A Wednesday discussion on allowing smaller minimum lot sizes in certain agricultural and forest zones included a lesson on property taxes for Clark County Commissioners Tom Mielke and David Madore, both of whom questioned why property taxes would increase even if property owners didn’t decide to split up their land.
As part of a larger review of rural land rules, the county contacted owners of land zoned Agriculture-20, which refers to 20-acre minimum lots zoned for agricultural use, and owners in Forest-40, which refers to 40-acre minimum lots zoned for forestry use.
County planner Jose Alvarez said there are grandfathered or nonconforming smaller lots in those zones. The county surveyed people who own at least 10 acres in the agriculture zone and at least 20 acres in the forest zone.
Owners were asked whether they want to keep the status quo, or allow 10-acre minimum lots in the Agriculture-20 zone and 20-acre minimum lots in Forest-40 zones.
The county heard from 618 of 1,079 property owners from the two zones. An overwhelming number (72 percent in the agricultural zone, and 82 percent in the forest zone) wanted smaller minimum parcel sizes. A majority of respondents also said they would like to “cluster” new homes on their property.
For example, a 50-acre lot could be split into five 10-acre parcels, and have five homes on minimum one-acre lots.
The idea of smaller minimum lot sizes grew out of the Rural Lands Task Force, which suggested giving property owners more flexibility. Commissioner Steve Stuart said he’s heard from people frustrated that they can’t build a second home on their land for a family member.
Some respondents wrote comments on the survey, encouraging commissioners to decrease the minimum lot size: “Please hurry, have been waiting for this for 30 years,” and “These changes would help tremendously,” wrote two respondents, while others wanted the commissioners to set the minimum lot size at five acres, equal to the minimum lot size in surrounding areas zoned rural.
Others were critical of the county’s idea.
“This is the worst money-grabbing move I have seen thus far … not only no but hell no. I moved out here to be left alone. Should have moved out of Clark County,” wrote one owner.
“It ain’t broke don’t fix it,” wrote another property owner. “You must have extra money to throw away. I sure don’t.”
One resident wrote that a 10-acre minimum would be preferable, “if it doesn’t increase my taxes.”
Mielke thought that by setting a minimum lot size, owners would be forced to subdivide.
“If you go back and mandate that they divide their property up, that could increase their property taxes,” Mielke said. “That was one of the things we were accused of, for allowing the option.”
Christine Cook, a deputy prosecutor, explained that setting smaller minimum lot sizes wouldn’t require people to subdivide.
“I understand the concern there, but nothing would mandate that anybody divide their property,” Cook said. “Anybody who wants to retain a larger-sized property certainly would be able to do that.”
Clark County Assessor Peter Van Nortwick explained to Mielke that regardless of whether a property owner subdivided, taxes would go up because the land would become more valuable.
Mielke asked whether people could opt in for the zoning changes on a case-by-case basis, and Cook said that wouldn’t be legal under the state Growth Management Act.
Madore asked whether there was anything the county could do to avoid property tax increases.
“I think there’s an unintended consequence here that I think none of us want,” Madore said. “Not the property owners, none of the staff here, and that is that if we end up the 10 ag smaller parcel zoning, that property taxes would go up. And that ends up being a tax shift from others to the rural lands.”
He asked Van Nortwick if there were any alternatives.
“No,” Van Nortwick said. “Because, David, what you are doing is you’re making their property more valuable. And when you make their property more valuable, the percent of the total value of the county goes up, and that’s why it shifts over. You’re only going to get that property tax shift if you actually increase the value of their property,” Van Nortwick said.
Madore asked whether it’s fair to increase taxes based on the potential for the property to be subdivided.
“Yes,” Van Nortwick said. “Because the potential is what people are paying for … people buy lots because of the potential to buy a home.”
“If the market value of their land increases, under state law, we have to (assess) it at 100 percent of market value,” Van Nortwick continued. “So we really don’t have an option under state law to do anything differently.”
“So there could be no way that we could somehow prevent their property taxes from increasing?” Madore asked.
Oliver Orjiako, director of community planning, said the only way to avoid an increase in taxes would be to say nothing could be built on the land.
And that’s not the commissioners’ goal, Van Nortwick said.
Madore said he doesn’t think property owners understood the potential tax implications of changing lot sizes, and wants residents to know commissioners are just trying to maximize property rights. Maybe some of the “yes” votes would change to “no,” he said, if people understood the implications.
Van Nortwick said he thinks most people understand an increased value leads to increased taxes.
“Maximizing property rights maximizes the value of the land … if you have more rights, you have more utility, you have more value in the land,” Van Nortwick said.
“And we can let them make that choice,” Madore said.
The exchange between Van Nortwick and Madore was cut off by Mielke, who said the meeting had already gone longer than scheduled.
Orjiako, who was instructed by Mielke to continue developing the option to change minimum lot sizes, said he wanted to make sure commissioners understood the tax implications so they aren’t surprised if they hear from residents who object to the proposal.