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HomeMy WebLinkAbout2026-059 City-Wide Fiscal AnalysisSeptember 25, 2026 Report No. 2026-059 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: City-Wide Fiscal Impact Analysis Workshop Request BACKGROUND: During the August 18, 2026, City Council Work Session, Council Member Rumohr submitted a pitch requesting a presentation and workshop focused on spatial fiscal impact analysis. The initiative explores analytical methodologies used by municipalities across Texas and nationally to evaluate land-use financial productivity and long-term asset management obligations. Following Council discussion, staff were directed to prepare an Informal Staff Report outlining the conceptual framework of spatial fiscal modeling, presentation options, and proposed scheduling. The City of Denton has established prior experience with integrating fiscal impact analyses into its planning and land-use evaluation frameworks. In October 2019, the City Council updated the Denton Development Code (DDC) to add fiscal impact as a criterion for approval (Sec. 2.4.5.E.9) for development applications and requested that staff establish a formal evaluation mechanism. In July 2020, the City selected AECOM to build an independent, Denton-specific Development Fiscal Impact Model. Designed as a 40-year decision-support tool, the model isolates fiscal evaluation from developer-provided projections, drawing on parcel-level property data, historical General Fund expenditure trends, utility rate schedules, and 40-year roadway lifecycle cost methodologies to estimate long-range municipal revenues and cost implications for individual projects. These project specific fiscal impacts are included as exhibits to projects coming forward to Planning and Zoning Commission and City Council. DISCUSSION: Rather than assessing local government revenues and expenses purely in aggregate, spatial fiscal modeling utilizing GIS evaluates performance at the parcel and neighborhood level, comparing the revenue generated by a given land area against the cost to build, maintain, and serve specific land areas over a multi-decade lifecycle. Whereas other fiscal models attribute costs based on populations, calls for service, or other metrics, this type of analysis attributes costs to parcels based on service areas for that infrastructure or service. For example, rather than costs for fire service being considered based on call volume, the cost would be based on the area within a fire station response time window. Key concepts in spatial fiscal analysis include: • Tax Yield per Acre: Evaluating ad valorem property taxes on a spatial, per-acre basis rather than relying solely on total property assessment per lot. This metric allows municipalities to compare the true land-use efficiency and economic productivity of low- density, medium-density, and compact commercial or residential development patterns. • Return on Investment & Net Revenue Mapping: Overlaying municipal expenditure data onto parcel maps to contrast local tax revenue generation against baseline service delivery September 25, 2026 Report No. 2026-059 costs (such as police, fire, emergency services, and general maintenance). This mapping highlights areas that are net revenue-positive versus those that require long-term operational subsidies. • Life-Cycle Infrastructure Liabilities: Factoring in non-budgeted or deferred long-term capital replacement costs—such as linear feet of road networks, water mains, and sewer lines—to measure whether current development patterns generate enough revenue to cover future infrastructure replacement over a 20- to 50-year horizon. • Integrated Capital & Land-Use Planning: Utilizing spatial fiscal data to align Future Land Use Plans, Development Codes, Economic Development Strategies, and Capital Improvement Programs to ensure long-term municipal solvency and community affordability. Attachment 1 is a fiscal analysis completed for the City of Fate, Texas to be used as an example of the type of fiscal analysis that was discussed in the two-minute pitch. The presentation and workshop were initially proposed to be conducted by external land-use and fiscal planning professionals. During discussion, City Council directed that any entity conducting the workshop should be restricted from bidding on future contractual work resulting from or related to the analysis. In response to this restriction, the prospective presenters elected not to deliver the workshop so as not to preclude themselves from participating in future competitive solicitation processes. Accordingly, if this item moves forward as work session, the presentation and facilitation will be performed directly by City Staff. Upon receipt of the Informal Staff Report, Council Member Rumohr may indicate if the information provided satisfies their request. The item will be considered by the Agenda Committee for placement on a future Work Session agenda and routing through an appropriate board, commission, or committee. ATTACHMENTS: 1. City of Fate Fiscal Analysis White Paper STAFF CONTACT: Charlie Rosendahl Director of Development Services Charlie.Rosendahl@cityofdenton.com (940) 349-8452 REQUESTOR: Council Member Rumohr STAFF TIME TO COMPLETE REPORT: 2 Hours PARTICIPATING DEPARTMENTS: Development Services, Finance AVO 45603 August 2022 AVO 45603 October 2022 Prepared for the City of Fate, Texas FATE UDO ZONING CODE UPDATE FISCAL ANALYSIS WHITE PAPER UNIFIED DEVELOPMENT CODE UPDATE 1 Fate Unified Development Ordinance Table of Contents 1. Introduction ............................................................................................................. 1 2. Finding & Recommendations ................................................................................ 4 2.1 Land Use ............................................................................................................ 4 2.3 Density & Bulk Standards ................................................................................. 16 2.1 Block Length & Connectivity ............................................................................. 23 3. Methodology ......................................................................................................... 33 Figures Figure 1. Total Value Per Lot .......................................................................................... 1 Figure 2. Revenue Per Acre by Land Use ....................................................................... 