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The Economics of Growth, Sprawl and Land Use Decisions

The Economics of Growth, Sprawl and Land Use Decisions. Jeffrey H. Dorfman The University of Georgia January 2004. Some very similar slides to those printed here can be seen on the web at: www.growthtools.uga.edu/resources/publications.htm

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The Economics of Growth, Sprawl and Land Use Decisions

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  1. The Economics of Growth, Sprawl and Land Use Decisions Jeffrey H. Dorfman The University of Georgia January 2004

  2. Some very similar slides to those printed here can be seen on the web at: www.growthtools.uga.edu/resources/publications.htm A report on several of the counties studied can be downloaded or read on the web at: www.forestry.uga.edu/warnell/pdf/cfb/EcCost.pdf Other Resources

  3. Some growth will come to your city or county whether you want it or not. Some growth won’t come to your city or county no matter what you do. Then there is a middle ground you can impact This part will decide your fate Why Manage Growth?

  4. These lands produce valuable products for consumers, generate jobs and tax revenues 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 government finances Economic Benefits of Farm and Forest Lands

  5. Green spaces increase property values of surrounding land Green and open spaces can provide environmental amenities for free If green spaces contribute to quality of life, you attract people and jobs to community Economic Benefits of Green Space

  6. Many counties and cities think that growth and development mean an increasingtaxbase and better financial health for the local government. Unfortunately a growing tax base is not enough to guarantee financial health, you must get revenue to grow faster than expenditures. Development by Type

  7. Development patterns have an impact on the cost of service delivery: sprawl is expensive to service. The same growth done more densely and contiguously saves both money, farmland, and provides environmental amenities. New Jersey, South Carolina, California studies Development Patterns

  8. Different categories of development provide different levels of local revenue and require different levels of local government services. To examine the impact of these differences in Georgia, I have conducted 9 cost of community service studies in Georgia. (Plus 1 in Florida) Average Service Costs by Land Use Type

  9. A cost of community service study analyzes the revenue collection and expenditure burden by class of development Common categories are: residential commercial/industrial farmland/forestland/open space Cost of Community Service Studies

  10. Such studies have been conducted around the US and many results are listed on the website of the American Farmland Trust (www.farmland.org). In general, residential development is an economic drain while commercial/ industrial and farmland/forestland/open space more than pay their own way. Cost of Community Service Studies

  11. Using results compiled by AFT, the national averages are: Residential: $0.87 Commercial/Industrial: $3.45 Farmland/Forestland/Open Space: $2.70 These figures are $’s of revenue for each $1 of expenditures. Revenues to Cost by Land Use

  12. Some Southeastern US ResultsRevenue:Expenditure Ratios

  13. Break-even Home Values

  14. Development pressure makes land more valuable to sell Development pressure also makes farming and forestry less profitable (and enjoyable) property taxes increase costs increase due to extra management required when near developed areas leapfrog development is the worst Challenges to Preserving Farm and Forest Lands

  15. Government should charge the full social cost of development (impact fees??) Government must find a balance of commercial (& industrial) growth to pair with residential Government should not push businesses across taxing borders A Role for Government in the Market

  16. Sociologists are finding that today more and more high skill workers are choosing where to live first, then finding jobs. Because businesses want high skill workers, they follow these workers to places with good quality of life. If you attract good workers, good jobs follow. Growth Patterns and Job Creation

  17. 31% if workers in Rural South work in a different county than where they live. 52% of employment growth in metro areas was from in-commuters. 27% of employment growth in rural areas was from in-commuters. This means jobs may not equal housing growth, but also that housing can grow without new jobs. Source for this slide is Mitch Renkow, NC State Jobs, Commuting, and Home

  18. The real conclusion is Local governments must ensure balanced growth, as sprawling residential growth is a certain ticket to fiscal ruin*. * Or at least big tax increases. Balanced Growth a Must

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