town-builder-insights

Investing in Your City's Future

benjamin@townbuilderinsights.com (Benjamin Browning) — Fri, 06 Jun 2025 22:36:56 GMT

Financial Principles for Building Municipal Wealth: Part 4 — Invest in Long-Term Value

Once a city has laid a strong fiscal foundation, it can begin making smart investments that improve the quality of life and increase prosperity.

This is the fun part: public spaces that draw crowds, policies that attract and create new businesses, and programs that improve residents’ lives. But to be worth it, those investments must return more value than they cost.

This is the final part of my series covering how land use and key financial principles go hand-in-hand in creating prosperous cities. So far, I have discussed why cities need to spend within their means , prioritize needs over wants , and prepare for downturns when crafting their land use plans. The fourth and final principle is investing in long-term value.

The Test of a Smart Investment: Value Captured

Every city wants more vibrant public spaces, new parks, bigger stadiums, updated streetscapes, and better infrastructure. However, without a clear understanding of how those improvements generate revenue, cities risk spending more than they’ll ever get back.

A successful public investment should more than pay for itself over time by increasing private spending or raising the value of nearby land and buildings.

When this happens, cities can collect more revenue through consumption taxes or land value capture — property taxes, special assessments, development fees, strategic land management, etc. That new revenue can then be reinvested in other areas or used to maintain the improvements.

Active Investments: Public Works and Programs

Investments can be active, like public work projects and programs, or passive, like policy reforms that allow high-value private development.

A few active investments that generate long-term value could include public investments in streetscape upgrades , pedestrian safety projects, industrial site preparation , new civic spaces, and small business support programs.

All of these investments can make a big difference as long as they’re tied to value capture strategies and the city making them has a strong financial foundation.

Passive Investments: Land Use Policy Reform

For example, a 2020 study of zoning practices in Boston, Chicago, New York, San Francisco, and Seattle indicated that each city captured additional public value from major projects by upzoning to allow greater heights and densities.

By removing barriers to development in the right places, cities can create the conditions for long-term value to emerge organically. This value increase occurs with minimal public investment.

Conclusion

Smart public investments allow cities to grow into the places their residents aspire for them to be. But lasting success depends on timing and discipline.

First, cities must build a strong fiscal foundation by spending within their means, prioritizing basic needs, and preparing for downturns. Only then can they afford to pursue larger goals and investments.

When cities are ready, the best investments are those that generate long-term value: projects and policies that make places more useful, attractive, and valuable to the people who live and work there.

It doesn’t matter if the in vestment requires public action or private capital. As long as investments have a clear and sizeable return, cities can meaningfully build wealth in their communities.

The simplest and most affordable way to invest in long-term value is by allowing the private market to create it. Zoning reforms that legalize greater density or a broader mix of uses, such as duplexes, neighborhood businesses, or accessory dwelling units, can raise property values without major public expenditure.

How can your city’s land use prepare it for downturns?

benjamin@townbuilderinsights.com (Benjamin Browning) — Wed, 28 May 2025 19:36:33 GMT

Financial Principles for Building Municipal Wealth: Part 3 — Prepare for Downturns

Last week, I discussed how cities must prioritize their needs over wants . The week before that, I explored how cities can live within their means by building less infrastructure. This week, we are examining how different land use patterns can either reduce or increase your city’s resilience against economic downturns.

Growth can be a great thing for city finances. With growth comes an inflow of cash from more businesses, more people, more investments, and higher land values. That cash can then be used to fund projects across the city that improve residents' lives.

But what happens when that growth slows or stops altogether? A downturn in the housing market, a factory closure, or a sudden drop in sales tax revenue (during a pandemic, for example) can bring city budgets under stress.

When that happens — not if, when, because it will happen eventually — can your city still meet its obligations to taxpayers and lenders? The answer often depends on land use decisions made years earlier.