1 Fate UDO Zoning Code Update 2 1. Introduction Cities across the country have begun taking steps to become more fiscally sustainable. Few have traveled that road further or as faithfully as the City of Fate, Texas. Led by an innovative body of elected officials and city staff, as well as forward thinking citizens, the City of Fate adopted the Forward Fate Policy Manual in 2021. This policy manual identified in its implementation action plan an update to the Unified Development Ordinance “to incorporate the development strategies recommended in this comprehensive plan” as a high priority short-term regulatory objective. True to form the City of Fate has initiated this process. The project team began this study with a simple hope. Namely, to make fiscally responsible recommendations for updating the City of Fate’s Unified Development Ordinance (UDO) with strong support from data analysis. This study aims to illustrate the relationship between patterns in the built environment, the City of Fate’s Development Regulations, and the City of Fate’s funding structure at a level of detail sufficient to support the recommended updates to the city’s UDO proposed by the project team. This paper has three primary sections consisting of the following: 1. Purpose - Introduction to the study describing its background, goals, and the organization of the rest of the paper. 2. Findings & Recommendations - This section describes the results and findings of the study. It also outlines how these results influence the recommended changes to the UDO, and how the recommended changes implement the 2021 Forward Fate Policy Manual. This report presents the findings and recommendations in the following sections: 2A. Land & Land Uses 2B. Density & Bulk Standards 2C. Block Length & Connectivity 3. Methodology - This section describes how the project team organized and executed this fiscal analysis study. Fate UDO Zoning Code Update 3 Purpose Property and retail sales taxes supply most general funds in most cities across Texas. Both these taxing structures have a direct relationship with the built environment. Property taxes generate funds based on how much value in the built environment accumulates on a parcel of land. A property with more improvements per square foot, or a higher value of built property per square foot, will generate more property tax revenue. In turn, development regulations that restrict how much a property owner can build on their property also restricts how much revenue that property can generate through property taxes. Minimum setbacks, minimum parking, maximum density, and maximum height restrictions all have the ability to restrict a property’s revenue potential. Understandably, taxes tend to inspire scrutiny and suspicion. A sentiment often heard about property taxes goes something like this, “if we have taxes at all they should be as low as possible.” The State of Texas has generally agreed by passing a variety of regulatory measures aimed to limit the taxing authority of Texas cities. While limited government power and limited taxes may be favored by many citizens, the smallest possible governments with the lowest possible taxes may ultimately not serve them well. A more sustainable approach to local taxing structures might begin with this sentiment, “if citizens require public services and facilities from their local government, then the taxing structure they authorize to that government should allow their elected representatives to adequately fund the services they require.” This approach requires a city to understand and quantify what “appropriate” services and funding looks like. Otherwise, a city’s tax rate becomes an arbitrary number based on emotions or ideological maxims. Furthermore, since Texas cities rely heavily on property taxes they should also understand and quantify the relationship between patterns in the built environment, their adopted development regulations, and their budgeting processes. It’s important to note that while this study aims to establish a more fiscally sustainable development pattern, the general welfare of citizens remains the primary goal, and not the highest possible returns on investment. Cities serve and support persons and families, not the other way around. While these recommendations to the UDO should provide more sustainable fiscal outcomes, these are tempered with the vision and goals cast in the Forward Fate Policy Manual which include an eye toward personal, social, and environmental quality as well as fiscal sustainability. Fate UDO Zoning Code Update 4 2. Findings & Recommendations 2A. Land & Land Uses Background Development regulations typically touch heavily on what kind of uses the City wishes to facilitate or prohibit across their jurisdiction. That means what, when, and how particular uses may exist by right or by special condition. Fiscally speaking, different land uses perform differently. The tables below illustrate the “Total Value Per Lot” (TVL) and the “Revenue Per Acre” (RPA) of some basic land use categories in the City of Fate. Figure 1 illustrates TVL for basic land use categories in Fate. TVL is a common metric that cities study to determine the relative value of different land uses. The logic says that the more valuable a piece of property, the more revenue it will generate. That’s not wrong, but it’s not entirely true either. A City looking at this metric might decide to invest heavily in Commercial and Industrial uses over Residential uses, and many cities have done just that. That same logic might suggest that larger residences on larger lots will generate more revenue than smaller homes on smaller lots. That’s just plain wrong as we’ll see moving forward. Aside from the logic, the metric itself isn’t the best. A city’s cost burden is more of a geographic, or per capita, cost burden than it is a unit-based cost burden. Cities don’t fund their roads, police, or fire protection services based on how many times citizens use those services. If they did, those budgets and staffing levels would vary wildly year to year. More importantly, an adequate amount of service might not be available when its needed. Cities plan and fund general fund services Chart 1 Total Value Per Lot (TVL) on average by Land Use Categories Figure 1. Total Value Per Lot Fate UDO Zoning Code Update 5 (police, fire, admin, parks, roads, etc.) to provide a level of service consistently across space and time, so that it’s always available at a minimum standard when needed. For instance, many cities will adopt a minimum response time for fire and police response. A city might decide that they want their fire service to maintain a minimum four minute or less response time anywhere in the city. Once development patterns create a situation where that response time grows beyond four minutes, the city begins to evaluate how to add fire protection facilities or services to lower it back below four