An Initiative A Day 1.3: Support Analysis of Long Term Impacts of New Development

January 22, 2014 in Vibrant NEO 2040, Vision

Current Trend Fiscal Impact – 12 Counties of Northeast Ohio

On February 25, the NEOSCC Board will be voting on the the Vibrant NEO 2040 Vision, Framework and Action Products.  With just under 40 days to the vote and 41 initiatives in the vision, we thought it would be good to create a countdown to the vote.  Everyday over the next 5 weeks,  we will be sharing an “Initiative A Day” with you so you can gent a better understanding of the vision and framework!  If you would like to read all of the Initiatives, you can download them here Vibrant NEO_Recs&Init_010114.

These recommendations, initiatives, and products, are not one-size-fits all and some aspects of the initiatives won’t be applicable everywhere in the 12-county region.  The Vibrant NEO 2040 Vision, Framework and Products are intended inspire and guide decision-making at the Metropolitan Planning Organization (MPO), Council of Government, and local levels to ensure that land use, transportation, and environmental considerations are simultaneously addressed by their processes. Ultimately, the implementation of Vibrant NEO 2040 is up to Northeast Ohio’s communities and residents. But regardless of the applicability of each initiative to any particular part of the region, the goal for each community within the Vision is the same: stability, prosperity, and a high quality of life for all of its residents.

Recommendation 1: FOCUS NEW RESIDENTIAL AND COMMERCIAL DEVELOPMENT ON SITES WITHIN ESTABLISHED COMMUNITIES

Initiative 1.3: Improve the ability of municipalities and townships to analyze the long-term impacts of new development and better manage their own development.

WHAT THIS MEANS. Making better decisions about what, where, and how to build next requires informed and realistic appraisals of the impact of development at a variety of timescales. Such appraisals are often difficult for local governments because of staffing shortages, gaps in expertise, legal constraints, or political pressures. While a municipality or township is experiencing growth, taking the time to appraise proposed developments can even be viewed as a liability, slowing down the pace of investment. Local governments have an obligation, however, to ensure that development does not compromise a community’s financial or environmental integrity for present and future residents.

Development impact analyses typically focus on the pure costs and benefits of a proposed development. A better approach would integrate the traditional cost-benefit analysis with, at minimum, an understanding and analysis of risk to municipal finances in the short and long term. A strong example of the factors that go into a thorough impact analysis was performed by Smart Growth America and Strategic Economics for three development scenarios in Nashville/Davidson County, Tennessee (citation: Smart Growth America, http://www.smartgrowthamerica.org/documents/fiscal-analysis-of-nashville-development.pdf). The analysis was conducted entirely in financial terms, but it weighed and monetized factors embodying long-term risk.

An even more thorough impact review process weighs impacts of development on quality of life factors such as housing choice and affordability, mobility and accessibility, watershed health and flood risk, and design. Such analyses often inform the levying of impact offset fees on development, a practice which is not generally available to Ohio communities due to the lack of authorizing state legislation.

WHY THIS IS IMPORTANT. The return on investment timeline of a municipality or township is both immediate and long term, whereas the developer’s is typically immediate. By relying solely on the reporting of pure costs and benefits of a proposed development, not only is a local government relying on a potentially compromised source of information (as cost-benefit analyses are typically generated by the proponent of a project), but it is discounting a host of other considerations that bear directly on the investment it is making in permitting a particular use on its land, not to mention whatever incentives it is providing to the developer. The first principal of investing is due diligence, which requires having the capacity and will to acquire good information and perform a balanced analysis of the economics of the investment proposition.

Local governments in Northeast Ohio have been hit hard by the region’s long process of economic restructuring. With the economic identity of the region still undergoing transformation, municipalities and townships must be very shrewd investors in their future. This imperative holds true for today’s growing communities and centers just as for the region’s established cities and towns, which were the growing communities and centers of yesteryear.

GETTING IT DONE. Ultimate responsibility for applying a better development impact analysis process rests with local governments; yet substantial gaps exist in the capacity of local governments in Northeast Ohio to do this. Many regional planning entities, notably the Metropolitan Council in Minneapolis and St. Paul, offer trainings and technical assistance to members on development review and impact analysis. Such support is sometimes mandated by state law regarding holistic analysis of development impacts, though this fact does not diminish the importance of prudent analysis. Without such directives from the State of Ohio and considering the scarcity of funding, NEOSCC and the region’s MPOs and Councils of Governments (COGs) should pool their resources and time to develop a “model development impact analysis” process tool that local government can start with should they be interested in implementing this initiative. Those partners should also offer trainings and conferences to encourage skill-building and development of a community of practice around this subject.

TOOL: Envision Tomorrow: This ArcGIS editing environment is linked to spreadsheets to create spatial alternative scenarios and assess the impacts of the resulting development patterns according to a variety of indicators. The tool incorporates building types aggregated up to development types as its basis. This software was used during the NEOSCC scenario planning process in 2013. http://www.frego.com/services/envision-tomorrow/

TOOL: The Northeast Ohio Fiscal Impact Tool (FIT), which was developed by the Vibrant NEO 2040 consulting team to aid in scenario development and evaluation, is one potential starting point for this initiative. The Fiscal Impact Tool is a spreadsheet-based tool that utilizes outputs from the Envision Tomorrow GIS modeling software to estimate the balance of revenues and costs at the county level. While producing estimates at the county level of geographic resolution suited the needs of the regional visioning process, future application to project evaluation and decision-making in local jurisdictions will require further development and refining of the tool’s parameters. Extensive documentation of the tool is provided in the “Technical Appendix”. This initiative might be best led by area universities or Councils of Government.

Lead

Nonprofit Organizations; Councils of Governments; Universities

Target Community

Strategic investment areas, asset risk areas, cost risk areas

Implementation Complexity

Low

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