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Residential Development Impacts in Two Minnesota Regions.

Author: 
Kalambokidis, Laura and Bob Patton .

New homes and new residents often bring to local governments both increased tax revenues and increased government service costs. Whether the development is a contributor to or a drain upon the local budget depends on the development's 'net fiscal impact'ラthe difference between the revenues flowing from the development and the costs of providing services to new residents. Some state departments of agriculture and other organizations have used fiscal impact analysis to analyze the effects of development on farmland. One such project carried out by the Minnesota Department of Agriculture (MDA) produced a computer program, Development Impact Assessment Model: A Technical Resource (DIAMaTRル) for Local Governments, that was designed to analyze the fiscal impacts of residential development resulting from local land-use policy decisions.
This article reports on the recent use of DIAMaTR to complete fiscal impact studies in two regions of Minnesota: (1) the City of Oronoco, the adjacent township of Oronoco, and Olmsted County; and (2) the City of Pine Island, the adjacent township of Pine Island, and Goodhue County. Researchers estimated the net fiscal impacts of three future development scenarios in each region. In 13 out of 18 cases, the development was projected to result in a net expenditure per resident in the jurisdiction. The results of the study indicate that changing the location and density of new residential development within a region changes the impact of the development on local governments' budgets. In addition, development that spans jurisdictions can have differing effects on the budgets of those jurisdictions. The authors conclude that local and regional governments considering a development should carefully consider the location and density of the development and work together with other affected jurisdictions.

Journal: 
CURA Reporter
Publication date: 
2005
Publisher: 
Minneapolis: Center for Urban and Regional Affairs, University of Minnesota.
Sponsor: 
This study evolved out of research originally supported in part by a grant from the Faculty Interactive Research Program, Center for Urban and Regional Affairs, University of Minnesota. Additional funding provided by the Minnesota Environment and Natural Resources Trust Fund, as recommended by the LCMR.
Pages: 
35 (2): 11-13.
Online availability
Download from CURA: 
CURA call number: 
Reporter 35 (2)