A recent study by Colorado State University indicates that sprawling low-density residential areas require more funds than are covered by the taxes they generate. While high-intensity areas tend to generate greater employment and tax revenues than low-intensity areas, high-intensity areas also tend to demand more services.
Farm and forest land uses, on average, require 35 cents of every dollar of tax revenue generated for services. However, disperse rural residential development, such as urban sprawl with one residence per 35 acres, costs tax payers $1.15 for every dollar generated. Transforming a low-intensity area into a high-intensity area creates a number of changes, many unintentional.
"Rural residential development affects wildlife, public land access, open spaces and the fiscal structure of the county," said Andy Seidl, Colorado State University agriculture and resource economics associate professor and Cooperative Extension public policy specialist. "Current residents of Colorado communities are subsidizing the sprawling new residential developments now characteristic of the Western landscape."
According to a study by Seidl and Roger Coupal, University of Wyoming associate professor in the Department of Agriculture and Applied Economics and Cooperative Extension community development specialist, residential areas have a great demand for community services such as police and emergency services, schools and transportation infrastructure – services cows and corn do not require.
"These results do not apply to all residential developments," said Seidl. "The results are meant only for low-density residential development and do not imply that all residential development is fiscally irresponsible."
However, policy makers face great decisions when it comes to rural land. This land can be converted from low-intensity uses, such as farming, to high-intensity uses, like residential areas. However, once the land is converted to a high-intensity use, it is almost impossible to be made back into a low-intensity area.
"Our results suggest that small acreage residential areas do not pay for themselves," said Seidl. "Although agriculture and forest lands do not generate as much revenue, they tend to pay for themselves because they don’t require as many costly services."
According to Seidl and Coupal’s study, there are no counties in Colorado that will financially benefit from transforming agricultural acres into low-density residential areas.
The study revealed transformations in Sedgwick County would be the least expensive, costing current residents about $1.10 for every dollar of tax revenue generated. Meanwhile, Larimer County has one of the highest estimated costs, leaving its citizens to pay almost $2.22 for every dollar generated to change farm lands into residential areas.
A copy of this study is available at http://dare.agsci.colostate.edu/extension/apr03-02.pdf
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