DQOTD: Development & Infrastructure?

[Midpack]

Another one for the brain trust here (sincerely).

How does residential/commercial development coordinate with infrastructure needs? I do know they must be independent of each other, different funding sources, and infrastructure costs have to be spread over the whole tax base - not just the last development.

There are endless arguments on Nextdoor with every new residential or commercial development. The NIMBY’s are against every project, and they always use ‘traffic is already impossible”, our “sewer/water systems” are already overloaded, schools are already too crowded, we don’t want to be NYC, etc.

While I don’t agree with resisting all development, it’s clear public infrastructure has to grow somewhat in tandem with private development.

Developers can’t just keep adding developments without any change in infrastructure AND municipalities aren’t going to throw money at expanding infrastructure hoping developers will come and build.

So how does that happen? I’m sure it varies some by state, county, city - but I assume it’s not just squeaky wheel vs available funds/resources.

[Asking on Nextdoor would be a waste of time…]

 

[Texas Proud]

The problem is that what you are asking about is a very local answer...


So, here in Texas if you are building in a city you have to connect to the city water/sewer... but if you are building a new neighborhood you will have to build the streets etc....


Out here in the unincorporated area you might have to build everything... there might be a utility district that you can ask them to annex you and get water/sewer but you will have to build it first and then get some reimbursement after it is done... or start your own utility district and issue bonds etc. to build it with proceeds from taxes of the houses you sell..


It is the large projects that have to handle everything... a small house here are there is a non issue...

 

[COcheesehead]

Where I live, it’s planned and proposed by the developer and then it goes through a public hearing process. People near the development have a chance to ask questions or propose changes. Revisions, if any are made, the lots platted and then the developer puts in streets, sewer, power etc.
It’s about a two year process with the city having to sign off on all phases of it. Anyone building on the new lots has to pay a “tap” fee of about $8000 that is supposed to go towards expansion of infrastructure.
I have seen the next door thing and one of the reasons I do not use the app. People will complain once the building(s) are under construction and by then the train has left the station.

 

[SecondCor521]

Around here, I think there is some sort of one time impact fee assessed by either the city or the county depending on where the development is located. This is to offset, in theory, the expansion of infrastructure required. Some think the impact fees are too low (these are usually the same people who are less fond of local growth). I have no idea how much the impact fee is, or how it's calculated.

99.9% of roads here are public and are therefore built and maintained by the city/county/state/Feds. Ditto the water and sewer systems. Private roads and wells and septic exist, are paid for by the land owner, and are very very expensive.

The impact fee is probably paid for by the subdivision developer or business lot developer, then passed along to the builders and then to the eventual owners (either homeowners or landlords or businesses).

We also have ongoing property taxes which in theory pay for the maintenance and upkeep of the infrastructure. Property taxes and state income taxes go to fund schools, which are not necessarily crowded but many locally think our teachers aren't paid enough.

Probably like most places, we build just enough infrastructure for the very immediate future, and periodically have to go back and expand/upgrade later. Which is more expensive over the long run probably, but it seems to be the way of things.

 

[Dash man]

I used to be on the local planning commission for my township. A new residential or commercial development typically requires the developer to pay a large portion of any widening of roads, sewer and public water access and new traffic lights. Major infrastructure improvements require state or federal funding, or a bond offering to finance the project. Grants can be obtained for beautification of roadway’s development of parks. I really witnessed a lot of arm twisting of developers to put up extra funds to get things approved.

 

[CardsFan]

I used to be on the local planning commission for my township. A new residential or commercial development typically requires the developer to pay a large portion of any widening of roads, sewer and public water access and new traffic lights. Major infrastructure improvements require state or federal funding, or a bond offering to finance the project. Grants can be obtained for beautification of roadway’s development of parks. I really witnessed a lot of arm twisting of developers to put up extra funds to get things approved.

So, are you saying, in your experience, most of the costs are actually passed to the developer (and hence the new home owner)?

