By expanding Clark County’s urban growth boundary in a highly publicized 2007 decision, the Board of Clark County Commissioners rezoned many acres of unincorporated agricultural land to various zone categories that would allow for future development. The zone change officially went into effect on Jan. 1, 2008, resulting in increased property valuations for parcels within the new boundary. As is true with land everywhere, Clark County acreage approved for commercial, industrial and office use generates a higher assessed value than does land zoned only for farming activities.
The change appeared straightforward. Shortly after Jan. 1, 2008, landowners within the urban growth boundary received notice of the new assessment of their land and the corresponding taxes due. In many cases, landowners within the new urban growth boundary saw the assessed value of their property increase by a large factor, as expected.
However, what has been unclear is how much landowners were being taxed on property that, because of new designations, could remain undeveloped indefinitely.
According to the county’s comprehensive plan, all parcels within this growth boundary also carry an overlay zoning designation called urban holding. County planners created the urban holding zone to preserve areas within the urban growth boundary that could not be developed immediately.
For example, parcels not annexed into a nearby city and not serviced by adequate infrastructure, such as roads and sewer lines, generally earn the urban holding designation. The county expected growth there but understood it would not happen quickly.
To prevent development of urban holding parcels without the necessary roads and utilities, the county wrote two conditions into its land use code, which must be satisfied before construction can begin.
Based on the county’s own plan, industrial, commercial, office and mixed-use urban holding property must be either annexed into a nearby city or selected by a “major employer” as the site of a new facility.
Thus, even if an urban holding parcel took on, for example, commercial zoning under the urban growth boundary expansion, no development could occur without satisfying one of the above conditions.
While the urban holding designation helps to ensure sensible development of Clark County’s rural land, it creates an open question as to the determination of that property’s value. Some parcel owners are now learning that although the county’s planning department prohibits development of their land, the Clark County Department of Assessment and GIS does not consider this fact in its annual valuation.
Urban holding land that cannot be developed until future annexation (which may be many years away) is, in many cases, assigned the same taxable value as would be assigned to a comparable shovel-ready industrial, commercial, office or mixed-use property.
While it remains uncertain whether the Department of Assessment will revise property valuations based on the urban holding designation, it is clear that owners of parcels within the urban growth boundary, like landowners everywhere, should take stock of their property’s zoning classifications when faced with an increase in taxes. Scrutinizing your property tax bill in light of market conditions as well as local land use codes is more important than ever.
Stephen Horenstein is a partner at the Vancouver law office of Miller Nash. He can be reached at 360-699-4771 or Stephen.horestein@millernash.com.
