Friday, September 7, 2012

Why would a city do this?

Like every other city in the United States, the Mound city budget is in trouble. Funds from the federal and states are drying up, pushing their money issues down to counties and cities, who are desperately attempting to balance budgets in very new creative ways. City staff and services are being reduced, and property taxes are creeping up.

I had a great opportunity recently to tour and hear about Conservation Design, a way for a city to develop neighborhoods that initially looks at the natural terrain, and builds a development around the natural features the city and developer would want to preserve. In a nutshell, this can put more homes in a new neighborhood, yet a significant part of the natural resources are preserved, giving each home owner direct access to the natural part of the neighborhood.

Towards the end, I was talking with a City Planner who was intimately familiar with the Conservation Design concepts, and we were talking about city revenue. I asked how much more property tax revenue the city took in since there were more parcels and residences developed on these lots. I was a bit surprised as he hesitated, and essentially said the city didn't really look at those numbers. He supposed the city took in a little more revenue, but it didn't matter as most of the city revenues come in from the commercial districts.

I thought this was crazy. So at the end of the meetings as things were wrapping up, I asked again, to everyone still in the room, "If there's nothing monetarily to be gained from these projects, Why would a city do this?!" There was lots of answers about better use of space, preserving the natural resources, and having better neighborhoods. Unfortunately there seem to be no financial reason for a development like this.

Everyone LOVES new developement. It's a sign of progress. That's why big bridges get built, new Walgreens are embraced, and new neighborhoods are hip and exciting. But the hard question has to be asked from a business point of view... can a city benefit financially from the development?

Further great reading at Strongtowns about cities finances...

League of Minnesota Cities report about the dire budget situations all Minnesota cities are facing (4 page .pdf)

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