February
1
2003
Analysis indicates that, for many Massachusetts communities, population growth associated with new housing is not inevitably followed by increased demand for services and higher municipal costs. While overall costs will increase with growth, per capita costs often increase less or decrease. Many of our fastest-growing communities experienced the slowest growth in per capita tax burden during the 1990s. In fact, there seems to be little correlation between increases in per capita costs and increases in population, and it seems that municipal services are generally increasing in cost regardless of the rate of population growth. This finding suggests that the standard models relied upon by cities and towns to estimate the fiscal impact of development may be systematically overestimating these costs in many communities. Given the shortage of affordable housing throughout Massachusetts and that these estimates are frequently used as the basis for decision making by local development agencies, it is clear that the methods communities use to estimate the costs of development must be reconsidered.