There are a significant number of arguments for walkability and density that are pushed forth by urbanists: convenience of access to amenities, decreasing carbon emissions, lowering the cost of housing, and so on. All of these are good arguments but often nothing pushes the envelope of change better than numbers, especially when those numbers are associated with money.

The other day, I remembered this article from Strong Towns. I recommend everyone read it before or after finishing this. It basically uses some case studies and a map to show what areas of a city are net tax-sinks versus net tax-gains. The article uses a very impactful map from Urban3 to show these areas and how they line up with density, which made me curious if there was a similar dichotomy in Louisville.

The map by Urban3 involves a lot of direct conversations, interpolation, and data collection that would be here a bit beyond our capacity at the moment, especially given all the other cities within Louisville, but I’d like to see how close we can get. The simplest way to do this is mapping tax revenue across the city. Below is a map of the average property tax income by census block.

This alone reveals some interesting trends. The highest density of high-tax income blocks are located downtown or nearby. All the tallest spikes here are non-residential and usually famous or important properties for the city. The (by far) most valuable property is the Yum Center, followed by other important properties: Churchill Downs, the Ford plants, downtown hotels, Mall St. Matthews, and so on. These are properties I would consider landmark properties; they are not really able to be recreated consistently throughout the city. We can only build so many stadiums, but housing and more basic commercial properties will always be in demand. So how do they shake out in terms of tax income? Let’s compare a few areas of the city.

Old Louisville falls largely under “traditional neighborhood” zoning. The neighborhood consists mostly of mid-density properties with some higher density ones thrown in, and a good amount of mixed-use. Old Louisville has a wide range of income values seen above, the tallest ones are either mixed-use or high-density multi-family housing: Cardinal Towne (mixed-use), The 800 Tower City Club Apartments (high density), Treyton Oak Towers (high density senior living), and more. The average tax value per acre is $10,556.

This area of Louisville has a good mix of single-family homes, duplexes, apartment buildings, and businesses. You can see that range represented in the height of the parcels, those single-family homes tend to be nearly flat here where almost every apartment building has a noticeable spike. How does this compare to a more suburban counterpart?

Here is Anchorage, a largely single-family area of the city with a very high household income of $305,000, compared to an average of $43,000 in Old Louisville. The residential properties here are some of the most expensive in the city, but the map has a lot less variation in zoning. Anchorage averages around $3,289 of property tax income per acre, a third of Old Louisville despite such a disparity in household income. The largest spike here in Anchorage is not an apartment building or large commercial property but it is John Schnatter’s house (Papa John).

Let's look at another urban neighborhood.

Portland is one of the poorest neighborhoods in Louisville and has a decent amount of multi-family properties, but the highest value parcels sort of portray a different story then we have seen so far. All of them are pretty low, and the tallest ones are commercial properties, with the highest being the Kroger on the western end. There are a good amount of higher density residential buildings which can be seen in the eastern portion and more spread out in the western portion. The neighborhood has a property tax income of $1794 per acre.

There is not much mixed-use property and Portland’s density largely does not go beyond 6-unit buildings. Portland has seen a lack of investment historically due to redlining. It has also been shown that urban residential properties cost around $2000 less per household to maintain than their suburban counterparts (PDF). It is still quite feasible that Portland properties generate more in tax revenue than they cost to maintain, but it overall does generate less income than the other examples even if you deduct the largely unusable areas (goes up to around $2100 per acre).

Let’s look at one last neighborhood, this one is one of the most suburban neighborhoods within the borders of the old city of Louisville (pre-2003 merger).

Hikes Point is a great neighborhood to look at, as you can easily see the dichotomy in tax income within the neighborhood. Hikes Point is bisected by Taylorsville Road, a large arterial road that is mostly surrounded by commercial properties. Outside of this corridor, most of Hikes Point is single family housing. Hikes Point gets a significant amount of tax revenue from businesses like Kroger, but the property generating the most tax by far is the Enclaves Apartment Complex. There are also smaller complexes and buildings that are generating a lot as well, but the Enclaves generates around the same amount as all of Hikes Point’s single family homes.

All of this does indicate a trend in Louisville, although not unique to it: Higher density areas generate healthier tax bases. Higher density, mixed-use development helps even more although there are less examples throughout the city. Suburban sprawl is much more expensive to maintain and often generates less tax income, so Louisville is more likely to lose money in these areas. This ends up with the poorer, urban core of the city subsidizing the expensive maintenance of the spread-out, single-family homes of wealthier areas. Strong Towns has worked with Urban3 multiple times to show this is a common phenomenon in heavily suburbanized cities.

The economic health of a city is vital to its future. Wise land-use policy is key in order to increase the economic viability of a city’s tax base so that it can actually pay for the services it needs to provide. This is especially pertinent in Louisville where we hear news stories of parking lots somehow being three million dollars in debt and many metro residents wanting better services. An urban core subsidizing the rest of the city is a one-way path to insolvency.