economic impacts of the anticipated non …

University of New Mexico Bureau of Business and Economic Research

ECONOMIC IMPACTS OF THE ANTICIPATED NON-ACCREDITATION OF BERNALILLO COUNTY LEVEES Part 2: Development Impacts September 2010

University of New Mexico Bureau of Business and Economic Research303 Girard Blvd. NE MSC06 3510 / Onate Hall Albuquerque, NM 87131

University of New Mexico Bureau of Business and Economic Research

ECONOMIC IMPACTS OF THE ANTICIPATED NON-ACCREDITATION OF BERNALILLO COUNTY LEVEES Part 2: Development Impacts September 2010

Lee A. Reynis, PhD Daren Ruiz, MA

University of New Mexico Bureau of Business and Economic Research 303 Girard Blvd. NE MSC06 3510 / Oñate Hall Albuquerque, NM 87131

Acknowledgments

This study could not have been completed without the help of many people and organizations. Danny Hernandez, Albuquerque Metropolitan Arroyo Flood Control Authority (AMAFCA) District I Director expressed interest in having the Bureau of Business and Economic Research (BBER) study the effects of the loss of accreditation for the levees in Bernalillo County. John Kelly, AMAFCA Executive Engineer worked with the AMAFCA Board and with the City of Albuquerque and Bernalillo County to secure the funding that made this study possible. We also appreciate the assistance of AMAFCA staff, specifically Lynn Mazur, who set up the meeting with the two floodplain managers and patiently answered questions; Jerry Lovato, who provided an initial briefing; and particularly Kevin Troutman, who provided the electronic data and explanations regarding the analysis by Mussetter Engineering Inc. We also wish to thank Bradley Bingham, City of Albuquerque Hydrology Section Floodplain Administrator, and Donald Briggs, Bernalillo County Public Works Floodplain Administrator for providing a bit of a tutorial on FEMA and the treatment of floodplains, including tougher development standards that would be applied and the likely higher costs of developing in a floodplain subject to stricter standards. Rene Sedillo, Bernalillo County Zoning, Building, and Planning Development Manager, assisted us in accessing County building permits and zoning information. Jacques Blair, City of Albuquerque Office of Management and Budget Economist, provided BBER with City building permit data on additions and alterations. Tom Sams, Bernalillo County Assessor Information and Research Administrator, explained the 2009 TAX shapefile BBER used to identify the study area. Brian Burnett, President, Bohannan Huston Inc., gave of his time to help us understand the variables affecting development options and costs within a floodplain. Jim Folkman, Home Builders Association of Central New Mexico Executive Vice President, discussed the likely development effects of stricter standards in the study area. Karen Dunning, New Mexico Mortgage Finance Authority Community Development Program Specialist, explained federal expenditure restrictions for housing programs when the housing would be located in a floodplain. Jack Cloud, the City of Albuquerque Development Review Board Chairman, clarified the County development review process.

Internally, many staff contributed to the completion of this study. Andrew Webb and Molly Bleecker investigated federal expenditure restrictions on developing in a floodplain. Andrew conducted interviews with developers and with agencies. Molly edited and formatted earlier drafts of this report and made suggestions for improvements. Kevin Kargacin, BBER Data Bank Manager, and Karma Shore assisted with building permit data. Jessica Bloom incorporated comments on the first draft provided by AMAFCA, as well as copy editing.

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We are grateful for the research assistance provided by two student employees, Sean Petranovich, who compiled information floodplain statutes, codes, and regulations respectively from the State, Bernalillo County, and the City of Albuquerque and who also summarized development review minutes from the City and the County, and Scott Maddux, who contacted homebuilders regarding the costs of developing in a floodplain.

While we have received helpful input from many, we take responsibility for any errors.

Lee Reynis and Daren Ruiz

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Table of Contents

ACKNOWLEDGMENTS ................................................................................................................ I TABLE OF TABLES.................................................................................................................... IV TABLE OF MAPS AND FIGURES.............................................................................................. IV TABLE OF ACRONYMS.............................................................................................................. V TABLE OF ACRONYMS.............................................................................................................. V EXECUTIVE SUMMARY ..............................................................................................................1 1 INTRODUCTION ...................................................................................................................4 2 RESIDENTIAL AND NON-RESIDENTIAL DEVELOPMENT WITHIN THE STUDY AREA:

RECENT HISTORY AND BASELINE PROJECTIONS .........................................................9 2.1 History of Residential and Non-residential Development in the Study Area............9 2.2 Activity within the Net New Floodplain...................................................................14 2.3 Toward a Baseline Forecast of New Construction in the Net New Floodplain.......18 2.4 Substantial Improvements .....................................................................................21

3 RESIDENTIAL AND NON-RESIDENTIAL DEVELOPMENT WITHIN THE STUDY AREA: BASELINE PROJECTIONS IN LIGHT OF AVAILABLE LAND AND CURRENT ZONING IN THE STUDY AREA..............................................................................................................25 3.1 Land Available to Develop in the Study Area ........................................................25

4 THE LIKELY EFFECTS OF STRICTER DEVELOPMENT STANDARDS...........................31 4.1 Stricter Development Standards............................................................................31 4.2 Increased Costs of Complying with the Stricter Floodplain Standards ..................32 4.3 Likely Development Effects on New Construction .................................................37 4.4 Likely Effects on Improvements to Existing Structures..........................................37 4.5 Effects on Affordable Housing ...............................................................................38

5 ECONOMIC IMPACTS OF THE NET NEW FLOODPLAIN IN BERNALILLO COUNTY.....42 5.1 Impacts of Floodplain Insurance on Economic Activity, Land Values and

Government Revenues..........................................................................................42 5.2 Impacts of Floodplain Development Standards on Economic Activity, Land Values

and Government Revenues...................................................................................44 6 EXTENDING THE ANALYSIS BEYOND BERNALILLO COUNTY......................................45 APPENDIX A: MRCOG FORECAST .........................................................................................46 APPENDIX B: LAND AVAILABLE TO DEVELOP .....................................................................48 APPENDIX C: PROPOSED SUBDIVISIONS ............................................................................52 APPENDIX D: CITY OF ALBUQUERQUE FLOOD HAZARD CONTROL ORDINANCE ..........55

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Table of Tables

Table 2.1 New Single-Family Residential Construction Permitted in the Data Analysis Zones (DASZs) Encompassing the Net New Floodplain.......................................................11

Table 2.2 New Multi-Family Residential Construction Permitted in the Data Analysis Zones (DASZs) Encompassing the Net New Floodplain.......................................................12

Table 2.3 New Non-residential Construction Permitted in the Data Analysis Zones (DASZs) Encompassing the Net New Floodplain......................................................................13

Table 2.4 Employment Allocated to Floodplain DASZs by MRCOG, 2000, 2004, and 2008.....14 Table 2.5 Study Area Single-Family Building Permit Values and Units by Year........................16 Table 2.6 MRCOG Projections of Population and Housing in the Net New Floodplain DASZs,

2008-2030 ..................................................................................................................19 Table 2.7 MRCOG’s Forecast of Employment, Net New Floodplain DASZs, 2030...................21 Table 2.8 Additions, Alterations and Other Improvements to Existing Residential and

Commercial Development in the Net New Floodplain ................................................23 Table 2.9 City of Albuquerque and Bernalillo County Permits for Substantial Improvements in

the Study Area, 2001 to 2009.....................................................................................24 Table 3.1 Land Area Potentially Available to Develop by Zoning Category and Parcel Size and

by SubArea Geography ..............................................................................................28

Table of Maps and Figures

Map 1.1 Parcels Affected by the Net New Floodplain within US Census PUMA 00603..............5 Map 1.2 Parcels Affected by the Net New Floodplain within US Census PUMA 00604..............6 Map 1.3 Parcels Affected by the Net New Floodplain within US Census PUMA 00605..............7 Figure 2.1 New Housing Units Permitted in Bernalillo County, 1990 to 2010............................10 Figure 2.2 Value of Non-residential Construction Permitted in Bernalillo County, 1990-2009,

Current Dollars and Adjusted for Inflation...................................................................10 Map 2.1 MRCOG DASZs and the Net New Floodplain .............................................................15 Map 2.2 Businesses within the Net New Floodplain ..................................................................17 Figure 2.3 City of Albuquerque Housing Units Permitted: History and BBER Forecast............20 Map 3.1 Unimproved Taxable Parcels in the Far North Valley with Current Zoning..................25 Map 3.2 Unimproved Taxable Parcels in the North Valley Central Corridor with Current Zoning

....................................................................................................................................26 Map 3.3 Unimproved Taxable Parcels in the South Valley with Current Zoning .......................27 Figure 4.1 Estimated Inundation Depth, Far North Valley Parcels ............................................34 Figure 4.2 Estimated Inundation Depth, North Valley Central Corridor Parcels ........................35 Figure 4.3 Estimated Inundation Depth, South Valley Parcels ..................................................36

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TABLE OF ACRONYMS

AMAFCA: Albuquerque Metropolitan Arroyo Flood Control Authority

BBER: Bureau of Business and Economic Research

CID: New Mexico Construction Industries Division

DASZ: Data Analysis Subzone

FEMA: Federal Emergency Management Agency

FIRM: Flood Insurance Rate Map

GIS: Geographic Information System

HUD: US Department of Housing and Urban Development

MFA: New Mexico Mortgage Finance Authority

MRCOG: Mid-Region Council of Governments

MSA: Metropolitan Statistical Area

NETS: National Establishment Time-Series Database

NM DWS: New Mexico Department of Workforce Solutions

NFIP: National Flood Insurance Program

NMSA: New Mexico Statutes Annotated

PUMA: Public Use Microdata Areas

SIC: Standard Industrial Classification

Executive Summary

The Federal Emergency Management Agency (FEMA) has provided notice of its intention not to accredit the levees which protect against flooding from the Rio Grande River in Sandoval, Bernalillo, Valencia and Socorro Counties, and to re-draw the maps to show unprotected areas lying within the floodplain. Mussetter Engineering Inc. (now part of Tetra Tech, Inc.) has provided AMAFCA with preliminary estimates of the anticipated Rio Grande floodplain in Bernalillo County. The first part of this study, Economic Impacts of the Anticipated Non-Accreditation of Bernalillo County Levees, Part 1: Estimated Cost of Increased Flood Insurance, used these estimates to calculate the expected increase in the floodplain (the “net new floodplain”), and analyzed the estimated costs of requirements, often imposed by lenders, on property owners within the net new floodplain to purchase flood insurance. This second report examines the economic impacts of the tougher standards that are required for building within the net new floodplain.1 These include requirements that all new construction and substantial additions or alterations2 to existing structures within the net new floodplain be elevated one foot above the water level anticipated from the 100 year flood, and the water displaced by the elevated structure(s) on a parcel will need to be retained on site by appropriate drainage and compensatory ponding.

Baseline scenario for the next 20 years. Based on forecasts by the Mid-Region Council of Governments (MRCOG), on BBER’s latest economic forecasts, and on the historical data on building permits issued within the area, it is reasonable to expect 30 housing units per year in the parcels that fall at least partially within the net new floodplain. Within the net new floodplain parcels, job growth is likely to be at best 0.2%, which would be an employment (payroll plus self-employed) gain of roughly 19 per year. Accommodating these additional employees could require as much as 320 thousand square feet of commercial space – about 24 commercial buildings – over the period. The net new floodplain has seen considerable permits for alterations, additions and other improvement of existing structures over the years – roughly 120 residential projects a year and in the neighborhood of 15 commercial projects – with no evidence of diminishment over time, so it is reasonable to expect similar levels of activity in the future. The land potentially available to develop in the study area, estimated at almost 2,000 acres, should be enough to support the baseline forecast summarized above, although the development may require subdivision of some existing large residential parcels and conversion of agricultural land, as has been the historical pattern.

Costs of stricter development standards. Estimating the increased development cost due to higher standards is extremely difficult, since development costs are very site specific. Bradley Bingham and Donald Briggs, City of Albuquerque and Bernalillo County Floodplain Administrators respectively, estimated that for single-family 1 The term “net new floodplain” is the area of the anticipated floodplain minus the area of the original floodplain. It is the net addition to the original floodplain that will result from non-accreditation. Net new floodplain is sometimes described as the “increase in floodplain” in figures and maps herein. 2 Substantial additions and alterations account for more than 50% of the value of the structure

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homes, the costs of complying could easily approach $20 thousand per unit. Siting a commercial structure within a floodplain could add 10% to the costs.

The stricter standards are likely to drive up the costs of preparing the site for development. Compensatory ponding will add to the costs of site preparation and subtract from the land available for development. For custom homes on large lots of an acre or more, the costs of complying with floodplain regulations may be a relatively small proportion of total construction costs, and the new home owners are likely to have sufficient income so that these floodplain costs can be easily absorbed. Figuring out how to site a home and comply with the regulations will be tougher if the lot is small, and the regulatory costs are likely to loom as a larger proportion of site preparation and construction. Tract home developments that would have been competitive in the absence of the floodplain may no longer be viable. Some of the same considerations will apply to commercial development. New commercial development on small lots will face logistical and other challenges. The increase in site development costs may simply rule out certain types of non-residential development because the economics no longer work.

