demolition strategy work

8/14/2019 Demolition Strategy Work

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Values

Row Labels Number of Parcels Sum of Units Sum of Assess Average of Assess2 Average of Market

210 1 Family Res 12 12 $524,000 $43,667 $60,996

220 2 Family Res 31 62 $1,138,750 $36,734 $51,548

230 3 Family Res 2 6 $68,000 $34,000 $47,493

280 Multiple res 1 2 $80,000 $80,000 $111,747

311 Res vac land 4 0 $10,200 $2,550 $3,562

312 Vac w/imprv 1 0 $17,100 $17,100 $23,886

411 Apartment 4 17 $150,000 $37,500 $52,382

Grand Total 55 99 $1,988,050 $36,146 $50,624

Baseline Data (from Montgomery County Tax Rolls and Web Site)

City Tax Rate per tho $13.89

User Fees per Unit 769

Total Number of Parc 55

Total Number of Unit 99

Avg Units/Parcel 1.8

Avg Assessed Value $36,146

Avg Market Value $50,624

Assumptions

Demolition Cost 9000

Discount Rate 5%

Analysis Approach Net Present ValueSchool Tax and County Tax Ignored

Tax Incentive Plan for 50% of assessed value first 5 years, +10%/year for each year after

Single Family Homes Constructed at 120% of average market value 2008 120% $60,748. 95

City Tax Rate Constant Over 10 years

User Fees Constant over 10 years

Scenario 1: Perfect World

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Number of Parcels 55 55 55 55 55 55 55 55 55 55

Number of Demolitions 0 0 0 0 0 0 0 0 0 0

Net Parcels 55 55 55 55 55 55 55 55 55 55

Net Units 99 99 99 99 99 99 99 99 99 99

Revenue City Tax $27,614 $27,614 $27,614 $27,614 $27,614 $27,614 $27,614 $27,614 $27,614 $27,614

Revenue User Fees $76,131 $76,131 $76,131 $76,131 $76,131 $76,131 $76,131 $76,131 $76,131 $76,131

Total Revenue $103,745 $103,745 $103,745 $103,745 $103,745 $103,745 $103,745 $103,745 $103,745 $103,745

City Revenue NPV $801,091. 50

Scenario 2: 5 Foreclosures/ 5 Demo

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Number of Parcels 55 50 50 50 50 50 50 50 50 50

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Number of Demolitions 5 0 0 0 0 0 0 0 0 0

Net Parcels 50 50 50 50 50 50 50 50 50 50

Net Units 90 90 90 90 90 90 90 90 90 90

Revenue City Tax $25,104 $25,104 $25,104 $25,104 $25,104 $25,104 $25,104 $25,104 $25,104 $25,104

Revenue User Fees $69,210 $69,210 $69,210 $69,210 $69,210 $69,210 $69,210 $69,210 $69,210 $69,210

Total Revenue Existing $94,314 $94,314 $94,314 $94,314 $94,314 $94,314 $94,314 $94,314 $94,314 $94,314

Demolition Cost $45,000

New Construction 5 0 0 0 0 0 0 0 0 0

New Construction Units 5 5 5 5 5 5 5 5 5 5

New Construction Market Value $303,745 $303,745 $303,745 $303,745 $303,745 $303,745 $303,745 $303,745 $303,745 $303,745

City Tax Incentive Discount 0.5 0.5 0.5 0.5 0.5 0.6 0.7 0.8 0.9 1.0

Revenue City Tax $2,110 $2,110 $2,110 $2,110 $2,110 $2,531 $2,953 $3,375 $3,797 $4,219

Revenue User Fees $3,845 $3,845 $3,845 $3,845 $3,845 $3,845 $3,845 $3,845 $3,845 $3,845

Total Revenue New Construction -$39,045 $5,955 $5,955 $5,955 $5,955 $6,376 $6,798 $7,220 $7,642 $8,064

