A Picture Is Worth a Thousand Words

Joe Minicozzi, head of the land use and economic analysis company Urban3, is a big fan of the 1969 book “Design with Nature,” by Scottish landscape architect Ian McHarg.

“It all started with him,” said Minicozzi, whose company uses big data, 3D maps and illustrations to lay out plans for sustainable economic growth to residents, city councils and developers. REALTORS®, too.

The goal, when all is said and done, is to help communities achieve financial stability and become more vibrant economically. Or at least move them in that direction and “away from just doing things the way they’ve always been done, even if it has cost them a lot of money,” he said.

We empower communities with new insights into their own data.

Urban3 takes a different approach to land value economics, property and retail tax analysis and community design. “We empower communities with new insights into their own data. Our work makes a quantifiable case for better city planning, urban design and smarter growth. And we back up our stories with facts and figures,” he said. “Urban3 makes the complex human.

“We demystify tax codes, government jargon and municipal finance data, allowing communities to clearly understand the economic impact of development.”

Minicozzi also fancies this quote from former New York City Mayor Michael Bloomberg, who said: “If you can’t measure it, you can’t manage it.”

“That’s why having data to back up proposals and create maps and illustrations is so great. We tend to stay away from the subjective stuff, because that almost never wins an argument. And it is prey to tons of biases.

“I like to think of our maps as a form of tax literacy. If a purple spike downtown or in a mixed use, new urbanism project represents a positive flow of tax money, anyone can see that it’s coming from denser developments.”

And the other way around with mapping that shows a red block that sinks below street level — often in residential neighborhoods or areas of disinvestment — representing a loss to the city.

“Basically, our maps illustrate that density pays for itself and supports sprawl, which doesn’t cover its own costs, leaving others to make up the difference,” he said.

Minicozzi said McHarg, who founded the department of landscape architecture at the University of Pennsylvania, pioneered the concept of ecological planning. He said McHarg’s tome continues to be one of the most widely celebrated books on landscape architecture and land-use planning.

McHarg set forth basic concepts that were later developed into GIS (Geographic Information System), a type of database containing geographic data, combined with software tools for managing, mapping, analyzing and visualizing that data, Minicozzi said.

GIS connects data to maps, integrating location data with a variety of descriptive information that provides a foundation for mapping and analysis used in science and industry. It also helps users understand patterns, relationships and geographic context. The benefits include improved communication and efficiency, better management and decision making.

“From a landscape architect point of view, McHarg was basically saying ‘don’t [expletive] up the planet,” Minicozzi explained saltily.

“There is a great video of him from 1968. He’s Scottish and kind of obnoxious. He’s smoking a cigarette and he’s showing a map of wetlands to a Minneapolis planning council.

“He told them ‘Mother Nature has given this asset — fresh drinking water — to you for free. You’d have to pay a lot for this. So don’t put your rubbish in it. Don’t pollute it.

“He was a genius, promoting a way of layered thinking with his maps. He was like the one-eyed man in the valley of the blind, trying to get people to wake the hell up.”

Fast forward to today and the country is still having similar problems, worsened by climate change.

“We are still trying to get people to see what we are doing to our home, the planet, right on down to our cities and neighborhoods.”

Minicozzi is an architect who also has a master’s degree with a concentration in real estate development. “As a designer, I learned that often when you talk about walkability, nice pedestrian spaces and place making, you get chased out of the room.

“People would say that’s fine and fancy, Joe, but we are talking about money here. Everywhere I looked, it was money calling the shots. So, I began to wonder why we were rewarding the wrong things financially.”

Downtowns and mixed-used, denser developments support the lion’s share of a community’s facilities and services.

By using software designed by Esri, a company founded by visionary Jack Dangermond and his wife, Laura, in 1969, Urban3 uses parcel-level tax and other data — transformed into maps — to illustrate that downtowns and mixed-used, denser developments support the lion’s share of a community’s facilities and services.

