Submitted
by Sarah Gardner, Ph.D.
Assistant
director, Center for Environmental Studies, Williams College
There is a commonly held belief that development
enhances the local tax base. Therefore,
it follows that housing development is a way to increase the wealth of towns,
including schools and other public services.
This thinking is based on the idea that more houses equal more property
tax. While this sounds logical, this logic has been disproved many times
over. Numerous studies have shown that
residential land is the most expensive for local government to support: it
costs the public more money than it pays in taxes and charges.[1] It is more expensive to serve residential
areas than commercial, industrial, farm or open land. Large lot housing developments are the most costly type of land
us for towns.
This research, cost of community services
studies, has found that revenue from residential land falls about 25 percent
short of covering the costs of the public services they receive. The ratios of revenues to expenditures for
residential. Commercial/industrial,and farmland/open space found in three
Massachusetts towns averaged: 1:1.12 for residential land; 1:.42 for
commercial/industrial land; and 1:.33 for farmland/open space.[2]
Another study found that for every dollar farms and open lands generated in
revenue, they required only 0.33 in services.[3] The adage that cows do not send their
children to school expresses a documented fact: farms and open land, far from
draining local taxes, actually subsidize local government by generating far
more in property taxes than they demand in services.
These findings call into question the
assumptions behind the term “highest and best use” of land. Growth and development do not generally
lower property tax bills. It is neither accurate nor responsible to claim that
expanding the residential tax base, especially through the development of large
lot single family homes, is an economic development strategy.
[1] “Economic Benefits of Open Space,” Government Finance Group, Inc. , Public Finance Digest, Sept. 1993.
[2] “Does Farmland Protection Pay: The cost of community services in three Massachusetts towns (Gill, Agawam, Deefield),” American Farmland Trust, 1992.
[3] “Cost of Community Services: the value of farm and ranch land in Hays County, Texas,” American Farmland Trust, DATE?