Total Revenue $55,268 $100,268 $100,268 $100,268 $100,268 $100,690 $101,112 $101,534 $101,956 $102,378

City Revenue NPV $735,541. 07

Scenario 3: 10 Foreclosures/10 Demo

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Number of Parcels 55 45 45 45 45 45 45 45 45 45

Number of Demolitions 10 0 0 0 0 0 0 0 0 0

Net Parcels 45 45 45 45 45 45 45 45 45 45

Net Units 81 81 81 81 81 81 81 81 81 81

Revenue City Tax $22,593 $22,593 $22,593 $22,593 $22,593 $22,593 $22,593 $22,593 $22,593 $22,593

Revenue User Fees $62,289 $62,289 $62,289 $62,289 $62,289 $62,289 $62,289 $62,289 $62,289 $62,289Total Revenue Existing $84,882 $84,882 $84,882 $84,882 $84,882 $84,882 $84,882 $84,882 $84,882 $84,882

Demolition Cost $90,000 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Construction 10 0 0 0 0 0 0 0 0 0

New Construction Units 10 10 10 10 10 10 10 10 10 10

New Construction Market Value $607,490 $607,490 $607,490 $607,490 $607,490 $607,490 $607,490 $607,490 $607,490 $607,490

City Tax Incentive Discount 0.5 0.5 0.5 0.5 0.5 0.6 0.7 0.8 0.9 1.0

Revenue City Tax $4,219 $4,219 $4,219 $4,219 $4,219 $5,063 $5,907 $6,750 $7,594 $8,438

Revenue User Fees $7,690 $7,690 $7,690 $7,690 $7,690 $7,690 $7,690 $7,690 $7,690 $7,690

Total Revenue New Construction -$78,091 $11,909 $11,909 $11,909 $11,909 $12,753 $13,597 $14,440 $15,284 $16,128

Total Revenue $6,791 $96,791 $96,791 $96,791 $96,791 $97,635 $98,479 $99,323 $100,167 $101,010

City Revenue NPV $669,990. 64

Scenario 4: 15 Foreclosures/15 Demo

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Number of Parcels 55 45 40 40 40 40 40 40 40 40

Number of Demolitions 10 5 0 0 0 0 0 0 0 0

Net Parcels 45 40 40 40 40 40 40 40 40 40

Net Units 81 72 72 72 72 72 72 72 72 72

Revenue City Tax $22,593 $20,083 $20,083 $20,083 $20,083 $20,083 $20,083 $20,083 $20,083 $20,083

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Revenue User Fees $62,289 $55,368 $55,368 $55,368 $55,368 $55,368 $55,368 $55,368 $55,368 $55,368

Total Revenue Existing $84,882 $75,451 $75,451 $75,451 $75,451 $75,451 $75,451 $75,451 $75,451 $75,451

Demolition Cost $90,000 $45,000 $0 $0 $0 $0 $0 $0 $0 $0

New Construction 10 5 0 0 0 0 0 0 0 0

New Construction Units 10 15 15 15 15 15 15 15 15 15New Construction Market Value $607,490 $911,234 $911,234 $911,234 $911,234 $911,234 $911,234 $911,234 $911,234 $911,234

City Tax Incentive Discount 0.5 0.5 0.5 0.5 0.5 0.6 0.7 0.8 0.9 1.0

Revenue City Tax $4,219 $6,329 $6,329 $6,329 $6,329 $7,594 $8,860 $10,126 $11,391 $12,657

Revenue User Fees $7,690 $11,535 $11,535 $11,535 $11,535 $11,535 $11,535 $11,535 $11,535 $11,535

Total Revenue New Construction -$78,091 -$27,136 $17,864 $17,864 $17,864 $19,129 $20,395 $21,661 $22,926 $24,192

Total Revenue $6,791 $48,314 $93,314 $93,314 $93,314 $94,580 $95,846 $97,112 $98,377 $99,643

City Revenue NPV $609,792. 32