Michigan Land Use Institute

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Research Report : The Cost of Sprawl

July 15, 2000 |
Great Lakes Bulletin News Service

The following information is submitted on behalf of Michigan Land Use Institute and other concerned citizens. The issue to be addressed in this report is the impact of the proposed Stone Ridge Farm development on public facilities and services, and the economic well-being of Weldon Township. We will use the term "fiscal impacts" to refer to this issue. As you know, fiscal impacts are a necessary consideration for the Township Zoning Board because of Standard 9.05(D-1)(f). This provision says that a Planned Unit Development like Stone Ridge Farm may only be approved if the developer can demonstrate that it

    Will not create excessive additional requirements at public cost for public facilities and services and will not be detrimental to the economic welfare of the community.

This, like the other provisions of Section 9.05(D-1), is not a "guideline," as the developer has tried to characterize it. Rather, this provision is a mandatory standard. The state Township Rural Zoning Act says that PUDs can only be considered if the zoning ordinance sets out mandatory standards like those in Section 9.05(D-1). In other words, if the developer cannot show he meets the standard on fiscal impacts, the ordinance instructs you to deny the PUD application.


Why do we think you should pay so much attention to the fiscal impacts standard? Because in study after study, independent, national organizations have concluded that, counter to what many people would guess, placing large developments in rural areas ends up being a drain on the local tax base.
Specifically, here are some of the well-documented conclusions about placing large-scale residential development in rural areas like where Stone Ridge Farm is proposed:

  • They result in increased costs to public services, and ultimately lead to higher taxes.
  • The cost of public services increases as the development gets farther away from already existing development.
  • The concept of "smart growth" requires developing "infill" areas that are adjacent to already existing infrastructure, rather than areas in the middle of rural, agricultural property. Such developments are more economical, discourage sprawl, and help preserve land values.


Many of the studies and reports we are referring to have been submitted for the record. Here is some of what they said:

Placing large developments in rural areas creates a drain on the tax base.

In the long run, large developments located away from existing residential areas result in higher taxes for everyone else. In effect, the existing taxpayers end up subsidizing the new development. The American Farmland Trust did the most influential study on the costs of new subdivisions in agriculturally-zoned communities. The AFT study concluded: "The results of this analysis show that over a wide range of densities (0.2 units/acre to 4.5 units/acre) the ongoing public costs of new residential development will exceed the revenues from such development." The Stone Ridge Farm proposal falls squarely within this range, at 1.18 units/acre.

Sources: American Farmland Trust, Density-Related Public Costs

Planning & Zoning Center, The Fiscal Impacts of Growth

American Farmland Trust, Farmland and the Tax Bill: The Cost of Community Services in Three Minnesota Cities

American Farmland Trust, The Cost of Community Services in Madison Village and Township, Lake County, Ohio

Pelley, et al, Sprawl Costs Us All

The further new development is from the developed part of the community, the greater the drain on services.

The costs of providing public services to a new development increases with how far it is from the part of the community where residential development already exists. Most of the reports on this issue say that the location of these developments is the number one factor in how much they will cost the community’s taxpayers in the long run.

Sources: National Growth Management Leadership Project, The Costs of Sprawl, Revisited

Southeast Michigan Council of Governments, Fiscal Impacts of Alternative Land Development Patterns in Michigan

There are scientific formulas that can be used to assess these impacts.

It is possible to estimate how much a given development will cost a community in increased burdens to public services and infrastructure. Detailed formulas and methods for doing this have been developed by planning organizations and universities. Using these studies, the costs of the new development can then be compared to the revenues which the project will bring into the community as local taxes. We would suggest that because the developer has the burden of demonstrating that the project will comply with standard 9.05 D-1(f), Stone Ridge Farm should not be approved until he undertakes some kind of real study of what this new subdivision will ultimately cost township taxpayers.

