New developments inevitably breed frustrations in Palo Alto, where city leaders have spent much of the past year exploring new ways to limit the growth of office space and curtail its most visible side-effects: traffic congestion and a parking shortage.
But when it comes to the city budget, more residents and more workers would translate into higher revenues, according to a new fiscal analysis the city commissioned as part of the ongoing update of its Comprehensive Plan, a document that will guide the city’s growth until 2030.
The analysis, which was performed by the Oakland-based firm Economic & Planning Systems, also suggests that a new resident is particularly lucrative when it comes to the city’s bottom line, bringing in on average about $115 a year more than a new employee would.
The fiscal analysis takes a look at the four growth scenarios being considered in the environmental assessment for the Comprehensive Plan and concludes that the scenario with the most aggressive growth policies is also the one that would pump the most money into the city’s General Fund.
Each scenario, the analysis found, would boost local finances, with revenue growth in the General Fund ranging from $5 million in the slowest-growth scenario to $7.4 million in the one with the highest growth. This represents an annual per-capital fiscal net benefit of $240 to $310 per person, with each new resident generating about $340 to $360 and each new employee bringing in between $190 and $280.
Even so, the study notes, the fiscal impact of even the most aggressive growth scenario represents relatively modest growth in the General Fund, which had an expenditure budget of $171 million in fiscal year 2015. The city’s General Fund would see an increase in $5.2 million by 2030 under Scenario 1, known as the “business as usual” scenario, which proposes no major policy changes.
Scenario 2, known as “growth slowed,” would make the smallest dent in the General Fund — $5 million by 2030. It includes policies that limit new office space, and it identifies no major new sites for housing.
The third scenario, called “housing reconsidered,” aggressively encourages housing in public-transit areas with policies that could, for example, relax height limits for downtown projects that include housing. That scenario would bring in $6.2 million.
But it’s the scenario with the most experimentation that is projected to bring in the greatest financial rewards. Known as “sustainability tested,” the fourth scenario focuses less on square footage and more on performance standards for factors like traffic, energy production and water use. It would encourage commercial areas to become more densely built; promote green-building practices and local solar-energy production; and consider new housing along El Camino Real near Stanford Research Park and Stanford Shopping Center. Under the existing projections, this scenario would also result in a population growth of 16 percent (compared to 10 percent in the first two scenarios and 13 percent in the third) and employee growth of 16 percent (same as in the first scenario, but above the 10 and 13 percent growths projected in Scenarios 2 and 3, respectively). Even when the increased costs of supporting a growing population are taken into account, the sustainability scenario projects a $7.4 million growth in the General Fund between now and 2030.
While strong hotel- and sales-tax revenues play a significant role in the projections, the main driver is property tax. Given the high value of Palo Alto’s real estate, income from this tax source is projected to be strong in the years ahead, particularly in the residential sector. Because of Proposition 13, assessed values of properties are restricted to 2 percent annual appreciation. However, when a long-held property changes hands, the assessed value can “reset to a market level that is many multiples its prior assessed value,” the fiscal analysis states.
“With residential properties being more numerous, more valuable in aggregate, and turning over more frequently in Palo Alto, it is probable that residential turnover in Palo Alto is adding assessed value to the city roll at a greater rate than commercial sector,” the report states.
The new study also notes that property-tax revenue from residential uses is “two to three times that of employment uses on a per-capita basis (reflective of value, space efficiency, and turnover).”
“This residential property-related revenue outweighs the higher per-capita sales-tax revenue and transient-occupancy-tax revenue generated by local employment,” the study states.
Overall, property-tax revenue accounts for between 50 percent and 56 percent of projected revenue growth, depending on the scenario, the new analysis shows.
In the slowest-growth scenario, property-taxes would increase by $5.7 million by 2030. In the largest-growth scenario, it would rise by $8.5 million, with more than $5.3 million coming from residential properties.
The report also looks at the cost implications of each scenario and concludes that, by and large, these pale in comparison to the revenues gains. The costs would range from $5 million in Scenario 2 to $8 million in Scenario 4. Revenues, meanwhile, are expected to rise by between $10 million and $15.4 million.
