September 2020 - Parks & Recreation - 23

Figure 2. Residential Development
The Myth

The Reality

Expands the
tax base

Raises the cost of
providing community
services

Increases local
tax revenues

Net deﬁcit inﬂuence
on local tax revenues

Reduces the tax
payments of current
residents

Increases the tax
payments of current
residents

Implications for Parks and Open Spaces
Residential development is the most common alternate use
proposed for potential park and open space lands. In those
situations, the key fiscal impact issue becomes: Will the net
costs of purchasing, maintaining and operating the land as
a park or as open space be greater than the net costs associated with servicing a residential development that may be
constructed on that site? The answer is usually " no. "
The following example suggests that if the annual
cost of maintaining and operating a natural park is
lower than $180,000, then it is likely to be less of a financial burden to the community than if the 50-acre
site is developed for houses.
On a 50-acre site, assume a density of three homes
per acre and a property tax rate (school district, city,
county, etc.) of 2.5 percent of market value on homes
valued at $300,000.
* Thus, annual property tax revenue equals $1,125,000
(50 x 3 x $7,500).
* Assume that the cost of servicing these residences
is 16 percent higher than the property taxes received
(see Figure 1). Thus, the annual net loss to the community for servicing this residential development is
$180,000 (0.16 x $1,125,000).
* If the operation and maintenance cost of the 50-acre
natural park is lower than $180,000 per year, then it
is a less expensive option to service than the housing
development on the same site.
Further, investment in parks and open spaces does not
incur the externality costs that accompany residential development, such as congestion, crime, pollution, infrastruc-

ture deterioration and changes in community character.
The economic costs and benefits of parks and open
spaces have largely been ignored in planning studies in the
past. These results demonstrate the need to include these
spaces in a community's fiscal and economic discourse. By
showing the relative fiscal strength compared to residential
development, park advocates can refute the notion that
parklands are a drain on local resources. A strategy of conserving parks and open spaces is not contrary to a community's economic health, but rather is an integral part of it.
The intent is not to argue that parks and open spaces are a
superior option to housing. People have to live somewhere.
There cannot be a national moratorium on residential development. The goal is not to prevent growth, but to encourage a balance between development and open spaces,
which tends to get lost without these types of analyses.
John L. Crompton, Ph.D., is a University Distinguished Professor,
Regents Professor and Presidential Professor for Teaching
Excellence in the Department of Recreation, Park and Tourism
Sciences at Texas A&M University and an elected Councilmember
for the City of College Station (jcrompton@tamu.edu).

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Parks & Recreation

September 2020 - Parks & Recreation

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