7/30/2015

Kansas City Parcel Capital Values

An analysis of the spatial distribution of high capital parcels in Kansas City, Missouri

Ryan WalshUniversity of Missouri – Kansas city

PurposeKansas City, Missouri is a city of unique neighborhoods and infrastructure. Much of the city’s patchwork is the result of annexation, historical landmarks, and also unfortunately, coerced segregation. The city’s mixed history of triumph and foil makes an interesting case study for parcel values.

Assessed values of parcels are an important part of city planning and government. The social and economic impact of land and property values impacts a city’s layout and future development. Parcel value plays an essential role in evaluating and improving the land needs. Urban variables (such as roads, traffic networks, buildings, and public services) have exchanging relations with the land value1. The fixed area of land for a parcel means that its use will affect the use and value of neighboring parcels.

The assessed value of land and improvements are a fixture of taxation for many city governments. The United States has been exercising this type of tax structure since it was first permitted by the Pennsylvania legislature in 1913. Using this two-rate tax system, the cities of Pittsburgh and Scranton exercised permission to tax land values at a higher rate than building values.2 The recommendation of higher rate assessed land values than improvements has been favored by many economists. This is mostly due to the fact that supply of land is fixed, therefore an increase of the tax rate on land value will raise revenue for the city without compromising the incentives for land owners to invest in their land. Also, landlords and property owners are unable to pass off a land value tax to a tenant or another user of the property. Taxes on assessed value of improvements typically discourage investment.

Many of Kansas City’s developed parcels have a higher assessed improvement value than land value. According to the 2013 tax assessments city data, Kanas City’s sum of parcels’ land value was $1,535,018,722. The sum of the parcels’ improvements value was $5,339,166,907. At almost a 5 to 1 ratio, the city’s assessed values of improvements are clearly higher for most parcels. Parks and other public property are exceptions here. Clearly, Kansas City’s assessed land value and improvements of parcels do not exemplify regular assessed rates and higher land values for a two-rate tax system. Instead, we will be taking a look at the total capital value of the city’s parcels to better determine the overall value of parcels.

The parcels within the many neighborhoods of Kansas City, Missouri will be analyzed to determine which of these hold the most capital value (total value of land and improvements). Downtown, Midtown, East Kansas City and their respective neighborhoods will be displayed showing their capital value of parcels. Furthermore, the spatial distribution of these parcels within the city will be analyzed.

1 El-Barmelgy, Mohamed M. “Economic Land Use Theory and Land Value in Value Model.” International Journal of Economics and Statistics. Volume 2. (2014)2 Dye, Richard F. “Assessing the Theory and Practice of Land Value Taxation.” Lincoln Institute of Land Policy (2010)

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Data and MetadataThe following datasets were downloaded from the Kansas City Parcels viewer at http://maps.kcmo.org/apps/parcelviewer/.

1) Cadastre.gdba. Parcels – An analytical and graphical representation of parcels in Kansas City,

Missouri. Condos and caves are included.b. Assessed Value Table – A table of assessed values for land and improvements for

parcels in Kansas City, Missouri.

2) Centerline.gdba. Centerline – A dataset that contains the centerlines of public and private

roadways, as well as municipal boundaries, school boundaries, zoning boundaries, postal boundaries, etc.

3) Other.gdba. River and Lakes – Major bodies of water in the 8 county metropolitan area are

represented.b. Neighborhood Census – Neighborhoods in Kansas City, Missouri are represented

with boundaries. Census data from 1990 were used to determine boundaries. Boundaries were modified if they had overlaps or gaps. Several areas with very little population in 1990 are not represented as neighborhoods.

All layers used within ESRI’s ArcMap and ArcScene were derived and/or manipulated from the feature classes and tables listed above.

The projected coordinate system for all data used in this analysis is listed as: NAD_1983_StatePlane_Missouri_West_FIPS_2403_Feet

The projection is listed as: Transverse_Mercator

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Methods and ProceduresBuilding a Geodatabase

In order to conduct the study, feature classes from the geodatabases of the Kansas City Parcels website had to be exported into a new geodatabase. I created a file geodatabase named “Kansas City Parcel Capital Values.gdb” and designated it as the default geodatabase for storing all existing and derived information. This is represented below as Figure 1.

Two feature datasets (“Kansas_City_Parcels” and “Spatial_Distribution”) were created to store similar layers and information. The remaining feature classes and tables were left as standalone items.

Joining the Kansas City Parcels attribute table with the Assessed Values Attribute Table.

The Kansas City parcels attribute table did not include assessed land value and improvements. In order to work with the land value and improvements information, I had to join the “All_Kansas_City_Parcels” attribute table with “Assessed_Values” table. The “KIVA PIN” field of the parcels table was referenced with the “PIN” field of the assessed values table in order to join the tables together and display each parcel with its respective assessed value information. This allowed me to use statistics tool and several geoprocessing tools to analyze the parcels.

Adding a Capital Value Field

Now that the Kansas City parcels attribute table contained the assessed land values and improvement values for each respective parcel, a total capital value field was needed. The land value represents the assessed value of the land itself, while the improvements value represents the assessed value of the buildings, landscaping, and other structures on the parcel. I wanted the total value of the parcel to be represented, so the “CAPTIAL_VALUE” field was added.