The study also assumes that the growth envisioned in the four scenarios would require “minimal capital investment in new facilities” and that what investment is needed would be covered without much difficulty by General Fund, development-impact fees and other available capital-investment sources.
Despite its conclusions, the study is unlikely to shift the City Council’s generally skeptical philosophy on growth. In recent months, the council has instituted an annual cap on new office development in the city’s three main commercial areas, hoping to moderate the pace of commercial development.
And despite a widely acknowledged housing shortage, so far the council’s main attempt to deal with the issue has been a proposal to encourage construction of secondary (or “granny”) units.
Significantly, none of the four scenarios propose any zone changes in single-family neighborhoods or assume any major new housing developments, with the lone exception of a possible multi-family housing project at the current Fry’s Electronics site.
Council members Cory Wolbach and Marc Berman, however, have been lobbying for policies that add housing.
“What mechanisms do we use to evaluate the value of having some amount of socioeconomic diversity in your city?” Berman asked at the Feb. 22 meeting. “I don’t know how to quantify it, but I know we’re losing it.”
Berman suggested that the council is becoming “too preventative of things and not taking advantage of this opportunity to evaluate a lot of different options and have a discussion about what those impacts might be.”
Wolbach agreed and proposed including in a fifth growth scenario the same level of housing growth that is currently embedded in the fourth scenario (which is higher than in the other three), though his colleagues ultimately rejected the suggestion.
While the results of the new analysis make an economic case for growth, the study also acknowledges its own limitations. Most significantly, it does not estimate “quality of life impacts that result from growth, such as changes in traffic congestion, parking supply, or other positive or negative factors related to increased land use density.”
And while it considers the operational costs and revenues in the General Fund, it does not take into account the major infrastructure projects — including proposals to dig a trench for Caltrain and to reconstruct the busy intersection of Page Mill Road and Foothill Expressway — that appear in some of the scenarios.
The study’s key findings suggest that “the City will have the financial resources available to provide the high quality and diverse mix of municipal services for both residents and local workers in all growth scenarios considered in the Comprehensive Plan Update,” a new report from the Department of Planning and Community Environment concludes.
But while the intention of the new analysis is to inform the council about the fiscal impacts of the four scenarios, city planners acknowledge that these impacts are just one of many factors that city leaders will have to consider in the months ahead, as the Comprehensive Plan update continues.
The 4th from last paragraph shows why the entire study needs to go into the circular file.
Totally agree with Paul Goldstein. I wonder how much this waste-of-effort study that ignores reality cost.
“Most significantly, it does not estimate “quality of life impacts that result from growth, such as changes in traffic congestion, parking supply, or other positive or negative factors related to increased land use density.”
But,hey, let’s do some more “community outreach” and “cool cities initiatives” and iconic design contests etc. so people will feel involved in the expensive destruction of our city.
It also under-estimates how much revenue each resident generates since it also ignores the amount of money the city “generates” from our over-priced utilities for the General Fund.
Yeah, what a joke. Did the city pay for this propaganda? – another of the unrepresented costs of growth for growth’s sake.
Why does Palo Alto need more revenue? It seems like it is already a very wealthy city with steady revenue streams. How much is enough?
Why was this study done? Anyone can see that more residents and more employees would bring in more revenue to the City of Palo Alto. Changing the building height limit to 100 feet would also bring in more revenue. But the big elephant in the room is obviously how growth has affected the quality of life in Palo Alto for both residents and employees that commute into Palo Alto. That’s the issue that should be addressed.
Since when are “higher revenues” for the city’s coffers a plus? Sounds to me like the best result for those of us who live here would be that the economic prospect is a wash. We get enough revenues to pay for the services people who already live here need. Big surprise: Walbach and Berman think this is a reason to build it and they will come.
I would so like to see the RFP on this to see how the City asked this group to approach this study. Paul Goldstein’s assessment warrants much consideration from Council and the City Manager.
First, hmmmm, let’s see . . . Palo Alto’s unfunded pension liability is approximately $300M. If the city devoted the $7.4M (max increase in income indicated by this study) entirely to paying down this debt, it would take 40 years to accomplish that, with no money left for anything else.