Conversely, those same maps show that most single-use, suburban residential neighborhoods built after World War II cost far more to maintain than they bring in taxes — especially when it comes to replacing the costly infrastructure underneath roads. Similarly, he said it’s easy to show that cul de sacs are not only a big drain on city finances, but they lead to congestion on feeder streets.

“Fortunately, transportation engineers have become enlightened to the fact that old-fashioned grids are far better for more porosity [than cul de sacs] and getting people through the system,” he said. “It just took 30 years of damage to get there.”

Minicozzi called Dangermond the “godfather of digital mapping technology” and said Esri has about 40 percent of the GIS market. Still privately held, it has more than $1.3 billion in annual revenues, 12,000 employees and controls 40 million data sets.

“We are facilitators of getting great data to our customers,” Dangermond said in 2021 Safe Graph podcast.

“We try to think holistically and systematically,” he said. “Data rules GIS and its success. Most of our customers in the government space create their own data with road or utility inventories or parcel boundaries that they digitize.

“In the private sector, it’s a different game. We often pull public information and package it in the cloud environment. It’s open [public] data… that we mash together to make application-ready data services.”

Minicozzi said Esri gathers information not only from assessment files, but information on water pipes, storm drains, sewers, fire calls, police calls, fire trucks, trees, ethnic makeup of neighborhoods and more.

“ESRI has built every single layer you can imagine for a city,” he said. “It is like a central nervous system for the entire government.”

To illustrate how putting money into downtowns makes financial sense, Minicozzi often uses the photograph of a former Penney’s building in the core of Asheville, N.C., that had sat empty for decades and was deteriorating.

Before Public Interest Projects repurposed the building as a mixed-use project, it was valued at $300,000 on the tax rolls. But after it was turned into condominiums on the upper floors, with commercial spaces on the street level and live-work units on the second floor, its value shot up to $11 million and the taxes produced skyrocketed 3,500 percent.

“That was all on two-tenths of an acre at little cost to the city, though they did put in a bike rack and a new tree,” quipped Minicozzi, who grew up in a faded mill town in New York and now lives in Asheville.

“From a shareholders or taxpayers standpoint, the county got a 3,500 percent gain off this asset. That increased tax money can now be spent on a park or put in an affordable housing fund. If you had a 401K plan that grew by 3,500 percent, wouldn’t you be excited about that?” he asked.

Minicozzi said Public Interest Projects co-founder Pat Whalen got Asheville residents and officials to think about “expense per acre” to the city instead of the overall value of a development.

“That was brilliant, but people have biases,” he said. “They would shoot back at Pat and say ‘yeah, that’s now an $11 million building, but Walmart’s is worth $20 million.’

“But he’d say that it took 34 acres of our city to make Walmart happen, while our building is only a fraction of that. So, it’s really apples and oranges if you look only at the big numbers.”

Minicozzi said he uses a formula like a three-act play when he speaks to community members of all stripes.

“I come in and talk about how and why we use data and then ‘mess with their heads a bit’ in the second act with our maps and perhaps 200 slides in 45 minutes.

“In the third act, we enable them to understand what they can do after they leave, empowering them. It is very much a graphic communication thing. We don’t use technical engineering gibberish, but we show that new urbanism and smart growth make financial sense.

“In the first part of the show, I talk a lot about what we’ve done in Asheville. But what I’m really doing is connecting with you so you’ll let me be an expert. In the second half, we go through other places and they’ll understand that the purple spike in downtown represents a lot of positive tax dollars.”

Minicozzi said when he did a presentation in Rancho Cucamonga, a city in Southern California east of Los Angeles, the assistant mayor — who is also a math teacher — practically jumped from her chair.

“She got excited out of her gourd,’” he exclaimed. “She said, ‘I’d like every child I’ve ever taught to see this so they could understand why math is important.’

“I said ‘thanks’ and she declared, ‘I want a purple spike!’”

When Minicozzi did a presentation in Hilliard, Ohio — a suburb of Columbus — residents complained that multifamily housing would result in hordes of children who would drive up school costs.

“But when we pulled the data, it showed that single-family houses are more likely to have lots of kids, not the multifamily dwellings.

