Fiscal Impacts of Residential Growth

Jeff Larson recently received his Master’s Degree in City & Metropolitan Planning from the University of Utah. This essay is a summary of his research. You can obtain the entire report here and you can reach Jeff at jlskiut83@hotmail.com or on LinkedIn.

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Many suburban cities attract or allow only low density, single family zones and struggle to maintain public utilities like roads and sewers. At the same time citizens refuse to pay higher taxes and oppose more dense developments. I grew up in South Jordan City, which lies in the suburbs of Salt Lake City, Utah.

South Jordan is a typical suburb but has some unique qualities. It is home to Daybreak which was designed using a traditional neighborhood development model. The city also had mixed use zones until the recently elected mayor and new city council changed that.

South Jordan is a fast growing city and with growth comes new costs incurred by the city. To support new subdivisions, developers and the city have to construct new roads, expand sewer and water lines, and provide other infrastructure and public services to new residents. This particular study is focusing on roads. The goal of this analysis is to gain a basic understanding of the fiscal implications of building single family homes, town homes, and apartments at different densities within South Jordan City and to find at what density a neighborhood has to be to pay for its own roads.

During my research and discussions with city officials, I found that funds for roads typically come from federal funds, gas tax, and property and sales tax. Using the city budget for the last 4 years I was able to determine the expenses for the roads, minus labor costs to be approximately 7.82%. I worked with the assumption that 7.82% is the estimated share of taxes (city revenue) from residents that is allocated to annual road expenses.

The standard width of residential streets in the city is 28 feet, Daybreak is 26 feet. The costs per square foot of roads and maintenance were obtained from the city engineer. Additionally, the total amount of road is for each neighborhood was obtained by the city. The city engineer and a city planner gave me estimated road cycles. However, those differed from each other and research from other sources provided more life cycles. Using the information gathered I determined a life cycle based on a 30 year time frame for the roads in the chosen neighborhoods and in what year the maintenance and repair work is done.

Click for larger image.

The table below shows an outline for each neighborhood and gives the estimated cost of the road cycle. Crack seal maintenance is completed during the 5^th year while 100% of the road surface receives a slurry seal on the 7^th year, and so on. While all of the maintenance is done at some point, each road is different depending on a number of factors including connectivity, traffic, and wear and tear. If the city were to maintain its roads at this level, it would take Ascott Downs about 75 years to pay for the estimated cost of the 30 year life cycle.

Ascot Downs has 1.7 units per acre. If the density were increased to 3.8 units per acre, the neighborhood would be able to pay for its 30 year life cycle by the 15^th year. The 15^th year is the estimated year for the first overlay and base reconstruction, the two most expensive maintenance projects. If taxes were increased it would require 31% rate increase to pay for its road without changing the density. Daybreak has 4.9 units per acre and would require 17.6 units per acre to pay for its 30 year life cycle in the first 15 years. Or a tax increase 20% to keep the density the same. Only Wyngate can pay for its road in less than 15 years currently.

If the city were to change the standard width of residential roads to a more traditional width of 24 feet, it would end up saving the large sums of money. For example, if Parkway Palisades was 24 feet wide, it would save $237,000 and 4 years off the expected time to pay off the road. Similarly, Daybreak could save $284,000 and 8 years.

The value per acre was also found for each neighborhood to see if there was a correlation with the revenue generated for roads. Wyngate has the highest value per acre, the highest density, and can pay off its road the fastest. Bad news is that it’s a privately owned development and HOA fees pay for its roads. However, Vista View has the lowest value per acre but can pay off its road faster than Daybreak Three and Ascot Downs. Parkway Palisades generates the most property taxes and is the wealthiest of the neighborhoods. Despite having the lowest density, it comes in second in paying off its roads.

The City’s General Plan states the following, “Preserve peace and quiet in residential areas through circulation design that slows traffic flows and encourages safe driving practices.”

The missing metric for South Jordan, revenue return from property taxes, is biased in favor of infrastructure intensive low-density sprawl that does not pay for itself over the long-term. It could be said that developments like Wyngate are essentially subsidizing the city’s low-density neighborhoods. However, there are not enough of them in the city to make up for the low density developments, and currently Wyngate is maintained privately. And thanks to the high land value of the city, there are some valuable low density neighborhoods such as Parkway Palisades but even that doesn’t cover its road costs.

Possible recommendations to help with the costs of roads would be making more traditional streets that are 24 feet wide and restrict cul-de-sacs to only when topography and existing developments require them. Granny flats and infill projects in residential developments would help increase the tax base. The city should also reinstitute mixed-use zones which traditionally have the highest value per acre and require the least amount of infrastructure. South Jordan is finite and has the opportunity to grow its tax base by making smarter decisions when it comes to infrastructure.

