“Urban growth places heavy demands on local governments for the provision of new and expanded facilities and services. A review of the literature over the past 25 years on the fiscal impacts of growth shows that urban growth is far more likely to be a drain than a gain to the local treasury.
The report shows that the most likely reason for this is the high cost of providing the basic facilities and infrastructure required by urban growth.” Eben Fodor, “The Cost of Growth in Oregon”
Boy, if ever a city was going down the wrong path quickly it is the City of Molalla. The never ending Ground Hog quest for an idiotic, indefensible “urban reserve” is racking up huge deficits. Fake “leaders” like mayor Clarke haven’t a clue about what growth COSTS.
Yesterday I sat at the Molalla City Hall to read documents for a truth-telling session about the cost of Molalla’s utterly insane “we need 2,400 acres for an urban reserve” campaign. Then I came home to find an excellent new article by Fodor called “Growth and Prosperity” that, coupled with the earlier Fodor “The Cost of Growth in Oregon” (both posted below), makes Molalla’s “plans” look like the “work” of some childish backwater hicks. That’s how off the reality path Molalla has strayed. There is no legal basis for any of the current “plans” and the city’s social injustice and waste of dwindling public monies is a travesty.
Keep in mind one primary fact: the quest for a 50 year urban reserve is TOTALLY VOLUNTARY FOR ANY CITY.
And keep in mind another fact: a county can refuse to honor a city’s request for an urban reserve. Period.
So, after 4+years of abject planning failure the financial chickens are coming home to roost in sleazy good ole boy Molalla.
THE PLANNING DEFICIT IS APPROACHING FOUR HUNDRED THOUSAND DOLLARS.
Plannin’ Potter (you know, the “guy” they hung the name “planning director on – the “guy” with ZERO DEGREE IN PLANNING who tries to fake it as a “planner”) has a listed DEFICIT at the end of September 2010 of $201,607 and was “loaned” $175,000 from the city water fund so $201,607 + $175,000 = PLANNING DEFICIT OF $376,607! That was as of 3 months ago and the legal and consultant bills are still piling up!
And guess what fake “manager” Atkins and fake “mayor” Clarke allow fake “planner” Potter to do? They allow Potter to rack up ENDLESS LEGAL BILLS AND ENDLESS CONSULTANT BILLS. Month after month, year after year with no end in sight.
And guess what “manager” Atkins and “mayor” Clarke allow Potter to rack up those ENDLESS HUGE LEGAL BILLS AND CONSULTANT BILLS FOR?
The years of ongoing ENDLESS LEGAL/CONSULTANT BILLS are to try to defend the indefensible, TOTALLY VOLUNTARY 2,400 acre urban reserve. These BANKRUPT fake “leaders” and their incompetent fake “planner” are taking the people of Molalla down the hole of public money financial hell to try to help “get” private land into a phony urban reserve.
It is fascinating to see the month by month detailed bills from Molalla’s greedy “tell you anything” loser lawyer and those nasty Winterbrook consultants. Talk about being taken for a ride.
There are endless bills for letters to try to defend the TOTALLY VOLUNTARY URBAN RESERVE, endless bills for the consultants to “fix” the already passed codes and endless bills to interface with fake “planner” Potter. There was even a bill for the lawyer to try to explain to fake “planner” Potter the difference between the two planning paths that can occur in our state: quasi-judicial and legislative.
Gee, fake “planner” Potter: have you ever heard of google? It’s free! We all realize you have zero understanding of urban planning and state goals but even a lay person could save a LAWYER’S FEE by hitting those two planning terms into the google box! Or maybe you can’t even understand what you read? Or maybe you are too lazy and so disrespectful of public money that you just don’t care that it COSTS A FORTUNE every time you drag in the LAWYER to fix the things you would, if you were a REAL PLANNER, be able to do yourself?
The funny part about the “teach Potter” story is that I asked him, in Nov. 2009, at a public meeting, to explain the difference between those planning paths. Talk about a “deer in the headlights” moment! Fake “planner” Potter squirmed and refused to answer. Then fake “manager” Atkins had to take a shot at answering a planning question his high paid fake “plannin’ director” couldn’t answer! So now, months down the pike, Potter gets a bill from a lawyer who tried AGAIN to teach him about legal planning paths in Oregon.
