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October 25, 2019

Recently, CBIZ hosted its fourth quarter Executive Advantage Series (EAS), Unlocking the Unseen Potential in Kansas City. The event took place at the CBIZ offices on the Kansas City Plaza.

Dennis Strait, AIA, ASLA is a landscape architect and the Managing Principal of the Kansas City Studio of Gould Evans. Strait brought his 37 years of industry experience to CBIZ to discuss development in Kansas City, Missouri – how we have developed historically, what we can anticipate for the future, and what steps we can take to curb the affordable housing crisis that is now beleaguering the East and West coasts.

Strait first placed Kansas City’s development into the context of broad national trends, beginning with the 1700s and ending with present day. Along the way, he described the rising popularity of home ownership, particularly with the advent of the 30-year mortgage in the 1930s, and the trend of plotting larger and larger parcels of real estate as the proliferation of cars and the development of the Interstate Highway System increased private citizens’ mobility.

Single family homes boast larger yards than ever before and Strait attributes this fact to the invention of the car and homeowners’ willingness to stretch their daily commute further and further. He shared some surprising figures with the EAS audience: In 1950 Kansas City, Missouri occupied 81 square miles hosted approximately 457,000 residents. In 2019 the city has grown to 319 square miles and 492,000 residents. The city has quadrupled in size and shown only marginal population growth. “To put it another way,” Strait said, “each of us has four times as much city to maintain.”

Why is this a problem?

In Kansas City we have enough streets that with the same amount of road you could start in New York City, pave a lane all the way to San Francisco and back and then pave a new lane up to Canada and back to New York City. If we rebuilt our city today, it would take $4.9 billion just to re-make the roads. Assuming roads are meant to last approximately 50 years with regular maintenance, this means Kansas City should be allocating $100 million tax dollars to road maintenance every year. The 2019 street budget is $16 million.

How does this all come together?

An average suburban home is responsible for 135 linear feet of street or, using the same road maintenance estimates referenced above, $657 per year for street preservation. A similarly sized plot of urban real estate is associated with 3.7 linear feet of street - $17.91 per year for street preservation. In the context of street maintenance alone, Kansas City will turn a profit on the apartment building and take a heavy loss on the suburban home – and yet Kansas City continues to grant tax incentives to developers who continue to exacerbate the tax deficit.

Strait concludes that urban development – small parcels of real estate generating tax revenue rather than large single-family homes – is the only way to get ahead of the affordable housing crisis and increase property tax revenues. If Kansas City changes the way it evaluates and incentivizes development opportunities by looking at the long term financial opportunities, we can ensure a bright and affordable future for all Kansas Citians.

Thank you to all our 2019 EAS attendees! We look forward to our 2020 EAS events and will release details soon. Ideas for future EAS events? Email kcevents@cbiz.com  


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