Podcast Show 181: Peatonito and John Yung

This week’s podcast is a double header starting with the first super hero ever to appear on a Strong Towns Podcast (still waiting on Cap’n Transit), the Mexican pedestrian advocate Peatonito. Then we’re joined by the slightly more reserved, but equally cool, John Yung of the site UrbanCincy.

Show 181: Peatonito

Five to Three

This was posted earlier today as part of our ongoing local conversation at our A Better Brainerd site. 

The most successful small towns are the ones that can see beyond their borders, understand how the world is changing and position themselves for that change. The small towns that become ghost towns stay locked in their thinking, irrationally believing that “what always worked” will always work, that we only need to keep doing what we are doing and things will work out.

The chance to fix South Sixth Street presents an opportunity to discuss the future of Brainerd. Will we be a city that frivolously throws away its wealth and its potential simply because we can’t see another way? The answer will be “yes” if we allow the common mentality expressed in a recent letter to the editor prevail.

Here’s that letter in its entirety (in italics) with an alternative way of thinking about this.

Planning is in the process to rebuild South Sixth Street. The powers to be want to eliminate two traffic lanes and make it a two lane street with bike lanes. Does this sound idiotic to you?

No, it sounds really intelligent. Surprisingly so, actually. South Sixth doesn’t have anywhere near enough traffic to justify five lanes – not even three, actually -- but I expected Mn/DOT and city officials to simply put them back that way. I’m heartened that other ideas are part of the conversation.

The street is just fine in its present configuration;

Just fine for whom? For the taxpayers that would be asked to pay for an additional two lanes of unneeded asphalt? For the homeowners and businesses along the street that aren’t allowed to park in this unused space yet must suffer speeding traffic feet outside their front doors? It certainly isn’t fine for anyone who lives or pays taxes in Brainerd.

Two lanes would cause considerable traffic congestion, but as always it seems the bicyclists want to turn our city into their own little world.

Let me be clear: there is no traffic congestion in Brainerd. None. Zero. Not even on the Fourth of July is there real traffic congestion in Brainerd. If you want to see traffic congestion, visit Atlanta or Houston. We never experience anything near traffic congestion in the city of Brainerd. Never.

So why do people – including our local cadre of engineers – talk frequently about traffic congestion? What they are talking about is not congestion but delay. We have lots of artificial delay, but it is caused by traffic signals, not too many cars in too little space. The signals cause cars to bunch and give the brief illusion of congestion. If you watch for this phenomenon, it will become obvious to you very quickly.

On South Sixth, however, going from five lanes to three would actually reduce this illusion of congestion. The spacing is too great today, the area needed to cross too wide. Eliminating the lane would make traffic flow better, if that is your only concern.

As for bicyclists….try biking once through Brainerd and then comment on how it is a cyclist's “own little world.” On bike and on foot, most of Brainerd is a dangerous and despotic place.

It seems they have convinced the powers to be to start by making a bike Lane on Willow Street with no consideration given to the residential parking on this street. There is not enough parking the way it is when services are being held at St. Andrew’s Church (and yes they also need to increase the size of their parking lot).

The entire controversy over Willow Street was in “consideration” of the parking. What were all the meetings about? And it would be a wonderful day in local Catholicism if St. Andrew’s Church had to increase its parking lot due to high attendance. We might get there – I’m a parishioner – but it hasn’t happened yet.

What the bike riders do not realize is that the residents of this street are assessed for the upgrade of their street.

This is not true for South Sixth, which is a state highway, and I’m pretty sure it wasn’t true for Willow, which is a state aid route.

Also state gas tax money is applied to the upgrade. Does this sound fair? The bike riders pay no gas tax and are not assessed for this street.

It is actually state and federal money, some of which is gas tax and a major percentage of which comes from general tax revenue and deficit spending, which bikers and non-bikers everywhere both pay. This doesn’t sound fair – why should we be taxing everyone in the nation to pay for a very local road project – but it has nothing to do with biking. Bikers may not pay a gas tax, but they also do no damage to the roadway.

I would suggest that if the city deems it necessary to build these bike lanes that they institute immediate bike licensing at a high enough rate to cover the cost of these bike lanes (or trails) and remove the burden from the taxpayers.

I’ll gladly go for this if we do the same thing for automobiles. If we did that, driving in Brainerd – its most socialized and subsidized activity – would quickly come to an end and bike sales would go through the roof.

Enough is enough stop the spending and bonding; who is going to pay for all of this? Elect new council people and mayor; return no incumbent to office.

And finally….two statements where I find common ground with the author, although for very different reasons. The city of Brainerd is going broke. We don’t have the money to pay for all of this, but “all of this” is a place where we spend millions on automobile infrastructure, destroy our tax base in the process, gamble on auto-oriented growth out on the periphery of the community and refuse to do the little things that would actually benefit residents and businesses.

We definitely need a new direction. Keeping five lanes on South Sixth is not that.