COST OF COMMUNITY SERVICES - RECENT FINDINGS
The consequences of increased development induced by transportation investments include added service delivery
costs to township, village, city and county governments.
Fiscal impact analysis of land use changes such as in the previous section has been widely used since the 1970's.
For example, the publication of the Fiscal Impact Handbook (1978) by Burchell and Listokins and its many updated
versions (now available on CD ROM) have made these analysis tools and techniques readily available to local
government decision-makers when addressing development and land use issues.
However, the awareness that alternative land use patterns have different fiscal impacts has evolved, beginning with
the famous study Costs of Sprawl (1974) prepared by the Real Estate Research Corporation (RERC) for the U.S.
Department of Housing and Urban Development. The study concluded that "sprawl" is the most expensive form of
residential development, especially for those costs which are to be borne by local governments.
In a follow-up RERC study in Wisconsin using three different growth scenarios (compact, high density
"containment"; "suburban expansion"; and "exurban dispersion"), there was another demonstration that dense,
non-leapfrog development will save significant moneys spent on community facilities.
In 1992, the Rutgers University Center for Urban Policy Research (CUPR) issued a report which calculated the
public costs that would accrue from the New Jersey growth management plan, compared to continuing the historical
patterns of sprawl. Conclusion: over a 20-year period, following the State plan could save $1.3 billion in road, water,
sewer and school facility costs. Not only would there be staggering financial benefits, but environmental and social
benefits as well: maintaining farmland and open space, reducing air and water pollution, protecting environmental
resources, and increasing social equity by enabling older urban centers to capture a greater share of future growth.
A similar study in Maryland found that the public costs of the "Vision" plan, when compared to the "Trend" plan,
reported that the costs per single-family unit were $4,104 and $9,141, respectively, or twice as expensive for the
sprawl scenario.
The Builders Association of the Twin Cities sponsored a study (1996) comparing different development scenarios
in terms of their aggregate local government infrastructure costs. The conclusion was that sprawl densities and small
amounts of land developed at "urban densities" contributed significantly increased infrastructure costs for local
governments. The cost variation between sprawl and the preferred scenario was $1.78 billion.
The Cost of Community Service (COCS) studies by the American Farmland Trust are the most widely known
examples of fiscal analysis studies related to land use and development. Of the eight initial COSC studies in four
states, the results were that for every dollar in tax revenue paid by farmland and open space, the cost of municipal
services averaged only thirty-five cents.
As fiscal impact studies accumulate, the results have been increasingly negative regarding the benefits of
development:
- Ladd (1990) evaluated 1978-85 data from 248 counties and found that counties with high rates of
growth and large increases in taxpaying new development had higher levels of public expenditure and higher tax rates
than slower growing communities.
- Landis (1991) found that in California, slow growth communities enjoyed greater revenue increases
over expenditures than faster growing, pro-growth cities.
- In DuPage County, Illinois, west of Chicago, where rapid growth occurred from the 1960's through
the 1980's, including commercial, office and industrial development, the results of a study attracted national attention
because it challenged the conventional wisdom about the benefits of commercial development. The tax levies in
communities that experienced above average growth were greater than in communities that were primarily
experiencing residential growth.
- In a soon-to-be released study sponsored by the USEPA, the costs of water and wastewater services
were analyzed for low and higher density communities in Greater Cleveland. The results clearly indicate that the
public bears higher costs when development is at the metropolitan fringe.
By 1997, it has become evident that in most cases, new development, including non-residential development
previously thought to be net contributors to the cost of providing public services, have proven to be fiscally negative.