Any major remodeling efforts or large additions to existing structures can force compliance with floodplain regulations. Indeed, the application of floodplain regulations may make it very expensive just to bring some old properties up to code. One very notable negative effect of expanding the floodplain will be the likely reduction in federal funding for home construction, rehabilitation and down payment assistance to some of the city’s most vulnerable residents, as these funds are diverted to land where development is less complicated. The floodplain rules will make it more difficult and expensive to remodel or otherwise modify small commercial buildings. On the other hand, modification of existing commercial structures that are larger and newer may slip more easily under the 50% limit, and larger properties will generally afford more options for complying should that be necessary.

Economic impacts. The requirement to purchase flood insurance was found to have a depressing effect on property values within the net new floodplain, but a relatively small net economic impact on Bernalillo County. The higher development standards for residential and commercial projects within the net new floodplain should similarly have a depressing effect on property values. These standards will add to development costs and may rule out certain types of projects altogether. The regulations are expected to slow development activity in the net new floodplain in favor of other locations, as well as skew what development occurs toward higher end estate-type residential development and larger acreage commercial projects. In general, BBER does not expect major macro-economic effects on Bernalillo County.

Extending the analysis beyond Bernalillo County. The loss of accreditation for the Rio Grande River levees will increase the floodplain outside Bernalillo County in Sandoval, Valencia and Socorro Counties. Many of the same dynamics discussed above are likely to play out in a newly-drawn floodplain for these counties. However, the affected existing housing in Valencia and Socorro Counties may generally be of lower value, which means that the substantial improvement threshold will be hit more

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quickly. Duplicating the study would require estimating boundaries for the net new floodplain, and may be hindered by the fact that there is less data readily available for these counties, particularly for Socorro County.

1 Introduct

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ion The Albuquerque Metropolitan Arroyo Flood Control Authority (AMAFCA) contracted the University of New Mexico’s Bureau of Business and Economic Research (BBER) to estimate the economic impacts of the Federal Emergency Management Agency (FEMA) not accrediting the levees in Bernalillo County. The current levees are not expected to meet FEMA’s post Hurricane Katrina standards, and FEMA will not recognize them as protecting against potential flooding from the Rio Grande.

The full report consists of two parts: Part 1, which established the “net new floodplain” and estimated the increase in flood insurance costs likely to be required for properties within the net new floodplain, and this report, Part 2, which examines the development impacts of the net new floodplain Map 1.1, 1.2, and 1.3 display portions of three Public Use Microdata Areas (PUMAs) that contain the study area.3 The blue areas of the maps show the net additions to the floodplain (net new floodplain) moving from the north (Far North Valley), through the North Valley Central Corridor, through the South Valley to the southern border of Bernalillo County. The net new floodplain would cut a broad swath running down the valley. In the Far North Valley, the area under the floodplain would extend from the river to the railroad tracks on the north side of Alameda Boulevard (Route 528) and generally to 4th Street south of Alameda Boulevard, with the boundary retreating west south of Osuna Road. South of Montano Road in the Near North Valley Central Corridor, the eastern boundary of the floodplain is generally to the east of Rio Grande Boulevard, and in many cases extends to 12th Street. South of Central Avenue the anticipated floodplain runs intermittently on either side of the Rio Grande.4

3 The US Census Bureau provides microdata and tabulated summary data for each PUMA, which contains roughly 100,000 people. There are currently five PUMAs within Bernalillo County. PUMA 00603 captures the study area north of Montano Road; this area will be referred to as the ‘Far North Valley’. PUMA 00604 captures the study area south of Montano Road, east of the Rio Grande River, and north of Bridge Boulevard; this area will be referred to as the ‘North Valley Central Corridor’. PUMA 00605 captures the rest of the study area in the south; this area will be referred to as the ‘South Valley’. 4 Some of this area in the South Valley is now protected by a new levee that conforms to FEMA engineering standards, but had yet to be accredited by FEMA at the time of this writing, and was therefore considered to be in the current floodplain.

Map 1.1 Parcels Affected by the Net New Floodplain within US Census PUMA 00603

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As was discussed in our first report, many homeowners within the net new floodplain will have to purchase flood insurance as a condition for obtaining a mortgage, refinancing their home, or keeping their current mortgage. Flood insurance may also be required as a condition of financing for non-residential properties. As such, the requirement to purchase flood insurance may be expected to discourage investment and reduce the values of properties within the net new floodplain and to impact the types of land development both within and outside the net new floodplain. Potentially more dramatic, however, are the effects on development created by the costs of complying with stricter development standards within the net new floodplain.

Very briefly, all new construction and substantial additions/renovations to existing structures within the net new floodplain area will need to be elevated one foot above the water level anticipated from the 100 year flood, per City and County ordinances. A similar requirement will pertain to any new roads or driveways within the floodplain. Moreover, the water displaced by the elevated structure(s) on a parcel will need to be retained on site by appropriate drainage and compensatory ponding. An engineering report of the proposed drainage plan will also need to be filed.

The effects on development are discussed with reference to a baseline scenario for the development that might be expected over the next 20 years or so within the study area. In developing this baseline scenario, BBER considers the private residential and non-residential development that has taken place over the past few decades, the availability of land and current zoning, and existing forecasts.

Chapter 2 reviews the history of development within the study area and presents a baseline scenario for future development. Chapter 3 presents a reality check for this baseline scenario by examining the availability and current zoning of land within the net new floodplain. Chapter 4 discusses how this baseline scenario will be altered by the regulations and stricter development standards. Chapter 5 puts it all together to consider the economic impacts of the net new floodplain on Bernalillo County. Chapter 6 explores the possibilities for extending the analysis to other counties that face a loss in FEMA accreditation of the Rio Grande levees.

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2.1

Residential and Non-Residential Development within the Study Area: Recent History and Baseline Projections

New construction and substantial improvements are development activities that would be subject to stricter standards within the net new floodplain. In an effort to develop a baseline scenario for development in the study area, this chapter first examines the history of residential and non-residential construction activity within the study area and within Bernalillo County as a whole. We then look at the availability of land in the study area and current zoning. Finally, we present a baseline forecast.

History of Residential and Non-residential Development in the Study Area

As will be seen, development in the study area has generally followed trends elsewhere in Bernalillo County and has been reflective of developments in the larger national economy. Figure 2.1 is a graph of the total single-family and multi-family housing units permitted in Bernalillo County from 1990 through the first four months of 2010. It puts what has happened in the study area into some perspective. The prolonged housing boom peaked in Bernalillo County in 2003, and fell-off dramatically beginning in mid-2006. Activity in 2008-2009 was extremely limited, reflecting the impacts of the national recession and a cycle of overbuilding. Housing prices in the Albuquerque area had been evidencing year-over-year declines since mid-2008. With credit flowing once again, 30-year fixed rate mortgages under 5 percent, and the incentive of federal tax credits for some home-buyers, there is evidence of a turn-around, but activity levels remain depressed.

Figure 2.2 is a graph of the total value of new non-residential private construction permitted in Bernalillo County between 1990 and 2009. The dotted line indicates the increases after adjusting for inflation as measured by the Chained Price Index for Non-residential Construction maintained by the US Bureau of Economic Analysis. Note the sharp fall-off in 2009 as global financial markets collapsed and credit became impossible to obtain.

New Single-Family Residential Construction. Table 2.1presents data from the Mid-Region Council of Governments (MRCOG) on new single-family building permits within the Data Analysis Zones (DASZs) that most closely correspond to the study area and offers a comparison with total single-family units permitted by Albuquerque and Bernalillo County. MRCOG includes in its definition of single-family homes stand-alone single-family residences, patio homes, townhouses, condominiums, and mobile or manufactured homes. Single-family permits in the DASZs of the study area accounted

for 6.9% of the total single-family units permitted within Bernalillo County between 2000 and 2007. The table also presents figures on the total value of these permits, but the data series are incomplete.

Figure 2.1 New Housing Units Permitted in Bernalillo County, 1990 to 2010

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Multi-FamilySingle Family

Source: City of Albuquerque and Bernalillo Co

Figure 2.2 Value of Non-residential Construction Permitted in Bernalillo County, 1990-2009, Current Dollars and Adjusted for Inflation

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Value of Nonres Const Permitted

Value in 1990 Dollars

Albuquerque & Bernalillo Co building permits, adjusted US Bureau of Economic Analysis chained price index--nonresidential construction

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Table 2.1 New Single-Family Residential Construction Permitted in the Data Analysis Zones (DASZs) Encompassing the Net New Floodplain

Single Family Permits

Year Far North ValleyNorth Valley /

Central Corridor South Valley00 52 142 37 231 3,577 6.5%01 71 73 46 190 4,424 4.3%02 119 91 65 275 4,865 5.7%03 155 113 185 453 5,761 7.9%04 101 113 185 399 5,989 6.7%05 115 146 131 392 5,535 7.1%06 112 152 76 340 3,791 9.0%07 54 106 63 223 2,410 9.3%

779 936 788 2,503 36,352 6.9%

Growth in Single Family Permits

0001 37% -49% 24% -18% 24%02 68% 25% 41% 45% 10%03 30% 24% 185% 65% 18%04 -35% 0% 0% -12% 4%05 14% 29% -29% -2% -8%06 -3% 4% -42% -13% -32%07 -52% -30% -17% -34% -36%

Value of Single Family Permits

00 6,170,265 14,171,768 4,026,180 24,368,213 344,866,575 7.1%01 10,475,049 7,481,006 5,678,983 23,635,038 428,988,272 5.5%02 22,756,871 11,327,012 8,092,110 42,175,993 499,817,437 8.4%03 32,634,906 16,252,572 15,674,737 64,562,215 605,864,131 10.7%04 a 6,084,602 1,822,979 4,298,297 12,205,878 61,478,950 19.9%05 a 5,170,142 8,598 4,589,292 9,768,032 61,042,191 16.0%06 22,362,892 17,270,049 9,498,548 49,131,489 408,611,424 12.0%07 11,805,766 22,605,328 10,049,681 44,460,774 399,784,968 11.1%

117,460,493 90,939,312 61,907,828 270,307,632 2,810,453,948 9.6%

UNM Bureau of Business and Economic Reserch processing of data from the Mid-Region Council of Governments.

a. Data on value are known to be incomplete. Other sources indicate that the value of total Bernalillo Co.single family permits was over $700 million in 2004, over $800 million in 2005 and approaching $700 million in 2006.

Net New Floodplain DASZs as % of Bernalillo

Co.

DASZs of Net New Flood PlainTotal: DASZs of Net New Flood

PlainBernalillo County

Total

Note that the percentage is higher for the more recent years of activity. Units permitted within the three areas consistently have a higher average value than those for Bernalillo County as a whole, although the series on values is incomplete. Single-family units in the Far North Valley consistently have the highest construction value, averaging $219 thousand in 2007, with those in the Near North Valley Central Corridor averaging $213 thousand in that year, and homes in the South Valley consistently the lowest value, averaging $160 thousand in 2007.

New Multi-Family Residential Construction. Table 2.2 presents data from the MRCOG on multi-family building permits within the Data Analysis Zones (DASZs) that roughly correspond to the study area and offers a comparison with total multi-family units permitted by Albuquerque and Bernalillo County. Multi-family units permitted 11

within the study area DASZ’s accounted for over 11% of the multi-family units permitted within the county. Note that the 606 units permitted reflected only five projects in eight years, with the largest project a 301 unit project in the Far North Valley and the smallest a 54 unit project in 2000 in the South Valley, the only multi-family project listed for that geography.

Table 2.2 New Multi-Family Residential Construction Permitted in the Data Analysis Zones (DASZs) Encompassing the Net New Floodplain

12

0.0%

0.0%

0.0%0.0%

0.0%

0.0%0.0%

Multifamily Units Permitted


Central Corridor South Valley00 0 0 54 54 214 25.2%01 0 110 0 110 689 16.0%02 0 0 0 0 1,21403 301 81 0 382 1,082 35.3%04 0 0 0 0 34205 0 60 0 60 448 13.4%06 0 0 0 0 84707 0 0 0 0 517

301 251 54 606 5,353 11.3%

Value of Multfamily Permits

00 0 0 1,574,400 1,574,400 9,423,409 16.7%01 0 3,004,873 0 3,004,873 36,076,098 8.3%02 0 0 0 0 52,900,59903 15,685,507 4,831,725 0 20,517,232 58,124,646 35.3%04 a 0 0 0 005 a 0 0 0 006 0 0 0 0 73,037,13207 0 0 0 0 40,473,363

15,685,507 7,836,598 1,574,400 25,096,505 270,035,247 9.3%


a. Data on value are known to be incomplete. Other sources indicate that the value of total Bernalillo Co.multifamily permits was $24.6 million in 2004, $24.8 million in 2005, $83.4 million in 2006 and$62.1 million in 2007. With these larger totals, permit values for the study area account for 7.4% of the total.

DASZs of Net New FloodplainTotal: DASZs of New Flood Plain

Bernalillo County Total

Net New Floodplain DASZs as % of Bernalillo

New Non-Residential Construction. Table 2.3 is similar to those used in analyzing residential permits in the study area versus the county as a whole. In this case there are rather large discrepancies between the MRCOG totals and those reported to BBER by the two issuing jurisdictions, so we have included both totals. An average of 20 permits a year for new non-residential construction were issued between 2000 and 2007 in the net new floodplain DASZs. This was more than 10% of the permits issued for new non-residential construction throughout Bernalillo County for the same period. However, it appears that the value of this non-residential activity is a somewhat smaller percent of the total, perhaps 6 to 7%. Moreover, it appears that a relatively larger proportion of the activity over this period was in the South Valley DASZs. Whether this

activity was actually in the area to be designated as net new floodplain cannot be determined without geocoding all the properties.

