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  • Jena Skinner, AICP

Inequitable Taxation Part 1

Comparative analysis of tax per acre, Duplex vs. Single Family units in Minturn, CO

I learned a new way of thinking at the APACO conference held the 18-20th in Snowmass, CO. It was a great discussion, hosted by Joe Minicozzi, AICP of Urban3. His business looks at the financial aspects of planning, and the inequities of taxation. For more info, go to http://www.urban-three.com/. Otherwise, please enjoy my version of what he was presenting as it pertains to new development. My analysis supports his theory that our method of taxation is inequitable in Minturn. Why this important to me, is in how we look at new development and if development actually pays its way in the long term. The answer is complicated, and solutions (outside of changing Tabor and taxation), is weighing on my mind as it pertains to locals and attainable living AND the sustainability of towns- as they are related. Oh, and I was recently appointed to the Minturn Planning Commission, so this is kind of important on that front as well... Data was obtained using Eagle County's Assessor and Treasurer online information portals.


Using the table above, you can see that the price per acre of a duplex in this scenario shows that the tax per acre is approximately 37% LOWER for a larger single-family home that is valued approximately $477,995.00 MORE than the smaller 1/2 duplex unit, located on a lot that is 0.145 acres smaller. This is a true example of where smaller lots/homes are paying more tax per acre for less land[1].


This means that even though the smaller units have a lower purchase price, the taxes per acre is higher and so affordable or attainable units pay more for less, as the underlying land is smaller for the unit because density is needed to keep the purchase prices down. This also means land must be set aside for parks or greenspace area to compensate for the smaller lots, which also adds an additional cost to HOA dues, therefore adding cost to the smaller attainable units; otherwise, it would cost the towns more if they accept maintenance of the greenspace.


The result of our tax structure using a one-size-fits-all taxation formula makes luxury single-family homes more affordable to live on (taxes-wise), which supports sprawl and eats up land needed for attainable units- good for the owner, bad for the town. This also affects infrastructure costs, where higher density is more sustainable and costs less for roads, and water and sewer service for towns to support[2] versus larger lots/lower density/and longer pipes and roads to maintain. This means towns are LOSING money to support lower densities and luxury homes, thinking that the general perceived amount of tax dollars support costs to sustain their communities.


What does this mean? We’re in a pickle. We know that higher density developments cost less to maintain for towns and offers attainable purchase prices for buyers. We know that lower density developments costs more to maintain, eats up the limited land available for new development, and don’t actually pay their way, taxation-wise. Until the tax structure is revised to reflect the true cost per acre of development and towns revise their rates for service to be more equitable, smaller, compact sustainable development will continue to subsidize the inequities of larger-lot/lower density communities.

[1] https://www.strongtowns.org/journal/2019/8/7/most-tax-productive-homes-in-south-florida-multi-million-dollar-mansions-or-average-homes


[2] https://usa.streetsblog.org/2015/03/05/sprawl-costs-the-public-more-than-twice-as-much-as-compact-development/

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