“What we do is bring information to people in ways that they can understand so that they can get past their biases. To counter those prejudices, we get the data that shows what’s true.”

The Data Doesn’t Lie

Tim Corcoran, planning director for the city of South Bend in northwestern Indiana, said his community has used Urban3 twice. The first time was in 2016, when the company did a per-acre tax analysis for all parcels in St. Joseph County, in which South Bend is located.

Three years later, Urban3 returned to do a Return on Investment (ROI) study, in which infrastructure costs are measured against tax revenues to illustrate the development typologies that contribute or drain tax dollars.

“We were very interested in illustrating how tax assessments could be undervaluing or over-valuing certain areas of the city,” Corcoran said. He noted that South Bend’s population peaked at 132,000 in 1963, but had dropped 30,000 since then while at the same time expanding geographically. On a positive note, he said the 2020 census showed it had grown by 2 percent, outpacing growth in the surrounding county.

“We looked at different building typologies and their value per acre. It really enlightened a lot of people throughout the government and also helped residents understand where the value was in their community.

“The ‘magic’ of Urban3 is how they are able to illustrate these somewhat complex issues in a simple and straightforward way through the graphics that they produce. That is very powerful. Helping people understand the value of the productivity of downtown South Bend was very important.”

He said the studies showed that single-family housing tends to be revenue negative for a city. “That allowed us to lay the groundwork for changes that we eventually made to our zoning ordinance that entitled more Missing Middle within the city, everything between a single-family house and a large apartment or condo building. That was a big result that came from their work.”

The city then created a new zoning district that allows for development at the lower end of that Missing Middle housing, things like duplexes and cottage courts. “We also changed the ordinance to allow ADUs on every parcel in the city by right,” he said. “In a sense, you could theoretically double the dwelling density on every residential parcel in the city with the changes to the ADU ordinance.

“When you show what types of housing there are in our community, you can start to see that we haven’t delivered enough for a broader range of types to address our demographics. So that became another sort of metric that we were able to show to get this new district in place.”

In addition, he said real estate pro formas showed that having housing options like duplexes, fourplexes and sixplexes would help reduce the per unit cost for new development, thus making living here more affordable.

Though there has been some pushback by residents who want to preserve their single-family housing neighborhoods — “because that’s what’s been promoted since the 1940s” — Corcoran said explaining the reasons for changing the city’s ordinance helped eliminate that bias.

“The process we’ve chosen allows us to create specific outcomes and solutions for different neighborhoods,” he said. “And people have come to understand both sides of the coin. They want to protect the single ‘familyness’ of where they live, but they might also want to remain in their same neighborhoods as they age in other types of housing like an apartment or condo.

“We also have put in a few guard rails to prevent things like conversions of homes into multiple units. So, we preserve homes that are on the ground. But we have a lot of vacant land in the city that’s pretty easy to get and relatively inexpensive to buy. So, putting in that well-built Missing Middle housing that fits harmoniously within a single-family neighborhood is the goal.”

In addition, Corcoran said Urban3’s ROI model made it clear “that we needed to stop spreading our sewer and water infrastructure out beyond the city boundaries into the county where we couldn’t do gravity sewers and we had to build lift stations that cost a lot of money to maintain and fix at the end of their life cycles.

“But these kinds of expenses were never considered when the suburban areas were being developed. I think there was an assumption that single-family housing paid for the infrastructure that was required to service it. We now know that’s not the case.”

California Communities Crunch the Numbers

Rancho Cucamonga, a suburb about 40 miles east of downtown Los Angeles with a population of 175,000, contracted with Urban3 in 2020 to help update its general plan.

“We brought them on to look at our fiscal picture and give us some insight into how our new land-use alternatives may or may not affect things,” said Matthew Burris, deputy city manager.

“They are very innovative in how they approach conceptualized revenues and costs. In our case, they helped us think about revenue in terms of value per acre and they got us to think about yields. Before, we thought of things on a project-by-project basis. Now, we drill down into the details.

“They wanted us to start thinking about what, as a mostly built-out and physically constrained city, it would mean to densify for our fiscal future. If you have a fixed amount of land, you want it to be as productive as possible.”

