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

It is an extensive survey, and clearly indicates that residential
development in "Outer Suburbs and Exurbs" (as the report is entitled) have
much higher costs for development than are compensated by that development.
However, while the report compares suburban and urban development in a few
places, demonstrating how much higher the costs are for suburban
development, it doesn't seem to go so far as to decide whether urban
residential development is subsidised.  It also very clearly points out that
suburbs are subsidized by adjacent cities.

As to new school capacity, there are certainly infrastructure costs
associated with any new development.  Commercial development generates many
new costs as well.  The question is whether the marginal costs of new urban
residential development are offset by the marginal increase in tax revenues
associated with that development.  Consider that there has been little or no
increase in population in Ann Arbor, according to the last census, yet there
has been an marked increase in school populations.  Your argument suggests
that the increase in school enrollment is due to increased residential
development, but that clearly is only part of the picture.  The biggest
factors in the growth of the Ann Arbor schools population are suburban
development in townships that are within the AA School District and the baby
boom echo.   Neither of these are due to urban residential development.

Ken Clark

----- Original Message -----
From: Phil D'Anieri <PDAnieri@senate.state.mi.us>
Subject: Re: SG-W:/ Tax cost of residential development

> 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.

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