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Re: SG-W:/ Tax cost of residential development

On Wed, 27 Oct 1999, Phil D'Anieri wrote:

> There was an excellent survey of the literature on this question (the
> costs of different kinds of development) prepared by the Office of
> Technology Assessment, a scientific research branch of the Congress.  
> The report can be found online at
> www.smartgrowth.org/library/TTRoMA.html.  I think this article goes
> into enough depth about the methodologies and content of the different
> studies that it might answer your question about urban residential vs.
> suburban residential development.

> Since new school capacity is frequently necessitated by new
> residential development, I expect it may be the case that even urban
> residential development "doesn't pay its own way".  Witness the
> current school crowding issue in the Ann Arbor schools.  In Michigan,
> most school operating funds now come from statewide taxes, rather than
> locally-collected property taxes, so we're somewhat insulated from
> this effect.  But while operating funds come from the state, funds for
> new buildings are still generated locally, so we would take a hit
> within Ann Arbor if new residential development proceeded to the point
> that new school buildings are required, which is apparently the case.

Phil makes a good point.  Schools are a big part of the public
infrastructure cost generated by development.  One extension of his
argument above is that if a particular project is likely to attract
residents with few children, then it is likely to be less of a tax drain
on the public.

For example, one and two bedroom units above downtown businesses are
probably "tax positive" unless they incur other major infrastructure costs
to the public.  Another would be senior citizen housing like that at the
former Campus Inn in downtown Ann Arbor.  Compare this to the *tremendous*
school-related costs imposed on all taxpayers by the hundred acre
McMansion subdivisions of 3 to 6 bedroom homes on the outskirts of town.
These kinds of developments also impose huge costs for water, sewer,
streets, fire and police services.  Other taxpayers subsidize these costs.
This is why "sprawl costs us all."  And of course, the environmental
damage of these sprawlscapes imposes another layer of major costs on the
rest of the community.


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