Table 2.3 New Non-residential Construction Permitted in the Data Analysis Zones (DASZs) Encompassing the Net New Floodplain Non-residential Building Permits


Central Corridor South Valley00 2 1 11 14 142 9.9% 123 11.4%01 9 6 6 21 159 13.2% 120 17.5%02 5 2 7 14 98 14.3% 165 8.5%03 12 1 10 23 190 12.1% 225 10.2%04 13 6 12 31 231 13.4% 274 11.3%05 5 4 8 17 139 12.2% 264 6.4%06 5 2 12 19 146 13.0% 208 9.1%07 7 3 12 22 187 11.8% 214 10.3%

58 25 78 161 1,292 12.5% 1593 10.1%

Value of Non-residential Building Permits

00 900,000 650,850 6,150,301 7,701,151 184,048,258 4.2% 133,839,520 5.8%01 4,224,045 13,756,719 1,669,379 19,650,143 222,681,310 8.8% 113,642,767 17.3%02 3,626,630 212,487 1,974,413 5,813,530 87,797,796 6.6% 121,813,059 4.8%03 6,555,113 850,000 7,397,440 14,802,553 311,582,286 4.8% 145,846,444 10.1%04 2,589,495 110,000 1,268,741 3,968,236 35,091,316 11.3% 162,120,431 2.4%05 1,527,835 0 7,535,506 9,063,341 86,508,783 10.5% 201,985,233 4.5%06 9,961,167 12,883,755 5,057,672 27,902,594 177,970,637 15.7% 195,322,843 14.3%07 2,986,914 3,451,000 4,317,254 10,755,167 473,297,631 2.3% 323,053,406 3.3%

32,371,199 31,914,811 35,370,705 99,656,715 1,578,978,017 6.3% 1,397,623,703 7.1%


DASZs of Net New Floodplain

Total: DASZs of New Flood Plain


(MRCOG)

New Floodplain DAZs as % of Bernalillo Co.


(BBER)

Net New Floodplain

DAZs as % of Bernalillo Co.

a. Data on value are known to be incomplete. BBER data from the issuing jurisdictions indicates that the value of total Bernalillo Co.nonresidential permits was $146 million in 2003, $162 million in 2004, and $202 million in 2005 . See discrepancies in both permits and

Examining permits for non-residential construction is one way of getting at changing non-residential land use within the net new floodplain. Another way is to look at the changes in employment by industry over time. As part of their long-range transportation planning, MRCOG has periodically geocoded all the employer records from the New Mexico Department of Workforce Solutions (NM DWS) ES-202 database for workers covered for unemployment insurance.5 MRCOG assigns employees to one of three categories of employers – basic, retail and services – depending upon the industrial classification of the reporting business.6 Table 2.4 reports the employment allocated to

5 The US Bureau of Labor Statistics has placed restrictions on the use of this data, so in 2008 MRCOG used INFO USA data. 6 Basic Employment: The sum of employment in the Standard Industrial Classification (SIC) categories of agriculture, mining, construction, manufacturing, transportation, communication, utilities, wholesale, and military. In addition, all non-retail employment on Kirtland Air Force Base is classified as Basic. Retail Employment: This includes all employment in the SIC category of retail which includes eating and drinking establishments. Service Employment: The sum of employment in the SIC categories of finance, insurance, real estate, services, and government. Refer to ‘Total Employment’ for the definition of employment.

13

those DASZs partly or totally within the net new floodplain in 2000, 2004 and 2008. Note that employment in all these DASZs totaled almost 24,000 in 2008, with services accounting for 46% of the total, basic accounting for 32%, and retail, which included eating and drinking places, accounting for 22%. Compound annual employment growth between 2000 and 2008 was 0.4%. Basic employment declined at a rate of 0.4% per year, while retail and service employment grew respectively at annual rates of 0.9% and 0.8%.

Table 2.4 Employment Allocated to Floodplain DASZs by MRCOG, 2000, 2004, and 2008

2000 2004 2008

Compound Annual Growth 2000‐2008

Far North ValleyTotal 4,542 5,095 5,005 1.2%Basic 1,472 1,350 1,181 ‐2.7%Retail 1,365 1,428 1,538 1.5%Service 1,705 2,317 2,286 3.7%

Total 8,275 7,373 7,925 ‐0.5%Basic 2,024 1,498 1,755 ‐1.8%Retail 1,619 1,526 1,517 ‐0.8%Service 4,632 4,349 4,653 0.1%

South ValleyTotal 10,091 9,884 10,751 0.8%Basic 4,379 4,431 4,700 0.9%Retail 1,749 1,481 2,038 1.9%Service 3,963 3,972 4,013 0.2%

Floodplain DASZsTotal 22,908 22,352 23,681 0.4%Basic 7,875 7,279 7,636 ‐0.4%Retail 4,733 4,435 5,093 0.9%Service 10,300 10,638 10,952 0.8%

Source of data: MRCOG

North Valley / Central Corridor

2.2 Activity within the Net New Floodplain

14

The data presented in Table 2.1, 2.2, 2.3, and 2.4 reflect activity in a somewhat larger geography than that of the net new floodplain. It should be noted that the fit between

the floodplain and the DASZs is closest in the Far North Valley and the North Valley Central Corridor. In the Far North Valley, 45% of the land within the affected DASZs lies within the new net floodplain. In the North Valley Central Corridor, the figure is 47%. For the South Valley DASZs, however, the figure is only 20%, as there are large areas outside the net new floodplain. For a visual picture, see Map 2.1 below.

Map 2.1 MRCOG DASZs and the Net New Floodplain

As part of our population estimates program, BBER has geocoded new single-family housing permits. Table 2.5 reports the single-family permits from 1990 to 2004 that were geocoded to the net new floodplain. The actual geocoded single-family activity within the net new floodplain – about 40 units per year, with more than twice that number in the peak years – is less than might be expected given the overlap between the DASZs and the net new floodplain. (See Map 2.1 and the discussion in Section 2.1 above.) We suspect that a substantial proportion of the new single-family permits were

15

drawn for areas of the DASZs that are outside the net new floodplain. The hottest area in town over this period for new housing was the west side, and some of the DASZs reach into areas west of the river, e.g., north of Montano. Another reason relates to areas in the South Valley located within Isleta Pueblo that do not show any building permits. Finally, while the geocoding process matched 96% of new permits, we do not have a separate breakout of the match rate for the net new floodplain.

Table 2.5 Study Area Single-Family Building Permit Values and Units by Year Year Value Count1990 1,004,263 271991 1,450,232 291992 3,661,575 551993 3,619,414 471994 1,094,592 331995 4,357,817 261996 3,261,774 191997 2,301,036 141998 1,763,247 131999 4,908,654 422000 4,815,958 412001 5,972,968 462002 16,477,313 1062003 17,349,481 962004 893,865 10

Grand Total 72,932,189 604

Table prepared by UNM BBER based on geocoded building permits from the City of Albuquerque and Bernalillo County

In trying to estimate the importance of the net new floodplain in terms of the Bernalillo County/City of Albuquerque economy, BBER made use of a longitudinal database (NETS) that is based on Dun and Bradstreet data.7 The NETS database reports both wage and salary employment and self-employment for those businesses that have obtained a DUNS number in order to obtain financing. For 2008, the NETS database has a higher estimate of 397,489 for total Bernalillo County employment compared to MRCOG’s 2004 estimate of 347,831 (Table A.1). Map 2.2 shows businesses within the net new floodplain.

7 Dun and Bradstreet maintains a widely-used industry database that tracks the financial credit of millions of individual businesses in the US. Each business is tracked using a unique identifier number, called a DUNS number. The database includes geographic location information.

16

Map 2.2 Businesses within the Net New Floodplain

Source: UNM BBER using data from 2008 NETS

17

In 2008, employment allocated to the DASZs partially or totally within the net new floodplain accounted for 6.8% of the total employment in Bernalillo County, according to the MRCOG figures (Table 2.4 and Table A.1). By contrast, the employment allocated

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2.3

to parcels of land partially or totally in the net new floodplain totaled 9,4888, or 2.3% of the total employment in Bernalillo County according to the 2008 NETS employment figures.

Toward a Baseline Forecast of New Construction in the Net New Floodplain

Residential Construction. Table 2.6 presents MRCOG’s projections of population and single- and multi-family housing units in the DASZs that are partially or totally within the net new floodplain. While the projections anticipate net growth in population for the area of only 66 people, or 3 people per year, between 2008 and 2030, the number of single-family units in the area is expected to increase by 2,104, or 96 units per year, while the number of multi-family units grows by 1,250, or 57 units per year. County wide, MRCOG expects the population to grow to 759 thousand (Table A.1).

BBER followed a somewhat different methodology, taking our latest May 2010 short term forecast of housing units permitted by the City of Albuquerque.9 Figure 2.3 presents a graph of City housing permits since 1980 through our forecast period, which ends in 2015. BBER forecasts economic variables for New Mexico and the Metropolitican Statistical Areas (MSAs) using a national forecast prepared by IHS Global Insight, and the same firm produces long-term forecasts. To estimate future activity within the net new floodplain DASZs, we utilized the historical data presented in Table 2.1, Table 2.2, Table 2.3 and Table 2.5. For single-family units, we assumed the DASZs capture on average 6% of total permits; for multi-family, we assumed 9%. For the period 2008 through 2015, BBER calculations for these DASZs indicate just under 115 single-family units per year and roughly 50 multi-family units. Based on IHS Global Insight’s long-term forecast, we would expect the pace of development to increase after 2015 and then to slow slightly over the long term.10 The BBER forecast results, based on a very different methodology, are remarkably close to the MRCOG numbers: a bit higher activity in the single-family area, a bit less multi-family activity. The exercise has

8 This figure is significantly larger than the employment BBER originally identified in the net new floodplain. We think that the result reflects (1) the inclusion of businesses on parcels only partly within the floodplain and (2) the imprecision of the NETS geographic coding. Street addresses show up in the public right of way. To capture parcel businesses coded in this manner, we used a 10 meter buffer, which on the map looks like a very reasonable rule. Taken together, the two assumptions did net more businesses than previously estimated. 9 BBER does not produce a forecast of housing permits for Bernalillo County, but the county’s single-family permits averaged 300-400 units per year – roughly 10% of the number issued by the City of Albuquerque – from the late 1990’s until 2007. While there may be multi-family units permitted by the NM Construction Industries Division (CID) for unincorporated Bernalillo County, BBER could only identify 124 units permitted by the County over the 20 year period versus over 14 thousand for the City of Albuquerque. 10 HIS Global Insight, The U.S. Economy: The 30-Year Focus, First-Quarter 2010.

provided some confidence that the MRCOG estimates provide a reasonable baseline forecast for housing in the floodplain DASZs.

Table 2.6 MRCOG Projections of Population and Housing in the Net New Floodplain DASZs, 2008-2030

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7

Area Population Single Family Units Multi Family Units

Far North Valley 13,771 5,255 512North Valley / Central Corridor 27,530 9,384 3,031South Valley 37,415 12,404 1,0692004 Totals 78,716 27,043 4,612



Population Single Family Units Multi Family Units2008 82,320 27,951 4,8252030 82,386 30,055 6,075% Change 0% 8% 26%Absolute Change 66 2,104 1,250Ave Change Per Year 3 96 5

Source: MRCOG

2030 Activity

Increase in Net New Floodplain DASZs

2004 Activity

2008 Activity

Figure 2.3 City of Albuquerque Housing Units Permitted: History and BBER Forecast

New Single Family

New Multifamily

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Forecast

Source: BBER FORUNM, May 2010

City of Albuquerque Housing Units Permitted

Non-Residential Construction. The historical data on values of non-residential permits are incomplete, and the MRCOG series are inconsistent with those permits reported by the City and Bernalillo County. As can be seen in Figure 2.2 in the first section of this chapter, in real terms, the total value of non-residential construction in Bernalillo County fluctuated around $100 million per year from 1994 to 2006. MRCOG does not forecast non-residential building activity but they do forecast employment for three categories, (as described in section 2.1) - basic, retail and services. The forecast for 2030 along with the calculated compound annual growth between 2008 and 2030 is given in Table 2.7.

MRCOG’s forecast of employment growth within Bernalillo County anticipates growth at a compound annual rate of 3%. By comparison, and with the possible exception of the Far North Valley, MRCOG is forecasting relatively slow net growth in employment in the net new floodplain DASZs, with the greatest activity in those businesses included under services. BBER’s current forecast of net employment growth for the Albuquerque MSA implies annual employment growth for Bernalillo County of under 2%, so the growth experienced in the net new floodplain DASZs could be much more subdued – probably half – of what MRCOG anticipates.11

11 UNM Bureau of Business and Economic Research, FOR-UNM A Quarterly Economic Forecast of the New Mexico Economy, August 2010.

