Economics of Development in Florida
Many communities around Florida and across the nation operate under the false assumption that any growth is good growth.
For more than a decade, the geo-accounting firm Urban3 has helped local governments understand their communities’ fiscal health by considering the potency of different development patterns from a property-tax value perspective. This analysis is akin to comparing automobiles based on the miles they can travel per gallon. The approach compares the revenue per acre of development with the short- and long-term costs to communities and their taxpayers providing the infrastructure needed to support it.
- Low-density suburban development does not produce enough tax revenue per acre to pay for its infrastructure liabilities.This form of development is fiscally insolvent over the long term.
- In contrast to the above, denser, walkable, mixed-use development patterns produce far more tax revenue per acre than is needed to pay for their associated infrastructure.
Natural and agricultural land, in turn, creates far less public burden (including roads, water, sewer, stormwater, schools, and other services) compared to suburban areas. Simply put, a plot of strawberries or oranges does not call the police or need schooling. But once you develop it, municipal services come with that development pattern, and you should do the math to make sure that you can afford it over the long haul.
- Low-density suburban development does not produce enough tax revenue per acre to pay for its infrastructure liabilities.This form of development is fiscally insolvent over the long term.
- In contrast to the above, denser, walkable, mixed-use development patterns produce far more tax revenue per acre than is needed to pay for their associated infrastructure.
Natural and agricultural land, in turn, creates far less public burden (including roads, water, sewer, stormwater, schools, and other services) compared to suburban areas. Simply put, a plot of strawberries or oranges does not call the police or need schooling. But once you develop it, municipal services come with that development pattern, and you should do the math to make sure that you can afford it over the long haul.
Shoot for 1:6
Cities have a stronger economic position if their downtown core has a 1:6 relationship of land to value with the remaining city. The average value per acre of the downtown should be six times as high as the average for the city. Proper infill development, mixed uses, and walkable urbanism support this.
Increase Fiscal Productivity in Suburban Areas
Existing suburban areas can be retrofitted with areas of higher productivity through infill development, new mixed-use centers, and enhanced walkability to help compensate for the inherent subsidy in the low-density pattern.
Do the Math on Development
Develop a process of measuring development fiscal productivity on new and old development patterns to better understand fiscal consequences of growth and how to best maintain long term fiscal health of your community.
Keep Rural Lands Rural
Rural lands generate less property and sales tax revenue than urbanized areas, while demanding only minimal infrastructure. Planning and land conservation strategies can help protect natural and agricultural lands to promote environmental and fiscal sustainability.
Urban3 prepared the Economics of Development in Florida on behalf of
1000 Friends of Florida, the University of Florida Center for Landscape Conservation Planning, and Live Wildly.