Don’t Think About the Metaphor Too Hard
Well, we’re not making any plans Friday night — not when we can watch the City Council and the U face off over student housing on CTN. We’ve never really thought of the university as “a reluctant bride,” but we’ve never thought of the students who pay sky-high rents to A2 landlords as “a burden on the community” either. (And “Melrose Suites”? Really.)
Yes, how exactly is an 800-lb gorilla turned into a reluctant bride?
posted by Murph on February 9th, 2005 at 8:09 amPlease. Ann Arbor’s already got a Melrose … that apartment over by East Quad and the In and Out.
posted by RDS on February 9th, 2005 at 8:41 amMurph - I would guess it involves tranquilizers and nets, but I’ll bet you don’t want to see the honeymoon.
posted by George Hotelling on February 9th, 2005 at 9:29 amMurph,
If you are going to go to this meeting (or Brandon), politely ask the city council how much the city will lose over a ten year period because UMich doesn’t pay property taxes.
If they don’t know the answer (I’ll be shocked if they do), ask them how much the city would lose if UMich housed all of their students in new dorms, not just 1/3 of the student body.
After you have asked these questions, remind them to add in personal property tax to that figure.
Now that they are finished with the math portion, ask them why would a city that struggles to make their budget work want a tax exempt organization to build MASSIVE housing projects, when the private sector has been begging to build units this size for decades.
Every city council member that I have spoken with or seen at meetings believes that UMich should be responsible for housing their own students. I have yet to hear a rational reason as to why this is the case.
If the private sector built these “dorms” the city would be able to help to choose where the projects are located, and they would reap the financial rewards (taxes) for doing so.
Maybe Mr. Kestenbaum has the answer? I sure don’t. Am I missing something again? Is there some tax kickback that I am unaware of like the firefighter “fee”?
posted by todd on February 9th, 2005 at 10:15 amTodd, I absolutely agree. The university has NO responsibility to house the students it educates except insofar as it supports their educational mission. My simplistic side thinks that since the baby boomers mostly lived in dorms at college, they think everyone should.
posted by Dale on February 9th, 2005 at 11:12 amTodd, the question of how much the city of A2 would lose over a 10-year period due to the U not paying taxes is impossible to answer. Property taxes are based on property value, and the I doubt there is any but a wild-assed guess as to what that value is.
As for demands that the U house its own students, the council is merely a conduit for the desires of the non-student population, who have made it extremely clear that they do not want students living among them. This is not rational for any number of reasons that you, especially, have pointed out, but there it is.
posted by tom on February 9th, 2005 at 11:38 amTom, I’m not an expert at property valuation, but I think that something much better than a “wild-assed guess” could be determined.
The value of the property is a simple question: how much could the state sell UM’s property for on the free market? Since we don’t have an answer to that question, we could assemble a data set of Ann Arbor properties with which to find a suitable answer. Controlling for location, building construction, access to utilities, etc., we can econometrically determine a pretty good guess as to what the value of the campus is.
Even better, though, is on the question of new dorms. We can see what a private dorm is valued at in comparable cities (I mean really comparable cities like Madison and Austin, not what Ann Arbor thinks comparable cities are — Manhattan, London, Boston, Tokyo) and, again controlling for other factors, see about how much the new ones coming into AA will be worth. Then calculate the property tax — and tell the city not to cash the check yet because it’s the U building that new dorm, not a private company on private land.
posted by Dan on February 9th, 2005 at 1:10 pmWell, here’s some rough, conservative math that will get you in the ballpark.
Assume:
500 units@ 500 sq. ft. gross (includes common areas)
= 250,00 s.f. (@ 7 stories, this building will have an enormous footprint)
In a downtown area buildout with land included will be ~$150/s.f. (Using the Mean’s book)
= $38 million dollar buildout
Assume taxable value is 1/3 of true buildout cost (big, conservative fudge factor) gives
you ~$13,000,000 taxable value.
Non-homstead millage for Ann Arbor @100% of the above taxable value: 59.7 mills over
$13 million gives you total tax bill of:
$800,000 per annum. And again, this doesn’t include personal property tax.
Feel free to correct my math or assumptions, but I think that this is a pretty good start.
…..purposely giving up $800K per year tells me that Ann Arborites have to REALLY hate students.
posted by todd on February 9th, 2005 at 1:18 pmOops, I’m an idiot. I just read the AAIO link, and the new Frieze project clocks in at $142 million…..mixed use with classrooms, though.
…….clearly, my numbers are pretty conservative.
posted by todd on February 9th, 2005 at 1:51 pmLast post.
For those of you keeping score at home, if they took the new Frieze project and assessed the taxable value at half of the project cost, giving you $71 million dollars, and apply the 59.7 mills, you will get $4.3 million dollars in property tax per year….again, leaving out personal property taxes.
This single building would balance the city budget deficit ($3.2 million), and leave the city with some pretty nice “walking around” money. Isn’t math fun?
Link to budget deficit:
http://www.mlive.com/news/aanews/index.ssf?/base/news-11/110760189128920.xml
posted by todd on February 9th, 2005 at 2:51 pmTodd, I’m impressed. Good stuff.
posted by tom on February 9th, 2005 at 3:03 pmIt’s 500 beds, NOT 500 units.
posted by Anonymous on February 11th, 2005 at 10:00 pmWhat I meant by 500 “units” was “housing units”. 500 sq. ft. per bed including all the common areas (hallways, showers, tv rooms or whatever) is a pretty low number. I didn’t have enough info. to know if these were quads, doubles, etc, etc…..
posted by todd on February 12th, 2005 at 9:24 amTodd,
Bzzzt! Wrong answer! Your numbers are correct in terms of the math. But the City doesn’t collect 59.7 mills for itself. That’s for all taxing units (schools, county, etc.) I’m too lazy to look up the numbers at the moment but I think the City’s share is around a quarter of the total. Your math also assumes that there’s zero cost to supporting the new development. I didn’t see how many additional residents it would house but there would be some cost to providing City services.
posted by Anonymous on February 12th, 2005 at 11:14 am“That’s for all taxing units (schools, county, etc.) I’m too lazy to look up the numbers at the moment but I think the City’s share is around a quarter of the total.”
Yeah, I forgot about that little detail. My brother was kind enough to point out my dumb mistake (btw, it is indeed around a quarter)…..however, seeing as how a lot of the funding that is sent to schools and the county finds its way back to Ann Arbor schools and county services…..it’s still lost money, no matter how you slice it. This is a very big deal, and it’s never brought up.
Costs very greatly when it comes to supporting a development. Hard to come up with a fixed number there. For instance, we had to pay every penny for sewer/additional water connection…..small example, but it’s the best I have.
Let UMich build it, and no one see a penny. $4.3 million per year is an awful lot of lost revenue no matter where it goes.
posted by todd on February 12th, 2005 at 3:56 pmOne reason that cities have traditionally pushed for universities to house their own students is the conversion of single-family neighborhoods into student ghettos. I very much doubt that the City has reaped a positive tax windfall when those conversions happen. But I also think that attitude is a reflection of a reality that doesn’t exist anymore. Students don’t stick around the dorms and single-family residences don’t transition well next to campuses. So pushing the U’s to house all of the students on campus is trying to recreate an era that’s long past.
posted by Anonymous on February 14th, 2005 at 9:23 pm