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Table 2.7 MRCOG’s Forecast of Employment, Net New Floodplain DASZs, 2030

200 8 2030Fa r No rth Va l ley

To ta l 5 ,0 05 7 ,16 0 1 .2% 1 .6%

B asic 1 ,1 81 1 ,45 7 ‐2 .7% 1 .0%R etai l 1 ,5 38 1 ,54 7 1 .5% 0 .0%S ervice 2 ,2 86 4 ,15 6 3 .7% 2 .8%

To ta l 7 ,9 25 8 ,46 9 ‐0 .5% 0 .3%B asic 1 ,7 55 1 ,68 5 ‐1 .8% ‐0 .2%

R etai l 1 ,5 17 1 ,30 9 ‐0 .8% ‐0 .7%

S ervice 4 ,6 53 5 ,47 5 0 .1% 0 .7%

Sou th Va lleyTo ta l 10 ,7 51 11 ,38 0 0 .8% 0 .3%

B asic 4 ,7 00 3 ,77 6 0 .9% ‐1 .0%

R etai l 2 ,0 38 1 ,71 5 1 .9% ‐0 .8%S ervice 4 ,0 13 5 ,88 9 0 .2% 1 .8%

F lo o dp la in DA SZ sTo ta l 23 ,6 81 27 ,00 9 0 .4% 0 .6%

B as ic 7 ,6 36 6 ,91 8 ‐0 .4% ‐0 .4%

R eta il 5 ,0 93 4 ,57 1 0 .9% ‐0 .5%S ervice 10 ,9 52 15 ,52 0 0 .8% 1 .6%

Sou rce o f d a ta : MRCOG

No rth Va l ley / Cen tra l Co rr id o r

C om pound Annu a l G row th 200 0 ‐20 08 200 8 ‐20 30

New residential and non-residential development within the net new floodplain. MRCOG is anticipating growth in the housing stock from new construction in the net new floodplain DASZs of 96 single-family units and 57 multi-family (Table 2.6). This translates to a growth in the housing stock of 0.3% per year. Growth within the parcels that are included in the net new floodplain is likely to be even slower. Non-residential construction in the floodplain DASZs has fluctuated around $12.5 million per year in current dollars, $11 million in real terms, and has supported job growth for area businesses of 0.4%, according to MRCOG estimates (Table 2.4). Within the floodplain parcels, job growth is likely to be at best 0.2%, which would be an employment (payroll plus self employed) gain of roughly 19 per year.

2.4 Substantial Improvements Historical activity in the net new floodplain. In addition to new construction, the stricter development standards within the net new floodplain will apply to alterations and additions that result in “substantial improvements”, with a 50% or more increase in the value of the structure. To estimate the historical volume of building permits for substantial improvements within the study area, BBER obtained data on all permitted additions, alterations and other improvements from both the City of Albuquerque and

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22

Bernalillo County. The City Office of Management and Budget provided BBER with City building permit data from 2001 to 2009.12 The City building permit data included type (addition, alteration, repair, etc.), use (commercial, single-family, etc.), address, and valuation. Building permits were geocoded and selected if they were located within the study area.13 Similar procedures were followed with the data from Bernalillo County.14 Table 2.8 includes all the residential and commercial permits that were identified for addresses within the net new floodplain between 2001 and 2009 in the case of Albuquerque and over the four years from 2006 to 2009 for Bernalillo County. The top segment of the table provides information on the number of permits granted; the second segment, information on the total value of the improvements and the third on the average value, in each case separately for residential and commercial. Almost all the residential permits are for improvements to single-family homes. Note that the activity here is much less sensitive to the housing cycle, although the difficulties in getting financing in late 2008 and in 2009 may have reduced overall activity.

12 The City of Albuquerque building permit data was composed of two different data sets, 2001 to 2005 and 2006 to 2009. More category detail was given in the latter time period. Also, the terminology was different between the two time periods, e.g. single-family house was referred to as ‘SINGLE’ in the earlier time period and as ‘SINGLE FAM’ in the later time period. 13 The address match rate for the geocoding process was about 93%, matching 14,937 building permit addresses out of 15,995 building permit addresses to a known address. 14 Bernalillo County building permits were pulled from the County GIS Program website from 2006 to 2010. The website address is http://www.bernco.gov/live/departments.asp?dept=11410&submenuid=15828.

Table 2.8 Additions, Alterations and Other Improvements to Existing Residential and Commercial Development in the Net New Floodplain

Residential Commerical Residential CommericalNumber of Permits

2001 63 62002 54 72003 70 62004 65 92005 43 102006 63 6 73 82007 68 6 93 142008 61 6 64 102009 41 4 69 12

Total Valuation of Projects Permitted2001 1,421,347 3,502,0492002 1,351,808 861,6962003 1,501,627 830,9602004 1,947,239 705,0872005 1,602,956 943,5302006 2,982,015 3,222,685 2,654,966 3,301,2072007 2,494,528 2,208,400 3,401,336 1,851,3712008 3,049,644 949,622 1,673,093 5,812,9982009 1,071,553 1,178,797 4,546,494 6,584,281

Average Valuation2001 22,561 583,675 2002 25,033 123,099 2003 21,452 138,493 2004 29,958 78,343 2005 37,278 94,353 2006 47,334 537,114 36,369 412,651 2007 36,684 368,067 36,574 132,241 2008 49,994 158,270 26,142 581,300 2009 26,135 294,699 65,891 548,690

Note: Figures exclude swimming pools.

UNM BBER using building permit data from the City of Albuquerque and Bernalillo County

City of Albuquerque Bernalillo County

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Estimating the number of historical permits that would qualify as substantial improvements is tricky. BBER tried various approaches, including use of the information on the value of property improvement included in the property tax parcel data base. Table 2.9 reports the number and value of residential and commercial permits with a valuation greater than 50% of the median assessed value. The median was calculated from values of improvements on parcels lying within the same area (e.g., Far North Valley). Similar procedures were followed with both the data for Albuquerque and that from Bernalillo County.15 The criteria used are probably much too stringent, as there are still many houses within the study area that were built many years ago and are in need of major improvements. Indeed, many people find the old adobe homes in the valley to be particularly attractive and are willing to invest in major remodeling.

Table 2.9 City of Albuquerque and Bernalillo County Permits for Substantial Improvements in the Study Area, 2001 to 2009

City of Albuquerque Locations

Year Count Value Count Value Count Value Count Value2001 4 321,769 2 3,186,324 2002 4 382,127 1 400,000 2003 3 169,652 1 400,000 2004 6 811,000 0 - 2005 6 695,000 0 - 2006 16 2,304,130 2 2,698,101 13 1,234,478 2 2,357,402 2007 11 1,480,206 2 1,750,000 10 1,034,149 3 2,705,120 2008 15 2,190,535 1 411,946 9 697,056 1 854,794 2009 3 409,184 1 1,009,297 7 528,060 6 6,214,902 2010 3 238,800 0 - Total 68 8,763,603 10 9,855,668 42 3,732,543 12 12,132,218

UNM Bureau of Business and Economic Research Calculations from City of Albuquerque and Bernaillo County data onAdditions, Alterations and Renovations Permitted

Bernalillo County LocationsResidential Commercial Residential Commercial

Baseline projections of improvements. BBER expects that there will continue to be many homeowners and owners of commercial properties who will continue to request permits for a range of improvements to existing structures. The historical data provide no evidence that requests for such permits have diminished over time, so for a baseline, it is reasonable to expect similar levels of activity in the future.

15 Bernalillo County building permits were pulled from the County GIS Program website from 2006 to 2010. The website address is http://www.bernco.gov/live/departments.asp?dept=11410&submenuid=15828.

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3

3.1

Residential and Non-Residential Development within the Study Area: Baseline Projections in Light of Available Land and Current Zoning in the Study Area

How the stricter standards will affect future development in the study area depends upon the availability, suitability and current zoning of land in the study area. Any credible baseline scenario must also take these factors into account.

Land Available to Develop in the Study Area Maps 3.1, 3.2 and 3.3 display the parcels respectively in the Far North Valley, in the North Valley Central Corridor and in the South Valley that are in the Assessor’s database for Tax Year 2009 as taxable and vacant (i.e., unimproved in terms of buildings), along with the current zoning per Bernalillo County and the City of Albuquerque.

Map 3.1 Unimproved Taxable Parcels in the Far North Valley with Current Zoning

Map 3.2 Unimproved Taxable Parcels in the North Valley Central Corridor with Current Zoning

When the vacant residential parcels are put on the screen, it is obvious that some of the smaller parcels are within subdivisions and/or on existing streets. Others, however, are fields that may be without road access. There are relatively few vacant commercial properties except along the railroad track in the South Valley.

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Map 3.3 Unimproved Taxable Parcels in the South Valley with Current Zoning

27

Table 3.1, which is based on the property tax parcel database and the zoning map, indicates that there are almost two thousand acres of land within the study area that could be developed at some point. The total includes the 1,150 acres of taxable parcels with zero improvement values shown on the previous maps, as well as 763 acres of parcels of three or more acres that BBER has identified as parcels that could be subdivided for future residential development (a scenario which plays out again and again with valley land) or that could accommodate additional business development.

Table 3.1 Land Area Potentially Available to Develop by Zoning Category and Parcel Size and by SubArea Geography

Zoning Category less than 1 acre 1 up to 3 acres 3 up to 10 acres10 up to 20 acres20 up to 30 acres Total AreaAgricultural 57 139 490 40 27 752Residential 76 36 55 43 0 210Commercial 9 2 10 23 0 44Total Area 142 176 555 106 27 1,006

Zoning Category less than 1 acre 1 up to 3 acres 3 up to 10 acres10 up to 20 acres20 up to 30 acres Total AreaAgricultural 21 44 50 0 0 116Residential 115 47 35 17 0 214Commercial 8 4 15 0 0 28Total Area 144 96 100 17 0 358

Zoning Category less than 1 acre 1 up to 3 acres 3 up to 10 acres10 up to 20 acres20 up to 30 acres Total AreaAgricultural 14 35 100 48 0 197Residential 151 35 54 8 0 248Commercial 14 14 51 25 0 104Total Area 179 84 206 81 0 549

Zoning Category less than 1 acre 1 up to 3 acres 3 up to 10 acres10 up to 20 acres20 up to 30 acres Total AreaAgricultural 92 218 640 88 27 1,065Residential 341 118 145 68 0 672Commercial 31 20 76 48 0 176Total Area 465 356 861 204 27 1,913

Source: Increase In Flooplain Parcels, Bernalillo County Assessor 2009 TAX shapefile, City of Albuquerque / Bernalillo Couny Zoning, US Census Public Use Micro Data Sample Areas.

Notes: Totals include those taxable parcels with '0' improvement value and non-zero total taxable value in 2009 TAX shapefile as well as those parcels of 3 or more acreas that have structures. Only half of the commercial lots with 3 or more acres are viewed as able to accommodate additional commercial structures.

Far North Valley

North Valley and Central Corridor

South Valley

Net New Floodplain

To say that valley lands have potential for development does not mean for any particular parcel that such is likely to occur any time soon. Some parcels are land-locked: there simply is no access unless the owners of an adjoining parcel are willing to provide right-of-way at a reasonable cost. Some are tied up with the settlement of estates. Some may have various undesirable features or require an immense clean-up effort. Some may be just too small, or they may lack access to an established sewer and be too small to support a septic system.

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There are 1,913 acres of land potentially available to develop in the study area, the majority of which is zoned as agricultural (1,065 acres), followed by residential (672 acres) and commercial (176 acres).16 The majority of the land that could at some time be available to develop is located in the Far North Valley (1,006 acres in PUMA 00603), followed by the South Valley (549 acres in PUMA 00605) and the North Valley Central Corridor (358 acres in PUMA 00604).17 (See Appendix B: Land Available to Develop Method for more detail.)

Each area (Far North Valley, North Valley Central Corridor, and South Valley) contains a different mix of zoning, with the majority of land available to develop contained in parcels that are between 3 and 10 acres.18 Three quarters (74%) of the land available to develop in the Far North Valley is agricultural, with almost two thirds of this land contained in parcels that are between 3 and 10 acres.19 Sixty percent of the land potentially available for development in the North Valley Central Corridor is zoned residential, with slightly more than one third of the total potentially developable acres still zoned for agriculture. In the South Valley, over 40% of the land available to develop is zoned residential, while 25% is zoned commercial, with the remainder in agriculture.

The land potentially available to develop in the study area, estimated at almost 2,000 acres should be large enough to meet development needs, through 2030 as discussed in the previous chapter, but probably only if some existing large residential parcels were subdivided and/or some agricultural land converted, as has happened in the past. If 30 single-family units were added per year, the total over the 22 years to 2030 would be 660, coincidentally the total number of residential acres identified in the net new floodplain parcels. There has been very little multi-family housing development, although the very large project between 4th and 2nd in the Far North Valley just south of

16 The City of Albuquerque / Bernalillo County zoning categories do not necessarily have the same meaning as the Bernalillo County Assessor 2009 TAX database property classes used in the previous study, Economic Impacts of the Anticipated Non-Accreditation of Bernalillo County Levees: Estimated Cost of Increased Flood Insurance, and later in the current study, Economic Impacts of the Anticipated Non-Accreditation of Bernalillo County Levees: Development Impacts. 17 Public Use Micro Data Sample Areas (PUMAs) are a United States Census Bureau geography that is non-overlapping and partition states. The Census Bureau releases social, economic, housing, and demographic characteristics through the American Community Survey available in PUMA geography. The previous study, Economic Impacts of the Anticipated Non-accreditation of Bernalillo County Levees: Estimated Cost of Increased Flood Insurance, used PUMA geography to estimate the mortgage rate and the percent of housing units that were built before 1978 in the net new floodplain. Later in the current study, PUMA geography is used to estimate median value of owner occupied housing units and average commercial improvement value in the net new floodplain. 18 Only 1 parcel is larger than 20 acres, which is in the far north valley and zoned agricultural. 19 “Parcel” refers to both parcels and parcel pieces. Parcels were assigned a zoning category and when the parcel had more than one zoning category, the parcel was split and each piece was assigned its respective zone.

