Annexation and Suburban Development March 24, 2016

Annexation Defined Annexation is the authority of a city to increase its geographic size by extending its boundaries to take in adjacent unincorporated areas. Only unincorporated area can be annexed. Incorporated municipalities can only be annexed with the permission of the municipality. NOTE: Cities can only annex adjacent property.

Cities Within a City West University Place, Bellaire, and the Villages are all incorporated municipalities completely surrounded by Houston. Because they are their own cities, they cannot be annexed by Houston.

Tax Shelters for the Rich Property tax rates Houston Hunters Creek Bellaire West U Piney Point Village Taylor Lake Village A MacMansion owner in West U pays a much lower property tax rate than the owner of a modest home in Sharpstown.

Urban Population Change What do the data in the graph show? Why do middle- and upper- income people move from the inner-city to the suburbs? Would you expect this to be a healthy or unhealthy development for the urban core?

Economic Segregation in Harris County Explain the data presented in this map. Is this situation healthy for city government? Why or why not?

Reason for Annexation # 1 Cities annex to expand their tax bases. When middle- and upper-income residents move to the suburbs, they leave behind low-income people who need services. Cities annex suburban communities to ensure they have the tax revenue necessary to provide services to all of their residents.

Houston Annexation History Houston expanded to encompass more and more of the middle- and upper-income suburbs.

Reasons for Annexation # 2 Cities annex to keep from being encircled by other cities which would prevent them from expanding in the future. For example, Houston has completely surrounded Katy. In the future, Houston could expand beyond Katy, but Katy is locked in place. Map of Katy

Reasons for Annexation # 3 Cities annex to add population. More people means more sales tax revenue, more federal aid, and more representation in the legislature and Congress. Where is future population growth expected to occur— in the inner city or the suburban areas?

Reasons for Annexation # 4 Cities annex for political reasons. For decades, Houston political leaders annexed to maintain a majority of white conservative voters in the city. For nearly 20 years, Houston city administrations have avoided annexing populated areas because they did not want to add conservative voters to the city’s electorate. “When white folks move away, we just reach out and get them again.” Mayor Louie Welch,

Rules of Annexation State law permits a city to expand its total land area by as much as 10 percent in any one year. A city that does not annex its full allotment in a year may carry the remaining amount forward to be used in later years, as long as the city does not increase its geographic size by more than 30 percent in any one year.

Low-income subdivision If you were a member of council, would you vote to annex a low- income subdivision in need of improvements? The residents want to be annexed in hopes of better streets, etc. No. The area will cost the city more in services than it will provide in tax revenue.

Shopping Center Would you vote to annex an upscale shopping center with no resident population? Yes. It produces sales tax and property tax revenue, requires relatively few services, and makes no voters mad. Will city residents have more shopping opportunities because of the annexation? Of course not!

Upscale Subdivision Would you vote to annex an upscale subdivision? The area needs no major repairs, but the residents are against annexation. This is a close call. The annexed area is a financial windfall for the city, but do you want to add a bunch of people who will vote against you in future elections?

Pace of Annexation Historically, Texas cities annexed aggressively, but recently the pace has slowed. The population growth rate has been driven not just by natural increase and immigration but also by annexation. What technological development had the greatest impact on Houston growth? AC

Slower pace Annexation has slowed because of political backlash and state laws that make annexation more difficult. Suburban interests have more influence with the Republican legislature than do Democratic mayors in large cities.

New rules Cities must adopt annexation plan Cities cannot annex areas described in the plan for three years Cities must provide a broad range of services immediately

Strategic partnership agreements (SAPs) Cities may negotiate Strategic Partnership Agreements (SPAs) with subdivisions to provide for limited- purpose annexation that trades sales taxes for some services.

Extraterritoriality The authority of a city to require conformity with city ordinances and regulations affecting streets, parks, alleys, utility easements, sanitary sewers, and the like in a ring of land extending from one half to five miles beyond the city-limits line called an ETJ. The idea is to ensure that development near the city conforms to city standards when it is annexed. What is the theory behind extraterritoriality?

Strip Annexation The city of Houston has used strip annexation to place most of the unincorporated area in the region within its ETJ. This prevents the formation of new cities and ensures that development conforms to Houston standards.

What You Have Learned What is municipal annexation? Why do cities annex? What procedures must cities follow to annex adjacent areas? Why has the pace of annexation slowed? What are SAPs? What is extraterritoriality? What is strip annexation?