Why Communities are Saying "No" to Residential Development

By Michael Bayer

Sammis White was as surprised as anyone to learn that fiscal impact is not often used to defeat development proposals in Wisconsin. Initially, that was the central focus of his study, "The Fiscal Impact of Residential Development in Wisconsin."

Instead, the UW-Milwaukee urban planning professor found that traffic, the design or style of development, the environmental impact, even the effects on stormwater runoff are more influential in determining whether housing projects were acceptable to local governments.

"Frankly, I was surprised," said White, who presented his preliminary findings at the WAPA Fall Conference in September. "We've gathered so many reports generated through fiscal impact analysis that conclude that residents don't pay their share. It seems the message is that there should be a relationship."

Indeed, a statistical analysis by Peter Maier, associate director of the Center for Urban Initiatives and Research at UWM, found no relationship between either absolute property tax rates or rates of property tax increase and rates of residential growth in the Milwaukee area between 1970 and 1996. Moreover, Maier's analysis did not uncover any relationship for the time frames of 1982 to 1996, 1970 to 1980, 1980 to 1990 or 1990 to 1996.

Other measures of taxes were not quite so clear. When the team examined the relationship of tax burden to residential growth, it found a slight negative relationship between the rate of population growth and the tax burden on citizens. In fact, the faster the community grew, the lower the tax burden was on residents.

The situation changed during specific periods, however. Between 1990 and 1996, for instance, the team found a weak but positive relationship between the rate of population increase and the rate of tax burden increase. In the end, growth decreased the relative tax burden borne by individual residents, but they still paid more than they had in the past.

These findings reinforced White's conclusion that the relationship between fiscal impact and growth is complex. That conclusion did not surprise William Malkasian, executive vice president of the Wisconsin Realtors Association.

The Wisconsin Realtors Association and Wisconsin Builders Association commissioned the study, Malkasian said, as part of an effort to "respond to emotionalism on the issue of land use."

"What we are finding is that it is not simply an issue of the environmentalists versus the developers," he said. "Typically, it is the rules, the antiquated zoning laws, that cause the problems. Growth is very localized, and it has a different impact on different communities."

White's team studied the issue by surveying more than 200 growing cities, towns and villages across Wisconsin. One hundred thirty-four communities returned the survey. In addition, White interviewed 18 developers from all corners of the state. The idea was to find whether the two sides were experiencing the same conditions.

The team also compiled a database on 90 municipalities and 51 school districts within the Milwaukee metropolitan area. The data were analyzed to determine the connection between rates of residential growth and rates of property tax increases. The team also evaluated the technique of fiscal impact analysis.

Developers almost as a whole reported that the development process has grown longer and more contentious, especially during the last year. In particular, the concerns of only a few residents appear to sway communities against specific proposals, sometimes over the objections of the professional planning staff, the report said.

Multi-family units face the most resistance. Even communities that had been open to multi-family development in the past have become, to the developers at least, more restrictive. White found a sentiment among developers that, "Folks just do not want high density."

These opinions were reinforced by the community survey. The survey asked communities to characterize their attitudes toward land uses. The respondents could describe themselves as "open" to land use, "somewhat resistant to it" or "greatly resistant."

The survey found that communities were most open to single-family housing. Eighty-eight percent said they were open to single-family, while only 2 percent were greatly resistant. Office development was the second most popular land use, with 82 percent of communities describing themselves as open to it.

Multi-family, meanwhile, was more controversial. Only one-sixth of the communities welcome apartments, the report said. More than two-fifths of communities were greatly resistant to multi-family, and another two-fifths had some resistance.

The communities also were asked to rate how residents were disturbed by specific aspects of development. The amount of traffic generated rated the highest, followed by stormwater runoff, the impact on schools, the loss of fiscal impact, and in fifth place, fiscal impacts.

While "negative fiscal impacts" may be part of the debate over development, White concluded that it is not the driving force against it.

Nancy Frank, associate professor of urban planning at UWM, reviewed the technique of fiscal impact analysis and determined that it did not always provide insight into the effects of residential development. In fact, three commonly use types of analyses yielded different answers with the same set of data. Therefore, the team concluded, communities evaluate proposals based on their assumptions about fiscal impact that may or may not be true at a particular point in time.

In his conversations with developers, White said many suggested that planners educate their plan commissioners about the effects of development "so they understand the bigger picture." White also suggested that planners engage citizens in discussions about fairness, both in terms of types of development and the local decision-making process itself.

Malkasian said the Realtors Association would continue to monitor the attitudes and experiences of developers and communities "to benchmark the issue." He expects the association to support a second study in 1999, perhaps to review the same communities examined in White's report, although the exact nature of the study has not been determined, he said.

Malkasian said he supports "good" planning and does not want good planning decisions overturned for political reasons.