Oh, the shame and the embarrassment – and Molalla wants to pretend it can attract more than flies with a fake “planner” like that representing the city? Molalla wants to pretend it is a desirable place to grow and presents fake “planner” Potter as the city’s front person? Good luck on that!
It’s a total travesty and rip-off! It’s a total hose job to taxpayers that any clueless berg with a FAKE “PLANNER” would ever, in these times of tanking real estate and depressed economy, allow a FAKE “PLANNER” to rack up a DEFICIT APPROACHING FOUR HUNDRED THOUSAND DOLLARS on a totally VOLUNTARY QUEST FOR A 50 YEAR PLAN.
Get it yet folks: HUGE DEFICIT FOR A TOTALLY VOLUNTARY PROCESS THAT THE COUNTY CAN REJECT?
That’s a planning deficit for a totally voluntary quest to enrich a couple of good ole boys.
That’s a planning deficit created for a totally voluntary quest to tag new land: new land that would compete with current properties and would further depress values of existing homes. YOUR HOMES.
That’s a planning deficit for a gigantic, outlandish, unnecessary urban reserve that the city could never afford to supply infrastructure for. Let’s be honest. Molalla is currently so ill managed and ill funded that is has to promote a kiddie game – dodgeball – to raise a few hundred dollars for the parks fund! LOL! Get real Molalla – you need 2,400 acres like a hole in the head. Your fake “leadership” is as bankrupt as your city.
The best gift is coming soon: the Federal census. The Federal census is official and it wasn’t produced by fake “planner” Potter filling in the blanks on some forms from PSU. And then the State of Oregon will use the Federal census to produce a state economic forecast that the state and counties will use for the official safe harbor population formula. And that official safe harbor formula will blow the biggest hole ever known to man in fake “planner” Potter’s bottom feeding lawyer’s EXPENSIVE, BOGUS POPULATION FORMULA LETTERS. And the inside word is that the economic forecast will be very low which will lead to a very low population projection for the state and its counties.
And then GOODBYE URBAN RESERVE!
It was funny to note yesterday that Molalla is trying to contest PSU’s certified census number for 2009. What’s up, plannin’ Potter – couldn’t you fake inflated numbers this year? And what does it matter what PSU posts, given the Federal Census will arrive in a matter of a month or two? Or – gasp! – will the fake “leaders” sue the Feds, too?????????
And Hoo Ha! I just talked to PSU and guess what? Fake “planner” Potter, in spite of THREE HEADS UP from the PSU census, FAILED to turn in his paper work on time. That’s why the city is contesting PSU – because Molalla FAILED TO MEET THREE WELL NOTICED DEADLINES. Next time PAY THE LAWYER TO DO IT, Potter! And where was fake “manager” Atkins while Potter was failing to meet the deadlines? Why didn’t he make sure CITY WORK was done in a TIMELY MANNER?
Wha-hoo! Or Hee Haw as fake “manager” Atkins likes to say. I’d be a firin’ them there expensive lawyers and consultants and that there fake “planner” because I hear from those in the know that Clackamas County is the best of the best when it comes to good, defensible planning. Clackamas County and DLCD are not a lookin’ kindly on the fakeout good ole boy campaign generated from the fake Molalla “leaders” Clarke/Potter/Atkins.
What’s next you backwoods, nepotism lovin’ fools? Will you project a new INTEL plant or a NIKE campus for Molalla and expect the world to believe you? Are you such tools – such putty – in the hands of those loser consultants and lawyers you are paying through the nose for that you can’t see the FAILURE writing on the wall? How low can you go and still be able to look the citizens of Molalla in the face?
The next Molalla mural could be a RIP for city hall: a big flow chart showing that Clarke/Atkins/Potter sold the city’s future down the river to enrich greedy, tell you anything you want to hear lawyers and consultants who DON’T LIVE HERE.
How about a big painted map of the ridiculous 50 yr urban reserves noting those “special” landowners Clarke/Potter/Atkins are driving up the planning deficit trying to “help”? A big bull’s-eye could note the sites and say “we drove the city to bankruptcy trying to help these properties”. Maybe there could be a cartoon of the taxpayers driving those fake “leaders” out-of-town!
I can assure you, if you are a city resident, no one is trying to help you protect your property values via modern planning. Your FAKE LEADERS are only interested in helping a couple of their greedy friends.