Maintenance is forever

Infrastructure is expensive to build, but cities have many ways to make the cost burden lighter: impact fees, developer agreements, tax-increment financing, et cetera.

However, once infrastructure is built, a city is responsible for maintaining that infrastructure as long as it and the city both exist. Those costs include routine annual maintenance tasks like filling potholes and street cleaning, as well as infrequent, large-scale maintenance projects like resurfacing and reconstruction.

Keeping up with these costs is much harder, and funding options are often limited to local taxes and service fees. That said, a city’s tax base must be strong enough to pay for annual maintenance expenses, reserve funds for future maintenance costs, and pay for other essential services.

This is impossible if properties are not producing enough t ax revenue to cover the costs of the infrastructure they use and then some.

High-density or mixed-use neighborhoods, commercial centers, and industrial parks can pull this off, especially when they are built around existing infrastructure. Low-density, single-family neighborhoods rarely do, yet they constitute the majority of our city’s developed land.

In a high-growth scenario, this matters less because the influx of cash from other sources offsets many of the uncovered costs. However, in a downturn, sufficient property tax revenue and reserve funds are critical to preventing service cuts.

Flexibility creates resilience

Beyond property values and reserve funds, land use flexibility is also critical to surviving downturns.

When zoning allows for more density and mixed uses, it gives residents and businesses room to adapt. For example, a single-family home can be converted to a duplex, an underutilized parking lot can become a farmers’ market, or a garage can be used to start a home business.

These changes may be small, but they are powerful. They help stabilize neighborhoods by supporting local entrepreneurship, providing more housing, and reducing vacancies, often without requiring significant public investment.

The more rigid a zoning code is, the less responsive individuals and communities can be to changing economic conditions.

Conclusion

Cities can’t avoid economic downturns, but they can choose to prepare for them. That preparation begins with land use plans that prioritize fiscal responsibility and flexibility.

By allowing financially productive developments on existing infrastructure and enabling neighborhoods to adapt over time, cities can build the financial resilience needed to weather hard times without cutting essential services.

The next downturn will come. It’s just a matter of when. Cities that plan accordingly will be ready.

If you would like additional guidance with your community’s land use plan, schedule a consultation with us today!

Prioritizing Needs Over Wants in Your City

benjamin@townbuilderinsights.com (Benjamin Browning) — Mon, 19 May 2025 21:26:24 GMT

Financial Principles for Building Municipal Wealth: Part 2 — Prioritizing Needs Over Wants

At a minimum, every city must have reliable infrastructure, core public services like fire protection and sanitation, safe housing, jobs, and access to daily essentials. These aren’t optional. They’re necessities for a city’s survival.

Yet in many places, land use plans prioritize aesthetics or lifestyle preferences over ensuring these basic requirements are met.

For example, zoning codes often prohibit multifamily housing in favor of large-lot single-family homes. While this may align with certain neighborhood preferences, it makes it harder to meet basic housing needs , particularly for lower-income residents or young people. Over time, this imbalance increases homelessness and drives people farther from jobs and services.

Likewise, many cities limit commercial activity to a few designated corridors, forcing long commutes and undercutting neighborhood businesses that could provide jobs and daily essentials closer to where people live.

These restrictions on housing and business inevitably burden municipal budgets by requiring costly infrastructure extensions. Fire departments, school districts, and transit agencies must stretch their resources across larger areas, increasing costs and response times. Meanwhile, the resulting developments fail to generate tax revenue sufficient to cover the costs.

Last week, I explored the principle of spending within your means and how it applied to the way cities should handle infrastructure investment. The main takeaway was that cities should only build infrastructure they know they can pay for long-term. This week, we are taking a look at the role of land use plans in achieving a city’s wants and needs.

Every city council member, town planner, and resident has an idea of what they want their city to be. With this vision in mind, they draft a land use plan to facilitate what they like and limit what they don’t.

