In a study published in May 2015, Smart Growth America (SGA) estimates that downtown development would generate 4.7 times the fiscal impact as development on the edge of town in Macon-Bibb County.
The connection between land use development patterns and the costs of providing public infrastructure and services has long been a topic of study. Most of these studies conclude that the compact development patterns of “smart growth” reduce local government spending on a per capita basis relative to sprawl. Yet these findings are not often included in the typical fiscal impact analyses done in connection with new development proposals. When used, most fiscal impact analyses for future land use development rely on a simple average cost approach, which implicitly assumes that each new resident or job will add the same amount of public costs, regardless of whether they live and work in a sprawling, low-density development, or a high-density walkable urban one.
In connection with a grant from the Department of Housing and Urban Development, SGA is developing a fiscal impact methodology that not only accounts for the increased cost efficiencies associated with denser development patterns, but can also be easily adapted and used by local practitioners across the country. Macon-Bibb County agreed to become a case study community in the development of this methodology.
Macon-Bibb County asked SGA to analyze the net fiscal impact of future growth focused on downtown infill versus continued greenfield development in suburban locations. To conduct this analysis, SGA developed four hypothetical development scenarios: Low Density Greenfield, High Density Greenfield, Downtown Infill and Downtown Infill with Premium. The purpose of the four scenarios is to illustrate the range of possible fiscal impacts associated with new development, depending on whether it is more or less compact, and whether it occurs on greenfield sites (needing new infrastructure) or in locations within or proximate to existing development (utilizing existing infrastructure).
The study shows that in Macon-Bibb County the combined net fiscal impact for Downtown Infill is substantially higher than the same development on a greenfield – $428,000-$788,000 per year for Downtown Infill versus $165,000 for High Density Greenfield. All of the high density scenarios produce positive net fiscal impacts for the county while the Low Density Greenfield scenario produces a negative net fiscal impact for the county of $822,000. This is due to three main factors: First, the multifamily and townhouse units in the Downtown Infill and High Density Greenfield scenarios generate fewer public school students than the single-family detached homes in the Low Density Greenfield Scenario. Second, the High Density Greenfield, and the Downtown Infill scenarios are more compact and therefore require less road and pipe to maintain than the Low Density Greenfield scenario. This is particularly true for the Downtown Infill scenarios, which would not only require less infrastructure if everything was built new, but can rely largely on existing infrastructure in Downtown. The use of existing infrastructure significantly reduces the marginal cost of new development.