Who’s working for YOU these days in Molalla? You had better put the screws to those fake “leaders” and stop the hemorrhage of YOUR public money out of Molalla and into the bank accounts of outside consultants and lawyers! There is literally no end in sight until the legally indefensible, TOTALLY VOLUNTARY urban reserve “plannin” stops and viable planning to improve the quality of the current city begins. But hey, when you don’t have a REAL CERTIFIED EDUCATED URBAN PLANNER you are dead in the water.
Good luck, citizens of Molalla: you are truly slaves to the INCOMPETENCE AND GREED OF A HANDFUL OF UNETHICAL, SLEAZY GOOD OLE BOYS!
And now read this study from the experts of all experts about why GROWTH DOESN’T PAY (too bad Clarke/Atkins/Potter are too foolish to understand the facts!):
Growth and Prosperity
Public policy often based on unsupported assumptions
By Eben Fodor
Most cities in the U.S. have operated on the assumption that growth is inherently beneficial and that more and faster growth will benefit local residents economically. Local growth is often cited as the cure for urban ailments, especially the need for local jobs. But does the empirical evidence show that growth is actually providing these benefits?
|Local metro areas follow the general conclusions of this study. MSA stands for Metropolitan Statistical Area.|
To test claims about the benefits of local growth, I examined the relationship between growth and prosperity in U.S. metro areas. This study looked at the 100 largest U.S. metro areas (representing 66 percent of the total U.S. population) using the latest federal data for the 2000-09 period. The average annual population growth rate of each metro area was compared with unemployment rate, per capita income and poverty rate using graphical and statistical analysis.
The “conventional wisdom” that growth generates economic and employment benefits was not supported by the data. The study found that those metro areas that have fared the best had the lowest growth rates. Even metro areas with stable or declining populations tended to fare better than fast-growing areas in terms of basic measures of economic well-being.
Some of the remarkable findings:
• Faster-growing areas did not have lower unemployment rates.
• Faster-growing areas tended to have lower per capita income than slower-growing areas. Per capita income in 2009 tended to decline almost $2,500 for each 1 percent increase in growth rate.
• Residents of faster-growing areas had greater income declines during the recession.
• Faster-growing areas tended to have higher poverty rates.
The 25 slowest-growing and 25 fastest-growing areas were compared. The 25 slowest-growing metro areas outperformed the 25 fastest-growing in every category and averaged $8,455 more in per capita personal income in 2009. They also had lower unemployment and poverty rates.
Another remarkable finding is that stable metro areas (those with little or no growth) did relatively well. Statistically speaking, residents of an area with no growth over the nine-year period tended to have 43 percent more income gain than an area growing at 3 percent a year. Undoubtedly this offers a ray of hope that stable, sustainable communities may be perfectly viable — even prosperous — within our current economic system.
While certain businesses prosper from growth, apparently the balance of the community does not. The statistics showing that fast-growing areas tend to have lower and declining incomes, indicate that any gains by the businesses that directly benefit from growth are more than offset by losses to the rest of the local population. In other words, a small segment of the local population may benefit from faster growth, but the larger population tends to see their prosperity decline.
This study was not an attempt to explain all the complex relationships that exist, but merely to test whether there is a correlation between growth and some of the benefits that are so often attributed to it. More research is clearly needed on this important topic.
Population growth tends to be directly linked to urban growth. There is a close, linear relationship between the two, as more people require more housing units and more commercial buildings for employment and shopping.
Public policies and plans regarding urban growth typically involve tradeoffs between economic, environmental and social impacts. Local residents may view a policy to encourage land development or growth as negatively affecting their quality of life through increased traffic congestion, environmental quality impacts, loss of farm and forest lands and loss of amenity values (such as tranquility, sense of community and open space). They may also be concerned about higher taxes to fund the cost of the new public infrastructure (roads, schools, sewer and water systems, etc.) required to serve growth. However, the prospect that new growth will bring jobs and economic prosperity that may benefit local residents is often viewed as compelling enough to outweigh these costs.
So if growth is actually not providing these benefits, then the decision-making balance shifts towards the fiscal, environmental and quality-of-life impacts. With greater awareness of the relationship between growth and prosperity, perhaps we will see a shift in our focus toward making our cities better places, not just bigger places.
Most U.S. cities have been actively pursuing growth with all the policy and financial tools at their disposal under the presumption that they are fostering local prosperity. As U.S. cities seek a path out of the recession, this study suggests that new economic development strategies will be needed that do not rely so heavily on growth.
