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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


> In a message dated 10/27/1999 3:54:57 PM EST, jamullet@umich.edu writes:
>
> << If you haven't seen a study that looks at urban development, how can
you
> say anything about it with that much certainty? >>
> Perhaps you missed the word "generally" in my response.  Sorry if you
> interpreted it as gospel.

Ok, so you're asserting that it's "generally" true without a study to back
you up.  Same difference.

> <<Do you know of a study that says that commercial and industrial
facilities
> are a net gain?>>
> Only the cost of community services studies I referenced, which do
endeavor
> to account for road and infrastructure costs to the degree possible.
Those
> studies are for one fiscal year, however, and some costs of that nature
may
> not be on the screen during that period.  They also do not consider the
> impacts that commercial and industrial facilities cause, namely increased
> residential development.  In the short term, commercial/industrial is a
net
> gain in the taxes v. cost analysis, but increased residential development
> will eat up that surplus eventually.  Scio is a case in point; their
margins
> are getting smaller even taking out the school cost, for which they don't
> govern but do influence.

So again, you're asserting that while acknowledging that the studies you've
seen missed details, particularly the induced residential demand. Note that
the future and present environmental costs question you're leaving
unanswered.  What exactly does "to the degree possible" mean in terms of
cost of infrastructure calculations?

> Copies of the Scio COCS are available from WPLT for $10 at P.O. Box 186,
> Dexter, 48130.

I'll send a check.

Note, I'm not being a curmudgeon or disrespectful.  If you are right then
what is the point of Ann Arbor doing anything other than business
development?  If it's really true that urban residential development is
always, or usually, or in general a net drain on Ann Arbor's tax situation,
we (Ann Arborites) should try to change our zoning to not allow anymore.  If
that's true we should only allow commercial and industrial development.
Presumably that would also mean that if anyone wanted those jobs, they'd
have to find a house outside Ann Arbor and commute in.  I find the premise
very hard to believe, and no one here has so far presented anything except
assertions that really suggests that urban residential development is
always, has to be, or is usually a tax drain.

I'd assert the opposite, that residential development done within an
existing urban area can be a net tax gain for the municipality, but I'll
admit that I don't have a study (yet) that agrees.  My first corollary to
that is it is possible to build housing in urban areas (Ann Arbor in this
case) that both isn't subsidized and reduces demand for urban sprawl.  My
second corollary is that the assertions floating around that residential
development never, or "generally", or rarely pays its way, and business
development always, or generally, or usually does are flawed.  Worse than
flawed, they encourage the reasoning that we should avoid all residential
development within Ann Arbor, which I would assert would result in greater
sprawl.

So the challenge still stands.  Does anyone know of a study that indicates
that *urban* residential development in general is a tax drain, and that
business and commercial development is generally a tax benefit?

Ken Clark



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