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SG-W:/ Tax cost of residential development

Congratulations to Doug on a great job this morning on WEMU.  This despite
being GRILLED by David Fair.  A far worse grilling than I would expect even
from the News.

I have a question, though.  Doug mentioned, and it also came up at a recent
AA Democrats meeting, that there are studies that show that residential
development doesn't result in as much tax revenue as it costs.  Dick Corpron
of the Ann Arbor Planning Commission mentioned a study that he was involved
in that concluded that business development pays its own way, but
residential development does not.

I have seen studies of *suburban* residential development that says this.
That is, suburban residential development doesn't produce as much in taxes
as are needed for infrastructure and services increases necessary to support
it as compared to other land uses.  I have not seen studies that say that
*urban* residential development is also subsidized.

This is an important question.  If there are non-flawed studies that say
that urban residential development doesn't pay for itself, than developers
would be right to say that Ann Arbor should concentrate on office
development and become a commuter mecca, even if it means tearing down
existing neighborhoods to build more office development.  I suspect that
there is no study saying that urban residential development is a drain on
tax coffers, or any study saying that is seriously flawed.  Flaws could
include: assuming large infrastructure increases are needed in an urban
area, accounting only for single-family detached housing, ignoring any
social costs/benefits.

I would like to be sure that when people talk about urban residential
development being a drain on taxes, we're careful that the studies cited
actually apply and are truly relevant to the discussion.  I'm very worried
that claims that urban residential development, like suburban residential
development, are subsidised is not correct, and making them is actually
playing into the hands of developers.

So, does anyone know of a study saying that *urban* residential development
doesn't pay its own way?

Ken Clark

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