Growth is largely powered by land development interests, which are the most powerful political force in the US at the local level. This special interest group, which includes developers, real estate lawyers, mortgage bankers and others, exert tremendous influence at city, county and even state levels by being the largest single industry source of local campaign spending.
In the past few years the National Association of Homebuilders (NAHB) has quietly become even more powerful in national politics than the NRA. Two years ago they secured a special bailout for their industry worth an astonishing $53 billion in “retroactive” tax credits. These were not loan guarantees, nor direct investment by the government as in the bailout of AIG. It was a straight-up cash giveaway.
Few people even know about this massive bailout of the giant developers which was tucked into a bill to extend unemployment benefits in 2010. It is a far bigger bailout than the Auto industry received (and with none of the payback from the Auto industry). If you read about it below*, you’ll see that it primarily enabled the big developers to buy land at distressed prices from small fry property owners.
Almost everything one hears about the benefits of urban growth is fictional propaganda generated by the land development industry. The NAHB maintains the most widely used fiscal impact analysis program in the US, which portrays a highly unrealistic fiscal bonanza from house construction (see Better Not Bigger message from Oct. 24, 2012 “Developer Shell Game Exposed” available at www.betterchelmsford.com).
In 2010 the biggest federally-funded study on the “Cost of Sprawl” had a shocking finding: even the best, most-compact, “smart growth” generates big net fiscal deficits for local governments. The study revealed that revenues cover only 71% of the costs generated by growth and adds billions in local government deficits every year. And that’s including “impact fees” which Chelmsford doesn’t even implement.
It’s important for individual citizens to understand the real fiscal impact of land development. Armed with this knowledge we will be far less likely to tolerate or subsidize poor development that destroys farmland, wetlands, and wildlife habitat while degrading water quality, generating congestion, undermining quality of life, and raising taxes on everyone.
Roland Van Liew