developing for fiscal, economic and social health

Developing for Fiscal, Economic and Social Health

We’re a little confused

Richard Drudl

Photo: Michael TobisUniversity of Chicago

Things we do to increase tax base are often a bad deal

Road serving a low-density neighborhood

• Rural, dead-end road• Serves a subdivision of

5-acre lots• Half of cost is assessed

to property owners, other half is paid for by city

Payback: 37 years

Based on taxes being paid by the property owners

• Not including additional maintenance and potential reconstruction

Case study by www.strongtowns.org

Road serving a set of high-value, shoreline properties

• Property owners want city to improve their access road and have maintenance taken over by the public

• Road serves the properties only

• Proposal: property owners will cover construction costs if city takes over maintenance

• Is this a good deal?Long term-maintenance cost (1 life cycle): $154,000

Long-term revenue collected by city for maintenance: $79,000

Case study by www.strongtowns.org

To cover these costs within the road’s life cycle, the local tax rate would need to go up 25% with 3% annual increase for next 25 years.

A sewer system for a small municipality

• Small city had sanitary sewer system built with federal government support in 1960s

• It has now deteriorated to the point where it needs to be completely replaced.

Cost to replace the system: $3.3MCost per household: $27,000City’s median household income: $27,000

Case study by www.strongtowns.org

Public health is now threatened by the deterioration of the sewer system. This city is now in a position where it cannot maintain basic infrastructure.

The chickens are coming home to roost

Low Density Development

Case study by www.strongtowns.org

Using Peter’s money to pay Paul

by www.strongtowns.org

We don’t fix the infrastructure

SMART GROWTH BENEFITS PUBLIC BUDGETS

Lower infrastructure costs

Growth scenarios in 14 regions found that more compact development almost universally resulted in infrastructure cost savings.

In some cases, these strategies would cut costs in half.

Rhode Island:Smart Growth Saves Money on Infrastructure and Schools

Sprawl Core Growth Net Cost of Sprawl

Local Roads $182,000,000(228 miles new roads)

$104,000,000(130 miles new roads)

$78,000,000

Schools $123,000,000(new construction)

$92,000,000(new construction and expansion)

$31,000,000

Utilities (water, sewer, gas, phone, electricity lines)

$306,000,000(306 miles new line)

$173,000,000(172 miles new line)

$133,000,000

Total: $611,000,000 $369,000,000 $242,000,000 Net savings of 40% over 30 years.

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Rhode Island:Smart Growth Saves Money on Operations

Estimated Operations and Maintenance Savings

Local Roads: $14 million (43%)

Schools: $19 million (24%)

Pupil Transport: $6 million (15%)

Public Sewer: $142 million (43%)

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SMART GROWTH BENEFITS PUBLIC BUDGETS: LOWER COSTS

Lower infrastructure costs

Building infrastructure to serve new development on the fringe can cost the city up to three times more per acre than urban infill development.

Things we won’t do to increase tax base are often actually a good deal

SMART GROWTH BENEFITS PUBLIC BUDGETS: HIGHER REVENUES

Higher revenues per acre

Multifamily housing in near an area’s center can generate nine times more revenue per acre than traditional large-lot, single-family housing on the fringe.

Sarasota County, FL Fiscal Impact Case Study

A Comparison of Tax Revenue per Acre Generated by Different Uses and Densities

Source: Public Interest Projects, Inc., J. Patrick Whalen and Joseph Minicozzi, AICP.

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Sarasota County: Mixed-use Downtown Earns 35 Times More per Acre than the Suburban Mall.

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Sarasota County: Smart Growth Means Much Less Land Yields Much More Revenue

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Sarasota County: Examples of Tax Yields per Acre

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Sarasota County: Smart Growth Offers Higher Return on Infrastructure Investments

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Sarasota County: Smart Growth Pays For Itself 14 Times Faster

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Sarasota County: Smart Growth Benefits Apply to Low-rise Mixed-use, Too.

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Smart Growth Benefits Public Budgets: Higher Revenues

Case Study: Central Falls, RIHistoric Preservation Increases Municipal Tax Bases

Elizabeth Webbing

Smart Growth Benefits Public Budgets: Higher Revenues

Case Study: Pawtucket, RIHistoric Preservation Increases Municipal Tax Bases

Riverfront Lofts

Cleveland: Same Population

1950: 1,389,582 2002: 1,393,978

Cuyahoga Co Land Use Maps – Cuyahoga Co Planning Commission30

Source: TTI 1982 2007

% peak VMT congested 10 28

% of land miles w/ congestion 10 23

Number of rush hours 3 5

Freeway and arterial miles 2420 4490

SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Case study: Arlington County, VA

Between 1970 and 2000, Arlington County added 15 million square feet of office and 15,000 units of housing on two square miles along its Metro rail corridor.

These investments now generate 33% of the county’s real estate tax revenue - on just 7.6% of its land.

Arlington residents make 58,000 trips each day on Metro, with 47% of residents along the corridor using transit to get to work.

Average daily car traffic along the corridor has fallen, down from 19,785 cars per day in 1990 to 18,873 in 2000.

SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Advocating Smart Growth Policy in RI

SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Advocating Smart Growth Policy in RI

• Reinstate State Historic Tax Credit

• Properly fund and enhance the state’s mass transit system

• Give municipalities ability & incentive to invest in their infrastructure

Develop an Aggressive Asset-Based Economic Development Strategy

SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Advocating Smart Growth Policy in RI

SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Advocating Smart Growth Policy in RI

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SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Advocating Smart Growth Policy in RI

SMART GROWTH BENEFITS PUBLIC BUDGETS: COST VS. REVENUES

Advocating Smart Growth Policy in RI

The economy: you can attract it, and you can grow it

Attracting new residents

LOCATION AND FORM MATTER: WHO MOVES THERE

Young professionals

64% of college-educated 25- to 34-year-olds looked for a job after they chose the city where they wanted to live.

- U.S. Census

Attracting new residents

LOCATION AND FORM MATTER: WHO MOVES THERE

Three qualities attach people to a place:

• Social offerings: entertainment and places to meet;

• How welcoming a place is;

• Physical beauty and green spaces.

Gallup poll of 43,000 people in 26 communities

Attracting new residents

LOCATION AND FORM MATTER: WHO MOVES THERE

Talented workers

Oklahoma City

LOCATION AND FORM MATTER: WHO MOVES THERE

Had the best incentives but lost the firm

Embarked on major program including: entertainment district, ball park, waterfront improvements

Mayor believes jobs will move to where people want to live

Smart Growth Draws Businesses

• Blockbuster Entertainment• Dallas Transit a major factor in locating in central

business district near Akard Station• Brought 1,000 employees downtown.

• Software company Fast Enterprises • Chose Denver over 36 other cities.• Sought location near transit stop with coffee

shops and restaurants nearby. • Began hiring software engineers at an average

salary of $82,000.

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Case Study: Lodi, CA

Walkability Attracts and Sustains Small Business• Town of 60,000 launched $4.5M pedestrian-

oriented project • Sidewalks widened, intersection curb bulb-

outs, street trees, lighting, benches

• Helped attract 60 new businesses, decrease vacancy rate from 18% to 6% and increase downtown sales tax revenue 30%

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Main Street USA, Disneyworld

Burlington, Vermont

235 Promenade Street, #550Providence, RI 02908401.273.5711, Ext. 5

jflaherty@growsmartri.com