Study: Walkable Infill Development a Goldmine for City Governments

A study out of Nashville by Smart Growth America provides more evidence that building walkable development in existing communities is best for a city’s bottom line.

Nashville's "The Gulch" -- a mixed-use development downtown -- generates a much greater public return than more suburban developments in the same city. Image: ## Region Tomorrow##

SGA recently examined three different developments in the Music City. One was a large-lot, traditional suburban-style development called Bradford Hills built on greenfield site. Another was a “new urban”-style, mixed-use, walkable development also built on a greenfield, called Lennox Village. The third — known as The Gulch — was a mixed-use, compact housing and office development with retail and dining, built on a brownfield between Nashville’s Music Row and downtown.

The study compared the costs of local services to each new development with the revenues returned. Overall, the urban, infill development was far and away the best value for municipalities.

The Gulch — a 76-acre project, including 4,500 housing units and 6 million square feet of office space — yielded the highest returns in the form of “property taxes, sales taxes, and other recurring revenues,” according to SGA. Per unit, the development produced a total of $3,370 in public revenue annually, while costing the local government about $1,400 per year in infrastructure maintenance, policing, fire response, and other general fund obligations. In comparison, the traditional suburban development Bradford Hills generated only half the revenue — $1,620 per year — and cost more to service — $1,600 — making it basically a wash for local taxpayers.

Per unit, the performance of new-urbanist Lennox Village barely beat out the large-lot suburban development, generating $1,340 for the municipality annually while costing about $1,300.

When you factor in density, the differences between the three models really crystallize. The Gulch, filled with condo towers, generated $115,720 in net revenue per acre annually. That’s an astounding 1,150 times greater than Bradford Hills, which generated a total of just $100 per acre. The downtown development also performed 148 times better for the local government’s bottom line than new urbanist development Lennox Village, which yielded $780 per acre.

Developers often shy away from urban brownfield sites, fearing the cost of cleaning them up. Given the incredible benefits to the city of that kind of development, there should be better incentives for developers to look to infill, rather than greenfields, for their next project.

10 thoughts on Study: Walkable Infill Development a Goldmine for City Governments

  1. I am not sure when the goal of local governments became to maximize tax revenues. I know these sorts of basic cost-benefit analysis are routine, but one would hope there would be more than just dollar signs in the benefits column.

  2. The study isn’t a cost-benefit analysis. It’s addressing specific perceptions about what type of development produces fiscally healthy city budgets.

  3. If only city hall would support this kind of development. Small, local businesses would seem ideal for this kind of place. Yet, city hall is focused on playing the big box swindle with big companies that export money out of Chicago. The mayor spends most of his time speaking with CEO’s of large corporations, according to the reader. City hall does relatively little to support small business creation and entrepreneurs in local communities. I can’t imagine a Target, Wal-Mart, Best Buy or Walgreens being a great fit in this development.

  4. Great article about building walkable environments – but in the photo you provided – where are the pedestrians? There’s not a soul in sight.

  5. “Maximize” really isn’t the right word here, but “balance” is. Local governments should be seeking projects that balance the tax revenues generated from a project with the costs they incur to service it. You otherwise end up with under performing projects subsidized by others.

  6. This is the problem with new infill projects. They’re more focused on the entertainment factor than community factor. I live in Nashville (Lenox Village in fact) and can tell you that many of the people in the Gulch are there because it’s the “it” spot, aka expensive and has $20 sandwiches. Of course you will get a net benefit from that.

    What surprised me about my lil hamlet is that it’s not much better than Bradford Hills. It’s more of a true community because there are quite a few houses thrown in, but I still can’t figure out why it’s only marginally better than Bradford Hills (I’ve been thinking for a while). If anyone out there knows, please let me know!

  7. Chicago is already walkable. It was born that way. Outside of a few city (S.F., NYC and Boston) it is the most pedestrian friendly city in the U.S..

  8. Are the alleys in Lenox Village maintained by the city or an HOA? If by the city, Lennox Village has somewhat more infrastructure to maintain (Bradford Hills has no alleys or sidewalks). Maybe Lennox Village only barely makes up for this by having smaller lots? Also while the lots are smaller, a lot of that is because they’re shallower rather than narrower, and a house with 60ft frontage and 100ft depth doesn’t cost that much less to serve than one with 60 ft frontage and 540ft depth, even though it costs a lot less than one with say 180 ft frontage and 180ft depth (180×180=60×540).

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