minutes. The call volumes of the fires stations often don’t come into play nearly as much as response time. In this manner the cost burden of general funds services reflects a per capita nature more than a per unit nature. Therefore, the revenue metrics we study should also reflect a per capita nature more than a per unit nature. Total Value Per Lot reflects a per unit, or per lot, nature. Revenue Per Acre provides a per capita metric that matches up well with the nature of a city’s cost burden. Analysis This study will use RPA as the foundational revenue metric for the analysis. The RPA metric tells different story than the TVL metric. Figure 2 illustrates the RPA metric across the same basic land uses shown in Figure 1. As shown in this second figure, Single Family Residences perform much better in the RPA metric than in the TVL metric, surpassing the Commercial and Industrial land uses by a significant margin. Table 1 describes the same data used in Figures 1 and 2. The Single Family TVL of $271,607 on average pales in comparison to the average TVL of the Commercial and Industrial lots at $631,833 and $890,560 respectively. The RPA for the same land uses shows an inverse set of values with the Single Family, Commercial, and Industrial land uses generating $3,051, $1,106, Figure 2. Revenue Per Acre by Land Use Fate UDO Zoning Code Update 6 and $936 respectively. Some cities will see this and gladly zone their entire jurisdiction for single family uses and call it a day. However, the story keeps evolving with more detail. Table 2 offers more detailed insight into the fiscal performance of different land uses by considering the impact of variable lot sizes. This double classification moves past looking at simple land uses into something closer to actual development patterns. The character of the built environment plays a significant role in a city’s development regulations, as well as their social, environmental, and fiscal performance. While Single Family scores a higher RPA than Commercial and Industrial uses overall, a more detailed look at the data reveals that lot size can dramatically alter how those land uses Table 2 Revenue Per Acre (RPA) by Land Use Categories with lot size categories Table 1. Revenue Per Acre (RPA) by Land Use Categories Fate UDO Zoning Code Update 7 compare to each other. Single Family lots 6,000 sf or less perform better than all commercial lots, except those commercial lots which are also less than 6,000 square feet. In fact, commercial lots 6,000 sf or less in area generate more than double the RPA than the Single Family lots at 6,000 sf or less. All but the largest Single Family lot size, 40,000 sf or larger, perform better than the overall Industrial uses. Table 2 also reveals that as the lot sizes increase for both commercial and single family uses, the RPA decreases. That’ s a negative correlation that shows up consistently across many of these studies, and it’s an important one to note. The TVL doesn’t show the same negative correlation. As the lot sizes increase, the TVL peaks in the 11,000 to 20,000 square foot lot sizes. Figures 3 and 4 illustrate similar patterns using a slightly different metric, Improvement Value Per Lot (IVL) which represents the value of the improvements (structures) on the lot excluding the value of the land. The RPA shown in the gold lines in Figures 3 and 4 consistently decreases as the lot sizes increase, however the average IVL peaks in the 11,000 to 20,000 lot size segments. Fate UDO Zoning Code Update 8 Figure 3 Revenue Per Acre (RPA) and Improvement Value Per Lot (IVL) for Single Family lots of various sizes Figure 4 Revenue Per Acre (RPA) and Improvement Value Per Lot (IVL) for Commercial lots of various sizes 9 Fate UDO Zoning Code Update The figures reinforce the conclusion that the RPA has an inverse relationship with lot size, but TVL and IVL don’t show much correlation with the lot size categories. The Commercial properties in Figure 4 show anomalous values in the RPA and the IVL for the 6,000 sf to 11,000 sf, which are both typically higher, especially the RPA. The anomaly comes from a small sample size (2 properties) which have old and low value structures on them, relative to the rest of the sample. This anomaly points to some of the intrinsic peculiarities of property taxes and appraised value systems and should correct itself once new development within this lot size category occurs. Property tax systems rely on land and improvement appraisal valuation practices. The location and size of land and improvements will largely determine the value of the land. These underlying tenets in appraisal practices contribute to the trends of declining RPA values as lot sizes increase. Land closer to developed areas carry more value per acre than land in rural undeveloped settings. Also, larger lots carry less value per acre than smaller lots, as Table 3 illustrates in the “Land Value Per Square Foot (Sq/Ft)” column. As lot size increases the land value per square foot declines. This helps to explain why single family lots perform better than industrial and large commercial lots. The land itself has higher value in smaller portions. Based on this correlation, enforcing lot size minimums without providing a maximum encourages larger lot sizes which carry lower land value per acre. The next series of figures are scatter plots and further illustrate how land use and lot size together constitute a development pattern. They also demonstrate how these different development patterns generate predictable revenue generation patterns. In these scatter plots each dot represents a single property with a dashed line representing a logarithmic scale to illustrate the correlation between the lot size and the RPA. The figures are large so each one is described here and then shown on the following pages. Figures 5-7: These figures have green dots representing single family properties. The X axis describes the lot sizes while the Y axis describes the RPA. These figures illustrate in greater detail the trends we’ve begun to discuss. RPA decreases as lot size increases, but this figure illustrates the scale of the decline. The RPA log curve declines precipitously from $7,500 per acre to $4,000 per acre between 5,500 sf lots and 12,500 sf lots. The relative drop in RPA to lot size decreases as one goes past 12,500 sf. The most impactful differences in RPA reside in the smaller lots, below 10,000 sf. Figures 5 and 6: These figures show clear groupings around the 1/2 acre (21,780 sf) and 1 acre (43,560 sf) lot sizes, and again a large grouping between 5,500 sf and 10,000 sf. These Table 3 Land Value Per Sq/Ft 10 Fate UDO Zoning Code Update clusters represent a combination of