The new and key strategy is to increase connectivity and accessibility throughout the city by creating more walkable urban areas.

Burris said one of the new and key strategies in the updated general plan is to move away from what he called “super blocks” and increase connectivity and accessibility throughout the city by creating some more walkable urban areas in key locations in the city.

The city worked with Urban3 to create a small road show that included maps and analyses that they took to the chamber of commerce, the planning commission, city council and community at large. “It was a combination of math and maps,” he said. “We spent a lot of time reaching out to the development community of which REALTORS® are a part. We shared information and started our discovery process early, getting our residents’ hopes and aspirations.”

The new way of looking at land use also affected commercial property. Right in the midst of the pandemic, Burris said the city learned that a “legacy industrial tenant” — a steel mill — had been purchased by a multinational company and was going to be leaving the state.

“They were a fairly significant sales and property tax generator for the city,” he said. “We caught our breath and were thinking ‘this can’t be good with all the other economic turmoil going on, to lose one of our very productive businesses with highly trained employees with good incomes.’

“Just by good luck as we were trying to figure out what it meant for our fiscal position, it occurred to us that we might want to consider how productive this property was on a value-per-acre basis because we had just had this discussion with the community.”

As it turned out, the steel mill generated close to the average in property and sales tax for the industrial sector. “That was surprising and reassuring,” he said. “It meant that if that property were to be redeveloped in a pattern that was generally consistent with the average industrial price in the city, we wouldn’t notice anything [different] in the long term on the fiscal end.”

Soon developers interested in buying and redeveloping the property started calling the city, including one who wanted significant subsidies for a large logistics [warehouse] facility.

“Because we had new tools, that forced us to have different conversations with a different vocabulary,” he said. “The logistics developer said ‘I’m bringing you an $80 million project and 800 jobs; you should be bending over backwards and give us everything we need.’

“We said we appreciate this, but we can tell you your project isn’t going to pencil [out] for us. It is actually going to cost us. And if it’s not year one, it will in year five or 10. It will be upside down by then.

“And most of the jobs would be minimum wage. We said, ‘We’re here to help you, but we can’t put our existing businesses and residents in a position where they are subsidizing your project. That isn’t fair.”

When they crunched the numbers, he said they learned that smaller, more diverse properties would produce more businesses and jobs per acre than a giant warehouse. And be more productive fiscally for the city.

“We’d never done this kind of per-acre analysis before. It reinforced the concept that having a diverse local economy leads to more stable finances for city operations.”

And as for redevelopment of that steel plant site? “We have some economic development goals that have us aiming for some manufacturing uses, especially in the electric vehicle and green-tech sector,” he said.

Seventy-five miles to the northwest of Rancho Cucamonga on the other side of the San Gabriel Mountains, Lancaster, Calif., (population 174,000) city officials began working with Urban3 in 2017.

“We hired them to do some analytics on our city and they produced some pretty powerful graphs,” said Trolis Niebla, Lancaster’s assistant city manager.

“We gave them all our property tax and sales tax data and a lot of other stuff so that they could run their reports,” he said.

“They also did 3D modeling that showed the value of properties and how that affects property and sales taxes in Lancaster,” he said.

Ultimately, the city used that study to come up with its Impact Fee Incentive Program. “They shined a light on the importance of development in the core, the role that density plays and that we needed to do something to incentivize developers to do projects in the center of Lancaster and build on pieces of land that had been vacant for 50 years,” he said.

As a result, the city defined its core within a specific set of geographic boundaries. Builders who proposed high-density, mixed-use projects in the urban core could have a 100-percent reduction in impact fees if they met certain criteria.

“The other component was to ensure that if you built on the outskirts of the city, you would be required to cover the additional costs needed to pay for municipal services like police, fire, sewer, storm, fire protection and road improvements with an additional property tax assessment,” he said.

Because the changes only went into effect a year ago, Niebla said it’s too early to tell how effective they will be. “Give us another year or two, though, and I think we’ll then see the rewards,” he said.