The Fiscal Impacts of New Development

New development can significantly impact a city’s budget. Gauging that impact is important to city officials, developers, and ordinary citizens.

Fiscal impact analysis is designed “to estimate the impact of a development or a land use change on the costs and revenues of governmental units serving the development,” according to the University of Wisconsin's Community Guide to Development Impact Analysis. “The analysis is generally based on the fiscal characteristics of the community — e.g., revenues, expenditures, land values — and characteristics of the development or land use change — e.g., type of land use, distance from central facilities.” 

The analysis helps local governments to estimate the difference between the costs of providing services to a new development and the revenues potentially generated by the development. Key players on the assessment team might be the community’s clerk or finance officer, the tax assessor, and a facilitator to gather additional information from specific services. Often the analysis is done to justify a variance, like a density increase, or to identify revenue created by the development for a revenue participation agreement.

At RSG, we understand the process and can gather necessary information from the assessment team, perform the analysis, and explain the results to the City, developer, and public. If you’re curious about the fiscal impacts of a proposed development in your city, contact us for an analysis.

Written by Brett Poirier, a Research Assistant at RSG