However, these plans often treat fundamental needs as an afterthought, making it more difficult for the city to fulfill its obligations. Putting needs first instead will ultimately give cities greater flexibility to pursue their wants down the road.

What does a city need?

Planning for essentials makes room for aspirations.

Conclusion

However, when land use decisions support attainable housing options, allow neighborhood-serving businesses, and concentrate growth where infrastructure already exists, towns can deliver essential services more efficiently .

That means less infrastructure to maintain and shorter response times for emergency services, freeing up resources for quality-of-life improvements.

That, in turn, builds the economic stability needed to pursue larger goals, whether it’s restoring a historic downtown, funding parks and trails, or supporting local schools and health clinics.

Land use plans shape nearly every aspect of a city’s future — where people live and work, what kinds of businesses can open, and how public dollars are spent. If a plan doesn’t prioritize meeting basic needs like infrastructure, housing availability, and accessible services, it will fall short no matter how visionary its goals may be.

Focusing on what the community must provide today creates the financial and physical foundation to pursue what it wants tomorrow. Stronger neighborhoods with more local businesses and less costly infrastructure support better schools, parks, and public services.

The best plans don’t just reflect a community’s dreams. They make those dreams possible by getting the fundamentals right first.

If you would like additional guidance with your community’s land use plan, schedule a consultation with us today!

Many cities have great goals, like attracting more retail, building a new library or community center, revitalizing the town square, drawing in new employers, or creating a beautiful park.

These goals make a community a better place to live, but they require a strong foundation. Land use policies that create sprawling cities weaken that foundation. Eventually, without reform, cities will be forced to raise taxes or sacrifice service quality.

Is your city living within its means?

benjamin@townbuilderinsights.com (Benjamin Browning) — Mon, 12 May 2025 23:54:14 GMT

Financial Principles for Building Municipal Wealth: Part 1 — Living Within Your Means

Cities, like households, need to live within their means. Most cities understand this at least at a basic level. However, living within their means is more than just avoiding vanity projects and wasteful spending. Often, it means passing up on investment “opportunities.”

Let me elaborate with an example in personal finance. Homes are traditionally seen as great assets and worthwhile investments. They serve an essential function as shelter and allow their owner to build wealth. However, they can be quite costly when expenses like mortgage payments, routine maintenance, utilities, and property taxes are added up.

That said, only people who understand the costs and are financially ready should buy a house.

So, back to municipal finance… Infrastructure serves an essential function in communities and helps cities build wealth, making it a valuable asset and a worthwhile investment. However, it too can be quite costly — first to build, then to maintain, and eventually to replace.

Because of this, cities should only build new infrastructure that they know they can pay for both now and in the future.

Cities thrive when they follow the same basic financial principles many households follow: spend within your means, prioritize needs over wants, prepare for downturns, and invest for long-term value. This is the first of a four-part series on how land use affects each principle.

However, many cities build new infrastructure without fully considering maintenance and replacement costs, setting themselves up for failure.

Several years after initial construction, deterioration becomes visible and worsens as the city doesn’t have the money for repairs.

This is many cities’ fir st failure to live within their means.

But it doesn’t stop there. As existing infrastructure deteriorates, many cities acquire new infrastructure liabilities, either by intentionally building it themselves or allowing a developer to build it and pass maintenance on to the city. This makes as much sense as someone buying new investment properties when the house they live in is falling apart.

As cities take on more and more infrastructure “investments,” they spend farther and farther outside of their means, moving them closer to insolvency.

But there are ways to prevent this and even mitigate this after it happens… Don’t build infrastructure until you need it. Concentrate value around existing infrastructure until revenue exceeds costs. Prioritize maintenance in high-value areas over low-value areas.

Regardless, accounting for the long-term costs of infrastructure can go a long way in building resilient community wealth. Failing to do so can lead to financial disaster. Make sure your city is living within its means.

If you would like additional guidance in managing your community’s infrastructure costs, schedule a consultation with us today!