Second, I am floored, yet again, by a city council who would fund a study that only looks at one side of the issue. Palo Alto does not have the money now to deal with the side-effects that unbridled growth has brought. At least two of the members put on the council in the past election – Filseth snd DuBois – campaigned hard on doing accurate financial and statistical analysis to get a clear picture of consequences of different alternatives. If this is an example of that analysis, we have no hope of ever dealing realistically with the situation we are in.
Yes, we need more housing. But we don’t meed more business/technology development. At three jobs for every possible worker in the city, we have enough jobs. But our retail sector is declining – we’re about to lose the last stationery and art supply store, among many others. (This by the way, forces residents to travel increased distances to cities with a variety of useful retail stores, adding GHG to the atmosphere, and hardly sustainable.) Palo Alto should stop all development until some realistic analysis of what can be done to manage housing, parking, traffic, school overcrowding etc. actually happens.
First, hmmmm, let’s see . . . Palo Alto’s unfunded pension liability is approximately $300M. If the city devoted the $7.4M (max increase in income indicated by this study) entirely to paying down this debt, it would take 40 years to accomplish that, with no money left for anything else.
Second, I am floored, yet again, by a city council who would fund a study that only looks at one side of the issue. Palo Alto does not have the money now to deal with the side-effects that unbridled growth has brought. At least two of the members put on the council in the past election – Filseth snd DuBois – campaigned hard on doing accurate financial and statistical analysis to get a clear picture of consequences of different alternatives. If this is an example of that analysis, we have no hope of ever dealing realistically with the situation we are in.
Yes, we need more housing. But we don’t meed more business/technology development. At three jobs for every possible worker in the city, we have enough jobs. But our retail sector is declining – we’re about to lose the last stationery and art supply store, among many others. (This by the way, forces residents to travel increased distances to cities with a variety of useful retail stores, adding GHG to the atmosphere, and hardly sustainable.) Palo Alto should stop all development until some realistic analysis of what can be done to manage housing, parking, traffic, school overcrowding etc. actually happens.
How about we improve the quality of life in the city first, before spending another dime on studying growth?
Why is yet more study money allocated to study how much money the city would gain if it grew X amount, when, for years, residents have been asking for the city to establish measurement and management systems addressing existing conditions created by growth? Nobody has said “we can’t afford that.” No, just, “let’s study something else.”
Yet we need: Continuous real time measurement of traffic, timing traffic lights with sensors to increase flow, underground the unsightly electric lines (is it 30 years now??), install smart parking systems, etc. This should be the priority, not what magic thing could we do to appear cooler. We are not so cool. Nobody is that cool.
The study doesn’t consider the costs of inreased density. It only looks at increases in city revenue. What a valuable study! After all the purpose of goverment is to increase its size, not manage public infrastructure and services.
Assumes minimal capital investment for a population growth of 16%. Yeah and the high speed rail will only cost $8B and solve important commute issues.
“Overall, property-tax revenue accounts for between 50 percent and 56 percent of projected revenue growth, depending on the scenario, the new analysis shows.”
However, almost 50% of that property-tax revenue goes to the PAUSD, a lost of the rest goes to the state and less than 20% actually goes to Palo Alto. Does the study take that into account?
Well no one is going to buy my place with more than 100 jets flying over it every day. Talk about quality of life.
Like Cheryl of Barron Park said……….let’s improve the quality of life here first before we spend anymore money of growth.
@ all of the above comments…great observations and warranted criticisms! That study was a waste of money and it sounds like they were given specific direction/instructions on making it limited to one subject. I wonder what group influenced that idea? Hmmm?
Funny, I read the article before there were any comments, but the 4th paragraph from the bottom struck me just like it did Paul Goldstein, the first contributor. Then I went grocery shopping, came back home, only to read a lot of comments, including Paul’s.
I have written so many times on my thoughts about housing in general, and affordable housing in particular. Also, the parking plan and it’s flaws, the scale back of 200 non-resident permits per year, e.g. And many other issues, including the ADU, SDU, ‘granny unit’, whatever tag is currently popular, to solve our housing problem, so I won’t repeat them here. I’ve lived here a long time, since 1961, so I was lucky enough to have had the opportunity to enjoy the good years in my city without these current problems. But, we still had our share of problems back then, mostly related to the establishment vs residentialist issues that are still with us. Some things just never change.