market, infrastructure, agricultural, and zoning influences combining to create a natural minimum, which in turn creates a development pattern. The 1/2 acre and 1-acre minimums might allow for owning livestock or using septic systems instead of installing sewer. However, the smaller lots most likely represent a regulatory or business model minimum, or some combination of the two. The hard stop around 5,500 sf comes primarily from development regulations (i.e., minimum lot sizes), suggesting that the market could support smaller lots if permitted through the zoning regulations. Figure 7 reveals a variety of vertical lines which demonstrate these minimums. Lot sizes tend to find minimums and cluster around them. Figures 5-7 also show that the City of Fate has very few lot sizes under 5,500 sf. That also means the city of Fate has very few lots generating more than $8,500 in RPA. Citizens of Fate could be missing out on a variety of very attractive housing and neighborhood options by prohibiting lot sizes between 3,000 sf and 5,000 sf in most areas of the city. Those citizens also miss out of the potentially much higher RPA those properties could generate. They might see that as funding for additional services or facilities, or a lower tax rate. Those denser patterns would also support a greater variety of commercial, industrial, office, and entertainment uses. Figures 8-10 show the same correlation between RPA and lot size, but for all land uses. All the different land uses suffer from diminishing RPA values as lot sizes increase. All the land uses appear to show the same precipitous drop off in RPA in the smaller lot sizes, with the rate of decline leveling off in the larger lot sizes. Table 4 demonstrates that as the Average Improvement Area increases for both residential and commercial properties, the Improvement Value Per Square Foot generally decreases. While cities likely can’t change land and improvement appraisal methodologies, they can adjust their development regulations to reduce or avoid patterns with diminishing values. Table 4 Average Improvement Area & Improvement Value Per Square Foot 11 Fate UDO Zoning Code Update Figure 5 Revenue Per Acre (RPA) along the Y axis with Lot Size along the X axis. Each dot represents one single family residential property. The Lot sizes are constrained to a range of 2,500 sf to 250,000 sf. Figure 6 Revenue Per Acre (RPA) along the Y axis with Lot Size along the X axis. Each dot represents one single family residential property. The Lot sizes are constrained to a range of 2,500 sf to 43,560 sf (one acre). 12 Fate UDO Zoning Code Update Figure 7 Revenue Per Acre (RPA) along the Y axis with Lot Size along the X axis. Each dot represents one single family residential property. The Lot sizes are constrained to a range of 2,500 sf to 10,000 sf. 13 Fate UDO Zoning Code Update Figure 9 Revenue Per Acre (RPA) along the Y axis with Lot Size along the X axis. Each dot represents one property. The Lot sizes span a range 2,500 sf to just over 43,560 sf. The blue Residential Inventory properties represent a platted lot with a residential improvement in some phase of construction. Figure 8 Revenue Per Acre (RPA) along the Y axis with Lot Size along the X axis. Each dot represents one property. The lot size range spans from 2,500 to 217,800 sf. The blue Residential Inventory properties represent a platted lot with a residential improvement in some phase of construction. 14 Fate UDO Zoning Code Update Figure 10 Revenue Per Acre (RPA) along the Y axis with Lot Size along the X axis. Each dot represents one property. The Lot sizes span a range of 2,500 sf to 12,000 sf. The blue Residential Inventory properties represent a platted lot with a residential improvement in some phase of construction. 15 Fate UDO Zoning Code Update Recommendations for Land & Land Uses Based on the previously described data the project team recommends the following changes to the City of Fate’s UDO: 1. A mix of land uses - The City of Fate should continue to provide for a wide range of residential types in its UDO. Residential use represents the foundational land use of any city. The development of a city begins with people living in homes. Once the residential density reaches certain thresholds, commercial and industrial uses begin to move in. The demand for commercial and industrial uses depends, in part, on residential density. Even though some uses perform better fiscally, they all rely on each other. The project team recommends allowing greater flexibility in the allowed uses in all the districts, especially residential uses such as townhomes, duplexes, triplexes, quadplexes, accessory dwelling units, and different scales of multifamily. This mix will better support the City’s commercial and industrial uses. A healthy mix of residential types will also better support residents across a wider array of life stages. 2. A greater mix of smaller lot sizes for all uses - Lot size demonstrates just as much variety in fiscal performance as the different land uses, and in some cases more. The data show that smaller lots sizes generally produce more RPA than the same uses on larger lot sizes. The project team recommends allowing smaller lot sizes across all uses to ensure a healthy mix of lot sizes. This includes allowing lots as small as 3,000 square feet in more areas of the city for residential development. 3. Lot size maximums - The project team also recommends establishing lot size maximums to reduce the occurrence of low performing RPA lots across the City. These recommendations allow for a development portfolio with higher RPA values, but they also address the following goals from the 2021 Forward Fate Policy Manual: DI-2.4 Allow for attached single family, townhomes, and other lifestyle housing within areas identified as mixed-use and dynamic neighborhood place types. This update will allow these residential uses, and the appropriate lot sizes, in more districts across the city. DI-3.3 Incorporate considerations for long-term adaptability of buildings when updating code requirements. Allowing a greater variety of uses across more zoning districts allows reuse of buildings without navigating the regulatory process for zoning changes. HC-2.2 Consider expanding allowance of accessory dwelling units (ADUs) and missing middle housing types in more zoning districts. This update will incorporate ADUs and missing middle housing types such as duplexes, triplexes, quadplexes, and townhomes into a wider range of zoning districts. 