This is what I would hope for and expect. Obviously, RE taxes on the new places will help fund things in the future.

Most folks I know do not think this happens, so good to know that it does, at least some places.

 

[Dash man]

So, are you saying, in your experience, most of the costs are actually passed to the developer (and hence the new home owner)?



This is what I would hope for and expect. Obviously, RE taxes on the new places will help fund things in the future.



Most folks I know do not think this happens, so good to know that it does, at least some places.

I’m sure it varies for each locality, but in my experience developers did pay a larger share than I expected. Our township taxes are relatively low, but school taxes are outrageous.

 

[Midpack]

I used to be on the local planning commission for my township. A new residential or commercial development typically requires the developer to pay a large portion of any widening of roads, sewer and public water access and new traffic lights. Major infrastructure improvements require state or federal funding, or a bond offering to finance the project. Grants can be obtained for beautification of roadway’s development of parks. I really witnessed a lot of arm twisting of developers to put up extra funds to get things approved.

So, are you saying, in your experience, most of the costs are actually passed to the developer (and hence the new home owner)?

This is what I would hope for and expect. Obviously, RE taxes on the new places will help fund things in the future.

Most folks I know do not think this happens, so good to know that it does, at least some places.

Evidently I assumed wrong, or not.

My assumption. For example, I was asking about widening roads outside the development for example, not building roads within the development which I assume are entirely the developers expense, initially at least. If one developer builds a new subdivision it might not require a road expansion, and maybe not the next several projects. But at some point that next development makes a road expansion necessary. It doesn’t seem fair the last developer would be responsible for most of the road expansion when all the developments led to the expansion.

I’m thinking impact fees may be the answer I was looking for. Right or wrong it’s a way to make each developer pony up a some $ for surrounding infrastructure. That along with increased revenue from property taxes on every new home or business help fund infrastructure. From there planning boards know what resources they have to support infrastructure, and they’re aware of all developments - so they know where the needs are most needed over time. So it’s an iterative process so to speak. Make any sense?

It is tiresome to listen to people argue about this online with every proposed development, as it’s clear 90% of posters have absolutely no idea how developments and infrastructure happen, or the benefits of development. The same NIMBY people sound off every time, recruit to go to city council meetings, cast all developers as evil outsiders and city council members as corrupt partisan bumblers. Being part of a planning board doesn’t look like much fun…

 

[Dash man]

Evidently I assumed wrong, or not.

My assumption. For example, I was asking about widening roads outside the development for example, not building roads within the development which I assume are entirely the developers expense, initially at least. If one developer builds a new subdivision it might not require a road expansion, and maybe not the next several projects. But at some point that next development makes a road expansion necessary. It doesn’t seem fair the last developer would be responsible for most of the road expansion when all the developments led to the expansion.

I’m thinking impact fees may be the answer I was looking for. Right or wrong it’s a way to make each developer pony up a some $ for surrounding infrastructure. That along with increased revenue from property taxes on every new home or business help fund infrastructure. From there planning boards know what resources they have to support infrastructure, and they’re aware of all developments - so they know where the needs are most needed over time. So it’s an iterative process so to speak. Make any sense?

It is tiresome to listen to people argue about this online with every proposed development, as it’s clear 90% of posters have absolutely no idea how developments and infrastructure happen, or the benefits of development. The same NIMBY people sound off every time, recruit to go to city council meetings, cast all developers as evil outsiders and city council members as corrupt partisan bumblers. Being part of a planning board doesn’t look like much fun…

Planning Commisison, Zoning Committee and Township Supervisor/City Council meetings are open to the public. People can attend and express they’re concerns and see how some of the process works. When I was involved, the same few people showed up every month, unless some hot button issue was on the agenda.

