. There are 61 vacant lots in Strawberry Hill. Adding a new $200,000 house to just one of them would nearly double their tax production. Each vacant lot replaced with a house is the equivalent value of 115 vacant lots.
(Above) Figure 9.7 - Adjusted for inflation, the houses lost since 1937 would be worth more than $30 million.
(Above) Figure 9.8 - Filling in these vacant parcels would add $12.4 million in appraised value
(Above) Figure 9.9 - Visit the Mapping Inequality website to further explore the subject of redlining.
A major reason for the vacancy was the resident's inability to get loans in this neighborhood thanks to redlining.
Image Credit: Jud Knapp
The reason vacancy is so important near downtown is the cost of that vacancy. Construction close to downtown doesn't require more new city infrastructure (pipes, roads, etc.). As the above image shows, new homes average $1,774 in taxes per year compared to the $15 that vacant lots return. That means one new house in a neighborhood near downtown equals the value of 115 vacanct lots.
Image Credit: Jud Knapp
One of the very real costs of vacancy is shown in the slideshow below, which shows how much more water pipe is required per person for suburban developments vs. traditional neighborhoods.
This slideshow shows how much more pipe is required per person compared to historic data. This image shows the current map of pipes in Kansas City, KS. Proceed through the slides to see historic maps(images by Jud Knapp)
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Conclusion
In the introduction to this report, we highlighted the fact that Kansas City, KS plays two roles: it has the prominence of being one of Kansas’s largest cities, but also serves in a regional capacity as one of many urban satellite cores that radiate outward from Kansas City, Missouri. So how do our findings relate to Kansas City, KS’s dual roles, and what is the best path forward for the city?
Kansas City, KS represents numerous trends common throughout the United States. Value in newer homes remains strong, but the housing stock lacks multifamily configurations. Further, Wyandotte County in general has very little of the small to medium sized multi-family buildings commonly known as the Missing Middle (LINK). An increase in these two to ten unit buildings, particularly around Downtown, would increase walkability, home affordability, and tax revenues.
We examined the abundance of vacant properties, particularly in the northeast section of the city. While new homes are constantly being built in the center of the county, many areas close to downtown would benefit from reinvestment and new home construction on older city lots. This housing imbalance represents a great opportunity for the City to create value by incentivizing growth closer to town. Great strides have already been made thanks to the SOAR (LINK) program, but there is more work to be done.
This brings us to the subject of Downtown. At first glance, Downtown Kansas City, KS might not seem like a very productive part of the City overall. With many buildings that are partially or entirely vacant, it would seem that the areas around the University of Kansas Hospital and the Kansas City Speedway are more productive than Downtown. However, the data and our analysis reveal that Downtown Kansas City, KS is truly the most valuable part of the City. The most productive buildings are there, and the aforementioned vacant buildings still produce a surprising amount of property tax and provide an opportunity for reinvestment. Beyond that, Downtown has a high concentration of pre-war buildings, which have a very high value potential when retrofitted to a higher use.
The quantitative analysis provided here and our many models of Kansas City are a snapshot in time. Goals regarding future development should evolve as information becomes available and through learned experience as Kansas City changes and grows. It is our hope that what we have shown in this report will spur the City to use data as the foundation for creating and implementing policies that ensure a bright future.
