Buy a South Dakota town for $399k

I haven’t seen one of these stories for a while so take note: you can purchase a small South Dakota town for $399,000.

The owner of Swett, pronounced sweat, is selling the roughly 6-acre  town that includes a tavern, a three bedroom house, three trailer homes and a former tire shop about 100 miles southeast of Rapid City, South Dakota.

Swett’s population peaked at 40 residents in the 1940s when it had a post office and grocery store, but now stands at two: owner Lance Benson and his wife, three if you count their dog.

Benson acquired Swett in 1998, later gave it up in a divorce settlement and then reacquired the town in 2012. He will toss in a 1990 Volvo semi-tractor now used for hauling trailers, according to a real estate listing by realtor Stacie Montgomery.

Benson, who owns a traveling concession stand, told the Rapid City Journal last week he wants to sell the town to focus on his business. He will keep the tiny prairie domain if no one wants to buy it within a year, he told the newspaper.

Not much of a town seeing that the Census doesn’t keep any facts on it and there isn’t much to see on Google Maps. But, it doesn’t have an interesting history in recent decades going from several dozen residents to part of a divorce settlement.

Perhaps we know this selling-a-city thing is going somewhere when a more substantial location goes up for sale. Imagine a community of 500 or 1,000 people is experiencing severe financial difficulties. In order to help make this up, the town tries to find a private owner or manager with a cash sum up front meant to help counter the debts. Or imagine Detroit decides to sell off a whole neighborhood to a private developer who makes some sort of deal to improve the community. I don’t even know if the first option is legal; can an incorporated community be sold to a private owner or corporation? I assume there are some guidelines in incorporation laws intended to protect community members…

The three issues behind an incorporation vote in a Utah suburb

After writing earlier this week about the decisions of The Woodlands, Texas to not incorporate, here is the story of the Salt Lake City suburb of Millcreek that is considering incorporation on election day:

To supporters, a city would cobble together a few suburban neighborhoods into a more perfect union. After years of living at the whims of county codes and tax rates, residents of Millcreek said they would, for the first time, be able to keep their tax dollars inside their own borders and write their own future…

Opponents say the status quo works fine. Forming a city would heap municipal rules and expenses atop existing layers of county, state and federal bureaucracy. They say a new city would need money for lawyers, accountants, city buildings and other services now provided by the county, and ultimately be forced to raise taxes.

In 2011, an independent study said that Millcreek’s economics, population and geography would make it a “viable and sustainable” new city. But it also said the area was mostly built-out and had few new opportunities for development, raising the prospect that its expenses would outstrip the money it takes in. If Millcreek goes its own way, the surrounding county would also stand to lose $30 million in annual revenues from one of its wealthiest areas, and be forced to cut services or raise taxes on other residents.
If the measure fails, some residents say they are worried the community will be torn apart. At a time when city budgets are strained, they say that Millcreek’s Home Depot, its for-profit hospital and supermarkets would make ripe targets for annexation by nearby cities.

It sounds like there are a few issues present. First is the issue of revenues. Could an incorporated community afford the services it would be expected to provide? Would it increase the local tax burden, something many suburbanites abhor. Second is the issue of annexation. Incorporation typically provides a community more protection against adjacent communities annexing land. this article suggests what is most at stake are revenue sources such as retail and commercial establishments and perhaps job providers as well.

Though not stated here, I imagine there is also a third issue: the tension between individualism and communitarianism that is often present in American suburbs. On one hand, the suburbs offer homeownership, small parcels of land, the idea that individuals have a little space in which to live their own lives. On the other hand, suburbs, even unincorporated ones, require services such as roads, sewers, schools, police and fire protection, and more that is more easily realized when people pool their resources (tax dollars). Can you have a fully developed community life if individualism wins out? Is community, not just services but also strong and weak ties to neighbors and others in the community, desired by a majority of American suburban residents?

Quickly, some Census statistics about Millcreek: it has just over 62,000 residents; the median household income is $57,385 (about $1,000 above the median for Utah), is 87.2% white and 8.4% Latino, and 41.9% of adults have a bachelor’s degree.

One other note: the article suggests “the election here next Tuesday is a fight about what happens as America’s suburbs grow up.” This is a typical phase that many suburbs go through though it is a bit unusual, as it is for The Woodlands, for a community to grow so large and still not be incorporated.

