Pollution Free Cities: Sprawl and Property Taxes

Tuesday, January 18, 2011

Sprawl and Property Taxes

Sarasota's Smart Growth Dividend- Doing the numbers proves that compact, centrally located, mixed use development yields the most property taxes (APA Planning Books, Dec. 2010)

From the heartland of where many think of by the term “sprawl”, Florida, comes a very interesting analysis comparing the tax revenues from suburban sprawl and box stores to the more intensifed urban form. Credit goes to Richard Risemberg for his Dec. 22 post to the Car Free Cities blog “Sprawl vs. Urban: which costs the taxpayer more?”. To the surprise of none of the urbanists who live and complain. The big advantage from a tax revenue perspective (for the municipality) and to more civilized and pollution-free living perspective (for the residents) is the urban form. A complementary analysis of costs showed the same conclusion. It is not difficult to extrapolate these results to other suburban areas of the USA and Canada to favour mixed use to optimize both types of housing/building.

Key Quotes:

“Responding to state growth management policies and seeking to discourage future sprawl, county officials enacted an urban services boundary in 1997. Its purpose was to channel future growth into areas where the county was planning to provide urban services and infrastructure”

“a "revenue profile" that compared tax revenues generated by a range of building types in different locations around the city.. calculated on a per acre basis rather than the more typical per lot, per unit, or per household basis … clearly showed a much greater return from some types of development — mostly close-in, mixed use properties, both old and new — over more conventional, single-use suburban offerings”

“the amount of county property tax paid by the owners of each of the profiled properties (information that is readily obtainable from the local tax assessor). The taxes are then divided into the land area occupied by each property to obtain a tax per acre figure. The complete revenue profile thus provides an apples-to-apples comparison of the property tax yield for each development type”

“ the biggest public costs will be lower in downtown areas. Funding public schools is generally cheaper there because, in most U.S. regions, families with children tend to live in more suburban areas. Among families who do live downtown, many will opt to place their children in private schools. Water use, too, is likely to be lower in more urban areas because yards are relatively small if they exist at all”

“we found that 3.4 acres of mixed use downtown development yielded 8.3 times more annual county property taxes than a suburban 30.6-acre, 357-unit garden-style apartment project.”

“compact mixed use developments in urbanized areas generate property tax revenue at a much higher rate than do single-use developments in more suburban locations”