Sources: Allagash Environmental Institute Center for Research & Advanced Study, The Comparative Economics of Residential Development & Open Space Conservation

Potawatomi Land Trust, A Cost of Community Services Study of Scio Township, Michigan


Based on the conclusions of these studies, the fiscal impacts of a project like Stone Ridge Farm need to be considered and studied very carefully. Who should do the studies? Michigan case law says the burden of showing that Stone Ridge Farm meets the fiscal impacts standard, like all the standards, is on the developer. See for example, Robert J. Eliassen & Sons v City of Livonia, 55 Mich App 596, 223 NW2d 84 (1974).

How much detail is required? Section 9.05(D) of the ordinance sets out a very high standard for determining whether the developer has met his burden:

    The Zoning Board shall establish beyond doubt that the general standards specified in the following and the specific standards outlined in each application section of the Ordinance shall be satisfied by the completion and operation of the proposed development.

So the developer has the burden, and the standard is "beyond doubt." Moreover, the national experts who have studied the issues conclude that large developments in rural zoning districts drain township resources, and the boost in tax base claimed by their proponents is an illusion when compared to their real long-term costs.


How does the developer respond to these well-documented concerns? With two statements about impacts, each of them about a page-and-a-half long, and unsupported by any documentation. In total, three pages of opinion and speculation. Essentially, the developer is asking you to "take it on faith" that Stone Ridge Farm will not be a fiscal burden to the Township.
The developer wants you to take it on faith that this development is somehow unique, that it is somehow different from all the projects reviewed in the national studies. How does he arrive at this conclusion? His "impact statements" offer four main opinions:

  • There will be no burden on emergency services from the 1,371 new residents because they will be mostly retired and semi-retired people, who live a "relaxed lifestyle" and therefore have little need for emergency response.
  • The 1,371 new residents will be not impact the local roads because they will be mostly retired people, who will not drive much.
  • The 1,371 new residents will not impact the school system because they will be retired people or the owners of second homes or vacation homes, so they either will not have children or will have children but they will not attend local schools.
  • The new residents will contribute more money than expected to the tax base because they will be mostly second-home or vacation-home owners, so their property will be taxed at higher rates.


Several of these statements are simply not credible. For example, how does one say with a straight face that retired people need emergency medical response less frequently than other segments of the population?

Others are just contradictory. For example, are the projected residents retired people who will not drive much, or vacation-home residents who will be coming in and out all the time? Are they retired people who will receive the homestead tax exemption, or second-home owners who will be taxed at the higher rate?

Most importantly, though, the developer gives you these opinions based on another opinion that he asks you to "take on faith." This other opinion he wants you to take on faith is that he knows exactly who the residents are going to be: their age, their lifestyle, their income, their recreational choices, even their driving habits.

    How does he know this? He will not tell you. Here are his exact words:

      "This knowledge is proprietary, is not now nor will it be in the future available for public dissemination."

In other words, you are going to have to take it on faith. Take it on faith that his demographic is so specialized and so unique that Stone Ridge Farm will not have any of the fiscal impacts that the hundreds of other projects studied across the country had. Take it on faith that he knows exactly what that demographic will be. Take it on faith how he knows it, because he will never show you – he thinks it is none of your business. In effect, he is saying, "Take it on faith that we meet our burden on fiscal impacts. How we meet it is not your concern."

But it is your concern. Zoning is a public process. Land use planning is a public process. The decisions you make on this project will impact every resident of this community for years to come. For better or worse, they will seriously affect the character of Weldon Township, and the regional area, permanently and irreversibly.

With such grave potential consequences, you must be careful (you must know "beyond doubt") that this project will not cost the Township money in the long run. We believe the studies outlined above show that Stone Ridge Farm will ultimately be a fiscal drain on the Township, that it will ultimately "create excessive additional requirements at public cost for public facilities and services" and will ultimately " be detrimental to the economic welfare of the community."

But it is not our burden. It is the developer’s burden. If the developer does not want to do the studies and put the information necessary to meet his burden into the record, either because he thinks it is none of your business or because he is afraid of what the answers will be, then that is just one more reason to turn this application down.

Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
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