16 Fate UDO Zoning Code Update 2B. Density & Bulk Standards The City of Fate’s UDO has great potential to take a unique approach to analyzing and regulating density and bulk standards. Density and bulk standards, such as setbacks and building height, significantly impact the way a development patterns looks, feels, and serves its residents. These standards also greatly impact the fiscal potential of any development pattern. Table 5 illustrates again how the relative value of land and improvements decrease as lots increase in size. While location and lot size largely determine the value of the land, the amount of improved space built for humans contributes most of the overall value. Density and bulk standards directly determine the amount of occupiable space a property owner can build on their property. Generally, the more space a property owner or developer is allowed to build for human occupation, the higher the potential RPA climbs. Large setbacks, minimum parking requirements, maximum densities, and maximum building height regulations limit the amount of occupiable space available for property owners to develop. That in turn, directly caps the RPA potential of any property. . The following illustration will demonstrate how the built environment impacts the RPA of a development pattern. A few things to observe while looking through the illustrations: 1. The sizes of single-family homes, and most residential products, do not vary in size nearly as much as the lot areas upon which they are built. Large lot residential developments might have lots that are 1000% the size of the lots in the adjacent neighborhood, but the homes themselves might only have 20%-100% more occupiable space. Table 5 illustrates this well. The average improvement area, or occupiable space, Table 5 - Land Value per Acre (LVA), Average Improvement Area (AIA), and Improvement Value per Square Foot (IVsf). 17 Fate UDO Zoning Code Update for single family residences on lots with more than 40,000 sf comes to 3,909 sf. That’s only a 45% increase in average occupiable space over homes built on lots smaller than 6,000 sf, but a 6,670% increase in lot size. 2. In most cases, as lot areas and structural sizes grow the RPA and Improvement Value per Square Foot (IVsf) will decrease, thus causing a diminishing return. 3. The relationship between the area of the land and the area of the occupiable space can be summed up in a metric called the Floor Area Ratio (FAR). It’s a telling metric, and one this study references frequently. However, this team will not recommend trying to regulate the built environment using FAR minimums or maximums, but will instead rely on related and familiar metrics already incorporated into the zoning district standards within the UDO. 18 Fate UDO Zoning Code Update Illustration 1 - Single Family Development: While the development regulations relevant to these properties may not require the setbacks, density, parking, and heights that exist, the patterns still reflect the impact of those types of standards. This illustration includes: 1) A 4,165-sf residential structure on a 2-acre lot generating $1,249 in revenue for the city, which comes to a RPA of $609. The FAR equals 0.05 2) A 2,745-sf residential structure on a 0.5-acre lot generating $957 in revenue for the city, which comes to a RPA of $1,927. The FAR equals 0.13 3) A 3,517-sf structure on a 0.12-acre lot generating $1,100 in revenue for the city, which comes to and RPA of $8,712. The FAR equals 0.64. This illustration drives home a variety of points. Property 1 has the biggest home and lot yet generates the lowest RPA by far of the three properties (318% less than property 2; 1,431% less than property 3), despite generating slightly more overall revenue (31% more than property 2; 14% more than property 3). The RPA represents the more valuable and applicable metric. Properties 1 and 2 have such large property areas that minimum setbacks likely did not affect the development of the home. However, those minimum standards can impact developments on properties less than 1/4 acre, like property 3. Property 3, despite its much smaller lot, manages to facilitate a home that’s 28% bigger than the home on property 2, and only 18% smaller than the home on property 1. Property 3 manages this by building two stories, allowing for more occupiable space on smaller properties, which results in a higher RPA. Allowing smaller lots with smaller setbacks could facilitate some residential development patterns with substantially higher RPA. The average home in Fate currently comes in at 3,045 sf which is 16% smaller than the home on the smallest lot, property 3. Also, notice that the FAR for each property correlates very well with the RPA for each property. 19 Fate UDO Zoning Code Update Illustration 2 - Multi Family Development: The residential illustration (Illustration 1) revealed that the FAR correlated strongly with the RPA. That trend continues with these multifamily illustrations, which include: 1) A 198,000-sf structure on 8.9 acres generating $44,112 in revenue for the city, which comes to a RPA of $4,948. The FAR equals 0.51 2) A 317,000-sf structure on 21 acres generating $95,018 in revenue for the city, which comes to a RPA of $44,065. The FAR equals 0.34 3) A 364,000-sf structure on 2.1 acres generating $77,554 in revenue for the city, which comes to and RPA of $36,173. The FAR equals 3.91. Parking can significantly impact the amount of occupiable space developable on a property. This directly impacts the RPA potential. Property 1 has mostly 2 story development with surface parking. Property 2 has three stories of development and similar surface parking to property 1. Property 3 developed to 4 stories and has structured parking. While the minimum parking standards might be the same on these properties, the density is much higher on property 3 than on property 1. This means property 3 either provided more parking in a structured format than property 1 or has a lower parking requirement. Furthermore, the density of property 3 may not be allowed in any other zoning districts, which means the RPA of property 3 isn’t allowed either. To achieve a comparable RPA in the other zoning districts, the higher FAR of property 3 must be allowed to occur through the bulk standards in the UDO. Any number of bulk standards could have prevented property 3 from achieving its high RPA. More restrictive minimum setbacks, minimum parking, maximum density, or maximum building height regulations could have lowered the RPA dramatically while providing limited community benefit. Additionally, property 3, with its denser development pattern, will support a greater volume of commercial properties. That boosts the city’s property and retail sales tax potential even more. 20 Fate UDO Zoning Code Update Denser development patterns have also proved to be a healthy lifestyle option for people, especially for the elderly and those who are too young to drive or simply choose not to. Illustration 3 - Mixed Use Development: This illustration provides some great insight into the characteristics of mixed-use development patterns. Property 1 demonstrates a traditional historic downtown development pattern common across Texas. Property 2 demonstrates the denser mixed use development patterns becoming more popular in urban areas across Texas. These properties have the following characteristics: 1) 158,000 sf of structure on 6.3 acres generating $27,399 in revenue for the city, which comes to a RPA of $4,307. The FAR equals 0.57. 