This “study” is to push the agenda of PA government employees: gimme more money and benefits.
Hi everyone. Gennady’s last point is important: the intent of the draft fiscal analysis is to inform the ongoing Comp Plan Update. We need to know what kind of impacts to the City’s General Fund we can expect over the next 15 years so we can make smart decisions about many things, including growth. We will also need to know what the impacts will be on traffic, noise, etc. etc. and we have a Draft EIR available for public comment right now. Please take a look at http://www.paloaltocompplan.org and send us some comments before the May 5 deadline.
I would like to know who is the genius who authorized this study and the payment of it. It’s really outrageous. There never seems to be s study about the degregation of the quality of life due to increased density and growth. All the studies the city finances are targeted at justifying more growth.
Palo Alto Fiscal finances are flush with money. This study was just another exponential waste of money a la the Palo Alto Way.
Obviously, the city has a hidden agenda, and it is not a legitimate one.
Ms. Gitelman,
Have you ever tried to use one of those community input forms? Try it yourself sometime and I think you’ll see how user-UNfriendly and time-consuming they are. What’s the average response rate to them?
I second Mauricio’s request for a survey on the degradation in our standard of living here.
I’d also humbly request that city staffers do some homework BEFORE wasting time and money presenting plans like the redesign of Middlefield Road where they constructed expensive 3-D models, slick but erroneous slide presentations etc.etc and learn that what they were proposing had been rejected time and again as unworkable 15 years ago when we had less traffic.
Fortunately one neighbor went door-to-door delivering flyers informing us of the proposed redesign and the meeting since very few of us were even notified. Thanks to our neighbor’s effort 70 — SEVENTY — of us showed up to educate the new Transportation Officer and his staff why and how the expensively developed “redesign” was unworkable, unsafe and undesirable. (He still managed to miss/ignore the point of our SAFETY concerns and has instead decided to add a passing lane to Middlefield.)
Maybe your “community outreach” could actually reach out and inform the resident taxpayers? Or mauybe you could hire our neighbor to deliver flyers? He’s a lot cheaper and way more effective.
> The study also assumes that the growth envisioned in the four scenarios would require “minimal capital investment in new facilities” and that what investment is needed would be covered without much difficulty by General Fund, development-impact fees and other available capital-investment sources.
Ah hah. Assume that facilities currently have so much excess capacity that they could absorb a 16% population increase. I haven’t looked at the study, but this type of study tends to ignore impacts on the school district, because it is a separate governmental unit.
Adding to previous comment about quality of life, it is “reasonable” to assume minimal capital investment if you assume a policy of lowering quality of life.
Doing growthy things builds city staff’s resumes. Doing quality of life things–not so much, if at all. And that’s the long and short of it.
Government of the people,
by city staff,
for city staff
Does it surprise anyone that newspapers like development when their man source of revenue is advertising from businesses that the developers brings?
Excellent point re the General Fund. Remind me again how much our ever-increasing utility bills are subsidizing the General Fund while pocking taxpayers’ pockets. The General Fund’s at what, $18,000,000 and counting?
Maybe that explains how the Utility Dept. can “project” increases through 2021 at a time we’re seeing declining oil prices, signing the cheapest 25-yr contract for solar energy, etc. etc.
“Planning” and preaching at us to get out of our cars and conserve is so much easier than doing real work like providing cost-effective services, efficiently managing public works projects and $500,000 contracts for suicide-prevention guards, fixing traffic light timing expeditiously, etc. etc.
Citizen Advisory Council Meeting – March 15th (Big one…need your input)
Date: March 15th
Time: 5:30pm
Location: Mitchell Park Community Center
Meeting:The CAC will be discussing Land Use policies for the Comp Plan
Why is this important? Because the primary way to get more housing in Palo Alto is by rezoning spaces to allocate for more housing. Building more housing will take land use policy. Make your voice heard
If you can’t make it that day, you can use the digital commenter page at http://www.peakdemocracy.com/portals/5/Forum_94/Issue_3453?
