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ATLANTIC HIGHLANDS HERALD |
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There probably hasn’t been a mayor or council member who hasn’t at some time defended residential development with the argument, “We need the ratables.” Yet there isn’t an elected official who could point to one instance where residential growth reduced local property taxes. Still, when open space advocates urge putting aside land for conservation and recreation, officials respond, “Who’s going to pay for it?” Residential growth increases property taxes. Why? School taxes can be two to three times higher than municipal or county taxes. More homes require additional police, fire, and municipal employees, but more children in those homes definitely require more teachers. And that means higher taxes. How? Assume there are 500 acres of open land that could be used to build 1,000 four-bedroom houses. If each house is worth $374,000 (the median for home sales in our area), the municipality’s additional ratables are $374 million (1,000 x $374K) -- a mayor’s dream! But wait. A five percent property tax rate, with three points for schools, will raise $11.2 million (0.03 x $374M) for schools. However, if each house has a minimum of two children at a yearly cost of $11,107 per child (N.J.’s average), school operating costs increase by $22.2 million ($11,107 x 2 x 1,000). The deficit is $10 million ($22.2M – $11.2M), which doesn’t even include capital costs for any new classrooms. In addition, the state Council on Affordable Housing links “affordable” housing to ratables. For every four new market-priced dwelling, an “affordable” dwelling must be built. Otherwise, a municipality faces “builder’s remedy” lawsuits against its zoning code. However, if a municipality encourages commercial development instead, COAH still requires additional “affordable” dwellings. More students, more development – higher taxes. Now, instead, let’s create a “passive” or “limited activities” park. If a half-acre building lot costs $125,000 (excluding streets and utilities), the 500 acres could cost $125 million ($125,000 x 2/acre x 500). At 6 percent interest, mortgage payments would be about $0.9 million a year for 20 years. By preserving the open space, the municipality is ahead by $10.3 million a year ($11.2M – $0.9M), and with county and Green Acres assistance, the savings would be even higher. Not only does preservation pay, the municipality is mortgage-free after 20 years. School costs, however, go on forever. Some officials push age-restricted housing to avoid additional school costs. But guess who buys the “empty nesters’” homes -- a younger family with children. On the other hand, if retirees on fixed incomes are pushed out of their homes by rising taxes, guess again who buys their homes. A savvy official should want more parkland. Who knows, a grateful electorate might even name the park after him or her. Unfortunately, the number of municipal applications to So stabilize your taxes – create a park. We’ll help. Mrs. Judith Stanley Coleman  |
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