The field calculator from the data management toolbox was used to calculate the sum of the “ASSESSED_LAND_VALUE” field and the “ASSESSED_IMPROVEMENT_VALUE” field to populate the “CAPITAL_VALUE” field. This is the desired attribute needed for each parcel in order to conduct analysis.

The parcels could now be displayed by their assessed capital value with 10 classes of natural breaks across a “Cyan-Light to Blue-Dark” symbology color ramp. This created a clear picture

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Figure 1

of parcel capital that ranged from no value to almost $64,000,000. Although the two highest capital value parcels (the KCI Airport and the National Nuclear Security Administration National Security Campus) are outside of the urban core and are not included in this analysis.

High Capital Urban Parcels

In order to better analyze the polarization of parcel capital value and its spatial setting, I wanted to scale down the area to its urban core. Using the “Select-by-Polygon” tool, I selected all parcels south of the Missouri river and inside of the Interstate 435 loop. Following that process, I ran a query to select all parcels that had a capital value of greater than $1,000,000 with the expression: CAPITAL_VALUE > 1000000. Using a contrasting light orange color, it became easy to see where the highest value parcels are located.

Spatial Statistics Analysis

Using the “Spatial Statistics” toolset, a “Mean Center” and a “Median Center” of high capital parcel value distribution were calculated and placed on the map. Following those calculations, a “Directional Distribution” of high capital Kansas City parcels was calculated to show and summarize the central tendency, dispersion, and directional trend of the high capital value parcels.

ArcScene Extrusion

Even among parcels with a high capital value assessed at over $1,000,000, I wanted to show the variation in that specific attribute value as well. With ESRI’s ArcScene application, the “Feature to 3D Attribute” tool from the 3D Analyst toolbox was used to extrude the parcels to a height value derived from the “CAPTIAL_VALUE” attribute field of the “Kansas City High Capital Parcels Study Area” feature class. The highways, rivers and lakes, Kansas City neighborhood boundaries, and direction distribution ellipse layers were added to help visualize the location of the parcels.

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Maps and ResultsThe first 3 maps, show below, display different areas of the city. They all use a “Cyan-Light to Blue-Dark” symbology to represent the 10 classes of capital value for parcels. The natural breaks (Jenkins) method is used to divide the classes. Darker blues represent higher capital parcels.

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Figure 2

In Figure 2 above on the previous page, the downtown neighborhoods and the capital value of their parcels are represented. Clearly, this part of town has no shortage of high value parcels. The Central Business District and Crown Center have many high capital values represented from the darker blue colors. The smaller residential and commercial parcels are mostly cyan and light blue coloring as well. This suggests that this part of town is relatively healthy economically.

Midtown Kansas City, as shown in Figure 3, includes more residential parcels than Downtown Kansas City within its neighborhoods. The lighter blue colors are fairly solid throughout the various residential parcels, especially along the larger ones following Ward Parkway south of the

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Figure 3

Country Club Plaza. The larger parcels tend to be darker blue, and represent the neighborhood centers for culture, entertainment, and dining. This section of town has a high amount of land and property value.

Unfortunately, Kansas City’s segregated past still has lingering effects on the city today. The capital value of the East Side’s urban neighborhoods, shown in Figure 4, exemplifies this. Only the Central Academy of Excellence and the Kansas City VA Hospital are parcels assessed to have a capital value of more than $1,000,000. The lack of medium and high capital parcels is

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Figure 4

another visual representation of the need for more businesses and wealth for Kansas City’s East Side.

In the above map, Figure 5, only parcels of a high capital value are displayed. Parcels within the urban core that are assessed at a value of over $1,000,000 are shown, represented by the sandy beige color. The mean center of the spatial location of these parcels is the blue dot in northern Midtown, and the median center is the red dot in southern Downtown. Not surprisingly, the directional distribution of the high capital value parcels is confined to an area bordered by the Missouri River, US Highway 71, the state line, and the Brookside neighborhood area

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Figure 5

Finally, Figure 6 above shows an ArcScene screenshot of the value of high capital parcels in Kansas City’s urban core. Each parcel has been extruded 3-dimesnionaly to reflect parcel capital values. The tallest parcel in this image is that of the Kauffman Performing Arts Center. The Federal Reserve Bank is the second tallest. One can clearly see where the highest value parcels are located in the city. The directional distribution ellipse is also visible in the screenshot. Clearly, Downtown Kansas City doesn’t just have parcels with skyscrapers of physical height, but also of enormous capital value.

Conclusion of Results

The overall conclusion of the findings is that Kansas City’s north to south urban core has concentrated areas of high capital parcels in many of the more dense neighborhoods and entertainment districts. The Power and Light District, River Market, Crown Center, Westport, and the Country Club Plaza districts (along with the surrounding residential neighborhoods) are examples of this. Not surprisingly, the more underserved and impoverished areas in the east side of the city’s urban core has very little representation for medium and high capital parcels. A lack of businesses, middle class residents, and sufficient services likely limits the assessed land and improvement values of the parcels.

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Figure 6