2) 343,000 sf structure on 3.4 acres generating $59,478 in revenue for the city, which comes to a RPA of $17,457. The FAR equals 2.31. The properties in 1 exhibit a mix of one- and two-story development with very little residential footprint evident. This group of properties covers twice the area with half the improvement of the properties in 2. This leads to a much higher RPA and FAR in the second example. Properties in 2 don’t just have twice the RPA and FAR, they have 4x the RPA and over 4x the FAR. Interestingly, the second example achieves its higher RPA despite the large footprint of a three- story tax-exempt property occupying the southwest corner of the block. Typically, this would 21 Fate UDO Zoning Code Update represent a significant hit to the RPA, but the adjacent three- and four-story mixed use and multifamily development absorbs the revenue loss from the tax-exempt property. Tax exempt properties often provide crucial services to citizens, but they can also comprise a large portion of a city’s development portfolio and create substantial cost burdens and revenue gaps. Developing multi story improvements can significantly increase a property’s RPA and FAR, and also minimize the impact of tax-exempt properties. These illustrations accomplish a mix of uses, small setbacks, and somewhat smaller parking footprints. The parking footprint avoids a heavily auto-centric development pattern, but we still see property group 1 served by a scattering of surface parking lots and on-street parking while property group 2 has a large parking garage and on-street parking. While property group 2 might appear to have the bigger parking footprint, its higher density enables it to still achieve the much higher FAR and RPA (405%) than property 1. Multi story mixed use developments offer some significant advantages to cities by allowing the integration of residential into the commercial, office, and institutional uses that the residents demand. Single story office and commercial uses embody the same missed opportunity that the single-story homes did in the first illustration. Multi story buildings provide wide ranging benefits to cities and the City of Fate’s UDO should encourage, and in some cases require, multi-story construction. 22 Fate UDO Zoning Code Update Recommendations for Density & Bulk Standards Based on the previously described data the project team recommends the following changes to the City of Fate’s UDO: 1. Minimize setback standards in a reasonable manner to maximize the buildable footprint for properties. This allows more improvement on a property which will contribute positively to the RPA of developed properties. 2. Require and/or incentivize a minimum building height in commercial, mixed use, high density residential, and industrial zones. This would lead to more improvement area per square foot of land as the city continues to develop and redevelop, which will also facilitate higher RPA and better connectivity. 3. Include maximum parking standards and let the development community guide the minimums. Many cities are shifting away from minimum parking standards and allowing developers to largely establish parking standards that work best for their projects based on their own modeling and business models. These recommendations allow for a development portfolio with higher RPA values, but they also address the following goals from the 2021 Forward Fate Policy Manual: MG-1.1 Prepare an update to the Unified Development Ordinance to incorporate the development strategies recommended in this comprehensive plan update. These recommendations work directly toward achieving this goal. DI-2.1 Promote a flexible framework for the I-13/FM 551 focus area that is fiscally sustainable, pedestrian scaled, high quality, and supportive of growth of downtown and surrounding neighborhoods Moving away from minimum parking standards, reducing setbacks requirements, and allowing and requiring more multistory construction gives developers greater flexibility in their projects. DI-2.4 Allow for attached single family, townhomes, and other lifestyle housing within areas identified as mixed-use and dynamic neighborhood place types. These changes will reduce conflicts these development types often encounter with setbacks, parking, and height standards. DI-3.3 Incorporate considerations for long term adaptability of buildings when updating code requirements. Denser multistory development patterns have greater success getting repurposed into other buildings and allows more flexibility in redevelopment projects. 23 Fate UDO Zoning Code Update 2C. Block Length and Connectivity Cities consist of two types of space. 1. Destination Space - Space where persons or things come to rest like homes, stores, offices, restaurants, parks, etc. 2. Approach Space - Space where persons or things move between destination spaces such as sidewalks, trails, streets, bike lanes, etc. Each type of space has its own dynamics and design tenets. This study has shown how regulating the design of the destination spaces can impact the fiscal sustainability of a city. This section of the study will consider how the regulation of approach spaces can also impact the fiscal sustainability of a city. The Land & Land Uses section and the Density & Bulk Standards sections both describe how the built environment for destination spaces performs better fiscally when it has a high density of improved space built for people rather than automobiles. Higher concentrations of people require more property improvements which generate more property and sales taxes. The previous sections of this study have recommended regulatory changes which would lead to a built environment with: 1. more multi story buildings 2. allowing larger building footprints 3. less destination space dedicated to parking All three of these outcomes would lead to a socially, environmentally, and fiscally healthier built environment of destination spaces for citizens. A significant portion of this impact comes from the scale of the design. These approaches reference a person (pedestrian) for