Planning for Economic and Fiscal Health

1. Planning for Economic and Fiscal Health 2014 Utah APA & Western Planner Joint Conference Salt Lake City, Utah October 3, 2014

2. Planning for Economic and Fiscal Health 2014 Utah APA & Western Planner Joint Conference Salt Lake City, Utah October 3, 2014

3. Presentation objectives • Understand the context within which communities plan • Shape the future you want • Economic competitiveness • Community character • Quality of life

4. Smart Growth Smart growth means building urban, suburban and rural communities with housing and transportation choices near jobs, shops and schools. These strategies support thriving local economies and protect the environment.

5. Planning for Economic and Fiscal Health This is about how the pattern of development – how we choose to grow – affects our region’s ability to compete economically, to be fiscally sustainable, and to provide efficient and effective public services – to maintain our high quality of life.

6. The way we design and build our communities has enormous consequences

7. 1. The market is changing, especially for housing2. The recipe for economic growth is changing3. We can no longer afford to use tax money to subsidize inefficiency We must be aware of 3 important factors affecting the future of our communities

8. THE CHANGING MARKET

9. THE CHANGING MARKET Your community is changing and preferences and the market are following.

10. THE CHANGING MARKET Your community is changing • There are two demographic changes that are driving the market and must drive your decision making. • The rise of the Millennials. • The aging of the Baby Boomers.

11. PROSPERITY Demographic change and the labor force

12. THE CHANGING MARKET American households are changing In the 1950s roughly half of all households were families with kids. “Between 1970 and 2012, the share of households that were married couples with children under 18 halved from 40 percent to 20 percent.” US Census Bureau, America’s Families and Living Arrangements: 2012 By Jonathan Vespa, Jamie M. Lewis, and Rose M. Kreider August 2013

13. THE CHANGING MARKET The market: Housing

14. THE CHANGING MARKET How will your community meets the needs of millennials and aging boomers in order to improve your competitiveness?

15. PROSPERITY

16. PROSPERITY The nature of the economyis changing and so is the role of communities in economic growth.

17. PROSPERITY

18. PROSPERITY The Network City(city as network)

19. PROSPERITY The rise of the millennialsand the global economy are driving the economy.

20. PROSPERITY The labor force • Millenials choose where to live before finding a job. • 64% looked for a job after they chose the city where to live. (Source: U.S. Census) • How people want to work is changing and where they want to work is changing.

21. PROSPERITY Businesses respond to changing preferences • Across the country corporations are responding to employee preferences and moving to the talent. • They are choosing to relocate from suburban offices to downtown locations.

22. PROSPERITY Businesses respond to changing preferences Zappos, Las Vegas, NV Hillshire, Chicago, IL

23. PROSPERITY “Urban vitality drives innovation and attracts ‘talent.’” (Freedmen, Tung & Sasaski, 2012) “Livable cities draw creative people, and creative people spawn jobs.” (Wired, “Small Cities Feed the Knowledge Economy”, Adam Davidson, May 31, 2011.)

24. PROSPERITY There is a price/value premium for walkable places Applies to residential real estate - Above-average walkability:  $4,000 to $34,000 more in home sales price • Sources: “Walking the Walk” by Joseph Cortwright, CEOs for Cities and • “The Walkability Premium in Commercial Real Estate Investments” by Gary Pivo and Jeffrey Fisher

25. There is a price/value premium for walkable places Applies to commercial real estate - Greater walkability:  1% to 9% increase in commercial property value depending on type; also higher incomes and lower capitalization rates • Sources: “Walking the Walk” by Joseph Cortwright, CEOs for Cities and • “The Walkability Premium in Commercial Real Estate Investments” by Gary Pivo and Jeffrey Fisher

26. PROSPERITY Encouraging Job Growth • Up to 80 percent of job growth is from existing businesses. • In the new era of specialized, network businesses, proximity matters. • Workplace strategies should focus on existing concentrations of workplaces. • Target those industries related to existing City assets. -- Michael Freedman 

27. PROSPERITY Smart growth is part of an economic development strategy • Economic development is increasingly a competition over placemaking. • Building a great place to live, work, and play IS an economic development strategy.

28. PROSPERITY How can your community take advantage of the changing nature of the economy in order to create jobs and wealth?

29. FISCAL HEALTH

30. FISCAL HEALTH How communities develop affects costsandrevenue.

31. FISCAL HEALTH Municipal budgets • Municipal budgets are feeling pressure • State and federal funds are disappearing • Costs are escalating • Tax bases have shrunk

32. FISCAL HEALTH Municipal budgets • A large portion of municipal budgets go to infrastructure and services. • building and maintaining roads, bridges, sewer and water lines, etc • providing fire and police services, trash removal, paratransit, etc

33. FISCAL HEALTH Municipal budgets • Costs are not just infrastructure related but also operations and maintenance. • Burden usually falls on taxpayers.

34. FISCAL HEALTH Municipal budgets • You have to spend on these things. • You need to ensure that you are spending those funds in the most effective and efficient manner. • Budgets are not just financial documents – they reveal are goals and what we value.

35. FISCAL HEALTH Development affects costs • When it comes to infrastructure costs… • Compact development development is the best deal. • Low-density suburban development rarely pays for itself. • It makes sense to reuse existing infrastructure.

36. FISCAL HEALTH Development affects costs Building infrastructure to serve new development on the fringe can cost the city up to three times more per acre than urban infill development.

37. FISCAL HEALTH Development affects costs • Compact development offers efficiencies in regards to services as well. • Police and fire departments have less area to cover. • Fewer miles of road to cover for snow removal and trash pickup.

38. FISCAL HEALTH Development affects revenue • When it comes to revenue… • Compact development is the best deal. • Low-density suburban development generates much less per acre revenue. • You can increase your property tax base significantly simply by bringing back areas that already exist

39. FISCAL HEALTH Development affects revenue • The revenue side of things is affected as well. Multifamily housing in near an area’s center can generate nine times more revenue per acre than traditional large-lot, single-family housing on the fringe.

40. FISCAL HEALTH Development affects costs Building infrastructure to serve new development on the fringe can cost the city up to three times more per acre than urban infill development.

41. FISCAL HEALTH Development affects revenue Courtesy Joe Minicozzi,AICP of Urban 3

42. FISCAL HEALTH Development affects revenue Courtesy Joe Minicozzi,AICP of Urban 3

43. FISCAL HEALTH Development affects revenue Courtesy Joe Minicozzi,AICP of Urban 3

44. FISCAL HEALTH Development affects revenue

45. Nashville Case Study • 3 development projects • Bradford Hills (conventional suburban) • Lenox Village (“New Urban suburban”) • The Gulch (smart growth) • Operating Costs only • No infrastructure cost analysis • General Fund only

46. Bradford Hills (conventional suburban)

47. Lennox Village (“New Urban suburban”)

48. The Gulch (smart growth)

49. Project Acreage

50. Housing Units