VIEWPOINT | A modest proposal: incremental development districts

Guest column by Boyd McPeek

A map from 1902 shows a block of North Main Avenue in Sioux Falls. This block had a bakery, grocery, feed store, office, lumber yard, a candy company, rooms to rent, blacksmith shop, carpenter shop, another grocery, carpet store and an office with rooms above (still in use). The core of the city was and still is laid out in 50 foot by 150 foot parcels with a 15 foot alley at the rear. This arrangement with no set back or lot use requirements allowed that wide mix of businesses to find a niche. The buildings were built one at a time by small developers and entrepreneurs. This was known as incremental development because the block was developed in small, incremental sections over time rather than as one project done all at once.

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Phillips Avenue between Ninth and 12th Streets was developed in this fashion more than a hundred years ago. Unfortunately, after World War II, a different development pattern swept the nation in which developments are built all at once to a finished state. This pattern produced prosperity because everything was shiny and new, but now the luster has worn off. When a large project fails, it leaves a large hole in the city and a lot of infrastructure to maintain without adequate tax revenue. Over the years, we end up with parking lots where there used to be businesses and homes. So, here is a modest proposal to change the development pattern to favor small developers doing sustainable development on under-valued lots..

Let's look at those lots on North Main Avenue. These lots previously had stores, businesses and apartments. Now they are parking lots owned by the city. They don’t generate any property tax and have only limited income from parking fees. Mixed use buildings in place of the parking lots would generate property tax and probably significant sales tax. But the best part is that no costly new infrastructure would be needed to develop the lots. Their location on Main Ave near the public library is in a desirable downtown commercial area. Multi-story mixed use buildings with residential units on these lots could provide much needed housing in a walkable part of the city. Here is a modest proposal for developing this site – Incremental Development Districts (IDD).

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The purpose of incremental development patterns is to recreate the bottom-up city building that worked well in Sioux Falls prior to 1950. IDD prioritizes small scale, resilient growth. This will maximize return on investment in existing infrastructure by developing low value vacant lots and parking lots into high value mixed use buildings. 

Here are key concepts for IDD:

Improve land use – Replat land parcels into 50 foot by 150 foot lots as used in the original city layout to streamline development. The property in question could be returned to seven 50 by 150 foot lots with a 15 foot alley between them. Lots could be broken into smaller lots to encourage small scale development.

Taxes – Set base tax rates on the value of the land and infrastructure rather than the value of structures. This would provide incentives to build on vacant lots because owners would pay the same amount of taxes if the land was vacant or had a building on it.

Parking – Eliminate parking requirements for all buildings and lots in the IDD. Parking requirements – arbitrary and often not connected to actual circumstances – raise costs for developers and ultimately for future tenants.

Setbacks – Eliminate set-back requirements for all buildings in an IDD to allow builders to use the entire property to maximize return on investment. Lack of setbacks is common in incremental development as shown in the Phillips Avenue blocks.

Zoning – Eliminate zoning that prohibits mixed-use buildings in the IDD if any exist in the downtown core. Streamline fire, building and business codes while maintaining safety and health standards to reduce startup costs for small businesses.

Approval Process – Use pre-approved building plans to reduce permit processing times, development costs and uncertainty in the approval process. Anyone using a pre-approved plan would know they could build the building they wanted.

Traffic – Use traffic calming methods on Main Avenue to create a safe, walkable, bikeable street. This can include lane narrowing, diagonal parking, bump outs, etc. The use of street trees and landscaping will create a desirable streetscape and a place for murals, sculptures and other street art to build community. And, finally, promote transit options for the area to reduce traffic counts.

Using concepts like these, an IDD could provide a viable way to redevelop low value areas downtown to create livable, walkable neighborhoods that create wealth for owners, residents and city tax payers.

Boyd McPeek has been a Sioux Falls resident since 1980 and is an active member in Strong Towns, a nonprofit organization dedicated to helping cities and towns in the United States achieve financial resiliency through civic engagement. He spent three decades working as a safety professional before a dozen years as a data analyst.