chapter 4 public restrictions on ownership rights
TRANSCRIPT
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Chapter 4
Public Restrictions on Ownership Rights
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Four Basic Powers of Government Over Real Estate
Taxation
Escheat
Eminent domain
Police power
(includes zoning)
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Property Tax
“ad valorem” tax millage rate exemptions The tax bill for a property in the DFW
area with a market value of $100,000 and a municipal tax rate of $0.60 per $100 valuation is calculated as follows:
Market Value $100,000
Divided by 100 / 100___$1,000
times tax rate x 0.60__equals Property Tax $600.00
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Administering the Property Tax
First step, identify all properties and estimate their values
Second step, develop a budget and tax rate. The budget is determined by the
appropriate government officials based on the costs of providing government services to the community (police and fire protection, schools, libraries, street, etc.)
Dividing the budget amount by the tax digest (total value of properties in the jurisdiction) yields the tax rate necessary to generate the budget amount.
Third step, bill the property owners and collect the taxes.
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Tarrant County Property Taxes
Tax Rates
Texas Homestead Exemption Qualifications:
Must own home Jan.1 If over 65, exemption is
immediate regardless of ownership date
Must be principal residence
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Tarrant County Exemption Types
Types of Exemptions Homestead
All school districts ($15,000) Cities can decide if they want
to offer Over 65
All school districts ($10,000 min. & tax freeze)
Cities can decide if they want to offer (and/or freeze)
Disabled Must provide evidence from 2
doctors All school districts ($10,000) Cities can decide if they want
to offer
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Power of Escheat
Government’s right to acquire ownership of land when the landowner dies without an heir or a valid will
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Power of Eminent Domain
right of the government to take private property for public use upon the payment of just compensation
Use must be a valid public use.
Property owner must be compensated fairly.
5th & 14th Amendments to U.S. Constitution
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Eminent Domain Issue
Broad definition of “public use” or “public best interest”
- Stadiums
- Economic Development
- Shopping Malls
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Eminent Domain – Philadelphia Area
2004 $275 million
“Neighborhood Transformation Initiative”
Goal: to strengthen tax base by luring new residents with newer residential properties.
5,500 properties to be condemned through eminent domain
Includes profitable businesses and older neighborhoods (but not slums)
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Eminent Domain Debate
Gives Municipalities ability to redevelop neighborhoods and replace vacant land and abandoned houses
VS.
Government chooses “winners” and “losers”
Can be abused by developers who get access to cheap land/buildings (cities often subsidize to attract
development) Can break up lower-income but very
viable neighborhoods and social networks
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Eminent Domain Case #2
Hurst, Texas Late 1990s
Expansion of Northeast Mall
Remove 127 middle-class homes.
10 homeowners sued (some owning homes for 30+ years) – lost
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Eminent Domain Case #3
Toledo, Ohio 1999 Chrysler wanted to expand
manufacturing plant (assumption of increased or retained jobs)
83 homes bought or condemned with eminent domain
4,900 jobs expected
Through automation only 2,100 actual jobs
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Eminent Domain Case #4
Canton, Mississippi 2000 Construction of Nissan plant Mississippi Major Economic Impact
Authority (MMEIA) given state power of eminent domain
One family had lived in the same neighborhood for generations
Condemnation/purchase forced 15 family members to move
Nissan said they could build even if families stayed but MMEIA insisted they move anyway.
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Eminent Domain Case #5
East St. Louis 1999
Local Racetrack wanted to expand parking
Company owning 148 adjacent acres didn’t want to sell
Racetrack went to the Southwestern Illinois Development Authority, applied, and had the Authority use eminent domain to buy the land for the racetrack.
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Police Power
Power to regulate use of private property to protect public health, safety, morals and general welfare
Land uses are interdependent, meaning that the way one property is used affects other nearby properties.
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Comprehensive Plan
Comprehensive general plan projected economic
development transportation plan to provide
for necessary circulation public-facilities plan that
identifies such needed facilities as schools, parks, civic centers, water and sewage disposal plants
land-use plan official map
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Implementing Comprehensive General Plan
Zoning – division of a community’s land into districts to regulate the use of land and buildings and the intensity of various uses Type of use – residential, commercial,
industrial categories Intensity of use - developmental
density Height and bulk limitations Bulk regulations Floor-area ratio Minimum lot size and setback
regulations
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Figure 4.1Examples of FAR
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Zoning Changes
Legislative relief Administrative relief Variances Special use permits Judicial relief
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Other Issues:
Nonconforming Uses
Building Codes
Subdivision Regulations Subdivision Approval Process
Mandatory Dedication
Impact Fees
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Innovative Land-Use Control Methods
Planned unit development
Performance zoning
Incentive zoning
Transfer of development rights
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The Takings Issue
If government action changes value of property
Very complicated subject Periodic court cases to
refine legal definition of a “taking”
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End Chapter 4