A link to the full study, “Relationship between Growth and Prosperity in 100 Largest U.S. Metropolitan Areas,” can be found at www.fodorandassociates.com
Eben Fodor is the principal of Fodor & Associates, a consulting firm based in Eugene and specializing in studying the fiscal, economic, and environmental impacts of urban growth and land development. This independent research was funded by Fodor & Associates as a public service.
1This study is a completely updated and expanded version of the original study, The Real Cost of Growth in
Oregon, issued July 1996 and published in the journal Population and Environment, Vol. 18, No. 4, March 1997.
FODOR & ASSOCIATES
394 East 32nd Avenue • Eugene, Oregon 97405 • 541-345-8246
THE COST OF GROWTH IN OREGON
By Eben V. Fodor
Fodor & Associates
This study is an effort to provide a more complete understanding of the current costs of urban growth to Oregon communities. Rather than attempt to quantify all the costs and benefits of growth, the study focuses on the public-sector impacts that ultimately affect taxpayers. These public costs are usually distributed across the entire population of a community through property taxes or general obligation bonds, whereas the benefits of these investments accrue primarily to the new development.
Urban growth places heavy demands on local governments for the provision of new and expanded facilities and services. A review of the literature over the past 25 years on the fiscal impacts of growth shows that urban growth is far more likely to be a drain than a gain to the local treasury.
The report shows that the most likely reason for this is the high cost of providing the basic facilities and infrastructure required by urban growth.
Notes on Methodology
There are 18 main cost categories for public facilities and infrastructure associated with urban growth. These are identified in the figure above along with the environmental and social costs.
Nine of the 18 capital cost categories (shown in italics) were evaluated in the report, including:
school facilities, sanitary sewerage, transportation facilities, water system facilities, parks and recreation facilities, stormwater drainage, fire protection facilities, and library facilities.
The ninth category is the cost of “quasi-public” power generation and distribution facilities.
While the environmental and social costs of growth are significant, they are difficult to quantify in monetary terms. The economic values associated with environmental quality, natural amenities, livability and quality of life can be estimated using various methods.
These less-tangible costs may actually have a greater impact on the community than the physical infrastructure costs reported here. While additional research in this area would undoubtedly be productive, even the most readily-quantifiable economic impacts of growth have yet to be adequately studied.
Two common increments of growth are used as the basis for the cost analysis: a typical new single family house, and an increase in the size of the local population. The house used here is a threebedroom, single-family detached house typical of those being built today.
The costs associated with this residential land use are based on the needs of a statistically-representative 3.1 occupants,including 0.67 school-age children. The house is constructed on a modest 6,000 square foot lot and is assumed to be part of a larger development in an urban area on previously undeveloped land with utilities nearby.
To simplify accounting, it is assumed that all infrastructure requirements are met with new
facilities. If the needs of new development are met with existing excess capacity, the value of the Growth-Related Capital Costs for Public Facilities/Infrastructure
• School Facilities (K-12)
• Sanitary Sewer System
• Storm Drainage System
• Transportation System
• Water Service Facilities
• Parkland & Recreation Facilities
• Fire Protection Facilities
• Library Facilities
• Police Facilities
• Corrections and Jail Facilities
• Ambulance and EMS Facilities
• Open Space
• Solid Waste Disposal Facilities
• General Government Facilities
• Electric Power Generation and Distribution
• Natural Gas Distribution System
• Telephone System
• Cable TV system
Environmental Costs and Other Growth-
• Decreased Air Quality
• Decreased Water Quality
• Increased Rates of Natural Resource
• Lost Open Space and Resource Lands (farms,
• Lost Visual and Other Amenity Values
• Lost Wildlife Habitat
• Increased Noise
• Lost Mobility Due to Traffic Congestion
(delays and increased commute time)
• Higher Cost of Housing
• Higher Cost of Living
• Increased Crime
• Lost Sense of Community
• Increased Regulation (loss of freedoms)
• Costs to Future Generations
existing infrastructure can be estimated and assigned to the development in the same manner as new infrastructure. Also, not all of the public costs associated with growth will be paid by local taxpayers. Some public works projects receive Federal and state contributions.
