Eyes on the street: What do tax subsidies for suburban infrastructure look like on the ground?

In the spirit of Denver’s ongoing East Central and East Area neighborhood plans, we’re hoping to illustrate what Denver’s high level tax priorities towards suburban concrete and asphalt look like in real life?

As many of our readers already know, Denver, like most american cities openly embraced a growth “ponzi scheme” following world war II which allowed cities to grow fast and wide. Unfortunately, along the way we forgot to ask whether this new development was able to pay for the ongoing infrastructure maintenance to service these miles of roads, sidewalks, sewer systems, stormwater systems, schools, fire & police departments, and lots and lots of free storage spaces for private vehicles on public property. Unfortunately, the property tax paid by Denver’s suburban property owner’s rarely pays the bill for accessing, maintaining, and servicing their infrastructurally inefficient properties, and Denver looks like this when it comes to paying the infrastructure bill with property tax:

Does your property tax pay for your infrastructure to access and service your property?

This typically gets more exacerbated the further from downtown that we get:

Interestingly, many neighborhoods that are typically known as wealthy or “nice” are often some of the biggest beneficiaries of these infrastructure subsidies from people who often live closer to downtown, are more likely to rent, and often have lower net worth. Polo Club neighborhood is one of the worst offenders.

What does this actually look like on the street though? Understanding that annual infrastructure maintenance costs $1.06/sq. ft. of land in Denver, here is a financial break down with Denver’s median single family home, duplex, 4-plex, and rowhome:

Single Family Homes with large lots, lots of street frontage, and lots of roads, sewers, sidewalks, paved parking, and stormwater to access and service the properties don’t have enough property tax base to support the maintenance for this built environment.
Duplex – the numbers are getting better and about half the subsidy of a single family home, but still requiring a lot of help from more productive places.
Smaller lot sizes, less street frontage per family, and more economical asphalt and concrete require even less of a subsidy. Added environmental efficiencies of shared walls and less energy use per resident especially if located near to jobs, restaurants, and services that the residents would frequent with transportation.
Finally an economically productive building type and a positive return on the cities public infrastructure investment even in a somewhat low land value area.

So what?

Denver is a very fortunate city in that it has plenty of sales tax, and lodging tax to make up the difference, but it isn’t very equitable, and not very financially resilient in the case that Denver experiences any future recessions or drawbacks in sales tax. Let’s be conscious of what were building and the long term liabilities of the development Denver promotes through its zoning and tax systems.

Leave a Reply