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Paseo del Norte is at least partially within the net new floodplain. In terms of non-residential development, if 19 jobs were added per year, this could mean as much as 320 thousand square feet of commercial space, or about 24 commercial buildings.20 Many of the existing commercial parcels are small, so accommodating this development could require some conversion of agricultural land.

20 The United States Energy Information Administration estimates that there is an average of 17 workers per all commercial buildings and 766 ft² per each worker, so on average each commercial building has about 13,022 ft² of space.

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4

4.1

The Likely Effects of Stricter Development Standards This chapter explores the likely development effects of the stricter building standards that are applied in floodplains. The first section deals with the regulations that are enforced throughout Bernalillo County. The second section explores the impacts of the floodplain regulations on the bottom line. Finally, we discuss how the stricter development standards are likely to affect future development within and outside the net new floodplain.

Stricter Development Standards Development in a floodplain is held to a stricter standard to reduce the risk of loss of life and property damage. The state of New Mexico mandates counties and municipalities that contain designated flood prone areas to participate in the National Flood Insurance Program (NFIP).21 Participation in the NFIP obligates counties and municipalities to adopt a floodplain ordinance that conforms to the federal insurance administration’s regulation 1910 issued pursuant to Subsection 7(d), 79 Stat. 670, Section 1361, 82 Stat. 587 and 82 Stat. 575, all as amended. Furthermore, they must designate a floodplain manager to administer the ordinance.22

The state of New Mexico charges counties and municipalities in designated flood prone areas to designate and regulate special flood hazard23 areas and floodways24 and prescribe construction standards for special flood hazard areas.25 Bernalillo County and the City of Albuquerque have adopted flood hazard ordinances and designated floodplain managers. The flood hazard ordinances are very similar. What follows is a simplified discussion of the City’s version. The anticipated Rio Grande floodplain produced by Mussetter Engineering, Inc. (now part of Tetra Tech, Inc.) provides

21 State of New Mexico, 2009 NMSA 1978, Statutory Chapters in New Mexico, Chapter 3 Municipalities, Article XVIII, Section 7. 22 State of New Mexico, 2009 NMSA 1978, Statutory Chapters in New Mexico, Chapter 3 Municipalities, Article XVIII, Section 7, Subsection B and C. 23 The City of Albuquerque defines an area of special flood hazard as “the land ... subject to a one percent or greater chance of flooding in any given year” and an area of shallow flooding as “a designated AO Zone on the Flood Insurance Rate Map (FIRM). The base flood depths range from one to three feet; a clearly defined channel does not exist and the path of flooding is unpredictable or indeterminate” in City of Albuquerque Code of Ordinances, Chapter 14: Zoning, Planning, and Building, Article 5: Flood Hazard and Drainage Control, Part 1: Flood Hazard Control. 24 The City of Albuquerque defines floodway as the “...channel of a river, arroyos or other watercourse and the adjacent land areas that must be reserved in order to discharge the base flood” in City of Albuquerque Code of Ordinances, Chapter 14: Zoning, Planning, and Building, Article 5: Flood Hazard and Drainage Control, Part 1: Flood Hazard Control. 25 State of New Mexico, 2009 NMSA 1978, Statutory Chapters in New Mexico, Chapter 3 Municipalities, Article XVIII, Section 7, Subsection A, Parts 1, 6, and 2.

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4.2

estimated depth across the area but is a first approximation (Figures 4.1, 4.2 and 4.3). FEMA will conduct the official and more detailed analysis of the floodplain.

The flood hazard ordinance development standards apply to both new construction and substantial improvements to both residential and commercial development. The City of Albuquerque defines substantial improvement as “any repairs, reconstruction, or improvement of a structure, the cost of which equals or exceeds 50% of the market value of the structure...”26 Residential structures, including manufactured homes, and commercial structures, whether new or the result of substantial improvements, must be elevated at least a foot above the base flood elevation to reduce the risk of loss of life and damage to property.

Subdivision proposals are required to have public utilities and facilities (sewer, gas, electrical, and water systems) located and constructed to minimize flood damage, provide adequate drainage, and to provide base flood elevation data. Compensatory ponding is another development standard required by the Floodplain Administrators in a floodplain. The pond needs to be able to capture the displaced water caused by the new or substantially improved structure. The other floodplain standards apply to construction materials and methods. Table A.1 in the appendix arranges the flood hazard control ordinance by flood hazard area and development activity.

Increased Costs of Complying with the Stricter Floodplain Standards Estimating the increased development cost due to higher standards is extremely difficult since development costs are very site specific.27 BBER staff met with Bradley Bingham and Donald Briggs, City of Albuquerque and Bernalillo County Floodplain Administrators respectively. They started with a stand-alone single-family house and broke down the potential costs of complying with the stricter floodplain standards as follows:

Elevating the structure. Earthwork could cost $5,000. If dirt had to be imported, at a cost of $5 to $7 per cubic yard, cost could be $15,000 to 20,000. They thought $10,000 would be a reasonable estimate for elevating a structure and the associated earthwork. On top of this, there would be a $300 fee for an elevation certificate from FEMA.

26 City of Albuquerque Code of Ordinances, Chapter 14: Zoning, Planning, and Building, Article 5: Flood Hazard and Drainage Control, Part 1: Flood Hazard Control, Subsection 4 Definitions. 27 Home builders and contractors were contacted and asked about the increased cost of developing in a floodplain and none were able to give estimates and all said it was site dependent. Some site specific factors effecting the stricter development costs are architects and engineers interpretation and response to stricter standards, size and shape of structure footprint, size and shape of parcel, depth of base flood, pond depth limit, and use of lot (residential or commercial).

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Grading and drainage plan. They thought the design work could run $3,000 to 5,000, with $4,000 a reasonable estimate.

Cost to grade the site and dig a compensatory pond to capture water displaced. The earthwork could cost $3,000 to 5,000.

Altogether, the costs of complying could easily approach $20 thousand. Some of this work – elevating the structure, providing adequate drainage – would be standard for any project whether or not it is in a floodplain. The extra costs are a matter of degree. Dealing with a potential depth of up to one foot could be a relatively minor expense but the costs of everything will rise as the depth to be accommodated increases. In some cases there will not be a need to haul in dirt. The need for dirt for purposes of elevating may be largely met with extra dirt on site resulting from digging out the compensatory pond and grading.

New subdivisions. Where the project is a subdivision, the compensatory ponding requirement can be met by constructing one or more large ponds to which the water would be piped from the site of each structure. The two floodplain managers estimated that with a big subdivision, installing pipes and compensatory ponding could take the cost of a lot from $40 thousand to $60 thousand – effectively adding $20 thousand to the cost of a lot.

Commercial structures. The two floodplain managers estimated that siting a commercial structure within a floodplain could add 10% to the costs.

One thing that became very clear in talking with Brian Burnett, President of Bohannan Huston in Albuquerque, is the importance of having space within which to meet the stricter standards. According to the two Floodplain Managers, for safety reasons a compensatory pond can be no deeper than 3 feet. Depending upon both the footprint and the elevation of the structure, the required pond could be quite large. On a large lot, the landscaping could actually turn this requirement into an amenity. With a small lot, the boundary constraints will eliminate many of the options and could actually be a deal breaker. With subdivisions, compensatory ponding requirements are likely to reduce the number of housing units that can be built per acre. For commercial developments, the drainage and compensatory ponding requirements can be met in creative ways, e.g., a sloping parking lot, but again only if the lot is large.

As is evident in the previous discussion, the potential depth of the water that must be accommodated is critical in terms of the development options and the cost. The following maps are based on the engineering study of Mussetter. The study area consists of the parcels of land partially or totally under water according to the Mussetter estimates: these parcels are all assumed to be within the net new floodplain. The shaded areas in Figures 4.1, 4.2 and 4.3 show the net new floodplain moving from the

north (Far North Valley), through the North Valley Central Corridor, to the southern border of Bernalillo County (South Valley).

The darkest areas are anticipated by Mussetter to be under more than three feet of water. Parcels coded white have no inundation.

Figure 4.1 Estimated Inundation Depth, Far North Valley Parcels

.

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Figure 4.2 Estimated Inundation Depth, North Valley Central Corridor Parcels

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Figure 4.3 Estimated Inundation Depth, South Valley Parcels

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4.3

4.4

Likely Development Effects on New Construction The stricter development standards will affect development in several ways. First, the standards are likely to drive up the costs of preparing the site for development. For custom homes on large lots of an acre or so, the costs of complying with floodplain regulations may be expected to be a relatively small proportion of total construction costs and the new home owners are likely to have sufficient income that these floodplain costs can be easily absorbed. Indeed, for this market, a good developer will use the contours of the lot and create an amenity out of what otherwise could be an eye sore. Figuring out how to site a home and comply with the regulations will be tougher if the lot is smaller, say a half acre or a quarter of an acre or less. And the regulatory costs are likely to loom as a larger proportion of site preparation and construction. Tract homes that would have been competitive in the absence of the floodplain may no longer make any economic sense. If built at all, the project will in all likelihood be built elsewhere.

Second, the standards will require compensatory ponding which will add to the costs of site preparation and which will also take up land that could have been used for building additional homes. There will be fewer units over which to spread the infrastructure and site development costs. Thus, the floodplain regulations drive up costs per housing unit; however, by reducing density – the number of dwelling units per acre – the regulations are likely to have the additional effect of reducing the total project revenues for the developer.

Third, the stricter development standards in combination with the requirement by lenders the owner have flood insurance would be expected to result in lower land prices within the floodplain. There is only so much land in the valley. Valley living will continue to have appeal. However, more will need to be spent on developing the site and on building in compliance with regulation, so the development that occurs is likely to be mostly higher end.

Some of the same considerations will apply to commercial development. New commercial development on small lots will face logistical and other challenges. Commercial development on larger lots may continue but only if the site is favorable – e.g., from the standpoint of serving a particular market. The increase in site development costs may simply rule out certain types of non-residential development because the economics no longer work.

Likely Effects on Improvements to Existing Structures The non-accreditation of the levees in Bernalillo County could make it very expensive to bring some old properties up to code, much less to undertake major remodeling efforts or put large additions onto existing structures. Existing property owners are likely to

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4.5

scale back their projects to keep the costs under a level that will necessitate compliance with the floodplain regulation. This will be far more difficult where the structure currently has a low value, because of where it is, because of its size and/or because of age. Simply bringing the property up to code or putting on a new roof could bring the total bill above 50% of the current value. On the other hand, those with large valuable homes will easily be able to make additions or to remodel without triggering the need to comply with the stricter floodplain building standards. This activity will probably continue and be minimally affected.

For all the reasons discussed under new construction as well as the comments just made regarding single-family residential projects, application of the floodplain rules will probably make it difficult and expensive to remodel or otherwise modify small commercial buildings. Thus, such activity is likely to be curtailed,28 and those who currently own such properties may find that their real estate has depreciated in value. On the other hand, modification of existing commercial structures that are larger and newer may slip more easily under the 50% limit and larger properties will generally afford more options for complying should that be necessary.

The floodplain regulations will affect the market for existing homes and existing commercial properties. The market price for any properties where even minor improvements can trigger tougher floodplain standards is likely to fall accordingly. Essentially, the cost of fixing up a quaint old house will have increased substantially. Valley property may still command a premium by virtue of its scarcity. If the buyer likes the location and has the money, it may make more sense to demolish an existing structure and start from scratch.

Effects on Affordable Housing The impact on the construction of affordable housing was one of the first concerns raised by Jim Folkman, Executive Officer of the Home Builders Association of Central New Mexico. He pointed out that complying with the stricter standards for development in a floodplain would in all likelihood raise the cost of new homes above what would be affordable. Builders in that market, who might, for example, choose a location within the South Valley would be at a cost disadvantage. They would probably decide to put the project elsewhere or scrap it entirely. This has implications in terms of providing good housing for people who want to stay in their South Valley community and for others who might choose the life-style this area currently offers. It should be noted that the very large project to improve part of the South Valley levee system should open up some

28 Or conducted under the table and without the appropriate permit.

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new housing options, but we have not investigated the economic impact of the change in availability of land after the levee improvement project is accredited.

One very notable negative effect of expanding the floodplain will be the likely reduction in federal funding for home construction, rehabilitation and down payment assistance to some of the city’s most vulnerable residents, as those funds are diverted to land where development is less complicated. The New Mexico Mortgage Finance Authority (MFA) manages several pools of HUD and other federal funds aimed at improving housing. Karen Dunning, a project specialist with MFA who oversees some of these programs, says that because of insurance and environmental requirements, these funds tend to gravitate away from floodplains.