The total costs for the incremental capacity of the facilities required to serve new residential development amounts to approximately $33,260 for a typical new, three-bedroom single-family house. (This total does not include the onsite, private-sector costs associated with residential development that are assumed to be paid directly by the developer, such as local streets, sidewalks, water and sewer lines.) This cost is representative and is not intended to be the actual cost for any particular municipality. It is also a partial cost, in the sense that there are additional facility costs, such as police stations, that were not included, as well as environmental and social costs that were
The costs are “net” costs in the sense that they represent the balance to the public sector (taxpayers) after any assessments have been deducted. Some cities, such as Eugene, charge development impacts fees (called system development charges, or SDCs in Oregon) to offset these costs. These impact fee payments, if any, should be deducted from the total costs reported in this study.
Growth Cost Summary
New Single-Family House
Cost Item Amount
School Facilities $11,809
Sanitary Sewerage $1,660
Transportation Facilities $4,430
Water System Facilities $2,729
Parks and Recreation Facilities $2,915
Stormwater Drainage $483
Fire Protection Facilities $298
Library Facilities $441
Electric Power Generation and Distribution Facilities $8,494
These same costs are also broken out on a per-capita basis to reflect the cost of local population growth. The per-capita cost of urban facilities is approximately $16,300. This does not represent the cost for any particular individual, but rather the average cost of permanently increasing the size of the local population. (Note that per-capita costs do not correlate with the occupants of the new house due to differences in cost allocation procedures, as explained in the report.)
The city of Eugene charges development impact fees (system development charges) for five categories of public infrastructure totaling $4,672 for a new single-family house. In addition, Eugene’s electric utility does not subsidize electric service connections to new homes, reducing the cost to ratepayers by approximately $1,000 for each new house. Both of these amounts (totaling $5,672) should be deducted from the $33,259 total cost to estimate a net public-sector cost of approximately $27,587 for each new house that is built in the city. Assuming that between 1,000 and 1,500 new housing units are built in the city each year, the total public sector cost to accommodate new residential development would range from $28 million to $41 million per year.
An estimate of statewide costs is $400 to $600 million annually.
At a net cost of $27,587 per new house in Eugene, the cost to taxpayers (and electric utility
ratepayers) for providing urban infrastructure to land developed at a density of six units per acre is $165,500 per acre. By comparison, the cost for purchasing undeveloped land inside the Urban Growth Boundary in Eugene ranges from $50,000 to more than $100,000 per acre. At these land prices, public land acquisition would result in a sizable net savings to taxpayers (and ratepayers) when compared with the cost of providing urban facilities to new development.
When growth doesn’t pay its own way, the use of public sector resources to fund growth can result in a net subsidy of growth by taxpayers. The subsidy tends to stimulate more growth by artificially lowering the private sector costs of land development.
The capital costs associated with providing public facilities and infrastructure to new development are substantial. Payment of these costs through broad-based taxes (or rates) results in a system that obliges established residents and businesses to subsidize new growth. Residents who are not benefitting from additional growth will find this subsidy to be inequitable. Once state and local governments have accurately identified and reported growth-related costs, the continued use of public resources to stimulate growth can be prioritized against other community needs.
The high costs of urban growth are unavoidable. The costs must be paid either directly through taxes or fees, or indirectly by diverting resources from other areas of government or tolerating declining levels of service as existing roads, schools and sewage plants become overburdened.
Raising taxes to pay for growth can lead to anti-tax and anti-government sentiments from residents who aren’t benefitting from these investments. Development impact fees represent an equitable means of funding growth that can maintain service levels without increasing tax rates.
There is generally a lack of good information about the costs of serving new development. With rapid growth occurring across the state, Oregon’s public policy-makers have an urgent need for more and better information about the economic and fiscal impacts of this growth.
About the Author: Eben Fodor is a community planning consultant and does research and writing on growth and
sustainability topics. His new book, Better, Not Bigger – How To Take Control of Urban Growth and Improve Your
Community, is available from New Society Publishers (800-567-6772 or visit http://www.newsociety.com/aut.html).
He holds a Master’s degree in Urban and Regional Planning, a Master of Science degree in Environmental Studies
from the University of Oregon and a B.S. degree in Mechanical Engineering from the University of Wisconsin.
Copies of the full report can be obtained from Fodor & Associates, 394 East 32nd Ave., Eugene, OR 97405. The cost
is $20 per copy plus $5 shipping and handling (payable to Fodor & Associates).
Copyright © 1998 by Eben Fodor. Permission is granted to reprint this executive summary in its entirety for educational,
non-commercial purposes only.