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The cost to deploy most services does not increase linearly with the tax base. Usually it's capital expenditure. Maybe (but not necessarily!) the number of pol

The cost to deploy most services does not increase linearly with the tax base. Usually it's capital expenditure. Maybe (but not necessarily!) the number of police can grow linearly with the growth in taxable property. But police cars and police stations must be acquired from scratch. Same with sanitation workers vs an expanded water treatment plant, bus drivers and buses. Some of those costs can maybe be amortized via debt issue (bonds), but the cost of servicing those would still be borne by the community overall and not necessarily the newcomers' taxes alone. When a new development is proposed, it's the developer who's there in the moment, hoping to make business and a profit. The prospective-and-still-hypothetical newcomers are not yet there to make a case that housing be built for them. So it's not insane that the developer be put in a position to minimize negative effects of new building. This isn't a perfect system, and it's certainly one that can be abused by nimbys as everyone now knows. In particular things get unintuitive for (usually older) folks who are house-rich but cash-poor ... accommodations might leave them with a house worth more, even as a fixed income prevents them from absorbing, say, increased taxes. But, since Proposition 13 passed in 1978, California has been pretty clearly biased towards disproportionately helping out those sorts of people though. Can't say we weren't warned.

TulliusCicero 10y ago
> The cost to deploy most services does not increase linearly with the tax base. In the long run, infrastructure for dense housing developments is cheaper per resident than infrastructure for sprawly housing developments. An apartment complex of 100 units requires far fewer miles of road, water pipes, electrical wiring, sewer pipes, etc. per $ of local tax revenue generated than a development composed of 100 detached SFHs. But, you're right about the immediate impact vs tax revenue that comes in slowly.
davmre 10y ago
> Some of those costs can maybe be amortized via debt issue (bonds), but the cost of servicing those would still be borne by the community overall and not necessarily the newcomers' taxes alone. This seems like another way of saying money is fungible. Suppose there is School A used by current residents and School B we propose to build for new residents. The annualized cost (labor+amortized capital) of a School is $X/year, which registers as a tax burden on current residents. Building School B doubles the total tax burden, but in response to a doubling in population, so per-person taxes are unchanged. (assuming that new residents pay taxes at or above the average rate, which is certainly true in the Bay Area). It's meaningless in this case to distinguish who is paying for which schools - you could say "newcomers are paying the entire cost for School B" since the marginal revenue increase equals the marginal cost, or you could say that the costs of servicing both schools are "borne by the community overall". But in the latter case, in order to claim that current residents are contributing to new infrastructure, you have to acknowledge the reciprocal contribution of new residents to existing infrastructure: increased tax revenue helps to pay off the bonds that built the current schools, and that will eventually be sold to renovate and rebuild them. Either way it balances out.
- makomk 10y ago
  The annualized cost of a school isn't fixed though. Firstly, the capital cost of the older schools may well have been paid off. Secondly, the cost of building one is going to be pushed up by the fact they're competing with expensive premium housing for land, builders, etc. Thirdly, they're also going to be competing with existing schools for teachers and it's not like teachers from outside the area are going to be able to afford to move there unless they're paid an awful lot.
  - davmre 10y ago
    > Firstly, the capital cost of the older schools may well have been paid off. In the long term nothing is "paid off"; you have to keep up a regular schedule of renovations and renewal projects, or things fall apart. Which is what's currently happening to a bunch of US infrastructure. :-( As for cost differences, property tax revenue scales with rising land values, so land costs should be a wash (ignoring prop 13 insanity, which from other replies seems like it might be the real issue here). And expensive housing / high cost of living for new teachers is caused by high demand for housing without a corresponding increase in supply. So existing schools would already face that problem, but increasing supply by developing new housing should help to mitigate it.

TulliusCicero 10y ago

> The cost to deploy most services does not increase linearly with the tax base. In the long run, infrastructure for dense housing developments is cheaper per resident than infrastructure for sprawly housing developments. An apartment complex of 100 units requires far fewer miles of road, water pipes, electrical wiring, sewer pipes, etc. per $ of local tax revenue generated than a development composed of 100 detached SFHs. But, you're right about the immediate impact vs tax revenue that comes in slowly.

davmre 10y ago

> Some of those costs can maybe be amortized via debt issue (bonds), but the cost of servicing those would still be borne by the community overall and not necessarily the newcomers' taxes alone. This seems like another way of saying money is fungible. Suppose there is School A used by current residents and School B we propose to build for new residents. The annualized cost (labor+amortized capital) of a School is $X/year, which registers as a tax burden on current residents. Building School B doubles the total tax burden, but in response to a doubling in population, so per-person taxes are unchanged. (assuming that new residents pay taxes at or above the average rate, which is certainly true in the Bay Area). It's meaningless in this case to distinguish who is paying for which schools - you could say "newcomers are paying the entire cost for School B" since the marginal revenue increase equals the marginal cost, or you could say that the costs of servicing both schools are "borne by the community overall". But in the latter case, in order to claim that current residents are contributing to new infrastructure, you have to acknowledge the reciprocal contribution of new residents to existing infrastructure: increased tax revenue helps to pay off the bonds that built the current schools, and that will eventually be sold to renovate and rebuild them. Either way it balances out.

makomk 10y ago
The annualized cost of a school isn't fixed though. Firstly, the capital cost of the older schools may well have been paid off. Secondly, the cost of building one is going to be pushed up by the fact they're competing with expensive premium housing for land, builders, etc. Thirdly, they're also going to be competing with existing schools for teachers and it's not like teachers from outside the area are going to be able to afford to move there unless they're paid an awful lot.
- davmre 10y ago
  > Firstly, the capital cost of the older schools may well have been paid off. In the long term nothing is "paid off"; you have to keep up a regular schedule of renovations and renewal projects, or things fall apart. Which is what's currently happening to a bunch of US infrastructure. :-( As for cost differences, property tax revenue scales with rising land values, so land costs should be a wash (ignoring prop 13 insanity, which from other replies seems like it might be the real issue here). And expensive housing / high cost of living for new teachers is caused by high demand for housing without a corresponding increase in supply. So existing schools would already face that problem, but increasing supply by developing new housing should help to mitigate it.