Quality of life has deteriorated throughout the City. When I moved into my home the noisiest vehicle on the street was the Sheriff’s car with a bad muffler, now there is a barrage of construction trucks barreling up and down all day. They take up all the parking and when that runs out they park in the middle of a narrow street. The noise of construction goes on all day and often is far more obnoxious than the air traffic–at least during the day. The air traffic, once limited to 7am-10pm, now continues all night.
Before the city tries to increase housing they need to bring back all the independent businesses they have driven out–bookstores new and used, art supply, art and craft, shoe, second hand, stationery, fabric and needlework, quality grocery, general merchandise stores eg Patterson’s. We don’t need more banks, financial institutions, chain restaurants. Bring back the healthy variety of movie theaters in downtown areas.
New housing, especially multi-family, high rise, high density? Put it near the companies that hire people. Insist that Stanford U, Facebook, HP, etc share the burden of housing as part of their sites. Insist that they also provide sufficient parking for those who use and work at their facilities.
El Camino south of Embarcadero has become a canyon as a result of all the high rise, right to the sidewalk buildings. The sidewalks are not wide enough for this.
Why do we have all this congestion? The City wants more money for the General Fund, Perhaps they should instead end the utility user tax and not increase utility fees. Get used to it City employees–you can’t have a redecoration of your building every few years.
NIMBY’s to the rescue. Be patient, we’ll do our part. Those of us who have lived here and owned homes a long time…30, 40, 50 years, will die and there will be a new supply of revenue from the resulting huge tax increases on those properties.
“Building more housing will take land use policy. Make your voice heard”
Aim your pitch to our people on the City Council: Berman, Kniss, Scharf, Wolbach, and possibly Burt. Do not bother with the others because they are not part of us.
This ridiculous consultant study embodies everything
which is profoundly wrong in this City government.
The City’s unfunded pension liability + other post-employment benefits is more like $500M.
There is a bedrock-solid case for economic growth: it makes developers and their investors even wealthier. And that brings in campaign cash for the councilmembers wise enough to support it.
It all depends on your vision of what the city should be. If more development brings more ( specially) childless people that is a good thing for the city budget and it’s a good thing for the cultural and entertainment life of Palo Alto. It would also concentrate and apportion city resources in a fairer way. People with single housing larger properties, pay significantly less for their resources than those in multifamily properties, even if we don’t take prop 13 in consideration.
For those without children, young and old Palo Alto doesn’t offer much to do. It’s a breath of fresh air to have a little more development.
For those who complain I’ll say that the value of your house is directly tied to Stanford and the tech companies for the employment they provide putting pressure on housing market. That’s why you have your physical assets valued
as they are. So what are the NIMBYS No growth people complaining about? Because things are not as they had envision them and only the past is good? Yes, there will be more cars, more people, more to do….If you don’t like it, lucky you can move to Peoria and live as a rich person there in quiet comfort knowing that your years in Palo Alto
provided you with a nice chunk of money for your property thanks to development that you now decry.
Let me get this straight, you are claiming that a renter pays more in property tax (annual basis via portion of his/her rent) than an R1 homeowner? Seriously?
Please show me the math on that.
“Palo Alto doesn’t offer much to do” ??
@CPD, I didn’t understand that part either. Maybe ndn meant “pay significantly less OF their resources” ?
Crescent Park Dad, please suspend your bias. A lot of people in multifamily properties are not renters but homeowners. Multifamily concerns pay more than single family owners simply because the city resources for a single family house on a 6000 sq feet lot are all dedicated to a few people at best (sometimes even just one) whereas the same size lot in which a there is a multifamily dwelling (common interest development, for example) the same resources serve many people. It’s an easy math- for example: city utilities physical resources (street plumbing, electric, etc), street management (repairs, policing, etc) must serve their cost for only a few people in a single family but in a multiple dwelling the same resources serve many more people, making the cost/person lower than in a larger dwelling property. The same with all other city and County services. It’s elementary math really.