The financial reasons The Woodlands, Texas does not want to incorporate

Many communities want to incorporate so they can control land use as well as fund and provide local services. But The Woodlands, Texas has resisted incorporation for financial reasons:

For one, The Woodlands is one of the nation’s best case studies when it comes to weighing the costs and benefits of incorporation. According to Bruce Tough, Chairman of the township’s seven-member Board of Directors, his community boasts an unprecedented level of success when it comes to governance, public services, and environmental excellence. Just 20 years after it was founded, the township had won a Special Award for Excellence from the Urban Land Institute and a LivCom Nations in Bloom Gold Award. Residents enjoy more than 190 miles of hiking and biking paths. A little over 20 percent of the township’s acreage is set aside for green space, greenbelts, and golf courses…

Unlike similarly successful (and now former) townships including Irvine, California, The Woodlands has reliably refused to incorporate as either a standalone city or part of Houston, even as the issue is raised every few years by developers, residents, or the city of Houston, which provides municipal services such as waste removal, water, and local law enforcement from the sheriff’s department. Tough points to the township’s one-of-a-kind public service provider agreement with Houston and the fact that the township is run more like a business than a municipal government as the primary reasons why The Woodlands doesn’t need to incorporate. Houston agrees not to annex The Woodlands during the next 50 years. In exchange, The Woodlands continues to make service payments to Houston.

Among residents, the question of incorporating is primarily a financial concern. Research indicates that becoming a standalone city could raise property taxes in The Woodlands from 32.5 cents up to anywhere from 58.14 cents to a staggering 81.5 cents per $100 valuation. (By comparison, the property tax rate in Houston hovers around 63 cents.) The costs would include road maintenance, setting up new sewage and water provisions, and establishing a separate police department. Estimates for just those few basic services reach into the hundreds of millions, costs residents fear would be added to their annual tax bills…

For now, The Woodlands residents can relax. For its population, the township has one of the lowest tax rates in the United States but more and better services than similar counterparts. There is no local income tax charged in The Woodlands, and Texas is one of seven states without state income tax. The bulk of their tax money comes from sales tax levied against visitors who flock to the downtown promenade and amphitheater.

This is an interesting case but it sounds like the primary reason The Woodlands has not incorporated is because it can afford not to. In other words, it can afford to contract with Houston for municipal services and it can rely on visitors to provide a lot of revenue rather than having to tax its residents at a higher rate. The community of over 93,000 residents has a median household income of $103,229, is 88.4% white, a poverty rate of 5.1%, and 59% of residents have a college degree. Many communities do not have this luxury.

Lawsuit over “super-majority white neighborhoods” in Atlanta suburbs

Atlanta is often held up as an example of Southern sprawl. The Atlanta Journal-Constitution reports on a new lawsuit filed against some recently created suburban communities north of Atlanta:

The Georgia Legislative Black Caucus filed a lawsuit Monday against the state of Georgia seeking to dissolve the city charters of Dunwoody, Sandy Springs, Johns Creek, Milton and Chattahoochee Hills…

The lawsuit, filed in a North Georgia U.S. District Court Monday, claims that the state circumvented the normal legislative process and set aside its own criteria when creating the “super-majority white ” cities within Fulton and DeKalb counties. The result, it argues, is to dilute minority votes in those areas, violating the Voting Rights Act of 1965 and the Fourteenth and Fifteenth Amendments to the Constitution…

Sandy Springs, created in 2005, is 65 percent white and 20 percent black. Milton, formed a year later, is 76.6 percent white and 9 percent black. Johns Creek, also formed that year, is 63.5 percent white and 9.2 percent black. Chattahoochee Hills, formed in 2007, is 68.6 percent white and 28 percent black, while Dunwoody, created in 2008, is 69.8 percent white and 12.6 percent black.

Emory University law professor Michael Kang said the case is unique because the Voting Rights Act focuses on redistricting, whereas this lawsuit challenges the legality of cities. Kang, who has not reviewed the case in its entirety, said the plaintiffs will likely have to show evidence of discriminatory purpose to have a strong claim. Kane said the case has interesting implications.

“If we look at this realistically, there is some white flight going on. The creation of these Sandy Springs-type cities enables white voters to get away from black voters,” he said. “It does strike me that the Voting Rights Act might have something to say about this, but it’s unknown what the courts will say about it.”

There is little doubt that there are exclusionary practices that take place in suburban communities, whether this is through zoning for particular uses (typically to avoid apartment buildings or lower-income housing – read about a recent debate over this in Winnetka, Illinois) or high real estate prices.

But the idea that incorporation itself is exclusionary is an interesting idea. Certainly, this is done along class lines: wealthier communities have incorporated in order to help protect their status and boundaries. Cities and suburbs have a long history of annexation in order to expand their own boundaries and their tax base (see this argument that Detroit should annex surrounding areas to help solve some of its problems). But was this done intentionally in regards to race (as opposed to just class or other issues) in these Atlanta suburbs? And what sort of evidence would a court find persuasive in this argument?