Carrying out the city plan

In Portland, Oregon, a verdict is made up of:

Both of these rules of damage are open to either of two objections: First, in some jurisdictions juries are averse to finding any benefit, in which case a much greater sum than is just is spread over a benefit district, and owners who have justly received as damages large sums for land taken or damaged pay entirely inadequate assessments for the special benefit which they have received. Second, if the jury gives full consideration to the benefit which a piece of property receives and subtracts the full amount of benefit from the compensation awarded for damages to the property, the owner has a decided grievance because he may be paying $100 for one hundred dollars’ worth of special benefit, but his neighbor on the other side of the street whose property has not been taken is paying in a special assessment only 25 per cent or 30 per cent of the special benefit to his property.

The commissioners appointed in street cases in Minneapolis are directed to find:

The owner of the property receives as compensation the excess of compensation for damages over the special benefit. This rule is open to the second objection which we have discussed above and only in a less degree is the code of California objectionable which requires the finding of:

Thus in California the owner of property taken will have as damages at least the value of the land taken, whereas in the Minneapolis street procedure it is conceivable that the owner might not receive as compensation the value of the land taken.

The better rule in these cases is illustrated by the Kansas City procedure where the jury must find:

Only this special assessment (4) may be deducted from the owner’s compensation for damage (1) and (2).

THE EFFICACY OF SPECIAL ASSESSMENTS

It is clear that the value of the special assessment method differs considerably in different communities and depends greatly on local conditions. The land owners of Kansas City and Denver pay special assessments practically without litigation, and as a general rule, in most cities, collection of assessments is attended with little difficulty, even where the burden is heaviest on the land owner.

The process of collection in New York City, for instance, is very effective. Like most cities where the cost of street improvement is assessed wholly or in part on property specially benefited, the owners of the land assessed may pay the entire assessment at once or in annual instalments. On the failure in payment of any instalment, the land becomes charged with the city’s lien. For three years the owner may pay interest on the amount he owes the city, but at the end of this period the city’s lien for all charges against the land is sold at auction to the person who bids the lowest rate of interest for which he will pay the face value of the lien and carry it three years more. Thus the city gets its money and the land owner merely has, in addition to the face of his assessment, an interest charge which is apt to be ridiculously low since the bidding in on city liens is usually active.

Boston is one of the few exceptions to the rule in the collection of special assessments. Property owners contest special assessments wherever a contest is made worth while by the size of the special assessment, and reductions in assessments by juries on appeal go far to destroy the effectiveness of this method as a means of providing funds for the acquisition of land; and yet land owners in Boston are treated much more leniently under the law of 1906 than they are in New York, Kansas City, Denver, or Indianapolis. One explanation of the unpopularity of the special assessment principle is that the funds used for improving the old city and opening and widening the streets were taken out of the general appropriation, and property owners, therefore, in the newer sections, or property owners in older sections where openings and widenings are necessary, are opposed to any innovation which puts on them a heavier burden. But the ineffectiveness of the special method in Boston is due chiefly, first, to the statutory limitation on the discretion of the assessing board; and second, to the provision which postpones the apportioning of the assessment until after the completion of the improvement.

The fixing of the proportion which the city must pay irrespective of the character of the street in question and the narrow limitation of the benefit area, work together to place upon a very few owners an altogether disproportionate burden. These are the unfair features of the Boston assessment law: (a) The city must pay 50 per cent at least of the cost of a purely local street, even a street 30 feet in width, the only direct benefit from which is to abutting properties; (b) the city in practice pays as high as 80 per cent of the cost of such streets, because in the opinion of the commissioners the value of the property within 125 feet on either side is sometimes so low that to assess 50 per cent on it would amount to confiscation; (c) the property that receives the most benefit is assessed nothing, particularly in the case of a widened thoroughfare where the benefit accrues certainly no more to the abutters than to the termini of the thoroughfare, or to abutters on the streets leading off from the thoroughfare whose property has been made more accessible.

The time which is allowed to elapse between the opening or widening of the street and the levying of the assessment is a further handicap to the success of special assessments in Boston as to a less degree in Seattle. The chance of offsetting benefits against damages is lost, and consequently the labor of collection is increased. Property owners who get their damages for land taken, alienate the property, and the owner not a party to the condemnation proceedings who has paid to his predecessor in title an increased price on account of the improvement to the property, naturally opposes payment of a special assessment. That most of the action under the law is a perversion of the special assessment principle has been recognized in recent Massachusetts special legislation, where the limitation on the assessment area has been removed and the size of the area left to the discretion of the street commissioners.[76]

A comparison of the returns from special assessments in Boston, in Seattle, and in Minneapolis, may be made by means of the subjoined tables:

TABLE 3.—RETURNS FROM SPECIAL ASSESSMENTS ON STREET IMPROVEMENTS. BOSTON, 1895-1906

There have been remarkably few contests on any assessments in Minneapolis. The park board has been able to pay every instalment on every certificate as it matured without a moment’s delay. All the assessments are collectible as a part of the annual tax for state, county, and city purposes.

In Minneapolis, Kansas City, and Denver the amount collected shrinks but little from the

TABLE 4.—RETURNS FROM SPECIAL ASSESSMENTS ON STREET IMPROVEMENTS. SEATTLE

TABLE 5.—RETURNS FROM SPECIAL ASSESSMENTS ON IMPROVEMENTS. MINNEAPOLIS, 1889-1908

amount assessed. In Indianapolis and in Chicago a five per cent delinquency is figured in the amount of the total assessment, so that the return adequately meets the cost of the improvement. Indianapolis has collected in the past three years (1909 to 1912) by the assessment method $476,487. Kansas City has collected $8,724,919 in twenty years.

CONCLUSION

Special assessments as an equitable method of distributing the cost of land acquirement have the great advantage of a thorough testing. Judicial decisions universally sustain their legality. Ample precedents prove their practicability as financial expedients. Several cities in the United States are so completely satisfied with the results of an experience of from five to fifteen years with this “American device” that the suggestion of experimenting with the European method of distributing the cost known as excess condemnation meets with little enthusiasm. It remains, however, to consider the applicability of excess condemnation to American conditions.