the design scale of the destination space, not an automobile which would be at a much larger scale. So, we could summarize the findings of the previous two sections with this statement: Destination spaces designed and built at the scale of the person generate healthier social, environmental, and fiscal environments. Approach spaces must dwell in harmony with destination spaces. The further apart they grow in scale, the less lively they become. A regulatory approach aimed at fiscally sustainable destination spaces must also address the approach spaces in a complementary fashion. Typically, addressing the regulation of the approach spaces involves updating the engineering design standards of a city’s public and private rights-of-way. That’s a necessary effort. However, this study has taken a more macro approach, and will consider regulatory language concerning block lengths and connectivity. Most often city planners will champion the small block over the super block due to scale and connectivity. That’s true and good but requires more specificity about scale of the primary user. Designing a system of approach spaces at a scale for automobiles will poorly serve a destination space built at a scale for persons. This study does not recommend designing a system of approach spaces strictly for persons with no consideration of automobiles. Alternatively, this study recommends the following: 1. Adopt minimum block length standards at a personal scale 2. Adopt a secondary block length standard for automobiles 24 Fate UDO Zoning Code Update City planners typically prize gridded street networks like the one shown in graphic 1 and try to steer away from longer block lengths as shown in graphic 2. With longer block lengths pedestrians have less connectivity, and in some cases must take a much longer circuitous route to arrive somewhere much closer than the total travel distance required. This type of block structure inevitably leads to citizens using automobiles to arrive anywhere, which in turn requires the rest of the city to design at the scale of the automobile creating a socially, environmentally, and fiscally unsustainable development pattern. This approach assumes that block length only refers to automobile blocks without additional connectivity for pedestrians, and in many examples of suburban development built over the last 50-80 years that’s true. However, it’s not intrinsic. Traditional college campuses across the world offer a good example of a dual block pattern where auto- centric blocks have much greater sizes than pedestrian centric blocks. The key is to regulate and design for both. Moreover, designing for both can have a substantial impact on the social, environmental, and fiscal strength of a city. 25 Fate UDO Zoning Code Update Illustration 1 describes how a block measuring at 200 by 200 feet would perform with different single family residential patterns at different lot sizes. The area of the block and size of the lots determine how many lots will fit on the block. Then, the Annual Revenue Per Block comes from the appropriate RPA rates from Table 2 multiplied by the acreage of the block. The Annual Road Costs come from assuming one travel lane per block face at a standard lane mile rate of $1.32M per lane mile multiplied by the perimeter of the block (this reflects generally accepted engineer’s estimates for road construction at the time of this writing). The Annual Net Revenue comes from the difference of the Annual Road Costs and the Annual Revenue Per Block. The “People Count” metric has been included to represent the scale of potential retail sales tax with each pattern. Higher densities of people generate higher densities of retail sales taxes. Illustration 1 shows how the Annual Net Revenue has an inverse correlation with the lot sizes. As the lots get smaller the Annual Net Revenue increases. That makes sense based on what this study discussed earlier. This block pattern only achieves a positive Annual Net Revenue with the smallest lot size segment. Auto-centric approach space on either side provides high connectivity for pedestrians and vehicles but it carries a high-cost burden. Also, while pedestrians might need that level of connectivity due to their travel speeds and the energy required for the movement, vehicles don’t need the level of connectivity. A circuitous route rarely prevents a person from making a trip in their vehicle, however it will often prevent them from choosing to walk or ride a bicycle. 1 26 Fate UDO Zoning Code Update The second illustration (2) shows a larger (200 x 600) vehicular block with smaller (200 x 200) non-vehicular blocks spaced for pedestrians, cyclists, and other users. Assuming the same variety of single-family residential development patterns but replacing the vehicular infrastructure in the interior of the block has an overall positive net fiscal impact. In this pattern the 5,645 sq/ft and the 7,523 sq/ft lot patterns achieve a net positive gain. The losses of the larger lot size patterns are steeper, but the potential fiscal gains are also much stronger. The connectivity remains high, and likely safer, for pedestrians and cyclists. Vehicles can handle the additional 500 feet or so, and traffic might flow smoother and safer with fewer intersection conflicts. Illustration 3 shows the impact of doubling the pattern in illustration 2 for a 200 x 1200-foot block. The two smallest lot size categories remain the only positive gainers in the Annual Net Revenue, but the larger categories have closed the gap on their losses per block. It’s worth studying the impact on vehicular traffic because these patterns might peak in efficacy and begin to diminish at some point, but the social, environmental, and fiscal benefits this approach seem clear. Illustrations 4 and 5 demonstrate how these changes can affect a larger area. Illustration 4 consists of 48 blocks at 200 x 200 feet. Assuming these blocks all contain the same single family development pattern using 7,523 sq/ft lot sizes then we find the following: 1. The pattern of consistent 200 x 200-foot blocks, which represents a traditional and often prized grid block pattern, produces a negative Annual Net Revenue of -$4,032. 2. The pattern of mixed block types includes 27 blocks at 200 x 200 feet, 5 blocks at 200 x 600 feet, and 1 block at 200 x 1,200 feet. This pattern produces a positive Annual Net Revenue of $16,421. 