As KC home demolitions continue, mayor says city should tax vacant land. Can it do that?

Twenty-one historic homes have been torn down in recent weeks in the Valentine neighborhood: an artist’s bungalow from the early 1900s. The shirtwaist house of a mother who raised three teachers. The small home of a former Kansas City Blues pitcher in the 1890s.

Neighbors have been documenting each one, as they continue to protest nearby Kansas City Life Insurance, which owns 150 parcels of real estate in the city and has been clearing the land of nearly two dozen Midtown homes, which the company has called “non-viable” and a safety risk, for eventual redevelopment. No plans have been publicly announced.

Meanwhile, other buildings that could house new businesses or homes remain intact but empty across the city, including an old school and historic buildings along major corridors.

Mayor Quinton Lucas has talked about the need to deal with vacant lots in the city since before he ran for mayor. It’s an issue officials have tried to address — not always successfully — for years. In recent weeks, he’s again been talking up ideas he’s eyeing to reduce the burden of privately-owned vacant properties in neighborhoods across the city and encourage their use.

The biggest one? Implementing a tax on vacant lots and buildings. Lucas and other proponents of the concept suggest that needing to pay a higher tax could motivate owners to either do something with their unused land or sell it to someone who will.

It’s a different approach than what the city has tried before, but some significant roadblocks — including a Missouri law — could make it hard to pull off.

Nothing official has been proposed yet. But earlier this month, Lucas wrote on X, formerly Twitter, that the city should consider a tax on vacant land that would be approved by voters. He wrote that such a tax would activate blighted and vacant lots, neglected by their owners.

In a follow-up interview with the Star, Lucas emphasized the large scale of redevelopment happening around all parts of Kansas City.

But anyone going around the city has to be honest, he said, about seeing vacant lots that have been abandoned for years, if not generations. He noted, for example, the long-closed former Paul Robeson Middle School, 8201 Holmes Road, which sits dilapidated and undeveloped after the school district sold the property in 2018.

“They see buildings that have been long-abandoned and that have been underutilized,” Lucas said.

The question, he said, is how to get such properties into active use, rather than banked for real estate speculation, as the city pays millions to keep vacant buildings secured and clean, and residents report crime, graffiti and illegal dumping. The city also loses out on tax revenue from unused properties.

“We recognize that it is, frankly, past time that we find a way to address it,” Lucas said.

Should Kansas City place a tax on vacant land?

A handful of other larger cities in the U.S. have adopted or explored a special tax on property that sits vacant, with varying details, versions and degrees of success.

Before Kansas City could move forward with one of its own, officials would need to figure out what kind of proposal would work under Missouri law.

Like other properties, vacant or empty properties are currently charged property taxes based on their assessed values.

Council member Crispin Rea, 4th District At-Large, told The Star it will also be important to consider the nuances — residential properties versus commercial, individual local owners versus owners of several lots, empty properties versus empty buildings — and avoid unintended consequences.

Rea pointed to a state law that allows for a $200 fee on either a property with a residential structure or a commercial property with dwelling units, but could pre-empt the city from instituting a vacant land tax on some properties.

According to reports about vacant land tax rollouts in other cities, reception has been mixed. The local real estate market plays a big role, and the tax can be difficult to implement.

For example, some vacant property owners in Washington, D.C. tried to skirt the rules without making improvements to their properties, while over two-thirds of properties got an exemption from a similar tax in Oakland, California, after public confusion.

And there could be risks in Kansas City, a memo from the mayor’s office says, including a negative impact on local owners with fewer resources who have been saving money to rebuild or who inherited land hoping to build generational wealth.

A tax could also hit owners of properties that help conserve the environment, such as those who own lots with trees and other natural elements on them.

The city would need to figure out which properties to target and when to offer exceptions to avoid creating more problems. A possibility could be to focus the tax on larger properties with high values or on owners with multiple properties, the memo says.

If the concept of a vacant land tax gains traction among city officials, and the final idea is legally sound, voters would have the final say before anything changes.

How many vacant properties are there in Kansas City?

Something like a vacant land tax could be welcome in neighborhoods like Valentine, where several historic homes have been cut down in recent weeks. Kansas City Life Insurance, which owns most of the properties in a four-block area off Pennsylvania Avenue.

Demolitions continue on blocks around Pennsylvania Avenue in Valentine as Kansas City Life has pursued knocking down vacant buildings the company owns that it has said are a safety risk and “non-viable” after time has taken its toll ahead of eventual redevelopment.

Valentine Neighborhood Association board member Mary Jo Draper said residents have not had a chance to discuss a vacant land tax as a neighborhood, but that the association likely would support such a move.

Meanwhile, a new group called Save Valentine has been demonstrating against the demolitions, filled the neighborhood with yard signs and documented the history of each house getting knocked down.

According to city data, there are nearly 17,900 vacant properties in Kansas City as of November 2023, or 9% of all properties in the city. About 20% percent of vacant properties in Kansas City are publicly owned, including those in the city’s land bank. Around 25% are owned by a business entity.

Nearly all are zoned for residential use and have no structure on them.

More ideas to address vacant land in Kansas City

Currently, Kansas City charges owners no fee to register a property as vacant, but it does charge $100 for failing to register or renew. Registration is required.

The memo from the mayor’s office suggests setting up a more proactive system of registration and fees as another way for the city to make up for lost revenue and discourage owners from sitting on unused property in anticipation of future profit.

The memo points to the registration system in Syracuse, New York, which has a sliding scale of fees for unused buildings that increase by the size of buildings and how long they sit empty.

It also calls on the city to streamline its process for selling publicly-owned vacant land and hiring a vacant land coordinator.

And more ideas are being floated: Rea told Valentine residents that he is working on how to put safeguards in place to prevent future home demolitions, and the city has new software that can help better track vacant lots and enforce registration requirements.

Meanwhile, work continues to get publicly-owned vacant lots back online, including those owned by the Kansas City Land Bank. City efforts over the years to promote construction on vacant lots have seen mixed success, including scattershot work that didn’t make a larger impact in neighborhoods.

Council member Melissa Patterson Hazley, 3rd District At-Large, launched a more targeted approach this year, called the Housing Accelerator program, that aims to redevelop 95 acres of vacant land in the Washington Wheatley neighborhood off Agnes Avenue.

For the initiative, area lots owned by the Kansas City Land Bank would be sold with a steep discount and a simplified process for developers to build new houses.

The City Council approved in late October a $4 million grant application to the Environmental Protection Agency to help cover the costs of cleaning up the properties to prepare them for redevelopment.

The memo suggests properties with environmental contamination issues and publicly-owned properties sold for redevelopment could be exempt from any future vacant land tax.

This story was originally published November 25, 2024 at 11:00 AM.