Growth Pays For Itself

New development in Alachua County pays much more than its share of public infrastructure costs, a newly released study by economists at the University of Florida has concluded.

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News Release:

New Development Does Pay For Itself In Alachua County

Contact: Margie Krpan, 372-5649
Builders Association of North Central Florida

Released August 6, 2001 --- New Development in Alachua County pays much more than its share of public infrastructure costs, a newly released study by economists at the University of Florida has concluded.

The new study has implications for many growth related issues such as infrastructure funding, impact fees, "sprawl", and it is certain to refute the often repeated, but unsubstantiated claims by no-growth advocates that growth does not pay for itself.

The study was conducted and authored by Dr.’s Jim Dewey and Dave Denslow of the Policy Studies Program at the University of Florida’s Bureau of Economic and Business Research. Dewey conducted a portion of the research in this report while working as a consultant for the Gainesville Builders Association.

"We estimate that the typical new household pays more than its share of infrastructure costs by $3,114," stated Dewey.

"Growth management is a comprehensive issue and our industry believes Alachua County and other decision makers should have as much information as possible before making any decisions about current or future growth", said Rick Howe, GBA President. "This report clearly indicates that development in Alachua County pays its fair share, and in some cases even more, and we hope the Commission would factor these findings into their decision making process. We’ll continue to work with the Commissioners to provide any other additional information they may need," continued Howe.

Howard Wallace, GBA’s Governmental Affairs Chair, commented "It is gratifying to see that our industry has added nothing but value to the community."

Wallace said that he expects the new study will defuse the rhetoric used by anti-growth groups to further shift public facility costs to the private sector.

The principal purpose of the UF study was to determine whether substantial impact fees could be justified on the theory that new growth does not pay its associated public costs. The researchers found that the current development pattern in Alachua County generates enough tax revenue to cover those costs. For example, new residents help pay past and present bond debts, sales tax on building materials, documentary stamp taxes, and of course, property taxes.

Moreover, the researchers warned that charging new residents taxes and fees that substantially exceed their share of associated public costs will harm the local economy, unduly delay development, and result in a general economic slowdown.

"Significant impact fees are clearly not warranted in Alachua County if the main argument in favor of them is that conventional development does not pay its share of public costs," the study concluded.

In a related finding, the UF researchers concluded that there is no academic consensus to support the assertion that "compact development" is superior to conventional "sprawl" development.

The County Commission is in the final hearing stages of adopting an updated Comprehensive Plan, the blueprint for future growth and development through the year 2011. Many of the proposed policy changes represent a massive intervention by county government into the private real estate market and vetoing of consumer preferences for conventional development.

"We favor letting our customers decide how and where they want to live" said Howe. "This new study shows that mandates for compact, higher density development may be ill-advised for our community."