2 3 200 ft 200 ft 200 ft 200 ft 27 Fate UDO Zoning Code Update 4 200 ft 200 ft 28 Fate UDO Zoning Code Update 5 200 ft 200 ft 29 Fate UDO Zoning Code Update These illustrations support an approach to regulating block length with a set of pedestrian block length standards, and a separate set of block length standards for vehicular traffic. This approach also allows for retrofitting neighborhoods and commercial centers by replacing existing streets with pedestrian oriented approach spaces where appropriate. This type of approach to block patterns would not only benefit people in new developments but could also provide some positive impacts to existing development. The illustrations below (1, 2, and 3) show examples of how a city might approach retrofitting its block structures to provide a higher level of pedestrian connectivity while also removing more expensive sections of road infrastructure designed for vehicular travel. The green lines represent where a city might replace an auto-centric approach space with a pedestrian centric approach space. Retrofitting these spaces may have a minimal impact on RPA, but the cost savings could be significant. 30 Fate UDO Zoning Code Update Categorizing a city into approach and destination spaces provides insight into how cities have developed an intensely auto-centric development pattern at a steep cost for its citizens. The illustrations to the left reveal how auto-centric a city with entire blocks of destination space dedicated to automobiles is. The blue and orange lines represent approach spaces. Any space surrounded by orange or blue lines represents a destination space, or block. These apartment complexes (1 and 2) retain some pedestrian oriented blocks by maintaining pedestrian oriented approach spaces navigating around the apartment buildings. This design functions similarly to traditional college campus setting and creates concentrations of both destination and approach spaces built at a human scale. Conversely an auto-centric scale is much larger and carries a proportionately larger cost burden without providing additional revenue to offset it. The next two illustrations (3 and 4) demonstrate how auto-centric commercial developments end up creating entire blocks of destination space dedicated to automobiles. Regulatory language identifies these destination spaces as parking stalls, and often requires large amounts of them. These blocks of auto-centric destination space carry a large cost burden and generate very little revenue to offset it. This study has established how spaces built for people generate stronger social, environmental, and fiscal development patterns. Our regulations should steer us toward block patterns which support the citizens of a city, while maintaining a balance of accommodation for automobile use. 31 Fate UDO Zoning Code Update Recommendations for Block Length & Connectivity Based on the previously described data the project team recommends the following changes to the City of Fate’s UDO: 1. Adopt a 200-foot minimum and 600-foot maximum pedestrian scaled block length. This standard should serve as the default measurement and can serve to break up large vehicular scaled blocks. 2. Adopt a 600-foot minimum and 1,200-foot maximum vehicular block length. This will reduce the overall cost burden of vehicular road infrastructure while also continuing to serve both pedestrians, motorists, and other users well. 3. Establish a maximum 1,800-foot vehicular block length along arterial streets. These recommendations allow for a development portfolio with higher RPA values, but they also address the following goals from the 2021 Forward Fate Policy Manual: MG-1.1 Prepare an update to the Unified Development Ordinance to incorporate the development strategies recommended in this comprehensive plan update. These recommendations work directly toward achieving this goal. DI-2.1 Promote a flexible framework for the I-13/FM 551 focus area that is fiscally sustainable, pedestrian scaled, high quality, and supportive of growth of downtown and surrounding neighborhoods. Establishing block standards which begin at the human scale will better establish this area as a pedestrian friendly area. DI-2.4 Allow for attached single family, townhomes, and other lifestyle housing within areas identified as mixed-use and dynamic neighborhood place types. These standards support the pedestrian-oriented streetscapes necessary to support mixed-use and dynamic neighborhood place types. DI-3.1 Incorporate code requirements for block configurations that enhance walkability, connectivity, and pedestrian oriented uses. Providing an accessible connected network of rights-of-way designed at the human scale for pedestrians and other non-motorized transportation modes by establishing separate pedestrian and vehicular block standards constitutes a significant step towards this goal. 32 Fate UDO Zoning Code Update Methodology The data in this report comes from two primary sources: 1. Urbex Solutions – the tables, figures. graphics, and analysis all call from Urbex Solutions. As a company, Urbex Solutions has established a variety of processes to create a unique data set, based on publicly available raw data. 2. Appraisal Districts – the publicly available raw data comes for the Rockwall and Dallas County Appraisal Districts. This data is downloaded from their website and then processed, mapped, and illustrated by Urbex Solutions. a. Dallas County Appraisal District can be found here: Data Products (dallascad.org) – this study used the 2021 certified property tax rolls. b. Rockwall County Appraisal District data can be found here: Digital Mapping Information – Rockwall CAD – Official Site (rockwallcad.com) – this study used the 2021 certified tax rolls. Some notes on abbreviations: • RPA – Revenue Per Acre is calculated by applying a city’s property tax rate to the total taxable value of each account identified in the raw data. This total revenue represents how much the account owner should pay in taxes after incorporating any exemptions or caps and applying the local tax rate. Then the total revenue for all the accounts on each parcel gets added together to the create the total revenue per parcel. Then that total revenue is divided by the total area of the parcel in acres. This is a much more valuable metric than the others listed. • TVL – Total Value Per Lot is calculated by the appraiser for each county. This is the primary job of appraisers. The total value includes both the value of the land as well as the improvement. The total value of all the accounts located on the same parcel are summed up to create the total value of all the appraised land and improvements on a single property (lot). • IVL – Improvement Value Per Lot consists of the TVL minus the value of the land. • IVsf – Improvement Value Per Square Foot consists of taking the total value of all improvements on a lot and dividing it across the total area of those same improvements or structures (not the area of the lot).