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The Missing Metric: Economics and The Counterintuitive Nature of Planning

The document discusses the need for a new metric called the Fiscal Impact Quotient (FIQ) to evaluate development projects. The FIQ would represent the number of years required for a municipality to recoup its infrastructure investment in a project through increased tax revenue. Having an FIQ could help places regulate development in a way that addresses both community preferences and fiscal challenges. The document provides examples to illustrate how an FIQ might work and compares the FIQs of hypothetical projects in different counties.

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35 views

The Missing Metric: Economics and The Counterintuitive Nature of Planning

The document discusses the need for a new metric called the Fiscal Impact Quotient (FIQ) to evaluate development projects. The FIQ would represent the number of years required for a municipality to recoup its infrastructure investment in a project through increased tax revenue. Having an FIQ could help places regulate development in a way that addresses both community preferences and fiscal challenges. The document provides examples to illustrate how an FIQ might work and compares the FIQs of hypothetical projects in different counties.

Uploaded by

Planning Docs
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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The Missing Metric

Economics and the


Counterintuitive Nature of
Planning
U

The definition of an Expert:

The definition of an Expert:

Someone
from far away with
slides

The new definition of an Expert:

Someone
from far away with
Power Point

I fail the expert test

Henry Cisneros
addressing the
Congress for the
New Urbanism

Im a consultant in
planning and
strategic marketing

Upper Rock District:


Existing Conditions

Upper Rock District:


Build out per previous entitlements ($3.5 million)

Upper Rock District:


Build out per newly granted entitlements ($84 million)

Rockville, MD:

Upper Rock

Rockville, MD:

Upper Rock

Rockville, MD:

Upper Rock

Rockville, MD:

Upper Rock

Commissioned by JBG Companies; Duany Plater-Zyberk & Company

Ive also worked as a planner around the


United States

Oceanside, CA

Ive also worked as a planner around the


United States

Oceanside, CA
Sarasota, FL

Ive also worked as a planner around the


United States

Arlington, VA
Oceanside, CA
Sarasota, FL

Any given Tuesday


U

Any given Tuesday


U

Any given Tuesday


U

Any given Tuesday


U

Any given Tuesday


U

Any given Tuesday


U

Quality of life vs.


development impacts
U

Quality of life vs.


development impacts
U

Issues related to
revenue never came up
U

A time bomb under the street

A time bomb under the street

Impact fees only cover capital costs

New Roadway Facilities


University Parkway

I-75

N. Cattlemen Road (from University


Pkwy to DeSoto Road)

N. Cattlemen Road

Honore Avenue

University Pkwy & N.


Cattlemen Rd. / Cooper
Creek Boulevard Intersection

N. Cattlemen Road & DeSoto


Road Intersection

DeSoto Road

N. Cattlemen Road (from DeSoto


Road to Richardson Road)

Another problem with


impact fees...

DeSoto Road (from Honore Avenue


to N. Cattlemen Road)

Honore Avenue & DeSoto


Road Intersection

Total
Estimated Cost
$38,050,000

Right of Way $5,000,000


Construction $33,5000,000

New Roadway Facilities


University Parkway

Honore Avenue

University Pkwy & N.


Cattlemen Rd. / Cooper
Creek Boulevard Intersection

N. Cattlemen Road

I-75

DeSoto Road

N. Cattlemen Road (from University


Pkwy to DeSoto Road)

N. Cattlemen Road & DeSoto


Road Intersection
N. Cattlemen Road (from DeSoto
Road to Richardson Road)

Honore Avenue & DeSoto


Road Intersection

DeSoto Road (from Honore Avenue


to N. Cattlemen Road)

Total
Estimated Cost
$38,050,000
Right of Way $5,000,000
Construction $33,5000,000

Approved Platted Residential Lots


1400

1222
1200

# of Approved Lots

1000

800

600

So lets talk about


Sarasota County.
571

400
237
200
104

88
0

0
FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

*Data through 11/1/10

Approved Platted Residential Lots


1400

1222
1200

# of Approved Lots

1000

800

571

600

400
237
200
104

88
0

0
FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

*Data through 11/1/10

We didnt know what


was paying the bills
P

In 2008 the Sarasota County manager asked


staff to look at where our
property taxes were coming from

In 2008 the Sarasota County manager asked


staff to look at where our
property taxes were coming from

In 2008 the Sarasota County manager asked


staff to look at where our
property taxes were coming from

1923

a 4:1 ratio!

1926

2006

These two malls on 55 acres pay $1,145,028

Thats $350,000 less than

Thats $350,000 less than

this one building on 2/3 of an acre

It takes 145 acres of Walmart to equal the


revenue earned by 1350 Main Street

It takes 145 acres of Walmart to equal the


revenue earned by 1350 Main Street
Again, it occupies just 2/3 of an acre

What about Sales Tax?

1350 Main St:


$1+ million
generated
on .67 acres

1350 Main St:


$1+ million
generated
on .67 acres

1350 Main St:


$1+ million
generated
on .67 acres

Sarasotas downtown today


Mostly 1-2 story buildings

St. Petersburg;
the boom improved its
downtown

So what about
the cost side of the
equation?
P

Caveat: This is less


about tall buildings
than having the market
to fill them.
P

Caveat: This is less


about tall buildings
than having the market
to fill them.
P

Caveat: This is less


about tall buildings
than having the market
to fill them.
P

Caveat: This is less


about tall buildings
than having the market
to fill them.
P

Is this a national
pattern?
P

Now that we understand our tax base today,


how might we improve it going forward?

In many regions, there are Smart Growth


projects that will do well

In many regions, there are Smart Growth


projects that will do well

We need a method of
regulation that addresses the
places that people dont care
deeply about, and our
current fiscal challenges.

Could we mandate a maximum


pay back period?
The number of years required to
pay back the municipalitys
infrastructure investment

FIQ=Fiscal Impact Quotient


The number of years required to
pay back the municipalitys
infrastructure investment

FIQ=Fiscal Impact Quotient


The number of years required to
pay back the municipalitys
infrastructure investment

FIQ=Fiscal Impact Quotient


County A FIQ: 10 years
County B FIQ: 5 years
County C FIQ: 20 years

Its a new metric


Heres how it might


be used

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