Twin Cities Metropolitan Council

Twin Cities Metropolitan Council

LOCATION: Twin Cities Region

TYPE: Fiscal Impact Analysis

TEAM: Carson Bise

Compact development is a financial plus for cities, according to a first-of-its-kind regional fiscal impact study conducted for the Metropolitan Council. Compared with a more spread-out development pattern, compact development produces more net revenues in a city’s general fund to pay for municipal operations and generates more savings in building infrastructure, such as sewers, water lines and streets.

The study examined the costs of serving new development or redevelopment and the revenues generated to calculate the net fiscal benefit. The costs examined by the study are “marginal costs”– that is, expenditures necessary to build new facilities and provide additional services to accommodate growth beyond existing municipal capacities. This approach reflects actual variations in the timing of development and in its geographic location, factors not incorporated in other methodologies. The revenues examined in the study include property taxes as well as one-time construction-related fees for permits, administrative charges, and special assessments.