As we travel the country, there are few things better than witnessing an elected official have an “a-ha” moment and realize that the conventional wisdom they’ve been handed down about growth and development perhaps wasn’t actually the best wisdom after all.
Fiscal Implications of Development Patterns
Earlier this year, Smart Growth America released a new model for analyzing the fiscal implications of development patterns. Since then we’ve analyzed development in Madison, WI, West Des Moines, IA, and Macon, GA.
For the latest installment, Smart Growth America teamed up with New Jersey Future to find out how much state, county and municipal governments in New Jersey could save on road maintenance bills by building in more compact ways.
The Fiscal Implications of Development Patterns: Roads in New Jersey analyzes population and employment density to understand just how much money could be saved if the distribution of New Jersey’s population and jobs could be made even incrementally more dense and compact.
Researchers at Smart Growth America and New Jersey Future took two distinct but related approaches to these questions. Smart Growth America partitioned the whole state into grid cells of equal size and then compiled data for each cell. Using U.S. Census data regarding population and employment, and the New Jersey Department of Transportation’s database of road segments, Smart Growth America’s researchers calculated the relationship between density and the road area per capita.
Actually, more than quadruple. It would generate 4.7 times the fiscal impact as development on the edge of town.
Back in April, we released a new model for analyzing the fiscal implications of development patterns. Since then we’ve analyzed development in Madison, WI and West Des Moines, IA.
Now, Macon, GA is the most recent city in which we’ve applied our model.
We looked at four scenarios of how Macon could grow over the next 20 years, and what each scenario would mean for the city’s finances. Our research found that development on the edge of town would generate about $165,000 for the city each year. The same development, if located downtown, would generate at least $428,000 per year for the city—and potentially as much as $788,000 per year if walkable places’ higher property values were factored in.
These results are similar to those from Madison and West Des Moines: building in compact, more walkable ways benefit a city’s bottom line. These strategies reduce the cost of infrastructure and services, while also generating more tax revenue per acre. The only question is, how much would your city gain with a smart growth approach?
In early April, Smart Growth America released a new model for analyzing the fiscal performance of urban development. The City of Madison, WI, was the first city to use the new model in their development planning.
Today we’re proud to release new analysis of development patterns in West Des Moines, IA. The new research examines four different strategies for West Des Moines’ growth over the next 20 years. Each scenario assumes the development of 9,275 housing units and 2.69 million square feet of commercial space, which is in keeping with West Des Moines’ current growth.
The four scenarios have different densities and a different mix of home types. A “base density” scenario approximates the average density of development in West Des Moines today; a “low density” and “higher density” scenario represent incrementally lower, and higher development densities, respectively, than the base. And a “walkable urban” scenario has the highest density of all scenarios considered and represents a more dramatic departure from the typical development pattern in West Des Moines (though does not propose any high-rise development).
The model calculates average annual public costs for each scenario. Our researchers subtract that from the average annual public revenues generated by each scenario. The result is the net fiscal impact of each type of development.
To what degree does the choice of development pattern impact costs for a local government? How do these decisions affect a municipality’s budget and tax revenues, and the cost of infrastructure and services it must provide?
The Fiscal Impact of Development Patterns, a new model from Smart Growth America and real estate advisors RCLCO, is designed to help municipalities answer these questions.
The new model was unveiled yesterday morning, and as part of the kickoff Chris Zimmerman, Smart Growth America’s Vice President for Economic Development, and Patrick Lynch, Smart Growth America’s Research Director, presented an overview of the new resource at an event in Madison, WI. The presentation was webcast live yesterday afternoon and a recorded version of their discussion is now available above or on YouTube.
The Fiscal Implications of Development Patterns, released today by Smart Growth America and real estate advisors RCLCO, is a new model for analyzing the fiscal performance of urban development.
It is designed to help towns, cities, and counties understand what financial returns their development currently generates—and what strategies could generate better returns in the future.
This new model is unique in that it is sensitive to both geography and density. We allow municipal costs per capita to vary based on these factors.
Smart Growth America will be presenting this new tool at a live event today at 2:00 PM EDT in Madison, WI. The event will also be live streamed on the web, and we invite you to watch.
Madison is the first city in the country to use our new model, and today’s event will also include a demonstration of how the model applies to Madison’s development specifically.
Smart Growth America is always working to help towns and cities better understand the impacts of their development choices. Our new model is the most recent in this line of work and we look forward to sharing it with you. Join us later today to learn all about the new resource.
P.S.—Want to conduct this analysis in your town, city, or county? Contact us to learn about our consulting services.