Cost of Community Services

Last night I went to a presentation by Whit Whitney of the Maine Coast Heritage Trust about land conservation. He made two points that stuck with me. They were both things that I'd heard before, but not quite as well stated.

First, he said that there are three ways to conserve land permanently. Your town (or state) can buy it and make it a park; a non-profit can acquire it and make it a preserve; the owner can place a conservation easement on it. When the town buys land it has to pay for it up front, it has to pay to maintain it, and it loses it from the tax rolls. When a non-profit acquires land, it may leave the tax rolls, although the nonprofit may elect to make a payment to the town in lieu of taxes. When the owner places a conservation easement on land, it stays on the tax rolls although maybe at a reduced rate. So all forms of conservation cost the local political entity something, at least in the short run. But conservation easement is the least expensive form of conservation.

His second point was that conservation was actually a good investment. Why? Because development, especially residential development, always costs more than conserved open space. That might seem counter-intuitive, since new development brings in new tax revenues. But it turns out that services required by residential development always cost more than this development brings in in revenue.

The evidence of this is provided by studies of the costs of community services. These studies attribute portions of community revenues and expenses to the land use that generates them. If you look at the revenues and expenses that are attributable to residential, commercial, and open space/agricultural areas in a community you get a ratio of dollars spent per dollar brought in by each type of land use. Across 70 of these studies around the country residences invariably cost more than revenue attributable to them, while for both commercial and open space the opposite is true. Usually, this ratio is three to four times greater for residential than for open space.

Of course, there's no mystery to the fact that services for people cost more than services for empty space. No one would want a town with no residents, would they? But a balance of residences and open space is a good thing. Thinking that more development will reduce taxes is absolutely wrong.

It would be interesting to see such a study for our town. At the moment, forest, farmland, and open space are taxed by our town at a much lower rate than residential, so our ratios might be less unbalanced. Is this another way to judge fairness?