Palo Alto indeed offers a lot only to families or the crowd who enjoys nature (even if you have to drive to it). If you are young, or old and well off or not there are very limited offerings to spend your money and enjoy yourself in the process. Performing Arts? No. Pubs and really good restaurants? no, not really. Ballet? Jazz? Places for impromptu get togethers? seldom! Plastic arts? No, not at all. I don’t see any announcements for “vernissages”… And as far as dress up a bit with more elegant clothing? Well, all dressed up and nowhere to go …. So much money in PA and so very few venues for it…. specially for young people who by and large brave a daily commute to be part of a more modern and interesting crowd.
So count me in for development, since I have to live here. If you don’t like it the way it’s going you can try to get it your way.
and please save me the “ developers making money”. You too have made money with development if you own real estate around here. Are you prepared to sell for less to help your cause of less development? NO? So you are not only part of the problem , you are the problem, because you are advocating for others what you don’t want for yourself.
I couldn’t really follow the logic about cost of resources; but as one of the great unwashed I had to look up “plastic arts” and “vernissage”, and suddenly a banner ad appears at the top of this very page for such a venue right downtown on Ramona Street — http://www.pacificartleague.org/terms/ — this internet thing is getting spooky.
“because you are advocating for others what you don’t want for yourself.”
That is nothing new. Lots of people want to build housing “near transit centers,” which is DogWhistle-ese for “stick ’em in ghettos over by the tracks away from my house where I can’t see ’em.”
“please save me the “ developers making money”.
But they will, you know, because that is the objective of this campaign of orchestrated hysteria swirling around us. Maybe somebody will learn what PR firm is manufacturing it.
So temper your wishes, good buddy. SOHO, TRIBECA, and The Village ain’t happening here in this century, unless you can buy up and clearcut all the expensive real estate for miles around and build a new Manhattan in a couple years. Why not take a job in the actual NYC and enjoy the real city life now?
“because you are advocating for others what you don’t want for yourself.”
Tell that to the single-story overlay proponents, often villified as part of the problem.
“People with single housing larger properties, pay significantly less for their resources than those in multifamily properties,”
I still don’t understand the math behind this statement.
There is a duplex on Colorado on the market for $2.6mil. Property taxes will be approximately $28K. There is a 3BR single resident house on Coastland (right next to OR Xpwy) for the same price…same property tax. These two properties are within 10 blocks of each other. Two families can live in the duplex, one family in the R1. In theory, the 2 families split the property tax, while the R1 family pays full rate. Utilities cost essentially the same per unit and/or per capita. It would seem R1 residents are paying more for city services ($28K) versus the 2 families splitting the property tax bill.
What am I missing? Thanks.
And also think about the parcel (PAUSD) taxes. Same fee for either property. R1 pays the two parcel taxes at full rate, the duplex families split the cost of the parcel taxes.
Crescent Park dad, you are wrong on the facts . A condo pays exactly the same amount of property taxes as the one single family residence of the same price if both were bought at the same time. But the condo, a common interest development, shares many city resources with the other owners, (for example other 100 owners) and therefore each condo owner consumes much less of pertinent city resources than a single residence or even a group of city residences. Even duplexes do not “share” taxes if each is a separate parcel and the overwhelming majority are. You seem to confuse a co-op with a common interest development. Condos, townhouses are common interest developments and each unit pays parcel tax correspondent to the price. There are almost no co-ops in Palo Alto. Effectively, condo owners subsidize single family residences. That one reason why growth and development is good for the city coffers.
Just one more clarification: If a property is sold as a total and there are two separate residences then what you have is a co-op and pays taxes as one property. But in Palo Alto there are very very few of those and mainly exist because they are either grandfathered or there is more then one dwelling in the property, for example a house and a granny unit. But the overwhelming majority of units (many thousands) are not co-ops, but common interest developments and each unit pays a separate parcel tax that only dependent on the price of the unit-it’s not cheaper and is not shared at all by others in the same development.. So for example if there are 12 condos in a development and each cost 2million dollars each of them pays the tax due for such a price and the county receives the the amount for 12 parcel taxes correspondent to that price. But those 12 units occupy the space of a single family house, whose tax would have been less if the house’s price was less than 24 million dollars. And by and large it would have been.
Now I understand your point, re: Condos.
But if we can agree that (in most cases) condos cost less than a R1s, then can’t we also agree that a condo owner pays less in property taxes?
Has anyone noticed how government can pull up a study to justify its frame of mind on just about anything? We smell a rat with this new study. Follow the money.
