REAL4000 Chapter 4

Steps to Calculating Property Tax Bill

Step 1) Local government assesses the property and attempts to estimate the market value of the property. Step 2) The assessed value of the property is usually some percentage of market value Step 3) Figure out property tax exemptions in order to reduce tax bills by excluding some of the property's assessed value from taxation. Step 4) Multiply your taxable value by the millage rate to compute your taxes due

Effective Tax Rate Formula

Tax/Market Value of Property

Eminent Domain

The government's power to acquire land for public use as long as just compensation is paid to the owner

Millage rate

The millage rate states the $ of tax that must be paid for every $1,000 of taxable value

Zoning

regulation of land use, population density, and building size by creating geographical districts of similar uses

List three examples of negative externalities in local land use

Traffic, Noise, Storm Runoff

Given the following data, compute taxable value. Market value: 100,000. Assessment percentage: 85 percent. Exemption: 10,000. (1) With a tax rate of 25 mills, what is the amount of property tax? (2) What is the effective property tax rate?

75,000 (1) 1,875 (2)1.875

Identify four differences between a PUD and traditional zoning

A PUD can differ from traditional zoning by allowing mixed uses, not imposing uniform setbacks, allowing variable density, and incorporating open spaces and nature preservation along with structures.

Comprehensive Planning

A general guide to a community's future growth and development

Elements of traditional zoning include all except? A) Performance Standards B) Setback Requirements C) Bulk Limits D) Land Use Categories E) Provision for Special Use Districts

A) Performance Standards

Explain what change has occurred since 1950 in the use of eminent domain

Since 1950, the use of eminent domain has come to include public benefit as a public use. Therefore the public does not need to use the property, but only benefit from its taking.

Inverse Condemnation

An action initiated by the property owner against the government to recover the loss in property value attributed to government activity

Explain what launched the "revolution in land use controls" about 1970

An environmental revolution in the late 1960's launched the revolution in land use controls about 1970

A new form of land use control that replaces zoning by land uses with separation of building/development type is? A) Form-Based Zoning B) PUD C) Performance Requirements D) Impact Fees E) Urban Planning

B

How is the property tax bill calculated?

By multiplying the millage rate by the assessed value of the property and dividing by 1,000

Zoning is an exercise of which type of general limitation on property rights? A) Eminent Domain B) Taxation C) Police Power D) Escheat E) All of the above

C) Police Power

Taxing Authorities

City, Improvement districts, County, Transportation authorities, Schools, Water Management districts

Explain the difference between condemnation and inverse condemnation

Condemnation is the legal procedure of the government taking private property through eminent domain. Inverse condemnation is an action initiated by property owners against the government for the loss of their land

New Urbanism is a term used to describe? A) Growth Management laws enacted by state governments B) Improvement of transportation system to encourage disposition of a city's population C) The requirement that infrastructure be available concurrently with development D) The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian oriented. E) The trend for construction of self-sufficient "new towns"

D

Externalities in land use include all except? A) Leap-Frog Development B) Increase storm runoff from paving C) Traffic Congestion D) Inability to judge the quality of a structure, once built E) Noise created by land use

D) Inability to judge the quality of a structure, once built

The most accurate conclusion about the regressivity of the property tax is that it is? A) Regressive B) Not Regressive C) Based on Ability to Pay D) Regressive, but when benefits are considered, the net result may be fair E) Not Regressive until the benefits are considered

D) Regressive, but when benefits are considered, the net result may be fair

Traditional land use controls (pre-1970) include? A) Zoning B) Building Codes C) Subdivision Regulations D) a and b, but not c E) All three: a, b, c

D) a and b, but not c

A comprehensive plan usually deals with which of the following elements? A) Land Uses B) Population C) Public Services D) Natural Resources E) All of the above

E) All of the Above

Property taxes are a major source of revenue for ? A) The Federal Government B) School Districts C) Local Governments D) State Governments E) Both Local Governments and School Districts

E) Both local governments and school districts

Nonconforming Uses

Existing property use that is inconsistent with the current zoning regulations

Impact Fees

Fees that communities charge developers to pay for the infrastructure needs created by new developments

Market Failures

Free market fails to allocate resources efficiently

What does the government have to prove in order to exercise this power?

Have to prove that the land is needed for a public use, and that the landowner has been justly compensated

Development Density

How much space can be built on a particular site

Condemnation

Legal procedure of the taking of landowner's property without consent in return for just compensation

New Urban Planning

Mixed use, public transportation, pedestrian oriented

List three requirements of the courts for zoning to be a legitimate use of police powers

Ordinance is reasonable, based on a comprehensive plan, and provides for all types of housing

What two things does zoning focus on regulating?

Permitted uses, and development density

What constitutional power enables state and local government to regulate land use?

Police power

What is required in a comprehensive plan?

Projection of future population growth, requirements for water and waste disposal, projected needs of future public services, and projected demand for land use

Zoning Variance

Property owner seeks permission from the government to violate some specific element of the zoning ordinance, and intended to offset the "one size fits all" approach

Issues with Property Tax

Regressive, Uneven across geographic areas, and poorly administered

Properties Exempt from Taxes

Religious Organizations, State Property, Homestead, Educational Institutions, Nonprofit Organizations, Sports Stadiums

Inclusionary Zoning

Requires developers to include a specified portion of "affordable" units alongside market-price units in any new housing development

Traditional Planning

Separated uses, automobile oriented, uniform density, cul-de-sac hierarchy in neighborhoods

Police Power

The power of the government to regulate private actions in order to protect the health, safety, and welfare of its citizens

Ad Valorem

The tax base is the value of the property rather than the income generated by the property

With the following information, compute the property tax rate for the community. Total budget expenditures: $40 million. Total non-property tax income: $5 million. Total taxable value: $1 billion. Total exemptions: $250 million.

The tax rate is 4.67

Exclusionary Zoning

To exclude/segregate certain people from obtaining properties in certain zones

Purpose of zoning

To limit overcrowding/overbuilding, stabilization of neighborhoods, segregating incompatible uses

Identify two divergent views in recent planning theory concerning the best practice in street layouts and in the relationship between residential and commercial land use

Traditional planning of street layout is built through a hierarchy of cul-de-sacs. Additionally, traditional planning favors complete containment of nonresidential land uses in designated areas. On the other hand the new urbanism planning allows for grid pattern, narrow streets, and a mix of land uses within the same area

Permitted Uses

Uses allowed for a particular site

Holdout

When assembly of multiple private parcels is involved, one or more landholders can "hold hostage" the entire project by refusing to sell at a reasonable price

Property Taxes and Jurisdictions

You pay a single property tax, but are taxed by multiple jurisdiction. Each jurisdiction sets its own millage rate, and determines which exemptions to grant. Taxable value may vary from jurisdiction to jurisdiction

List three aspects of land use typically restricted by zoning, in addition to the type of land use

Zoning typically imposes setback requirements, building height limits, minimum lot dimensions, and building floor area limits as a ratio to land area

Planned Unit Developments

authorities evaluate the overall site plan instead of requiring the project to meet every element of the local zoning ordinance

building codes

detailed standards for the construction of new buildings and alterations to existing ones

Name two examples of monopoly affecting local land use

electric, and water

what purpose do building codes serve?

promotion of public health and safety, and promotion of energy conservation

Rezoning

want to use the site in a way that is not allowed by the current zoning classifications, and must get the site's classification changed to one that allows the desired use

Impact fees are used to pay for things such as

widening roads, increasing sewer capacity, building schools