Prior Lake will need 6,600 new housing units between now and 2040, according to a study by Maxfield Research and Consulting just released by the Scott County Community Development Agency and covered in the Dec. 31 Prior Lake American. Those 6,600 units are a fraction of the 30,000 units projected for all of Scott County over the next 23 years.
It’s about housing, but it’s also about infrastructure: expanded sewer and water systems, road improvements, classrooms, police services, more congestion, noise and environmental degradation. If Prior and Spring lakes have an algae growth and water quality problem now, it’s only going to get worse. And what about quality of life — how is it possible to maintain a “small town feel” with 6,600 more housing units and upwards of 20,000 more people? The answer is it’s not. The surest way to make Prior Lake another sprawled suburb is to passively allow development and take no steps to manage it.
What are the true costs and benefits of development? Who pays and who benefits? Local governments across the country are struggling with demands for more infrastructure and services and the unintended consequences of growth and development. One example is Charlottesville, Va., which looked at the costs and the consequences of growth and said “no.” Communities in Oregon and Washington with strong anti-growth constituencies have done the same. Lake Elmo said “no” to the Met Council and developers and ended up in a legal battle that’s lasted years — with many of the issues still unresolved.
Since the 1960s, states and local governments have increasingly turned to impact fees to shift the costs and capital financing for new development from existing taxpayers to developers and landowners. Impact fees make developers and landowners pay for all infrastructure and development costs up front. They are an important economic discipline that allows projects to move forward only when they can make money.
At first impact fees were levied for capital improvements, such as sewer and water systems, directly linked to a specific development project. That’s been increasingly broadened over the years to include the need for new roads, schools and capital facilities occasioned by growth and development affecting an entire community. In California in 1978, suspicions about growth became so widespread, particularly through the environmental movement, that a fiscal revolt by taxpayers led to passage of Proposition 13 limiting local property taxes.
Upwards of 30 states have statutes permitting communities to levy impact fees on developers and landowners. Not surprisingly, California uses them the most. Nationally, impact fees are being used to pay for: sewer and water services, new roads, road improvements, parks, schools, libraries, public buildings, emergency medical services, police and fire services.
The list doesn’t include Minnesota. There is no explicit statutory authority for municipalities in Minnesota to impose development impact fees. They do have authority to impose certain exactions that are directly linked to a specific project, but where municipalities have tried to broaden that authority they’ve met resistance and litigation from developers and landowners. Minnesota courts have ruled impact fees are a tax and that unless conferred specifically by the Legislature are outside a local government’s revenue raising powers.
The Met Council was created by the Legislature in 1967 to control growth and development by setting geographic boundaries for expanded sewer and water systems. It has helped, but it hasn’t been completely successful given the council’s pro-growth policies, which are far too accepting of the interests of developers. The Legislature is considering steps to restructure the Met Council, hopefully making it an elected body responsible and accountable to taxpayers and voters. Loud wails and protests will come from special interests, but impact fees should be a part of that discussion and legislation.
This year, Prior Lake will be reviewing and revising its 2040 Plan. Previous plans have accepted and even encouraged growth without fully considering the costs and consequences for residents. Past public meetings, promoted and facilitated by staff, have too often taken on the character of cheerleading sessions absent efforts to frame the hard economic and environmental issues and unintended consequences. The results of the recent election showed dissatisfaction with that status quo. It’s important the new mayor and council chart a more reflective direction.
For more background and information, readers are encouraged to Google “development and impact fees in Minnesota.”