The real cost of growth in Oregon

Abstract

The costs of growth are little known, poorly understood and typically understated. This study is an initial effort to provide a more complete understanding of the current costs of growth in Oregon. While more than two dozen cost areas are identified, the focus is on basic physical infrastructure required for urban development. A “proportionate share” costing method is used to determine the public infrastructure costs associated with the construction of a typical single-family house. Each increment of growth is allocated costs for only the increment of system capacity required to serve it. Cost figures are from representative projects recently completed or underway in Oregon. The result is a composite of recent cost data selected to be representative of the state as a whole. An analysis of seven public infrastructure cost areas associated with the construction of a typical single-family house—including public facilities for schools, sewer, storm drainage, roads, water service, parks and recreation, and fire protection—shows that the total cost is about $24,500 per house. Oregon's development impact fees are recovering only a fraction of these costs. As a result, most of these public infrastructure costs are distributed across the entire population of a community through property taxes or general obligation bonds, whereas the benefits of these investments accrue primarily to the new development. The methodology used in this study can be easily replicated and may provide a useful tool for communities trying to obtain better information about the economic and fiscal impacts of urban growth. A review of relevant literature and references are provided.