Wednesday, February 16, 2011

Cost of Community Services

One of the challenges we have is to ensure we have a good mix of different types of development in our community. Not only is important for forming a well-rounded city it also directly affects our bottom line.

Give this report (pdf download) from Red Deer County a quick once over. It looks at different land uses such as Residential, Industrial and Commercial and compares how much revenue each one brings in with how much it consumes in services.

The key concepts it outlines are; that Residential uses more in services than it provides in revenue; that Commercial roughly pays for itself and finally that Industrial basically subsidizes everything else.

Two really interesting sections:

Industrial – The Industrial land use appears to be a significant subsidizer of all other land uses. The low cost of this land use is more or less in line with other COCS studies. A sensitivity test of the “Power and Pipe” taxes, a significant source of the Industrial land use’s revenues, indicated that even without these revenues, the Industrial land use would still pay for itself in dramatic fashion.


It is significant to note that the Residential land use did not pay for itself in any scenario in this study, not even in the re-calculations done to make this study more comparable to previous studies. ... This effectively means that other land uses are subsidizing the level of service provided to the Residential land use.

Although the specifics would be slightly different for us I'm willing to bet that the fundamentals would be largely the same for any community in the province.

It goes to show that a community like GP with a majority of it's land used for residential development is not sustainable because we don't have enough industrial development to subsidize the service residential development demands.

Communities with significant "Power & Pipe" or linear tax sources are much better off.

1 comment:

Anonymous said...

Ok. Then what are you suggesting is the solution?


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