***PLEASE SEE MY LATEST BOOK, The Science of City Design:
Architectural Algorithms for City Planning and Design Leadership. The book offers a universal language to correlate the work of many isolated disciplines concerned with one issue: The provision of shelter for the activities of growing populations within a limited Built Domain that protects their quality and source of life - The Natural Domain. It is available from
Amazon.com in both e-book and paperback.***
Architecture represents real estate value, revenue potential, investment opportunity, shelter capacity and context contribution. It yields many forms of public revenue, but the average revenue per square foot of activity sheltered is a key piece of missing information. This is particularly true when the objective is economic stability with activity and intensity allocation, and the imperative is to preserve context for people with the architecture of city design.
The gross building area constructed per buildable acre involved represents a choice among development capacity options. These are also referred to as intensity options. Productivity is the revenue generated per building square foot constructed and yield is the revenue generated per acre of land consumed. The ability to forecast the development capacity of land unlocks the ability to outline three-dimensional city design for productivity, yield and public benefit. In fact, it unlocks the ability to comprehensively forecast anything that is a function of the gross building area per acre chosen, measured or forecast. This includes, but is not limited to: population, cost, revenue, return on investment and traffic generation.
From this perspective, the public benefit of architecture should be obvious, but the claim depends on the ability to forecast development capacity options and yield implications, since they represent context alternatives. Selected options affect a population’s physical, social, psychological, economic and environmental welfare, or quality of life.
City design is a massing plan for future architectural completion. It correlates open space with intensity to protect a population’s quality of life. When architecture can offer city design advice based on the public revenue implications of intensity options, its claim of public benefit will be easy to defend.
For the sake of those who have not read my previous essays or book, massing is a simple cubic or rectangular envelope that defines gross building area limits. Development capacity is the gross building area produced by design specification decisions. Gross building area shelters activity and has population, cost, revenue and return on investment potential. Pavement includes all impervious surfaces that serve the building. Project open space defines the external space that sets the stage for building composition and limits potential intensity. Project compositions combine to create urban form. The evolving physical result influences our opinion regarding the total quality of life created.
Gross building area options are a function of the specification values chosen and entered in the design specification template of a forecast model. The model produces intensity options (development capacity options) in a planning forecast panel. These intensity options have context implications that influence a population’s physical, social, psychological and economic welfare. They also affect the special interest of private investors.
The relationship between the context created and the revenue generated by architectural design is its strongest quantitative link to public benefit at the present time, but information is required to correlate intensity with activity and revenue potential that can produce public benefit.
Context is specified with design specification values. Composition, or arrangement, is design. Intensity represents a choice within a range of possibilities. The revenue produced per acre consumed by the intensity chosen for a specific activity determines its economic contribution to the stability of a city; but most, if not all, cities have not forecast intensity nor coordinated with activity to produce a stable economic base. City design does not exist; revenue remains unstable; and each architectural composition contributes to unrestrained sprawl. This is permitted by cities seeking economic balance they can only define with rudimentary budgets based on hindsight. The problem begins with a city’s lack of information regarding the productivity and yield of the acres within its jurisdiction. The problem expands with a city’s inability to accurately forecast development capacity options, context implications, revenue potential and investment opportunity per acre.
In summary, architecture shelters activity. The intensity planned determines the square feet of activity introduced per acre. The nature of the activity determines the revenue generated per building square foot. Intensity multiplied by revenue determines the yield produced per acre consumed. In the end, city design comes down to land use allocation options, intensity forecasting, revenue prediction, context evaluation and massing design decisions. These decisions create shelter for growing populations within a city design composition that protects a population’s welfare and relationship to a natural domain that will not be dominated by our failure to adapt.
Local income tax revenue is an example of a public-private financial relationship that has suffered from a lack of correlation with architecture and city design. Local income tax is only collected from those who work in a bedroom city or suburb, unless the community also elects to tax the income of those who work in other jurisdictions. This makes a bedroom suburb vulnerable to its morning migration of occupations, and the affluent resident is left to wonder why the suburb is claiming poverty. The situation is aggravated when the government’s real estate tax revenue declines as the school system takes an increasing share.
This is a critical situation because the preservation of value in a city requires public investment / spending on operations, maintenance and improvement. The appreciation of value is influenced by public services that define its quality of life. The real estate tax, however, often becomes dominated by the need to fund the increasing cost of education, and the income tax is a function of employment centers that may be minimized in its jurisdiction. Eventually, cities learn that: (1) Visible deterioration can threaten both preservation and appreciation of value; (2) That educational systems cannot offset declining physical, social, psychological and economic attraction; and (3) That economic development is an isolated tactical effort when a strategic city design for comprehensive productivity and yield is not available.
