Over on www.smartgrowthforconservatives.com the conversation continues about how to build stronger communities that remain fiscally solvent over the long term. This conversation has been spearheaded by folks such as Joe Minicozzi and Charles Marohn of urban3 and Strongtowns.
I’ve said often that if you want to address smart growth issues in your community you have to first be willing to STOP what you are currently doing. Then you have to proactively evaluate your status quo. It begins with asking the right questions:
These questions center around simple accounting concepts.
1. What are your communities total assets. What is the value of the tax base. How does a community pay it’s bills? An accounting of the money coming (revenue) in vs. the money going out. (liabilities)
2. What are the long term obligations for infrastructure maintenance associated with sustaining those assets? What’s the money going out.
Next, communities need to ask the more complex questions. These should be used to frame a smart growth strategy.
1. In terms of geography, what parts and land uses of your community have a positive Net Present Value. (Positive ROI – Cash from long term assets minus the cost of long term liabilities) and which have a negative Net Present Value? This is largely determined by the types of land uses present. This process looks something like this: Here is a look at the efficiency of some Lower Macungie projects.
2. How does the tax base change in response to certain policy decisions? Is your community considering a rezoning? If so what are the LONG TERM fiscal impacts? It’s critical to look beyond the windfall which often skews the longterm picture. Is a project greenfield or infill? Will it require new infrastructure? What are the jobs/acre being generated vs. land lost? Have you quantified this? How much will it cost down the line to “improve” roads to handle new traffic if traffic forecasts are incorrect? (As they often are) What’s the cost to pay for new students in the classroom? To provide increased services? Police, Fire, amenities?
Positive vs. negative ROI is one of the main factors differentiating smart growth and dumb growth.
2. What types of land use patterns create the most wealth for the community? Are decisions creating high value land uses that create wealth or low value land uses that suck up more resources than revenue it generates? Remember, elected officials have a responsibility to taxpayers to show that zoning changes make financial sense.
3. With a goal being a stable predictable income stream, what types of land use patterns experience the greatest degree of volatility?
4. How do items that increase property value such as parks impact net present value? How far from the park does that effect extend?
5. How do items that hurt property values such as STROADS impact Net Present Value? How far from the STROAD does that effect extend?
Lastly and most importantly where can you best deploy limited resources to have the greatest overall impact?
