Sticking Taxpayers with 2050 bills

Citizens assume new developments are designed so the tax revenue generated will cover required services.  But is that true?

 

The most fiscally damaging and irresponsible aspect of the County Commission’s planned changes to Sarasota 2050 is the weakening of fiscal neutrality and mixed use design standards.  Why?  Surplus infrastrcture costs will be shifted to existing taxpayers.  It’s bad enough for County taxpayers. For dual-taxed City taxpayers, it adds insult to injury.   Sarasota County’s existing total potential housing supply is more than three times projected ten year demand.  Having taxpayers foot the infrastructure bill for additional new housing east of I75, housing that competes with existing residential real estate and siphons jobs, tax dollars and investment from our neighborhoods amounts to major taxpayer subsidies for surplus new development.   Our local government expects us to fund our competition.

 

The Sarasota 2050 optional overlay district allows high density development in rural areas outside the Urban Service Boundary (USB) if the development does three things: provides generous open space, employs mixed used design standards and is fiscally neutral.  Fiscal Neutrality means developments pick up the tab for their up front infrastructure costs – new roads, schools, water, sewer, police, fire stations, etc.  It’s the more obvious financial problem and part of the current debate.  Mixed Use design standards ensure that the tax revenue generated by the development will cover it’s long term infrastructure costs (e.g. road maintenance, public employee salaries, benefits and pensions).  The long term financial impact of weak or absent mixed use design standards has received far less attention.

 

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A recent study by Public Interest Projects demonstrates how incorporating mixed use development provides a solvent tax base for a community.  Joseph Mincozzi and Peter Katz analyzed property tax records from Sarasota County, and documented how different properties compare in annual tax revenue per acre.

 

In Sarasota County, single family County residences contribute $3611/acre to County coffers, and County multi-family units bring in $7,807/acre. Mixed use development brings a higher yield.  Mixed use low rise (e.g. two story structures on Palm Avenue) yields $91,472/acre, an urban mid rise (the Orange Blossom building) comes in at $790,452/acre, and the urban high rise (1350 Main) yields $1,195,740/acre.  Mixed use design buildings fund more public services than they utilize.  The opposite is true for typical suburban development.

 

Mincozzi writes: “When one does the math on those costs against the tax revenues we were seeing in Sarasota County, it took a suburban multifamily housing development 42 years to pay off its infrastructure, while a mixed-use downtown tower (calculated for its residential portions only) was paying off its infrastructure costs in 3 years.”

 

Forty-two years?  That’s longer than the life of the infrastructure.

 

The County’s plan to weaken or eliminate 2050 fiscal neutrality standards burdens taxpayers with upfront infrastructure costs.   The less obvious, more pernicious financial drain is caused by weakened mixed use design standards.  Discarding mixed use design creates neighborhoods that require more public services than they can pay for. Most City and County Commissioners don’t seem too concerned.  I hear some of them are working on an elected mayor.

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  1. DiCicco: Antidote to Sarasota’s Toxic Commission – The Detail

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