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An Opportunity To Reflect |
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Written by Paul Lumia, Executive Director North Branch Land Trust
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Wednesday, 16 September 2009 15:11 |
 Many communities in our region have experienced rapid growth over the last few decades, and now, with the current economic slowdown, we can reflect on this growth and investigate the positive and negative attributes that it has brought to our communities. It is also an opportune time to think: what changes might we want to make going forward, what might we want to do differently with respect to future community development, what amenities would we like to see, and what negative traits would we like to work on changing? To make an informed decision about our direction going forward, it is important to understand the basics behind the cost of development.
The increase in the housing stock (residential developments) and related infrastructure improvements including new roads, sewers, and related utilities in our rural communities is an indicator of accelerated land-use growth even when population growth is stagnant or slow. This brings with it the need for additional community services such as police, fire, ambulance, and of course school improvements. At first glance it might seem that this growth would be a financial windfall for the municipalities concerned, as their tax base blossoms with the completion and sale of every new residential construction project. Unfortunately, an analysis of this type of growth reveals that this is not necessarily the case, and that often municipalities and school districts are left with substantial financial shortfalls in their efforts to maintain infrastructure and services. The tax base for many growing communities does in fact expand as the built environment expands and residents settle into their new communities. These new tax dollars are quickly put to work and are ultimately found to be inadequate for the needs of the community. The reason for this lies in the fact that many forms of residential development require more services and related expenses (schools, roads, police, fire, ambulance, etc.) than the tax revenues can support.
Following the accepted standards and practices included in the Development Impact Assessment Handbook (Burchell, Listokin, Dolphin, et al.) published by the Urban Land Institute in 1997, a fiscal impact evaluation was submitted for the development of 168 single-family homes on a 157-acre site. The analysis revealed that the estimated annual net cost for this subdivision would be $32,038 to the county government and $65,352 to the township, while the school district would realize an annual deficit of $686,586. Using similar standards, a 2002 Cost of Community Services study in Bucks County, Pennsylvania, revealed that development of 32 single-family homes and 74 townhomes on 32 acres would result in an $834,651 annual deficit to the local school district. If we dig a little deeper into these numbers some interesting results come to light.
In 2002 a study was conducted in south-central Pennsylvania to investigate the fiscal effectiveness of municipal governance. The study was funded by the York Foundation with assistance from the American Farmland Trust, and examined the revenues and expenditures of York County, selected townships, and the related school districts. The study revealed that land used for residential development cost about $1.27 for every dollar of revenue generated, while farmland and open space cost between $0.17 and $0.59 for every dollar of revenue generated. A second study conducted by the Penn State Cooperative Extension over a period of about 15 years on revenues and expenditures of 20 Pennsylvania communities showed that residential development cost communities more for municipal and school district services than did farms, open space, and commercial and industrial land uses. In fact, farms and open space provided a net fiscal gain to communities while residential development proved to be a net fiscal loser.
With this information in hand, and given the current economic slowdown, we have an opportunity to regroup and begin to think anew about the cost of future development and the mix of the different types of development we would like to see in our communities. One of our major obstacles will be to overcome our desire to spread out, build new and abandon our older urban and suburban communities even when our population growth is stagnant or declining. This practice has an adverse impact on our ever-shrinking agricultural lands, has proven to be a fiscal loser for counties, municipalities and school districts, and has contributed to the loss of critical wildlife habitat and green space. The challenge for us will be to come up with the right mix and location of future growth while maintaining or improving upon the amenities and wonderful natural resources we have come to cherish in our region.
“As our communities grow, we need to consider all the costs of future development.” |