The income tax has been adopted by many local communities to expand the funding available for public maintenance, improvement and services; but it depends on the presence of employment centers within the jurisdiction. This means that when the term “economic development” is used, it means the attraction of employment activity and the use of intensity to improve potential income tax yield per acre from the shelter constructed. The focus has been on attraction, however, because intensity has been an undefined architectural term and the accurate prediction of many alternatives has been impossible within a realistic and affordable period of time. As a result, context evaluation has been limited to subjective site plan review. Intensity options are rarely evaluated. Revenue objectives are not correlated with land use allocation, and city design suffers from inadequate database information.
The local income tax and real estate tax are directly linked to architecture. They will only be a potential source of economic stability when the relationship of land use activity allocation, intensity, revenue and context can be evaluated.
The affluent residents mentioned in the essay, “Design with Intensity”, were paying increasing taxes and their streets were crumbling because of the confusion and inadequate information just mentioned. This was implied by the land use allocation and millage rate sections of Table 1 in the essay. These sections showed that little land was devoted to nonresidential employment centers producing income tax revenue, and that the city received only 9.9% of the real estate tax paid per net acre. The table could not explain, however, that residents did not realize that so little of their real estate tax revenue was reaching their local government; and that none of their income tax revenue was contributed when they worked outside the city.
It was also impossible to explain with accounting in “Design with Intensity” that the prevailing management attitude believed that the community had always been residential and would always remain residential; nor the popular belief that this should continue; nor the belief among seniors that evolution to a naturally occurring retirement community was desirable. Given the built-out nature of the suburb, residential emphasis would always prevail, but management was not prepared to predict what an increase from 5% to 10% commercial land use allocation could do for the revenue needed to maintain real estate value. This made it impossible to justify redevelopment in an environment conditioned to reject office and commercial urban renewal as a necessary adaptation to a shifting economic world.
It’s difficult for residents to understand that city services, maintenance and improvement are the foundation for real estate value. This is de-emphasized in school fund raising campaigns that emphasize benefit to real estate appreciation, and cities often avoid the argument and the competition for real estate tax income. The distinction should be understood, however. A city maintains value. A school system influences appreciation. Ignoring one for the sake of the other may be politically expedient, but it is a recipe for decline.
Unfortunately, most cities and suburbs only know that they need employment centers under the current concepts of taxation. They don’t know what kind and how much they need, but understand that more is better and begin offering tax-break incentives to compete with their neighbors. This makes many willing to sacrifice context for the sake of new money. It also encourages sprawl in an attempt to add revenue, but the lack of knowledge and forecasting ability often leads to new development and new money that proves inadequate for the maintenance and services required over time. This leads to more annexation in search of new money and a determination to avoid encirclement by protecting unincorporated “growth corridors”. This will continue until the implications of activity, intensity, context, revenue and investment can be more accurately measured, forecast, evaluated and negotiated by all invovled.
I’d like to close by referring to Table 1 in this essay. Accounting tells us that $8,150,000 was received from residential and non-residential income tax sources. Analysis tells us that this is $2,048 per net city acre, or 34.7% of the total revenue received per acre. The budget is balanced with $5,905 of revenue equaling $5,905 of expense, but the story remains to be told. The income tax is supplemented by unreliable estate tax and the real estate tax is supplemented by unreliable miscellaneous income to balance a budget that is already sacrificing maintenance and improvement for debt service. This is happening while affluent residents continue to insist that expense must be reduced because taxes are too high. Adequate explanations suffer from insufficient information and fear of political criticism, while assumption and decline continues.
I think most will agree that we cannot consume the planet for shelter and survive the sprawl created. If there is agreement, the question becomes: what activity allocation and intensity options can we build within symbiotic geographic limits to provide the shelter, stability, and self-sufficiency required to protect the public welfare? This is a strategic question that can only be answered with the help of many professions and sciences. The success of these answers will be expressed by the architecture that remains centuries after the challenge has been met. Architecture is a tactical effort, however. City design is the strategy behind the campaign that must contribute to a symbiotic goal. There are architects among us who are destined for the General staff when they focus on the intelligence needed and the equipment required.