For example, MFA manages a $2.8 million HUD fund dedicated to rehabilitation of old homes to improve heating and cooling efficiency, livability and value. These funds are also used in some communities to replace outdated mobile homes with new manufactured homes. For small projects, such as weatherization, floodplain status is not considered. However, whenever the value of the rehabilitation exceeds 50% of the value of the structure – which is often the case when replacing mobile homes with new manufactured homes, or with major modernization, repair or construction of existing homes – dispersal of the funds requires a multi-step environmental impact process. Part of this process involves examination of alternatives, such as routing the money to projects or land outside of the floodplain. HUD doesn’t absolutely forbid spending rehabilitation funds in floodplains, Dunning notes, but the extra requirements delay projects and add substantial legal and engineering fees.

Additionally, homeowners applying for rehabilitation, many of whom have passed homes through several generations and no longer have mortgages, are required to purchase at least a year’s worth of flood insurance as a requirement for rehab funding, Dunning notes. Furthermore, she says, some communities, including several local Native American tribes, do not participate in FEMA’s National Flood Insurance Program, so homeowners in these areas are not able to obtain insurance, thus precluding them from participating in rehabilitation projects if the homes are located in high-risk flood zones.

All of these factors limit the amount of rehabilitation the MFA can do in floodplain areas, which, in Bernalillo County, contain some of the area’s most vulnerable populations and oldest housing stock.

The MFA also manages funds for the purchase of foreclosed homes for sale to low-income families and for new affordable housing construction (including new single-family homes and multi-family apartment buildings). The recent federal stimulus package included about $8 million in Neighborhood Stabilization Program funding for

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New Mexico, to be used for the purchase and re-sale of foreclosed homes. In most cases, Dunning says, this funding is not used in floodplains because of the additional costs to homeowners incurred by flood insurance requirements. “Because so many people can barely qualify for mortgages for affordable housing, a whole new group of people will no longer qualify because of the added costs of flood insurance,” Dunning says.

Construction of new affordable housing is funded in one of two ways: through HUD-based federal funding, or through low income tax credits provided to (usually several) project funders. As is the case for HUD-funded rehabilitation projects, HUD discourages construction of new affordable housing in floodplains. Income tax credit-funded, developments located in a floodplain might be less practical because, as in the case of foreclosed home re-sales, the added cost of flood insurance would make the rents unaffordable for most low income tenants.

Of the new affordable housing units built in the recent past in the Rio Grande valley of Bernalillo County, only one appears to be within the new net floodplain (as described in Maps 1.1, 1.2 and 1.3) – the Paseo del Sol apartments at 2nd Street and El Pueblo Rd. NW. Dunning said there are a handful of other properties in the Rio Grande Valley that the City owns that could be developed in the future with affordable housing as at least a component of the overall project. These include the Barelas Railyard property and a piece of land at 4th Street and Mildred Avenue NW. The Sawmill Community Land Trust has been developing the Sawmill/Wells Park neighborhood over the past fifteen years; this development will continue and could expand into the Barelas neighborhood in the future, according to the Trust’s website. None of these properties fall within the projected floodplain, though they are very near it.

So, compared to the baseline scenario developed in Chapter 2, the change in floodplain status may be expected both to slow the rate and to skew the type of housing development toward larger lots with more estate-type development for those at the high end of the income scale. Production of housing for those with moderate or low incomes will be pushed out of the valley floodplain areas and either accommodated elsewhere in Bernalillo County or in the larger metro area. Improvements to the existing stock of housing will become more expensive and more difficult particularly when the lot is small, and it will, with even greater frequency, make much more sense financially and otherwise to demolish an existing home, however old and charming, and build a new home from scratch that conforms to the standards.

Compared with the baseline, the stricter floodplain standards are likely to result is less commercial development and to skew toward larger projects on larger pieces of land. Commercial development – new or reuse – on small lots will become difficult if not impossible. The economics of converting an existing facility to serve a new commercial

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use will discourage many such investments. Success may be greater where the use is similar and the remodeling required relatively minimal, e.g., a new restaurant opens in what was previously a restaurant – basically where the new tougher standards can be avoided.

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5

5.1

Economic Impacts of the Net New Floodplain in Bernalillo County In our first report, we analyzed how the non-accreditation of the levees that protect Bernalillo County properties from flooding from the Rio Grande River could impose a financial burden on residents and businesses through requirements (or inducements) to carry flood insurance. In this report, we have analyzed the effects of the tougher development standards applied in floodplains on the costs of new development and of improvements to existing structures. The previous chapter discussed the likely impacts of the net new floodplain on development within and outside the net new floodplain in Bernalillo County. This chapter takes up the question of the net economic impacts of the net new floodplain on Bernalillo County, the City of Albuquerque, and other taxing jurisdictions.

Impacts of Floodplain Insurance on Economic Activity, Land Values and Government Revenues

BBER estimated in Part I of this study that the increased cost of flood insurance for those parcels located in the net new floodplain that would result from the anticipated withdrawal of levee accreditation in Bernalillo County will range from $4.2 million in the first year and $5.3 million a year thereafter in flood insurance premiums on the low end and $8.0 million in the first year and $8.7 million a year thereafter on the high end, with the most likely cost being about $5.5 million in the first year and $6.3 million a year thereafter. Homeowners with a federally-backed mortgage in a floodplain are required to purchase flood insurance and were the only property owners considered in these estimates. Businesses were excluded from the analysis due to historically low flood insurance purchase rates.

Economic impact. The need to devote disposable income to buying flood insurance leaves less discretionary income available for other purchases. However, the purchase of flood insurance will be made through a local insurance agent, so there will be an offset in terms of the overall economic impact. BBER ran the analysis using IMPLAN, which is a software package with a proprietary database that is widely used in doing economic impact analyses. The effects of a loss in discretionary income are greater for lower income households, who spend a larger proportion of their income on goods and services.

The impacts are relatively small. For example, in the Far North Valley where median household income exceeds $50 thousand, the loss of discretionary income and associated reduction in spending is expected to result in a loss in employment in the first year of 21, with the loss in subsequent years at 26 jobs. In the combined lower income areas of the North Valley Central Corridor and the South Valley, the loss of jobs in the first year is estimated at 38, with the loss in subsequent years at 43 jobs.

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However, local insurance agents will be selling the flood insurance, resulting in a gain of some 40 jobs in the first year and 45 thereafter. The latter figures are based on historical averages across all types of insurance and may in fact overstate the job gains to this industry, but in any case the net job loss is estimated to be relatively small.

Impact on Land Values. Assuming that the property is permanently in the floodplain, the requirement to purchase flood insurance in order to obtain a mortgage may be expected to reduce the price people are willing to pay. In a very simple example, assume a Post-FIRM property where the house has no basement and is essentially on level ground with the surrounding land or slightly elevated (less than 1 ft). The building is worth $100,000 and the minimum 80% of the value of the structure is to be covered. The homeowner has made no effort to grandfather the property and hence is hit in the first and succeeding years by the applicable premium in an A zone. They have 15 years left on their mortgage and their mortgage requires flood insurance. We assume the rate in real terms stays constant at $1.05 per $100 of building value. In this case the annual payment is $840. Since the insurance rate is assumed to be a real rate and will stay the same regardless of insurance, it is appropriate to apply a real discount rate. If the interest rate that one might earn on investment is 5%, the real rate is probably somewhere around 2.5%, in which case the present value of what they will owe in insurance payments for the next 15 years is $10,400.29 Now consider that the same home has been put on the market. One potential buyer has decided to get a 15 year mortgage and will be required to purchase flood insurance. They are considering different properties, this one within the floodplain and perhaps one or two others located elsewhere in Bernalillo County. What they are willing to pay for this property should surely take into account their need to purchase flood insurance. Indeed, we might expect their offer to be some $10,400 less than what they would pay for a comparable house and neighborhood outside the floodplain. Those who can pay cash or get a mortgage that does not require them to purchase flood insurance may, of course, come in higher. And, for some people, there may not be anything quite as nice as a house in the Rio Grande Valley, so they may be willing to pay something of a premium. However, in determining what they are willing to pay, they should somehow factor in the future flood insurance payments as well as evaluating the risk of potential property damage from flooding.

The most likely estimate of the additional burden of floodplain insurance can similarly be used to calculate an expected impact on property values within the increased floodplain in Bernalillo County. Taking into account the fact that 17% are expected to grandfather

29 If, however, the anticipated annual investment yield was 7.5%, the real rate would be closer to 5% and the present value closer to $8,700.

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5.2

in the first year, the present value of the flood insurance payments over 15 years is over $100 million, which at one third would be 0.24% of Bernalillo County net taxable value for tax year 2009.30

Impacts of Floodplain Development Standards on Economic Activity, Land Values and Government Revenues

The higher development standards for residential and commercial projects, new construction and improvements to existing structures are likely to increase the costs of undertaking any particular project and to slow development activity within the floodplain in favor of other locations. Some projects will no longer make sense from a financial point of view and will be scrapped. Others may be viable at other locations outside the floodplain. Still others may proceed. Over time, it would seem likely that costs of development in the new net floodplain would shift from those associated with the purchase and holding of land to expenditures mandated on site preparation and construction for compliance with floodplain regulations. Potential reductions in property tax revenues might thus be compensated for by increased gross receipts tax revenues. The extra cost involved in compliance could translate into more jobs and income and support more economic activity in Bernalillo County, but not if projects are abandoned or downsized significantly or moved to locations outside the region. In general, BBER does not expect major macro-economic effects on the overall level of economic activity in Bernalillo County, nor do we expect major changes in tax revenues. What we do expect are shifts in the types of development that will occur in the valley floodplain versus elsewhere in Bernalillo County. These shifts will affect the people who live in neighborhoods along the floodplain as well as local businesses. The tougher floodplain standards limit options on what can be done with land within the net new floodplain and also threaten to adversely affect the value of these properties. Thus there are some identifiable losers, those whose wealth is in valley property, including those who were hoping at some point to sell or to pass this property on to their children.

30 Certificate of Property Tax Rates in Mills, Bernalillo County, 2009, as downloaed from the NM Local Government Division website (June 23, 2009) http://fmb.nmdfa.state.nm.us/content.asp?CustComKey=299892&CategoryKey=439265&pn=Page&DomName=fmb.nmdfa.state.nm.us

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6 Extending the Analysis Beyond Bernalillo County The non-accreditation of the Rio Grande River levees will increase the floodplain outside Bernalillo County in Sandoval, Valencia and Socorro Counties. Many of the same dynamics discussed for Bernalillo County are likely to play out in the net new floodplain for these counties, but the context will be different and possibly also the options. For example, the affected existing housing in Valencia and Socorro Counties may generally be of lower value, which means that the substantial improvement threshold will be hit more quickly.

BBER has talked with both Valencia and Sandoval Counties about obtaining access to the electronic property tax parcel data that was so critical to our analysis of Bernalillo County. The assessors charge for the database, but it sounds like the databases would be comparable to Bernalillo County with coding that will enable manipulation using GIS. Unfortunately, we know of no engineering studies similar to that by Mussetter Engineering that would help define the boundaries of a net new floodplain after non-accreditation.

The NETS database on businesses is available for the whole state, but the precision of the geocoding varies and is less reliable for more rural areas.

BBER regularly collects data from building permit issuing jurisdictions, and we have historical series, with fairly good coverage for unincorporated Valencia County and the municipalities of Belen and Los Lunas. In Socorro County, the only data we have readily available is data on the permits issued by the municipality of Socorro. In Sandoval County, the permit data is limited to that provided by the City of Rio Rancho. The gaps could be filled by using data from the NM Construction Industries Division (CID), which handles non-issuing areas. Unfortunately, even where we have data from issuing jurisdictions, we only have aggregate information. The CID data would need to be geocoded.

Fortunately, in terms of replicating the analysis, at least Sandoval and Valencia Counties are covered by the MRCOG data. Thus it should be possible to get historical data and projections for DASZs. The question is whether there is a set of DASZs that roughly corresponds to the geography of the net new floodplain.

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Appendix A: MRCOG Forecast

Estimates and projections of land development for sub-county geography are available from the Mid-Region Council of Governments (MRCOG). MRCOG forecasts socio-economic variables for Bernalillo, Sandoval, Torrance, Valencia, and Southern Santa Fe County to help local governments plan for future transportation needs, in planning, and in land use evaluation. MRCOG reports the variables in Data Analysis Sub Zones (DASZs). There are 648 DASZs in Bernalillo County compared to 141 United States Census Tracts, so on average, DASZs are smaller than tracts in Bernalillo County and offer finer socio-economic variable estimates.

MRCOG DASZs were overlaid onto the study area.31 Parcels were split when zone boundaries did not coincide with parcel boundaries. The parcels and parcel pieces were assigned the overlaid zones.

MRCOG’s latest forecast was prepared in 2004 for the period ending in 2030. Their databases, however, have been updated through 2008.

The population, single family housing units, and employment in the study area were expected to grow slower than the population, single family housing units, and employment in Bernalillo County according to MRCOG. MRCOG projects the population, single family housing units, and employment in the study area will grow 4% (from 25,767 to 26,849), 11% (from 9,059 to 10,055), and 15% (from 6,285 to 7,228), respectively, from 2004 to 2030. MRCOG projects the population, single family housing units, and employment in Bernalillo County will grow 26% (from 602,413 to 759,000), 32% (from 192,725 to 254,465) and 32% (from 347,831 to 458,505), respectively, during the same period. Table A.1 displays MRCOG’s population, single family housing units, and employment estimates and projections for the net new floodplain and Bernalillo County for 2004 and 2030.

