The Economics of Growth, , Sprawl and Land Use Decisions Jeffrey - - PowerPoint PPT Presentation

The Economics of Growth, , Sprawl and Land Use Decisions

Jeffrey H. Dorfman The University of Georgia The University of Georgia

8 2006, Jeffrey Dorfman

Other Resources

• To see similar slides to those printed here and

To see similar slides to those printed here and

• ther graphs, reports, and resources on the

economics of growth and land use you can use economics of growth and land use, you can use the web at: www.arches.uga.edu/~jdorfman/

• r

landuse.uga.edu

8 2006, Jeffrey Dorfman

g

Why Manage Growth? y g

• Some growth will come to your city or

Some growth will come to your city or county whether you want it or not.

• Some growth won’t come to your city or

h d county no matter what you do.

• Then there is a middle ground you can

impact

8 2006, Jeffrey Dorfman

p – This part will decide your fate

Economic Benefits of Farm and Forest Lands

• These lands produce valuable products for
• These lands produce valuable products for

consumers, generate jobs and tax revenues 1/6 f ll j b d t t d t i – 1/6 of all jobs and gross state product in GA

• These lands attract businesses and families
• These lands also provide a net surplus to local

8 2006, Jeffrey Dorfman

• These lands also provide a net surplus to local

government finances

Economic Benefits of Green Space

• Green spaces increase property values of

surrounding land

• Green and open spaces can provide

p p p environmental amenities for free

• If green spaces contribute to quality of life, you

attract people and jobs to community

8 2006, Jeffrey Dorfman

p p j y

Development by Type y y

M i d i i hi k h h

• Many counties and cities think that growth

and development mean an increasing tax base and better financial health for the local base and better financial health for the local government.

• Unfortunately a growing tax base is not

enough to guarantee financial health you enough to guarantee financial health, you must get revenue to grow faster than expenditures.

8 2006, Jeffrey Dorfman

expenditures.

Cost of Community Service y Studies

• A cost of community service study analyzes

the revenue collection and expenditure the revenue collection and expenditure burden by class of development

• Common categories are:

– residential – commercial/industrial

8 2006, Jeffrey Dorfman

– farmland/forestland/open space

Revenues to Cost by Land Use y

• Using results compiled by AFT, the national

Using results compiled by AFT, the national averages are:

– Residential: $0.87 – Commercial/Industrial: $3.45 – Farmland/Forestland/Open Space: $2.70 p p

• These figures are $’s of revenue for each $1

g

• f expenditures.

8 2006, Jeffrey Dorfman

Some Southeastern US Results

Revenue:Expenditure Ratios

$3.00 $3.50 Oconee $2.00 $2.50 Hall Thomas Carroll $1.00 $1.50 Carroll Jones Cherokee $0 00 $0.50 Union (NC) Leon (FL)

8 2006, Jeffrey Dorfman

$0.00 Resid. Comm. Farm/for.

Manufactured Housing

Dollars of Revenue per $1 of Service Cost

$1.00

Dollars of Revenue per $1 of Service Cost

$0 60 $0.80 Colquitt Grady $0.40 $0.60 Grady Hall Mitchell Thomas $0 00 $0.20 Thomas

8 2006, Jeffrey Dorfman

$0.00

Break-even Home Values

3 kids 2 kids 3 kids 1 kid 2 kids Jones Carroll Cherokee County 200 400 600 800 1000 1200 1000 $

8 2006, Jeffrey Dorfman

1000 $

Development Patterns

• Development patterns have an impact on the

Development patterns have an impact on the cost of service delivery: sprawl is expensive to service to service. Th h d d l d

• The same growth done more densely and

contiguously saves both money, farmland, d id i l i i and provides environmental amenities. – New Jersey, South Carolina, California

8 2006, Jeffrey Dorfman

studies

How to Change the Numbers g

• Cost of service goes down by 50% of land

Cost of service goes down by 50% of land savings (use half the land, save 25%).

• Avoid leapfrog development
• Avoid leapfrog development.
• Build where infrastructure already exists

(i fill i h h h i h) (infill is much cheaper than extensive growth).

• Multifamily is less expensive per unit until

density gets very high.

• Design so service costs are low.

8 2006, Jeffrey Dorfman

g

Possible Government Tools

• Zoning
• Standards
• Standards
• Impact fees

I ti (ti

• Incentives (time,

approval, differential fees) fees)

• TDRs

PDR

• PDRs
• Time

8 2006, Jeffrey Dorfman

• Infrastructure

Jobs, Commuting, and Home g

• 31% if workers in Rural South work in a

31% if workers in Rural South work in a different county than where they live.

• 52% of employment growth in metro areas

52% of employment growth in metro areas was from in-commuters.

• 27% of employment growth in rural areas

27% of employment growth in rural areas was from in-commuters.

• This means jobs may not equal housing

This means jobs may not equal housing growth, but also that housing can grow without new jobs.

8 2006, Jeffrey Dorfman

j

• Source for this slide is Mitch Renkow, NC State

Growth Patterns and Job Creation

• Sociologists are finding that today more and more

high skill workers are choosing where to live first, g g then finding jobs.

• Because businesses want high skill workers, they

follow these workers to places with good quality

• f life
• f life.
• If you attract good workers, good jobs follow.

8 2006, Jeffrey Dorfman

If you attract good workers, good jobs follow.

Balanced Growth a Must

• The real conclusion is
• Local governments must ensure

balanced growth, as sprawling balanced growth, as sprawling residential growth is a certain ticket to fiscal ruin*.

* Or at least big tax increases.

8 2006, Jeffrey Dorfman