Policy Analysis Modeling for Community Development in Small Cities

Abstract

Mathematical models are formulated to help planners, elected officials, and citizens in small cities estimate the socioeconomic and fiscal impacts of residential development. The city of Cohoes, NY, serves as a case study. The need for this work is established by reviewing the city's history from its period of growth as a mill town in the nineteenth century to its decline and attempt at reversal in the twentieth century. The community development process is briefly discussed. Two levels of models are developed: static and dynamic. The static models, which describe a new steady state in the city, are less expensive to implement but sacrifice flexibility and accuracy. The dynamic models, programmed in an interactive mode on the computer, are more expensive but provide a wider range of data at greater accuracy. The models contain three sectors, a residential sector which describes the changes in population and housing, a commercial sector which describes the changes in the retail economy, and the public sector which accounts for municipal costs, revenues, and tax rates. The inputs are the type and amount of development proposed. Typical outputs are population by age group, the tax revenues derived from the new development, and changes in the property tax rate. The models are calibrated with data from the city, state, and federal governments. Both static and dynamic model results indicate that new private-sector residential development on vacant city lands returns a net surplus of funds to the municipal government and school district.