The Economics of Regional Growth Jeffrey H. Dorfman The University of Georgia

Outline Economy of Atlanta and Georgia Current Regional Issues Future Regional Issues Policies Needed to Get/Stay on Track

Outline Economy of Atlanta and Georgia Current Regional Issues Future Regional Issues Policies Needed to Get/Stay on Track

Atlanta’s Industries No dominant industry. Atlanta lost a lot of technology jobs after the internet bubble popped. Georgia is the 4th fastest growing state. Have lots of corporate headquarters. Have lots of research universities/CDC.

Atlanta’s Industries

Atlanta’s workforce Atlanta is considered a good business city. Workforce is 2 million + Population and job growth are forecast to slow. Still #1 in US for single family home permits. 111,700 new people from Apr ’05-Apr ’06. Atlanta is growing again (yeah!!).

Atlanta’s buying power Low cost of living. Average home price approx $250,000. Low taxes. Together, this means consumers in Atlanta have good buying power. This keeps labor costs low for businesses.

Economics and Land Use How does land use connect to the state of Atlanta’s and Georgia’s economy? Land prices determine business location decisions. Land prices determine home prices.

Economic Benefits of Farm and Forest Lands These lands produce valuable products for consumers, generate jobs and tax revenues 1/6 of all jobs and gross state product in GA These lands attract businesses and families These lands also provide a net surplus to local government finances

Economic Benefits of Green Space Green spaces increase property values of surrounding land Green and open spaces can provide environmental amenities for free If green spaces contribute to quality of life, you attract people and jobs to community

Outline Current Regional Issues Economy of Atlanta and Georgia Future Regional Issues Policies Needed to Get/Stay on Track

The Big Regional Issues Water Air Transportation Land Use

Water Supply – 652 mgd, 72% from the Chattahoochee Demand – seems to at least match the supply, more in the summer, Demand will grow with population, but supply doesn’t (does growth have to stop?)

Water – Demand Uses

Air Smog/non-attainment Highway funding Emission checks on cars Human health impacts Key economic issues are highway funds and compliance costs

Transportation/Traffic Commute stats vary (bad to average) The stories about Atlanta having the worst commute in the country are not really true. Worse to better ??? The commute appears to be improving, maybe because some people are moving back to Atlanta and jobs are moving out to the people.

Transportation/Traffic Smaller demand than many think on public dollars. State spends 3.4% of budget on transportation. This is supplemented by $2 federal for each $1. Road connectivity is poor. This means trip times increase, air quality decreases, and it is very hard to retrofit.

Jobs, Commuting, and Home 31% if workers in Rural South work in a different county than where they live. 52% of employment growth in metro areas was from in-commuters. 27% of employment growth in rural areas was from in-commuters. jobs ≠ housing growth Source: Mitch Renkow, NC State

The Missing Economics We use lots of water because it is cheap. We pollute the air because it is free. We drive a long way because the tradeoff in homes, yards, and schools is worth it.

Land Use Land use patterns affect taxes which impacts business location and hiring decisions. Land use has a big impact on quality of life.

Revenues to Cost by Land Use Using results compiled by AFT, the national averages are: Residential: $0.87 Commercial/Industrial: $3.45 Farm/Forest/Open: $2.70 These figures are $’s of revenue for each $1 of expenditures.

Some Southeastern US Results Revenue:Expenditure Ratios

What do the $’s mean per acre?

Land Use Economics Issues LCI Transit Affordable housing Choices

How to Change the Numbers Cost of service goes down by 50% of land savings (use half the land, save 25%). Avoid leapfrog development. Build where infrastructure already exists (infill is much cheaper than extensive growth). Multifamily is less expensive per unit until density gets very high. Design so service costs are low.

Economics of Land Use The ways to change the numbers sure sound a lot like the LCI concept Commutes would be short Density would be higher Sometimes done as infill or redevelopment

Economics of Land Use Transit Light rail and/or commuter rail is a huge waste of money. Spending money on improving roads is iffy if you think it will reduce traffic congestion. People are moving back into Atlanta because the traffic is bad That is a good thing (which will help traffic).

Economics of Land Use Affordable Housing is a fiscal drain on local government. However, a healthy economy can afford to pay the burden. Ex: Athens-Clarke County found that 1,000 affordable houses ($100,000 average price) would raise the average homeowner’s property taxes by $4/year.

Economics of Land Use Choices The most important thing is to promote building and zoning codes that allow choices. Don’t force people to do things one way (like with minimum lot sizes).

Outline Future Regional Issues Economy of Atlanta and Georgia Current Regional Issues Future Regional Issues Policies Needed to Get/Stay on Track

Future Regional Issues Probably same big 4 Water Air Transportation Land Use Big difference is that more people will be living here.

Future Regional Issues Possible new issue is public education. Public education is too expensive for direct taxation. System works because businesses pay school taxes. If population grows relative to business ….

School Funding in Atlanta Break-even Home Values (3/4 kids/house)

Outline Policies to Get/Stay on Track Economy of Atlanta and Georgia Current Regional Issues Future Regional Issues Policies to Get/Stay on Track

Policy Choices and Outcomes Tools exist Choices determine sprawl, character, and cost of living Regional revenue sharing is not worth talking about.

Development Patterns Development patterns have an impact on the cost of service delivery: sprawl is expensive to service. The same growth done more densely and contiguously saves both money, farmland, and provides environmental amenities. New Jersey, South Carolina, California studies

Possible Government Tools Zoning Standards Impact fees Incentives (time, approval, differential fees) TDRs PDRs Time Infrastructure

Conclusions Economics is at the heart of many of region’s issues. Until different behavior makes economic sense, we are likely to stay on our current path.

Other Resources To see similar slides to those printed here and other graphs, reports, and resources on the economics of growth and land use, you can use the web at: www.arches.uga.edu/~jdorfman/ or landuse.uga.edu