Fiscal Impacts of Alternative Single-Family Housing Densities

Abstract

Across the nation, new residential development requires the construction of new infrastructure. However, financing the construction and maintenance of this infrastructure has become a contentious issue because of the various demands placed on local government budgets. The objective of this study is to ascertain how costs for certain infrastructures vary with the density of single-family residential development. Specifically, it examines how capital and life-cycle costs for roads, and sewer and water lines vary with density. Only on-site costs are examined, that is, the costs for infrastructure located within subdivisions. We find that life-cycle costs for roads and sewer and water lines increase as density decreases. Annual user fees for sewer and water cover the annual life-cycle costs for these infrastructures at lot sizes less than 0.4 hectare. We did not observe a relationship between annual life-cycle costs, expressed as a percent of revenues (the sum of property taxes and user fees for sewer and water), and density.