The Fiscal Impacts of Residential Land Use Characteristics

Abstract

This paper examines the fiscal impacts of urban development patterns. Previous studies have indicated that low-density, spatially expansive development patterns are expensive to provide public services leading to higher per capita expenditures. However, theory would suggest alternative outcomes. These two possibilities are examined empirically using a panel dataset of U.S. county areas from 1982 to 2012 and a specification allowing for a potential non-linearity between development patterns and per capita expenditures. Estimates indicate that the spatial extent of urban development is the most important, suggesting that more compact development is less costly to provide public services. Increased density largely reduces per capita expenditures; however, the effects are quantitatively small.