I remember when T-Mobile wanted to put a 135ft cell tower on my rear neighbor’s property right behind my home. They followed the law by sending a notice to home within 500ft, but in a plain white envelope with no return address. Few people opened them. DW and I made copies of their proposal and put it in every mailbox in our development. The Planning Commission recommended against it. The turnout to the Supervisors meeting was outstanding and it was not allowed to be installed on my neighbor’s property. They did eventually approve the tower on township property behind the fire department, which has no residential housing nearby and the township gets the rent money. It allowed the township to tear down and rebuild the aging fire station a few years later.

 

[Midpack]

I remember when T-Mobile wanted to put a 135ft cell tower on my rear neighbor’s property right behind my home. They followed the law by sending a notice to home within 500ft, but in a plain white envelope with no return address. Few people opened them. DW and I made copies of their proposal and put it in every mailbox in our development. The Planning Commission recommended against it. The turnout to the Supervisors meeting was outstanding and it was not allowed to be installed on my neighbor’s property. They did eventually approve the tower on township property behind the fire department, which has no residential housing nearby and the township gets the rent money. It allowed the township to tear down and rebuild the aging fire station a few years later.

That sounds like the process worked well for all concerned, but maybe only due to your actions. Reassuring?

 

[jazz4cash]

It seems like urban planning is a lost art around here. The development gets done and many years later the required infrastructure is built. We have this mentality of building new shiny stuff but no taste for maintaining the older systems. I agree an impact fee might address some of these issues.

 

[Midpack]

I wasn't aware of impact fees on developers before this thread, it sounds like a very reasonable approach to spread infrastucture expansion costs. OTOH, impact fees add costs which may discourage development, so it's a balancing act for planning boards. I am sure it's a challenge to apply infrastructure project funds where most needed with finite funds/resources - but it has to be done. The many boneheads on ND are of course willfully ignorant of the challenges, or benefits of growth/development.

Today, impact fees have become a popularly used method. About 60% of all cities with over 25,000 residents along with 40% of metropolitan counties use impact fees on new developments for public services or infrastructure. In some cities or states such as Florida, 90% of communities use Impact Fees. Twenty six states have implemented the use of impact fees in the western portion of the country, along the Atlantic coast, and within the Great Lakes region.

 

[Texas Proud]

Just to be clear on some of this... at least for here...


An impact fee is a payment to the gvmt entity to use existing infrastructure such as water and sewer if the plant has enough capacity...


If there is not enough capacity then the developer has to build it out and the gvmt entity will reimburse a percent of that cost...

 

[badatmath]

My HOA is required to build and maintain the street and the street lights. We won't talk about how stupid I was not to realize this 25 years ago when I got the house. I'm not actually sure how water/sewer is not an issue for us but we are connected to those. It would be less of a problem if my community was not small and underfunded.

 

[ERD50]

There was a proposal for a large shopping center (and before that a large residential center) near where we had lived. We attended most, if not all of the zoning/planning meetings.

In our area, the developers were absolutely on the hook for the cost of nearby street upgrades (extra lanes, traffic lights, etc), same with water/sewer, electrical. They were required to install berms and landscape to somewhat shield nearby homes for the traffic at the edges of the property. If studies showed the feeder streets could not handle that traffic, they could be asked to downsize the project.

But then, get someone with power that wants to pad their resume' with some big fancy development that they can say they oversaw, and it seemed that a lot of concerns get swept under the rug. Or someone on the approval board gets a cushy job with the developer a few years later? There is the potential for a lot of shady deals.

-ERD50

 

[jazz4cash]

As if pure infrastructure and development issues are not hairy enough, it will be interesting to see how the powers that be respond to expectations for a new football stadium now that the Washington Commanders have moved on from a despised owner. I think these overly grandiose stadiums can no longer be justified for use of public funds but there could be some public contributions for infrastructure and tax abatement.

 

[sparky08]

Eight years ago we bought a lot to build our retirement home on. Back of the subdivision, with beautiful views.

But when the 20 year plan came out we decided to sell the lot and buy an existing house with decent views.

The plan has so much growth that another elementary school and fire dept building is needed. The developer is on the hook for some of the cost for both.