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Sustainable Society:  A society that balances the environment, other life forms, and human interactions over an indefinite time period.

Per Capita Costs of Population Growth

To Local Communities^*

This report provides an estimate of some of the per capita public costs of population growth —the costs associated with new housing built to accommodate an increasing population.¹ It was developed from a baseline set of key cost factors, and serves as a starting point in assessing the actual public costs of population growth in communities across the nation.

Several studies have shown that population growth never pays for itself, and virtually always encumbers the existing residents with costs. Even when local community governments collect various fees or other assessments on new residential developments, such revenues do not even come close to compensating local communities for the actual costs of population growth. The question is how large the actual burden will be on the local taxpayers of an area, not whether there will be such a subsidy. "Growth management" policies which accompany such subsidies simply continue to encourage population growth.

Method

To provide an initial rule of thumb figure reflecting potential per capita costs of population growth in selected areas around the country, a representative case was developed based on a recent study, by Energy & Environmental Planning Associates (EEPA) of Eugene, Oregon.² The EEPA study estimated the public costs resulting from the construction of a single-family house in the state of Oregon, for the following selected infrastructure categories:³

- Educational facilities
- Water service
- Sanitary sewer service
- Fire protection/Emergency medical
-Storm sewer service
- Parkland
- Transportation
- Recreation facilities

As the EEPA study demonstrates, the public cost from these categories associated with the construction of a typical single-family house in Oregon is approximately $24, 500.⁴

Using this core of infrastructure costs from the EEPA study, reasonable extrapolations can be made by developing an appropriate multiplier and then adding in other elements from the actual costs in a given local area. (Consideration could also be given to "costs" which are less tangible, such as diminished environmental values, livability standards and other quality of life issues which may or may not be measurable in strictly economic terms —but these are not addressed here.)

Given an assumed typical family size of 3.1, the local per capita cost of infrastructure was computed on the basis of the Oregon typical new house example. The per capita figure provides a starting point for calculating additional costs as individuals are added to the local population. That is, using the Oregon calculation as a base, the resulting per capita cost figure is the cost of each additional person added to the population of a given area, on average.⁵

To estimate the per capita public infrastructure cost for localities other than in the state of Oregon, an appropriate multiplier was developed to apply to metropolitan areas in the various states. First, the average per home cost was obtained using data from the National Association of Homebuilders and others. A multiplier was then created for each metropolitan area, using Oregon costs as a baseline.

The assumption underlying the calculation of the multiplier is that higher housing costs reflect urbanization, especially increased land costs. A moment's reflection will show that each of the selected infrastructure costs considered in the Oregon study are, generally, higher as an area is increasingly urbanized.

Therefore, our multiplier uses the average per house cost in Oregon as the denominator and the average per house cost in the selected state as the numerator. This fraction was multiplied by the per house infrastructure cost in Oregon ($24,502) to yield the rough estimated public infrastructure cost per house elsewhere. This result was then divided by 3.1 individuals per household to get the per capita figure as presented in the following table. National household survey data show this number of persons (3.1) is the average for a 3-bedroom house, and that the 3-bedroom house overwhelmingly dominates the single family housing market.

So, if in metropolitan area X the average cost to purchase a newly constructed home is 10% higher than the average cost of purchasing a new home in Oregon, then we assume that the average infrastructure costs in metropolitan area X are 10% higher than in Oregon.⁶ The Oregon study and this report also assume 6000 sq. ft. /lot (6 homes per acre).

Caveat: The summary table is a rough rule of thumb of baseline per capita costs accruing to local taxpayers. It should be kept in mind that not all infrastructure elements are added in these calculations. Libraries, various energy distribution systems, air and water quality control costs, natural resource consumption, intangibles such as degradation of the quality of everyday life caused by loss of wildlife habitat, increased traffic congestion and extended commute times, as well as higher costs of housing and of living in general are not included. Thus, these costs are representative and do not necessarily reflect the actual cost for any individual community, and they apply to residential development only. Commercial and industrial development place additional burdens on public resources which are not included. (See Appendix A for examples of costs not included and a more comprehensive table with additional statistical information on metropolitan areas grouped by state.)

In general, higher per capita taxes are necessary to pay for the shortfalls, and these taxes are paid by everyone in the community, not just the newcomers. Therefore, the per capita figures on the tables must be considered very conservative estimates, to be used as baseline indicators of the effect on local taxpayers. Per capita costs will vary with particular community features, including amenities, and with the dominant new-housing type built in that community.

1. The United States population currently grows by nearly 3 million a year, or about 55,000 per week, and is now approaching 270 million. See appendix B in this report for a primer on U. S. population growth.
2. Eben v. Fodor, "The Real Cost of Growth in Oregon," Population and. Environment 18(4) March, 1997.
3. These are selected categories for which costs can be more readily documented and quantified. Not included are a number of other environmental, quality of life, and capital costs. One example of a capital cost not included is electric generating equipment (excluding operating costs), estimated at $1,500 to $4,000 for each additional person. See Appendix A.
4. As a point of comparison, the EEPA study found that public costs for undeveloped land inside urban growth boundaries were generally $15,000 - $35,000 per acre, compared to $147,000 per developed acre.
5. Since costs in some categories (e.g., fire protection) are a step function rather than a smooth linear progression, additional members of a household may not increase costs. The highest cost manifests itself with each addition of a new house or cluster of houses.
6. This is only a first order approximation —more detailed studies should be done to improve the accuracy of these numbers.
_______
Courtesy of Carrying Capacity Network.
* "Per Capita Costs of Population Growth to Local Communities", Starting Point: A Network Report. Carrying Capacity Network. April, 1997
Also available in Carrying Capacity Network's FOCUS Vol. 7, No. 3. 1997.
CCN is a national non-profit advocacy group working to secure the sustainable future of the United States. For more information please visit < http://www.carryingcapacity.org/ >.

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