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Re: SG-W:/ Tax cost of residential development
On Wed, 27 Oct 1999, Jodi Mullet & Ken Clark wrote:
> 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.
Fair was, well, fair. With no opponent of the Parkland Acquisition
Proposal on the show, he felt obliged to take the role of critic. I knew
this was coming, so there was no ambush. My initial awkwardness was due to
The News has now become the primary opponent of the Proposal. They have
attacked it 8 times in the editorial column. This is a remarkable number,
perhaps a record. Their Parks editorials are classics of distortion and
bias. Curiously, their Editors would not meet with Parkland Acquisition
Proposal organizers in advance of their recent piece formally opposing us.
In my experience and that of others, this is unprecedented. They have
always given both sides of ballot issues at least a chance to pitch their
ideas to the editorial board, even when their well-known biases are not
likely to be changed a bit. As a monoploy newspaper, they should at least
go through the motions of concern for diverse views and their role in the
community. I guess parkland acquisition is just so deeply offensive to
them that fair process goes by the wayside.
The News feature stories are somewhat less biased - though the one today
is a remarkable spin exercise. The Chamber of Commerce voted to be
neutral on the Proposal. This is a rare case where they fail to oppose a
tax increase. Their neutrality occured because quite a few prominent
players in the local business community strongly support the Proposal as
good for both citizens and businesses (they are listed as endorsers in our
literature). The News spun this into a story focusing on their "support"
for our opponents on several minor ancillary matters related to the future
of the parks system.
> 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.
Several studies from around the country, including one done here in Scio
Township, state that farms and businesses use less public service money
than they generate in taxes. New residences use more.
I think you are right to characterize these as suburban studies. The
costs and tax income from converting rural areas to residential are pretty
constant and therefore easy to study. The results are consistent wherever
Studies of urban residential construction are much less valid. Their
findings would be less generalizable because urban conditions are more
varied. For example, some urban projects (residential or other) may
impose massive costs for new public infrastructure (e.g., a new M14
interchange). Others may be virtually free in this regard because the
urban area has infrastructure "slack" to fill. The key is that
suburban/rural residential development almost always comes with a major
infrastructure tax bill. Urban projects must be judged one by one.
> 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.
I think the big issue is "what is good urban infill"? Developers have
latched on to this idea to justify building of all kinds anywhere remotely
near a city core. The real issues are 1) will a project abuse/exceed the
existing infrastructure and thus impose public financial costs? and 2)
will a project damage important natural areas and thus impose another kind
of public cost?
I judge each project on these criteria. This can be complex. But it
yields better understanding than simply accepting projects based on their
street address, as developers are now starting to suggest is reasonable.
> So, does anyone know of a study saying that *urban* residential development
> doesn't pay its own way?
> Ken Clark
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