One sprawl subsidy that is hidden -literally-underground is the cost of
extending new sewer and water lines out to sprawling development. In most areas, taxpayers
pay the cost of hooking up new developments to sewer and water service; the further a new
development is from town, the more expensive this will be. And though some cities and
towns charge fees to help pay for these expensive systems, this rarely covers the whole
bill. Who picks up the difference? The taxpayers do.
Even a simple water or sewer system can cost big bucks. Maryland Gov.
Parris Glendening estimated the cost of the average new sewer line to be around $200,000.
(15) Planners in Minneapolis-St.Paul estimate it will cost $3.1 billion for the new water
and sewage services that will be needed to accommodate projected growth between now and
Even when impact fees are charged, they often don't cover the whole cost.
For example, in Spring Hill, Tenn., home of the Saturn branch of General Motors, over $7
million was needed to cover the cost of new sewer and water service for the plant. But,
impact fees only recouped $2 million of the cost-leaving the city with a $5 million
In Colorado, we find the same dynamic. Arvada, a suburb of Denver, is
growing via the tried and true process of land annexation. As part of the annexation
agreement, Arvada has agreed to hook up a proposed development, TenEyck, to its sewer
system. TenEyck will consist of 90 homes, located nine miles from the nearest sewer line.
The new sewer line will cost between $2.25 million and $2.7 million, yet the average new
home in Arvada will bring in only $1,293 per year in property taxes. Even if all of the
new residents' property taxes were spent paying for the sewer, there would still be a
shortfall of well over $2 million.
A new study of Pima County, Ariz., starkly reveals how poorly
planned growth and irresponsible subsidies can feed on each other to create a financial
and environmental nightmare. Pima County allows "wildcat subdivisions"-where
landowners can split parcels up to five times and builders are subject to few
regulations-to be built almost anywhere. These wildcat developments are the epitome of
sprawl-they are built far from existing communities and are subject to little oversight.
According to the study, each new home built in a wildcat development costs
the county $23,000 while contributing only about $1,700 in property taxes. (18) And
wildcat subdivisions are very popular. A 1997 report found that over 40 percent of all
new, single-family building permits issued by Pima County were for this type of
development. Not surprisingly, this is costing the county a bundle. The report estimates
that providing infrastructure and emergency services to these developments costs between
$35 and $55 million a year.
There are other options. Smart-growth can lower infrastructure costs and
tax bills. A recent study compared 18 different communities in Michigan and found that
smart-growth development reduced construction costs for water and sewer lines by almost
$33 million. (19) A more in-depth study of Virginia Beach, Va., found similar savings.
Smart growth can save taxpayers a lot of money. In turn, reducing the
subsidies hidden in water and sewer line construction will slow sprawl.
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