I was sent this article, that I found very interesting relating to the urban sprawl of our city;
Since 2010 the City of Sioux Falls has annexed 3996 acresÂ of land into the city. That is almost 400 acres per year. How much tax revenue did that additional property bring in? How much did it cost to annex those areas? How much will it cost to replace all the associated infrastructure when it needs replacement? The answers to those questions are hard to piece together (maybe a good use of tax dollars would be to hire a company specializing in this kind of data to pull it together for us). In the meantime, we have some anecdotal data to look at.
So Detroit is a cautionary tale for cities caught up in a municipal Ponzi scheme. Here in River City things look pretty good . Sales tax revenue is floating our boat right now. We have money in the budget. Marohn refers to this as the illusion of wealth. It looks like we have money but the residential developments on the edge of town â€” which don’t generate sales tax directly â€” are new and don’t require replacement. When that infrastructure requires replacement the property tax revenue collected in those areas probably isn’t going to be enough to pay for it. Other areas of the city that are generating revenue will have to subsidize those areas â€” until they can’t. It happens slowly then all at once. Welcome to Detroit.
Ironically, several years ago when I got into Strongtowns, one of the main reasons I was drawn to it’s message was what they were saying about Urban Sprawl. It soon will be very expensive to live in Sioux Falls, if we are not already there.