Thinking differently about development.

• Author: Minicozzi, Joe

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Communities often experience some level of disconnect between economic development policy and ensuring sufficient tax revenue to cover the cost of the services the government provides. Suburban projects tend to be favored over denser downtown development, but data from more than 30 jurisdictions across 10 states' show that a municipality receives a greater level of revenue from its denser and more walkable urban patterns than its suburban pattern of development. Considering this information provides local government officials with an opportunity to consider development from a different angle.

The studies this article is based on cover municipal revenues per acre across states from California to Maine and Montana to Florida, including wealthy cities such as Mountain View, California, and less affluent towns such as Driggs, Idaho, and Dunn, North Carolina. The data consistently confirm that mixed-use, dense development produces greater revenues per acre than low-density patterns. In most cases, the proportion of revenue growth is exponential, not proportional, based on density increases. The "per acre" measurement is important; it is similar to judging the efficiency of a car in a "per gallon" basis. Both land and gasoline are finite resources, and comparing the consumption of the resource can be the easiest way to understand the efficiency of the product. This is especially true when annexation is difficult or impossible, limiting the amount of land available.

Exhibit 1: Costs Associated with Land Development Patterns [ILLUSTRATION OMITTED] This map shows a notable lack of consistency of land valuation on a per-acre basis. The mall property (A) is double the value of the parcels across the street (B). There are also notable outliers in the residential neighborhoods. CASE STUDY: SARASOTA COUNTY

Consider the example of Sarasota County, Florida (see "The Missing Metric," in this issue of Government Finance Review), which asked the following question: Can properties and cash-flow be isolated, geospatially, as revenue model? The state of Florida hired a consultant to assess the cost of public facilities for residential properties to help demonstrate the costs associated with spreading out land development patterns (see Exhibit 1). (5) Using this report, an apples-to-apples comparison was made between a suburban multi-family unit and a multifamily unit located downtown (see Exhibit 2).

Assuming a finite limit to the downtown...