31 However, DASZ id 4211 intersected the net new floodplain but was discarded because it was large (23,056 acres) and contained substantial employment (Isleta Casino & Resort) that was not in the net new floodplain. DASZ id 4211 is located on the southern border of Bernalillo County on the east side of the Rio Grande River. MRCOG DASZs were grouped into the three areas (far north valley, north valley, and south valley) using United States Census PUMAs.

Table A.1 MRCOG Population, Single Family Housing Units, and Employment Estimates and Projections, 2004 and 2030

Population Single Family Units Employment Population Single Family Units Employment2004 25,767 9,059 6,285 602,413 192,725 347,8312030 26,849 10,055 7,228 759,000 254,465 458,5052004‐2030 0.04 0.11 0.15 0.26 0.32 0.32

Increase in Floodplain Bernalillo County

Source: The study area, Mid-Region Council of Governments, Apportioned Data Analysis Sub Zones, 2004, and 2030

The estimated and projected employment in the study area was further broken down by area and sector.32 BBER used the geography of Census Public Use Microdata Areas (PUMAS) and divided the DASZs into those within the Far North Valley; those in the North Valley Central Corridor and those in the South Valley. MRCOG estimates the North Valley contained the most employment in 2004, while the broadly defined service sector had the most employment with 11,684 jobs. MRCOG also projects the North Valley will have the most employment in 2030 and that the greatest job growth will be in the service sector.

32 MRCOG defines employment and housing unit types in Definition of Variables for DASZ Datasets as “Basic Employment: The sum of employment in the Standard Industrial Classification (SIC) categories of agriculture, mining, construction, manufacturing, transportation, communication, utilities, wholesale, and military. In addition, all non-retail employment on Kirtland Air Force Base is classified as Basic. Retail Employment: This includes all employment in the SIC category of retail which includes eating and drinking establishments. Service Employment: The sum of employment in the SIC categories of finance, insurance, real estate, services, and government. Military enlistment and service sector employment on Kirtland Air Force Base is classified as ‘Basic Employment’. Total Employment: This is a count of jobs located within the respective DASZs. Housing Unit Type (Single Family and Multi-family): Multi-family units include units that are in structures that contain 2 or more housing units. An attached structure, such as a townhouse, is not a multi-family unit if there are one or more walls from ground to roof separating it from adjoining structures. All units that are not classified as multi-family are counted as single family units in the DASZ dataset; these include single family detached, single family attached, manufactured homes, mobile homes, trailers, and any other housing units which might include campers or vans”.

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Appendix B: Land Available to Develop

The method used to derive the land available to develop consisted of three steps. The first step began with the study area and defined the affected parcels in the study area.33 The second step assigned zoning categories to the affected parcels, and the last step trimmed the list of affected parcels down to developable parcels.

Study Area BBER continued to use the net new floodplain as the study area. The first study identified the net new floodplain as the area not in the current floodplain (Flood Insurance Rate Map released in September 2008 by FEMA) that would be in the anticipated Rio Grande floodplain. Mussetter Engineering Inc. simulated the floodplain as if the levees along the Rio Grande River were not there and tracked the modeled spillage through adjacent areas in conjunction with surface elevation data. The anticipated floodplain contains 8,339 acres.

Affected Parcels There are 13,267 affected parcels in the study area, with a total area of 11,523 acres. A vast majority of these parcels are residential (10,690), comprising 43% of the area of the affected parcels in the study area (4,959 acres out of 11,523 acres).34 Table B.1 displays the count and area of affected parcels in the study area by property class.

Table B.1 Parcels Affected by the Net New Floodplain Commercial Residential Vacant Grand Total

Parcels 418 10,690 2,158 13,267Acres (US) of Affected Parcels 1,773 4,959 4,790 11,523Land Value $141,855,571 $506,871,247 $199,044,907 $847,771,725Agricultural Value $830,833 $17,787,731 $340,820 $18,959,384Improvement Value $246,371,200 $1,434,586,227 $8,357,656 $1,689,315,083Source: FEMA Flood Insurance Rate Map, September 2008, Mussetter Engineering Inc. preliminary Rio Grande Floodplain, and Bernalillo County Assessor 2009 TAX shapefile

The first study identified the study area as those intersected by the anticipated Rio Grande floodplain and not intersected by the current floodplain. Parcels were selected 33 The overall goal of the larger study is to estimate the fiscal and economic impacts of the impending levee non-accreditation. The impacts will be calculated based solely on the changes caused by the removal of accreditation and only costs associated with the net new floodplain are identified and estimated. 34 The Bernalillo County Assessor property classes do not necessarily have the same meaning as the City of Albuquerque / Bernalillo County Zoning Code categories.

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from the Bernalillo County Assessor’s 2009 TAX shapefile that intersected, but were not necessarily contained by, each floodplain. The lists of parcels intersected by each floodplain were compared and only parcels that were in the anticipated floodplain and not in the current floodplain constitute the study area.

Zoning The City of Albuquerque / Bernalillo County zoning was overlaid onto the study area. Parcels were split when zoning boundaries did not coincide with parcel boundaries. The parcels and parcel pieces were assigned the overlaid zoning.35 The main zoning categories assigned to the parcels were agricultural, residential, and commercial. Table B.2 displays the sub zoning categories and their corresponding main zoning categories.

Table B.2 City of Albuquerque / Bernalillo County Zoning Code Categories AgriculturalA-1 Rural Agricultural—1-Acre Minimum ZoneA-2 Rural Agricultural—2-Acre Minimum ZoneA-3ResidentialM-H Mobile Home & Single Family Residential ZoneR-1 Single Family Residential ZoneR-2 Apartment ZoneR-3 Apartment ZoneRA-1 Single Family Residentdial Agricultural ZoneRA-2 Single Family Residentdial Agricultural ZoneSU-1 Sector DevelopmentSU-2 Sector DevelopmentCommercialC-1 Neighborhood Commercial ZoneC-2 Community Commercial ZoneM-2 Heavy Manufacturing ZoneO-1 Office & Institutional ZoneSU-1 Sector DevelopmentSU-2 Sector DevelopmentSU-3 Sector DevelopmentVC Source: City of Albuquerque, Planning Department, Code Enforcement Division, A Zoning Code Overview for the General Public, 2009

The zoning code is intended to regulate land use. However, there is overlap between zone categories and types of land use. For example, under permissible use, some businesses are allowed to operate in residential zones, some residences are allowed in

35 Parcel and parcel pieces will be referred to as parcels throughout the current study.

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commercial and agricultural zones, and so forth.36 See A Zoning Code Overview for the General Public for a general guide of common retail, wholesale, and entertainment businesses allowed to operate in different zones. Also, conditional use allows a different land use than specified in the zoning code through a public hearing.37

The City of Albuquerque published an unofficial excerpt from the Comprehensive City Zoning Code, Article 14, Chapter 16 that describes the zoning codes.38 SU-1 Sector Development and SU-2 Sector Development were apportioned evenly to Residential and Commercial, as sector development plans allow sub-zones for large areas. Zoning code A-3 was assumed to be an agricultural zone. There was not a zoning code of ‘VC’ in the excerpt. The 3 acre parcel that was zoned ‘VC’ was classified by its Bernalillo County Assessor 2009 TAX database property class, which was ‘Commercial’.

Land Available to Develop Of the 11,523 acres of the study area, there are 1,947 acres of land available to develop. This includes all vacant parcels that are zoned for residential, commercial or agricultural use. It also includes parcels of three acres or more than have some buildings but which could be subdivided.

Government and quasi-government owned land was removed. Government land was identified in the 2009 Bernalillo County Assessor TAX database as having no taxable value, and we assumed government and quasi-government entities would use the land for purposes other than development.39

Also excluded were 5,033 acres of non-taxable parcels. The US Indian Service owned the most land of this group with 3,222 acres. The majority (3,167 acres) of US Indian Service affected parcels is located at the southern edge of Bernalillo County and straddles the Rio Grande. Table B.3 lists non-taxable affected parcels larger than 10 acres that were not included in the land available to develop in the study area.

36 The City of Albuquerque explains permissive uses as “... uses that are allowed as a right in that zone. Such uses are specifically identified in each zone” in A Zoning Code Overview for the General Public. 37 The City of Albuquerque explains conditional use as “A type of special exception, the uses that may be approved on an individual basis after a public hearing are identified in each zone category. In certain cases these uses have conditions that must be met for approval of the conditional use” in A Zoning Code Overview for the General Public. 38 City of Albuquerque, Planning Department, Code Enforcement Division, A Zoning Code Overview for the General Public, 2009 39 Government land was identified in the 2009 Bernalillo County Assessor TAX database as having no taxable value. The Constitution of the State of New Mexico states, in Article VIII, Taxation and Revenue, Section 3, that government is not liable to pay property taxes.

Table B.3 Non-taxable Affected Parcels OWNER AcresUS INDIAN SERVICE 3,222ISLETA PUEBLO GRANT 316CITY OF ALBUQUERQUE 240CITY OF ALBUQUERQUE % REAL ESTATE DEPT 154BOARD OF EDUCATION 145ISLETA PUEBLO 107ALBUQUERQUE BERNALILLO COUNTY WATER UTILITY AUTHORITY 74COUNTY OF BERNALILLO C/O COUNTY MANAGER 73CITY OF ALBUQUERQUE REAL ESTATE OFFICE 70BOSQUE SCHOOL 47CITY OF ALBUQUERQUE EL ENCANTO INC. (BUENO FOODS) 38CITY OF ALBUQUERQUE REAL ESTATE OFFICE PRK 31SANDIA INDIAN LAND 30LA LUZ LANDOWNERS ASSOCIATION 30COUNTY OF BERNALILLO 21ARCHDIOCESE OF SANTA FE CATHOLIC SERVICE BLDG 16SAGEBRUSH COMMUNITY CHURCH 16NEW MEXICO STATE HIGHWAY DEPT RITE AWAY BUREAU 15USIS 14VILLAGE OF LOS RANCHOS 12BERNALILLO COUNTY SHERRIF'S POSSEE 11All other non-taxable parcels less than 10 acres 351Grand Total 5,033 Source: Bernalillo County Assessor 2009 TAX database, and City of Albuquerque / Bernalillo County Zoning Code

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Appendix C: Proposed Subdivisions

Proposed Major Subdivisions Subdivisions are another development activity that is subject to the stricter development standards. The City and County both require three platting phases (sketch, preliminary, and final) in the major subdivision application and review process.40 BBER examined the City Board minutes from October 7, 2009 to March 31, 2010 and the County Review minutes from December 10, 2009 to March 25, 2010. All action items were pulled if the project location was in the northwest or southwest quadrant.41 Pulled action items were selected if the lot or parcel was located in the study area based on location descriptions.42 Only action items that pertained to sketch, preliminary, or final platting were kept and only the last action of a project was reported in its respective table.

There does not appear to be any major subdivisions proposed in the study area.43 Jack Cloud, Bernalillo County Planning Department Chairman, attributes the overall lack of proposed major subdivisions in the County to the recent run up in home construction followed by the collapse of the economy. A recent review of the City of Albuquerque Development Review Board and the Bernalillo County Development Review Authority minutes indicates a lack of platting activity. Of the scarce platting actions approved by the Board and Authority, none are major subdivisions.

Proposed Minor Subdivisions There are some proposed minor subdivisions in the study area. The City of Albuquerque received and accepted seven platting requests over the five month period in review. Minor subdivisions located within the City’s platting jurisdiction are allowed an abbreviated review process and only need final plat acceptance.44 Table C.1 lists recent City platting actions. The County received six platting requests and approved four over the four month period in review. Minor subdivisions located within the

40 Albuquerque Development Process Manual, Volume I – Procedure, Chapter 2 Subdivision, Subdivision Procedure (Standard) and Bernalillo County Code, Chapter 74 Subdivisions, Articles II, III, and IV. 41 The vast majority of the net new floodplain is located in the northwest and southwest quadrants. 42 Most location descriptions are vague and are given in terms of bounding streets so there could be some action items not included that should have been or some items included that shouldn’t have been. 43 The City of Albuquerque defines a major subdivision as the act of subdividing a lot that results in more than 10 lots or requires installation of significant infrastructure or results in a lot not fronting a street in Albuquerque Development Process Manual, Volume I – Procedure, Chapter 2 Subdivision, Subdivision Procedure (Standard). Bernalillo County defines a major subdivision as containing between 7 and 24 parcels any one of which is less than 10 acres or containing more than 25 parcels in Bernalillo County Code, Chapter 74 Subdivisions, Article I. General Provisions. 44 Albuquerque Development Process Manual, Volume I – Procedure, Chapter 2 Subdivision, Subdivision Procedure (Standard)

County’s platting jurisdiction are allowed a summary review procedure and only need sketch and final plat approval.45 Table C.2 lists recent County platting actions.

