Editorial: City needs to ensure fairness when it reviews whether growth pays for itself

photo by: Journal-World Photo Illustration

Lawrence Journal-World Editorial

Lawrence is different from the rest of Kansas, for both good and bad. These days, one of the more significant differences is the reaction to a new housing development being built on the edge of town.

The vast majority of Kansas communities celebrate it because the vast majority of communities are shrinking. Such development may be the most hopeful thing that happens in any given year.

In Lawrence, that new housing development doesn’t create such celebration. On a good day, it creates a question, on an ordinary day a debate and on a bad day an argument. The issue in Lawrence is whether that new housing development is actually a benefit to the community or whether it creates more costs for local government through the need for increased services.

The City of Lawrence is trying to help the community come to a consensus on the issue. It is off to a good start. The community has agreed to lead a group of stakeholders in a “cost of growth” study. The group includes representatives from the Lawrence Home Builders Association, the Lawrence Board of Realtors, the Lawrence Association of Neighborhoods and the city-county sustainability director.

There are people on both sides of the issue in that group. The city is wise in trying to create that balance. There is no hope of getting the community to accept the study’s findings if it is viewed as a one-sided exercise.

But what the city has undertaken is just the beginning, and this first step won’t be the most important one. Making sure the study is comprehensive will be critical. Here are a few topics any honest cost of growth study should consider:

• People lead to retail development, not the other way around. That is critical to understand because the city’s budget is heavily weighted toward sales tax collections these days, which largely come from retail sales. Too many growth studies spend all their time looking at property taxes but give no credit to new housing developments for the role they play in creating new retail spending.

• Not all housing developments are created equal. The issue isn’t how much it costs the city to build a street, a sidewalk or sewer line to serve new development. Developers already pay for those costs directly through special assessments. People who are engaged in this issue already understand that. The issue is that the city must pay to maintain all those pieces of infrastructure, plus provide other services to a population that is now larger as a result of the new development. Here is a fact that is going to make some uncomfortable. A development full of $350,000 homes is going to provide a lot more money to pay for such costs than one full of $125,000 homes. It doesn’t really cost any more to maintain a street in front of a $300,000 home than a $125,000 home. But chances are, the incomes that reside in that $350,000 home are going to do much more to boost the spending power of a community — and thus the sales tax collections — than those that reside in the $125,000 home. Uncomfortable, but no less important to understand.

• Not all government spending is equal. Back in 2014, the city spent $22.5 million to build Rock Chalk Park. It didn’t have to raise taxes to do so. The natural growth and vitality of Lawrence provided the funding. Of that amount, $10.5 million was for a new recreation center. Growth did cause that need, as Lawrence’s larger population was crowding existing recreation centers. But the other $12 million funded infrastructure for stadiums and other facilities owned by a private developer and leased to the University of Kansas.

Growth didn’t fuel any of that development. KU’s desire for better facilities did. The city went along, it seems, as an economic development play. The point here is not to debate that argument. Rather, it is to recognize the city just as easily could have chosen to use that $12 million of readily available money to maintain its own infrastructure in the community.

Rock Chalk Park is just one example of local government choosing to use available money — produced through the growth and vitality of the community — to pay for amenities rather than address the costs that growth certainly does create.

That’s not a knock against amenities. Rather, it is a knock against those who want to punish growth for the simple fact that it never will pay for everything a community desires.

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