Why open space development is financially bad for your Town, and …
Why renovation, restoration, and redevelopment of existing properties is better:
Imagine five single-family homes of 2-4 bedrooms that already exist in Dartmouth, each one already connected to water, sewer, and electricity; each one on a street already serviced with trash pickup, snow plowing, & road repairs; and each one already accommodated by our school system, police, fire and other services provided by the Town.
Assume that, on average, these five homes are rated “fair to good” by Town assessors, and that the average lot size is 1-2 acres (some bigger, some a little smaller). Assume further that the average tax bill for each property is $5,000 (again, some a little higher; some lower).
If each of these five homeowners fixed up their house with a new roof, new paint job, and an upgraded kitchen and bathrooms, the assessor ratings for each one would likely go up to “excellent,” or at least to “good,” and the assessed value (as well as the actual or resale value) would go up accordingly.
Because of these improvements, their taxes may rise as well; let’s assume to an average of $5,500 or $6,000 … but the Town costs listed in paragraph 1, will see no increase whatsoever.
A 12-15 acre parcel of woods or fields (or some mix), which presently pays only modest land tax, is approved for a 5-parcel subdivision, and 5 single-family homes of roughly the same sizes mentioned above get built … all of them initially assessed as “good-excellent” condition, and, collectively, they pay the same $30,000 as the existing renovated properties described above.
Adjust that $30K downwards a little bit for the prior land-only tax the Town was getting previously, and say there is $28,000 of new revenue, annually, from the sub-division.
That $28K new revenue would not cover even half the fully-loaded the cost of even one single additional Town employee (police officer, school teacher, DPW worker, whatever)! It doesn’t come close to covering all the new costs the Town will incur to bring standard services to the new development. Even if the development is “very high end,” and the tax revenue is DOUBLED, the Town’s new annual expenses will FAR EXCEED the new revenue … and one doesn’t need to be an economist to understand why.
In our recent Town elections, several candidates (both winners and losers) argued strenuously for fiscal responsibility and keeping taxes under control. School costs, health care costs, pensions (not to mention basic salaries) keep climbing; some steeply.
The actions described in Scenario A benefit everyone involved (homeowners, taxpayers, the Town coffers generally). Scenario B might benefit one seller, one developer, and a few consultants and agents; everyone else, all taxpayers, suffer the losses incurred by the Town.
Planning Board members during the last 25 years estimated these costs (Scenario B) at approximately $1.39 spent for every $1.00 received in taxes. But the exact number doesn’t matter; the fact that it is a losing proposition is obvious, and the Town (like many other towns with the same issues) loses dramatically, whether the number is $1.25 or $1.50 … the basic problem is clear.
By way of example, the town of Lincoln, MA (one of the best-run towns in Massachusetts, financially) spends $1.27 for every tax dollar received in a new subdivision (per their Planning Board). Other towns are similar, and, given the things that drive such costs, it is easy to see why. Put another way, forcing the Town labor force to grow in any way is one of the most expensive things we can do.
By contrast, finding new revenues, without driving labor costs up, is very cost effective. In Dartmouth’s business districts, our average tax revenues from a new business (which vary widely by type of business) cost the Town roughly $0.70 for every dollar received in taxes.
In summary, the Town would be well advised to stop or minimize subdivisions or open space development of any kind; to actively encourage renovation, restoration, and preservation of existing homes; and to focus new development (or redevelopment) on businesses, only adding housing that is absolutely essential (i.e. affordable housing up to or above 10%, and senior/elder housing – at least in the near term, as baby boomers age).