Table C.1 Select City of Albuquerque Development Review Board Platting Action Items, October 9, 2009 to March 31, 2010 Date Project # Location & Acreage Action

10/14/2009 1007814located on 2100 & 2104 SANVENITO PL NW BETWEEN RICE NW AND SAN FRANCISCO RD NW containing approximately 0.1842 acre(s). (H‐13)

THE SUBDIVISION DESIGN VARIANCE FROM MINIMUM DPM STANDARDS WAS APPROVED. THE PRELIMINARY/FINAL PLAT WAS APPROVED WITH FINAL SIGN OFF DELEGATED TO PLANNING TO ADD PUBLIC DRAINAGE EASMENT, TO CALL OUT PUBLIC WATERLINE EASMENT, AGIS DXF FILE AND TO RECORD.

10/28/2009 1007011located on ON COAL AVE SW BETWEEN 8TH ST SW & 9TH ST SW containing approximately 0.1629 acre(s). (K‐13)

THE PRELIMINARY/FINAL PLAT WAS APPROVED WITH FINAL SIGN OFF DELEGATED TO PLANNING FOR EXPIRATION OF APPEAL PERIOD FOR VARIANCE.

2/17/2010 1004613located on 819 MARQUEZ SW BETWEEN 8TH ST SW AND TINGLEY SW containing approximately 0.4458 acre(s). (K‐13)

[Deferred from 2/10/10] THE PRELIMINARY/FINAL PLAT WAS APPROVED WITH FINAL SIGN OFF DELEGATED TO TRANSPORTATION FOR EXHIBIT INDICATING CURB CUT AND RIGHT‐OR‐WAY AND TO PLANNING TO CLARIFY EASTERN MOST BUILDING LOCATIONS AND TO REVISE PLAT ACCORDINGLY.

2/17/2010 1008190located on 4712 CENTRAL AVE SW BETWEEN 47TH ST SW AND 48TH ST SW containing approximately 0.8464 acre(s). (K‐12)

THE PRELIMINARY/FINAL PLAT WAS APPROVED WITH FINAL SIGN OFF DELEGATED TO TRANSPORTATION FOR SIDEWALK RIGHT‐OFWAY OR PUBLIC EASEMENT.

3/24/2010 1008217located on CENTRAL AVE SW BETWEEN 46TH ST SW AND ATRISCO DR SW containing approximately 0.7787 acre(s). (K‐12)

THE PRELIMINARY/FINAL PLAT WAS APPROVED WITH FINAL SIGN OFF DELEGATED TO TRANSPORTATION TO RESOLVE JOINT ACCESS ON CENTRAL AVE, AND TO PLANNING TO VERIFY WALL LOCATION.

3/31/2010 1007303located on GUADALUPE TR NW BETWEEN MONTANO NW AND GRIEGOS NW containing approximately .705 acre(s). (F‐14)

MINOR PLATS, FINAL (MAJOR) PLATS, AMENDED PLATS AND PLANS

3/31/2010 1007871located on CANDELARIA RD NW between RIO GRANDE BLVD NW and CALLE SAN YSIDRO NW containing approximately 1.3379 acre(s). (G‐12)

CASES WHICH REQUIRE PUBLIC NOTIFICATION, MAJOR SUBDIVISIONS, VACATIONS, SIA EXTENSIONS AND SITE DEVELOPMENT PLANS

Source: City of Albuquerque Development Review Board minutes, October 7, 2009 to March 31, 2010

45 Bernalillo County Code, Chapter 74 Subdivisions, Article V Summary Review Procedure (Minor Subdivision) Type 3 (Five Lots or Less) or Type 5 Subdivisions

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Table C.2 Select Bernalillo County Development Review Authority Platting Action Items, December 10, 2009 to March 25, 2010 Date Project # Location & Acreage Action

3/11/2010 SRP‐20100019proposing to create a two (2) lot subdivision, of Tract 2 Vigil‐Gallegos Subdivision, Section 24, T10N, R2E, located on 1325 Gonzales Rd SW, zoned A‐1, containing 2.2181 acres±.

Request for Sketch Plat, FINAL PLAT MAY BE SUBMITTED UPON COMMENT/ISSUE RESOLUTION

3/11/2010 SRP‐90035

proposing to create a five (5) lot subdivision, of Tract A‐2, Lands of Luciano Garcia, Town of Alameda Grant, Section 10, T11N, R3E, located at 10116 Guadalupe Trail NW, zoned A‐1, containing 5.95 acres±.

Request for Final Plat, REQUIREMENTS FOR FINAL PLAT COMPLETION DUE MARCH 15, 2010.

3/11/2010 SRP‐90067

proposing to create a three (3) lot subdivision of Lot 4, Lands of Telesfor Sanchez, Tracts 54‐A‐1 and 53‐A, MRGCD Map No. 31, Section 31, T11N, R3E, located at 1631 Patrick Place NW, zoned R‐1, containing 1.17 acres±.

Request for Final Plat, REQUIREMENTS FOR FINAL PLAT COMPLETION DUE MARCH 15, 2010.

3/25/2010 SRP‐20100012proposing to create a two (2) lot subdivision of Lot 3A, Ranchos De Cordova, Section 10, T11N, R3E, located on 408 Paseo Del Bosque Dr NW, zoned A‐1, containing 2.01 acres±.

Request for Final Plat,REQUIREMENTS FOR FINAL PLAT COMPLETION DUE APRIL 12, 2010

3/25/2010 SRP‐20100020proposing to create a five (5) lot subdivision of Lot 14,Val Verde Tract Addition, Section 1, T9N, R2E, located on 1727 Val Verde Rd SW, zoned R‐1, containing 2.0707 acres±

Request for Sketch Plat, DEFERRED INDEFINITELY

3/25/2010 SRP‐20100024proposing to create a five (5) lot subdivision of Tracts 1, 2, 3, & 4, Filvera Subdivision, Section 35, T10N, R2E, located on 17 Atrisco SW, zoned R‐1 & A‐1 containing 3.0559 acres±

Request for Sketch Plat, NOT ACCEPTABLE FOR SKETCH PLAT

Source: Bernalillo County Development Review Authority minutes, December 10, 2009 to March 25, 2010

Appendix D: City of Albuquerque Flood Hazard Control Ordinance

Table D.1 City of Albuquerque Flood Hazard Control Ordinance Arranged by Flood Hazard Area and Development Activity

Area of special flood hazard Area of shallow flooding floodwaynew construction or substantial improvements

Anchoring. All new construction or substantial improvements shall be designed (or modified) and adequately anchored to prevent flotation, collapse or lateral movement of the structure resulting from hydrodynamic and hydrostatic loads, including the effects of buoyancy. (1) All new construction and substantial improvements shall be anchored to prevent flotation, collapse, or lateral movement of the structure.

Encroachment Prohibitions. Prohibit encroachments, including fill, new construction, substantial improvements, the storage of hazardous materials and other development. (B) Flood Hazard Reducers. If division (A) above is satisfied, all new construction and substantial improvements shall comply with all applicable flood hazard reduction provisions of §§ 14‐5‐1‐8 through 14‐5‐1‐11.

new construction or substantial improvements

Construction Materials and Methods. (1) All new construction and substantial improvements shall be constructed with materials and utility equipment resistant to flood damage. (2) All new construction and substantial improvements shall be constructed using methods and practices that minimize flood damage.

Utilities Utilities. (1) All new and replacement water supply systems shall be designed to minimize or eliminate infiltration of flood waters into the system; (2) New and replacement sanitary sewage systems shall be designed to minimize or eliminate infiltration of flood waters into the systems and discharge from the systems into flood waters; and (3) On‐site waste disposal systems shall be located to avoid impairment to them or contamination from them during flooding. (4) All new construction or substantial improvements shall be constructed with electrical, heating, plumbing, ventilation, and air conditioning equipment, and other service facilities that are designed and/or located so as to prevent water from entering or accumulating within the components during conditions of flooding.

Subdivision Subdivision Proposals. (1) All subdivision proposals shall be consistent with the need to minimize flood damage; (2) All subdivision proposals shall have public utilities and facilities such as sewer, gas, electrical, and water systems located and constructed to minimize flood damage; (3) All subdivision proposals shall have adequate drainage provided to reduce exposure to flood damage; and (4) Base flood elevation data shall be provided for subdivision proposals and other proposed development whenever the floodway/flood boundary maps indicate that the land in question is impacted by a special flood hazard area; the determination will be made or will be approved by the City Engineer.

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Table D.1, Continued

Area of special flood hazard Area of shallow flooding floodwaymanufactured home All mobile homes shall be anchored to resist flotation, collapse, or

lateral movement by providing over‐the‐top and frame ties to ground anchors. Special requirements shall be that: (a) Over‐the‐top ties be provided at each of the four corners of the mobile home, with two additional ties per side at intermediate locations, with mobile homes less than 50 feet long requiring one additional tie per side; (b) Frame ties be provided at each corner of the mobile home with five additional ties per side at intermediate points, with mobile homes less than 50 feet long requiring four additional ties per side; (c) All components of the anchoring system be capable of carrying a force of 4,800 pounds; and (d) Any additions to the mobile home be similarly anchored.

Mobile Home Placement. Prohibit the placement of any mobile homes, except in an existing mobile home park or existing mobile home subdivision.

Residential* Residential Construction. New construction and substantial improvement of any residential structure shall have the lowest floor (including basement) elevated to a minimum of one foot above the base flood elevation. A registered professional engineer or land surveyor shall submit a certification to the Floodplain Administrator [i.e., the Administrator] that the standard of this division as proposed in § 14‐1‐8 is satisfied.

All new construction and substantial improvements of residential structures have the lowest floor (including basement) elevated above the highest adjacent grade at least one foot higher than the depth number specified in feet on the community's FIRM (at least two feet if no depth number is specified).

Nonresidential* Nonresidential Construction. New construction and substantial improvement of any commercial, industrial or other nonresidential structure shall either have the lowest floor, including basement, elevated a minimum of one foot above the base flood elevation; or together with attendant utility and sanitary facilities, shall: (1) Be floodproofed so that below one foot above the base flood level the structure is watertight with walls substantially impermeable to the passage of water; (2) Have structural components capable of resisting hydrostatic and hydrodynamic loads and effects of buoyancy; and (3) Be certified by a professional engineer that the standards of this division (B) are satisfied. Such certifications shall be provided to the official [i.e., the Administrator] as set forth in § 14‐5‐1‐7(B)(3).

All new construction and substantial improvements of nonresidential structures must: (1) Have the lowest floor (including basement) elevated above the highest adjacent grade at least one foot higher than the depth number specified in feet on the community's FIRM (at least two feet if no depth number is specified); or (2) Together with attendant utilities and sanitary facilities be designed so that below the base flood level the structure is watertight with walls substantially impermeable to the passage of water and with structural components having the capability of resisting hydrostatic and hydrodynamic loads of effects of buoyancy.

Enclosures* Enclosures. New construction and substantial improvements, with fully enclosed areas below the lowest floor that are subject to flooding, shall be designed automatically to equalize hydrostatic flood forces on exterior walls by allowing for the entry and exit of floodwaters. Designs for meeting this requirement must either be certified by a registered professional engineer, or meet or exceed the following minimum criteria: (1) A minimum of two openings having a total net area of not less than one square inch for every square foot of enclosed area subject to flooding shall be provided. (2) The bottom of all openings shall be no higher than one foot above grade. (3) Openings may be equipped with screens, louvers, valves, or other coverings or devices provided that they permit the automatic entry and exit of floodwaters.

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Table D.1, Continued

Area of special flood hazard Area of shallow flooding floodwaymanufactured home* Manufactured Homes. (1) Require that all manufactured homes to

be placed within Zone A, shall be installed using methods and practices which minimize flood damage. For the purpose of this requirement, manufactured homes must be elevated and anchored to resist flotation, collapse, or lateral movement. Methods of anchoring may include, but are not limited to, use of over‐the‐top or frame ties to ground anchors. This requirement is in addition to applicable State and local anchoring requirements for resisting wind forces. (2) All manufactured homes shall be in compliance with division (A) of this section. (3) Require that all manufactured homes to be placed or substantially improved within Zones A1‐30, and AH on the community's FIRM be elevated on a permanent foundation such that the lowest floor of the manufactured home is a minimum of one foot above the base flood elevation; and be securely anchored to an adequately anchored foundation system in accordance with the provision of division (1) above.

Land not suitable for subdivision

No land shall be subdivided which is found to be unsuitable for subdividing by reason of flooding, ponding, poor drainage, adverse soil conditions, adverse geological formations, unsatisfactory topography, limitations of water quantity, and/or quality, lack of access or restrictions on accessibility, or other conditions likely to be harmful to the public health, safety, or general welfare, unless such unsuitable conditions are corrected or mitigated to the satisfaction of the city. In determining suitability the city shall take into consideration prior zoning actions and determinations of land use as decided by the appropriate zoning authority. The Development Review Board shall state any decision regarding unsuitability in writing and afford the subdivider an opportunity to present data regarding such unsuitability. Thereafter, the Development Review Board may affirm, modify or withdraw its determination regarding such unsuitability.

Certification A registered professional engineer shall submit a certification to the City Engineer that the standards proposed in § 14‐5‐1‐8(C) are satisfied.

Drainage Require within Zones AH and AO, adequate drainage paths around structures on slopes, to guide floodwaters around and away from proposed structures.

Source: City of Albuquerque Code of Ordinances, Chapter 14: Zoning, Planning, and Building, Article 5: Flood Hazard and Drainage Control, Part 1: Flood Hazard Control

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economic impacts of the anticipated non …

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