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Utilities One sprawl subsidy that is hidden -literally-underground is the cost of extending new sewer and water lines out to sprawling development. In most areas, taxpayers pay the cost of hooking up new developments to sewer and water service; the further a new development is from town, the more expensive this will be. And though some cities and towns charge fees to help pay for these expensive systems, this rarely covers the whole bill. Who picks up the difference? The taxpayers do. Even a simple water or sewer system can cost big bucks. Maryland Gov. Parris Glendening estimated the cost of the average new sewer line to be around $200,000. (15) Planners in Minneapolis-St.Paul estimate it will cost $3.1 billion for the new water and sewage services that will be needed to accommodate projected growth between now and 2020. (16) Even when impact fees are charged, they often don't cover the whole cost. For example, in Spring Hill, Tenn., home of the Saturn branch of General Motors, over $7 million was needed to cover the cost of new sewer and water service for the plant. But, impact fees only recouped $2 million of the cost-leaving the city with a $5 million deficit. (17) In Colorado, we find the same dynamic. Arvada, a suburb of Denver, is growing via the tried and true process of land annexation. As part of the annexation agreement, Arvada has agreed to hook up a proposed development, TenEyck, to its sewer system. TenEyck will consist of 90 homes, located nine miles from the nearest sewer line. The new sewer line will cost between $2.25 million and $2.7 million, yet the average new home in Arvada will bring in only $1,293 per year in property taxes. Even if all of the new residents' property taxes were spent paying for the sewer, there would still be a shortfall of well over $2 million.
According to the study, each new home built in a wildcat development costs the county $23,000 while contributing only about $1,700 in property taxes. (18) And wildcat subdivisions are very popular. A 1997 report found that over 40 percent of all new, single-family building permits issued by Pima County were for this type of development. Not surprisingly, this is costing the county a bundle. The report estimates that providing infrastructure and emergency services to these developments costs between $35 and $55 million a year. There are other options. Smart-growth can lower infrastructure costs and tax bills. A recent study compared 18 different communities in Michigan and found that smart-growth development reduced construction costs for water and sewer lines by almost $33 million. (19) A more in-depth study of Virginia Beach, Va., found similar savings. Smart growth can save taxpayers a lot of money. In turn, reducing the subsidies hidden in water and sewer line construction will slow sprawl. Next: Fire, Police and Emergency Medical Services | Report Main Up to Top | Printer-friendly version of this page |
A new study of Pima County, Ariz., starkly reveals how poorly
planned growth and irresponsible subsidies can feed on each other to create a financial
and environmental nightmare. Pima County allows "wildcat subdivisions"-where
landowners can split parcels up to five times and builders are subject to few
regulations-to be built almost anywhere. These wildcat developments are the epitome of
sprawl-they are built far from existing communities and are subject to little oversight.