The Fiscal Implications of Development Patterns: Overview

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April 2015

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The Fiscal Implications of Development Patterns: Overview

Every town, city, and county makes decisions about how to grow and what kind of development to build. These decisions shape entire neighborhoods and form the foundation of communities as we know them. These decisions can also have enormous implications for a municipality’s finances.

Over the past 40 years research has shown that low-density, unconnected, development is more costly to the public sector than compact, urban development. Every municipality considering new development should understand the financial implications of these options. How much will it cost to support that new development in coming years? Would the development bring more net revenue if designed differently? These are potentially multi-million dollar questions that no municipality can afford to ignore.

Smart Growth America, a national non-profit, and RCLCO, a national real estate advisory firm, have created a new model designed to help municipalities understand the financial performance of development patterns, and what strategies could generate better returns in the future. We look at a variety of public costs and revenues to help municipal leaders understand how a smart growth approach to development could help improve their bottom line