Moving toward solutions
Regional government as a check?
What would regional control
mean?
• Sharing of tax base.
• Metro-wide income, sales or property tax
fund, redistributed to cities.
• “win-win” annexation.
• sharing of local public goods delivery.
• Regional unified health , (or parks) district.
The Tiebout hypothesis
• says decentralization is good.
• people can “vote with their feet”
• communities provide a package of public
goods and a tax “price”
• there exists an equilibrium among
communities
• people who desire low expenditure and low
tax jurisdictions can get them.
Critique of the Tiebout
hypothesis
• Proponents say that regional government
overrides the choice options for people,
implied by the Tiebout hypothesis.
• But the model assumes that all people are
equally mobile in space.
• Not true according to Rusk and Wilson.
• The poor and minorities are concentrated in
cities.
Delivery of public goods
• Efficiency says goods should be provided at
a level where economies of scale can occur.
Long run
avg. cost
# EMS runs
What is the optimal scale for
public goods?
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Fire service?
Police protection?
Schools?
School vouchers?
Income redistribution?
must be national or out-migration
Elasticity and the school tax base
TDRs – controlling sprawl
• Transferable Development Rights
• Development rights can be separated from a
parcel of land and sold or donated to
another person or legal entity.
• to permit more intensive development on
another property.
• TDRs are building rights that can be
transferred from one property to another.
How Do TDRs Work?
• Under his locality's zoning law, Farmer Jones can build 10
houses on his 100-acre farm.
• But if there is a TDR program, instead of selling his farm
for development, he can sell those 10 building rights
separately.
• The rights are purchased by Developer Smith who would
like to build more homes on his land than zoning will
currently allow.
• Once Developer Smith buys the rights, he can build the
extra homes, as long as other restrictions are observed.
• Farmer Jones still owns his farm, and can sell it, thereby
realizing the full market value of his property.
• The Farmer Jones property can be used for agriculture and
forestry, but residential development cannot legally occur.
More on TDRs
• A local government designates a "sending area"
and a "receiving area."
• The sending area is generally a rural region from
which development rights will be "sent away,"
• and the receiving area is an already urbanizing
region or development district where those
development rights are received or used.
• Government may extinguish the development
rights, bank them, or transfer them to support
preferred development patterns