Public decisions are often made in a vacuum of knowledge based on opinion. This is not a criticism. Government steps into the unknown to protect the public interest, when it is not preoccupied by self-interest; and opinion is influenced by persuasion laced with knowledge. I have used the local income tax to show that sprawl is the result when land is the issue because knowledge is required to alter the decisions taken in public debate. City administrations including, but not limited to, management, law, finance, engineering, services, parks and planning do not have the concepts, tools and measurement systems needed when the objective is economic stability, and a desirable quality of life, with a sustainable future. Architects have the inherent ability to produce a better answer, but they need a goal, strategy, tactics, tools and measurement system that can help them reach their full potential.
The common ground between design and public benefit is the relationship between land area and gross building area that I’ve called intensity options, or development capacity alternatives. Every acre in a city represents potential revenue that is often squandered because the yield per acre from the combination of activity and intensity cannot be predicted. This means that the acres are often misallocated and cannot be compared to the budget required to protect a city’s quality of life over time. As a result, decisions are based on uninformed opinion; and annexation becomes sprawl that extends the misallocation. It is all based on the mistaken belief that new money will solve old problems without better information and evaluation. In most cases, the hole will simply become deeper because this is a Ponzi concept created in desperation for want of better information. Architecture can help when it can offer the advice needed to pursue a strategy of informed city design and achievement.
Questions are needed. Research is required. New tools and information must be developed. Knowledge is the objective and a symbiotic future is the goal. Architecture and city design have a role to play. Their approach to shelter can seek to balance activity and intensity with revenue, profit and context within jurisdictional limits that protect The Natural Domain.
The wild card is population. I'm afraid we can’t face the issue, but we can approach it from the perspective of shelter demand and its impact on The Natural Domain. I’ve already said that I think most will agree we cannot completely consume this domain and survive. I’ve underlined the question, but would like to close by restating it in slightly different form. It's time to define how much we can consume in quantitative terms; how much shelter can be accommodated before intensity within limits destroys our quality of life; and how much population this implies.
AUTHOR NOTE: Intensity options can be quickly forecast, evaluated and negotiated between public and private interests with the help of Development Capacity Evaluation software. Yield requires additional information, however. Jurisdictions must build the data required to correlate the revenue potential from activity alternatives with the predictable options from intensity forecasting. The result will be context design to protect the public interest and its quality of life. It goes without saying that this must all occur within geographic limits defined to protect our source of survival.
I’ve created the language of intensity and its forecasting software to facilitate context research, measurement, evaluation, and prediction. It can lead to more informed and persuasive city design recommendations regarding activity, intensity, revenue, investment and context options within sustainable limits; and decisions will improve when design information is gathered to refine its predictive ability. Book and software references can be found in my profile.
TABLE1
LOCAL INCOME TAX IMPLICATIONS
from LAND USE ACTIVITY & ARCHITECTURAL INTENSITY RATIOS
| ||||||||
LAND AREAS
|
gross acres
|
gross %
|
net taxable
|
net acres as
| ||||
acres
|
% of total gross
| |||||||
ACRES
|
6,200
|
100.0%
|
3,980
|
64.2%
| ||||
ACCOUNTING
|
FINANCIAL EVALUATION
| |||||||
A
|
B
|
C
|
D
|
E
|
F
|
G
| ||
revenue
|
revenue per
|
revenue %
| ||||||
total
|
revenue
|
per NET
|
net land use
|
divided by land
| ||||
revenue
|
as % of total
|
city acre
|
category acre
|
use category %
| ||||
1) Residential Income tax
|
$2,800,000
|
11.91%
|
$704
|
$875
|
14.82%
|
low % reflects employment in other cities
| ||
2) Reciprocal residential income tax
|
$0
|
0.00%
|
$0
|
$0
|
0.00%
|
zero reflects 100% reciprocity with other cities
| ||
3) Non-residential income tax
|
$5,350,000
|
22.77%
|
$1,344
|
$11,146
|
188.77%
|
high % indicates only productive use of land
| ||
4) Total
|
$8,150,000
|
$2,048
| ||||||
5) % of total revenue received per net acre
|
34.7%
|
Income tax weak: supplemented by unreliable estate tax. Real estate tax weak: supplemented by unreliable misc income
| ||||||
TOTAL EXPENSE
| ||||||||
1) Operating
|
$16,150,000
|
68.72%
|
$4,058
|
high % reflects inadequate negotiation
| ||||
2) Maintenance
|
$4,100,000
|
17.45%
|
$1,030
|
low % for mature city indicates cutbacks
| ||||
3) Debt Service
|
$2,400,000
|
10.21%
|
$603
|
increasing % begins to limit future options
| ||||
4) Depreciated Assets
|
$850,000
|
3.62%
|
$214
|
equipment options for service delivery rarely evaluated
| ||||
5) Total
|
$23,500,000
|
100.00%
|
$5,905
| |||||