In 2012, only 8% of property taxes levied in York County, Nebraska were absorbed by new construction, with the remainder being passed on to property owners. According to York News Times, the trend of higher property taxes is escalating at an alarming rate, as the average increase over the last three years has been 9.3%, with the most recent years being closer to 12%.
The Baltimore, Maryland Development Corp. has recommended a tax break of $107 million in order to finance improvements for Harbor Point, the largest private development site proposed in the city. According to BaltimoreBrew, the $107 million TIF (tax increment financing) would not be a direct subsidy for the $1.5 billion development. Under the TIF setup, the city issues bonds on behalf of a private project, and the developer is expected to pay off the bonds with revenues that otherwise would have been used to pay property taxes to the city.
Rising demand and low supply due to lack of development over the past half decade has allowed hotel construction to experience its first upswing in quite some time. However, according to the National Real Estate Investor, developers are still worried about construction costs and labor scarcities moving forward as materials like lumber are seeing their prices spike while the labor market for workers is shrinking to levels of dangerously low capacity.
Texas House Bill 1306 is hoping to fairly apply the rules governing how land used for agriculture is assessed when applied to smaller operations. According to the San Antonio Business Journal, the Bill aims to clarify the existing tax code pertaining to what land can be appraised as qualified agricultural land so that property taxes are based on a lower valuation. Currently, even though no minimum requirement exists, many counties require that tracts be at least five acres to obtain agricultural valuation, leaving many small operations stuck with unfair values.
A Bill to correct general reappraisals resulting in property values that do not comply with the requirements of North Carolina law is currently in committee after passing the first reading. Senate Bill 159, in essence, is proposing that any reappraisal completed between 2008 and 2012 can be dismissed and re-done. The support behind the measure comes from the effects the Great Recession had on the economy and property values, and the belief that these circumstances were not properly taken into compliance with the applicable property tax mandates.
While financial reports indicate a recovering economy, February’s sequestration continues to cast a shadow over hopes of a full-fledged return to the booming economy of pre-downturn days. Manufacturing and industrial corporations throughout the United States are generally reporting higher than ever revenues and margins, and they are doing it with smaller workforces than they utilized prior to 2008. Clearly, companies are operating more productively and more efficiently than perhaps ever before. With the stock market recently reaching new record highs, shareholders in turn are seeking continued growth that many predict can only be realized if companies return to previous hiring levels yet continue to operate in today’s high efficiency manner.
The Idaho House has passed a bill that would exempt 90% of Idaho businesses from personal property taxes. According to MagicValley.com, the passage came after a short debate, with most lawmakers speaking in favor of the repeal, and will now move on to the Senate for consideration. This was the third personal property tax repeal proposal the House had considered, with the first two receiving no votes during their public hearings.
Analysis of over 7,900 recently closed hotels across the United States provides detailed insight into some interesting trends within the industry. According to HotelNewsNow.com, as one might expect, most of the hotel closures over the past decade have represented independent operations (80.8%), with economy properties a distant second (10.1%). Very few closures came at the high end of the spectrum (1.5%).
Despite the overwhelming demand for senior housing space, development continues to lack, and is commonly blamed on tight financing. However, according to the National Real Estate Investor, the lack of bank support may be a myth, experts say, as established firms are more likely just building carefully and focusing on need-based uses rather than market-rate properties. As it stands, construction starts for senior housing represent 1.4% of inventory, one-third less than the level right before the recession.
Despite under-performing compared to the housing market in 2012, commercial real estate is primed for a strong recovery in 2013. According to Marketwire, thanks to a robust recovery in the U.S. economy, and more specifically the avoiding of a fiscal cliff, there has already been an increase in rent and occupancy rates this year, and the trend is expected to continue as the economy continues to improve.
Recent Court of Appeals rulings in favor of IBM and Parkdale America, LLC have given property taxpayers in the state of North Carolina hopes of a fair shake now and in the future. The rulings show that there is hope for a level playing field for taxpayers by requiring the North Carolina Property Tax Commission (PTC) to not only reach a decision, but also explain the basis for its decision in sufficient detail such that it can withstand scrutiny by the Court of Appeals.
The last quarter of 2012 saw a continued snail's pace towards the recovery of the retail shopping center industry. According to the National Real Estate Investor, improvements in fundamentals were minimal at best, on par with quarterly results exhibited since the retail space market bottomed. These results were expected, however, as demand remains severely depressed despite little new construction. This has caused only incremental improvements in occupancy and rents.
All things considered, businesses large and small want to locate where they feel they have an edge on their competition. Geography is key as it relates to labor and infrastructure, however, recent evidence shows the states with the best tax systems will inevitably attract more new businesses no matter where they are located on the map. The reason is simple — taxes eat into profits. Higher taxes for businesses ultimately mean higher costs for consumers, employees and shareholders.
In 2007, Brunswick County, North Carolina conducted a countywide revaluation and was scheduled to do so again in 2011. However, in 2008, the county raised taxable values by hundreds of thousands of dollars for over 100 parcels owned by the Ocean Isle Palms development company.
While the commercial real estate industry has taken great strides in reducing their carbon footprint, industrial plants and commercial buildings still account for 45% of the greenhouse gas emissions produced in the US. According to the Atlanta Business Chronicle, with the expected increases in demand for energy in the future, the commercial real estate industry can help protect the environment while also improving bottom lines and making sites more appealing to tenants.
The Class A office market in downtown Pittsburgh, Pennsylvania is now the tightest in the country with less than five percent vacancy. According to the Pittsburgh Skyline Review for Spring 2013 by Jones Lang LaSalle, the majority of demand is coming from the top 16 downtown skyline buildings in the city, driven largely by financial institutions, health care companies and law firms.
The Idaho House is set to introduce two competing bills, one backed by counties, one by industry, which will cut the state's business personal property tax. According to magicvalley.com, Rep. Gary Collins, House Revenue and Taxation Committee Chairman, will schedule the hearings by the end of the week.
Fairfax County, Virginia has proposed a 2-cent hike in the base real property tax, along with a 1.5-cent hike in the commercial and industrial (C&I) tax. According to the Washington Business Journal, if approved, commercial and industrial property owners will pay $1.22 in property taxes per $100 of assessed value, while residential owners will pay the base rate of $1.095. It is all but a certainty that the C&I tax rate will increase as a funding bill adopted in February will reduce funding that the C&I tax can recoup.
Due to its traditionally lower vacancies and higher rents, the medical office market has generated investors' interest over the past decade like never before. According to GlobeSt.com, medical and dental tenants tend to be stable, credit worthy, and move less frequently than office tenants due to patient referral patterns and long-term patient relationships which are carefully developed over time. In fact, the vacancy rate among medical office buildings nationwide is generally half that of regular office buildings at about 5-7%.
One major casualty of the financial crisis has been huge, opulent corporate offices, which are now giving way to smaller spaces and cheaper rents. According to a researcher from Jones Lang LaSalle Inc., the average office space per person in the United States has gone from about 250 square feet to 150 square feet since 2008, with that number being predicted to get as low as 125 square feet by 2017.
Slumps in nonresidential and government projects caused construction spending to fall 2.1% in January, the biggest such decrease since July 2011. This decline came in spite of a median predicted rise of 0.4% by several economists. According to Bloomberg, private non-residential building was depressed by a plunge in construction of power plants, while public outlays dropped to the lowest level since November 2006 as government agencies face budget strains.