“But the condo, a common interest development, shares many city resources with the other owners, (for example other 100 owners) and therefore each condo owner consumes much less of pertinent city resources than a single residence or even a group of city residences.”
You lost me. How/why does a condo consume less city resources (e.g., police, fire, paramedic, water, sewer, roads) than a comparable freestanding residence?
Because every mile that’s policed is “divided” by more people, every mile of road that’s built or rebuilt serves more people, etc…… If it takes 1000 dollars to fix a sidewalk, for example, that cost is shared by more people if they are in a common interest development in which every single person pays their own dwelling taxes. If you have a park the size of the park doesn’t increase/increase when the numbers of users go up, but the more users paying taxes the better is the managing of the park, financially . It’s the principle applied to hotels, hospitals, etc in which fix costs do not proportionally go up with the number os users. If you have a school in which one teacher teaches 10 children and with the same conditions another teacher teaches 20 the price spent per student decreases enormously. Easy, very easy with an example (and a true one at that). A condo with ten units-the price of the latest units sold, was around 2 million dollars (one was actually close to 4 million) . That makes taxation based on more than 20 million dollars, which was not and wouldn’t have been the price of the single house those condos replaced.. Furthermore, in those all 10 units there are only 2 children (average family for a single house). So, you see, if you make the sums each condo owner is apportioned more in taxes than most single family house owners. And since the rules are different for common interest development that fact taxes “condos” even more proportionally, because of the legal requirements. I could explain in more detail, but it’s complex. it’s the principle of the big numbers. Certainly, condos in some areas are even more costly than single family houses in for example, the mayfield area of Palo Alto. Fyi, only 66% of Palo Alto residents own their abodes.
So many words, such small information density. But never mind, let’s accept the obvious: each person needs the same fire and police protection whether they live in a condo or an R-1, that they drive the same miles on the same roads, they flush just as often, so condos and R-1s represent similar burdens to city resources.
But I’m intrigued by this novel concept of “it’s the principle of the big numbers.” What is “the principle of the big numbers”? Is it like Stirling’s approximation to the factorial, or is it something else? And how many condos are needed to qualify for it?
Dear Condo owner, you don’t seem to want to understand what economies of scale are or consumer impact, not because you are stupid but because you don’t want things to change and growth is challenging for you. It’s legitimate for someone to say “ I don’t want city growth because it will bring all kinds of things I don’t like”. That is fine. What is not fine is the denial that the city will benefit financially from more people and more business, because the numbers and experience from the past by and large confirm that assumption. There is nothing, even a well developed and founded research that will persuade you, as if by accepting that financials gain with growth you are denying that there maybe things beyond financials that for you are more important. One thing has nothing to do with the other. So, let the subject rest. In any case it’s impossible to send a treatise on growth to a forum. So, good bye.
@ndn
Simplistic argument when only talking about the revenue side of it. If we already had the infrastructure in place to accomodate those people the argument might hold up. But we don’t and nobody is willing to come forward with a good study and analysis of costs vs the revenues derived. I know we have many really smart people in this town who could do it. Let’s hear from them, and I’m talking about objective independent thinkers who are not driven by any political agenda.
And there are many of us long time residents who remember the days of a good quality of life living here, and we can explain that, but I’d like to hear the argument from the other side on how lots of growth will improve our quality of life.
Tax revenues from business are less than the costs of publicly-supported services to business plus the costs externalized by business. People with commercial interests here are more numerous than residents, making it difficult for residents to avoid losing more through externalities than we gain through taxes. Residents devote thousands of hours each year to fight against projects which will benefit others at our expense.
A local real estate professional estimated the cost of traffic to homeowners on University Avenue to be more than two million dollars per year. Evergreen Park residents bear two thousand dollars a day in externalized commercial parking costs alone. Yet per capita business-generated tax revenues in Palo Alto are less than five hundred dollars per year!
Disproportionate business here deprives others of a fair share of jobs, access to goods and services, and tax revenue. Palo Alto’s per capita revenues are already one and one-half to four times those of comparable cities, and the lack of municipal services in nearby East Palo Alto has cost us millions of dollars directly and indirectly.