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



----- Original Message -----
From: <BLonik13@aol.com>
Subject: Re: SG-W:/ Tax cost of residential development


> The studies I have seen comparing costs of providing services to different
> land uses are all for exurban development, albeit some of that might be at
a
> higher density.  I've not seen any study that looks at urban development
per
> se, but generally speaking residential housing costs more than it pays in
> taxes due to the high service demand.  The opposite is true for commercial
> and industrial uses (and, tangentially, for farmland and open space) since
> those land uses pay a fair bit in taxes and don't require much in
services,
> primarily because they don't produce school-aged children.  That statement
> may be less true if taxes are really high and so are property values, such
as
> in Ann Arbor, and if the density is very high, say with multi-story
> buildings.  Regardless, commercial and industrial facilities are a net
gain
> and housing a net drain.

Interesting that you acknowledge that "that statement may be less true if
taxes are really high and so are property values... and if the density is
very high", but aren't willing to acknowledge in the same statement that
"residential housing costs more than it pays in taxes" could actually be
false in some circumstances.  If you haven't seen a study that looks at
urban development, how can you say anything about it with that much
certainty?

Do you know of a study that says that commercial and industrial facilities
are a net gain?  This is another blanket assertion I've heard that I've
never seen a study to back up.  Are road and other infrastructure costs
included in the calculations for commercial and industrial facilities?  Are
future and present environmental and redevelopment costs included in that
calculation?  Does that calculation include possible reduced property value
surrounding the commercial/industrial facility?  I'm sure the Detroit Edison
and Michcon Properties around Broadway bring in a good deal of tax revenue,
but their industrial nature brings the surrounding property value, prime
riverfront property no less, down considerably.  That's not considering the
possible future clean-up costs of those sites, either.  And they're
basically oversized parking lots, not real industrial facilities.

Finally, consider that the largest employer in Washtenaw County, with large
tracts of valuable property in downtown and northeastern Ann Arbor, pays not
one penny in property taxes.  You can argue that the University isn't a
commercial facility, but what about the University Hospitals?  They compete
with private sector facilities.

> Try having a look at the Rutgers/MSU/SEMCOG fiscal impact study published
a
> couple years ago.  There might be some info there, or at least references.

I'll request a copy, though I'll note that the title "Fiscal Impacts of
Alternative Land Development Patterns in Michigan: The Costs of Current
Development Versus Compact Growth", sounds like the same suburban vs. urban
development consideration that Phil's reference covered.

> Doug was probably referring to the infamous Potawatomi Land Trust cost of
> community services study of Scio Township, which indicated residential
land
> costs $1.40 in services per dollar of tax paid.  The deciding factor was
> school building and operation.  The land trust is now doing a study in Ann
> Arbor Township comparing the future cost of development v. the cost of
land
> preservation.  So far it looks like preservation is cheaper.  More to come
on
> that.

Yes, but as pointed out in the other study, there is little or no existing
infrastructure to take advantage of in that case.  Scio Township is also not
known for high-density development.  I'd like to get a copy of that study as
well, which I expect will start with the assumption "given the current level
of residential development density".

Ken



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