The fiscal trade-off: Sprawl, the conversion of land, and wage decline in California’s metropolitan regions

Abstract

Suburban jurisdictions are disproportionately likely to convert their land to land uses that maximize revenue generation. Yet, the jurisdictions that convert land to more fiscally lucrative uses are likely to experience gains in low-wage retail jobspossibly contributing to poor upward mobility. This study offers a new perspective on both the factors behind and effects of the conversion of land use to sales taxable uses, via a unique dataset that identifies land use changes on 1.2 million parcels in California (from tax assessor data) from 2007 to 2013. After linking to data on compactness, municipal tax structure, and economic characteristics, the study examines first how various urban form and fiscal factors shape conversion (controlling for economic and demographic variables), and then how conversion to more fiscally lucrative uses (along with urban form and fiscal factors) affect net job quality, specifically wages, over time. Not only does fiscal structure, particularly municipal dependence on sales tax revenue, lead to the conversion of land to fiscally lucrative uses, controlling for other factors, it also contributes to wage decline. The more compact the urban fabric, the less likely is land use conversion, yet the greater the wage decline. The findings of this study suggest that land use conversion may thwart broader economic development goals.

Environmental protection, climate regulation, and the persistence of sprawl in California

“…The Energy Commission uses these assessments and forecasts to develop energy policies. The 2016 IEPR covered a broad range of topics, including the environmental performance of the electricity generation system, climate adaptation activities for the energy sector, climate and sea level rise scenarios and provided recommendations for future research and analysis areas (Chapple, 2018).…”

“…Local control over land use enables cities and counties in their unincorporated territories to determine what types of land use they wish and where, including parks and open spaces, housing and its type and density, commercial and industrial amounts, and locations. It is also vital to local budgets as land use types generate different amounts of tax revenues that may or may not entirely offset services (Chapple, 2018 ).…”

“…Lower-priced housing generates less tax income than more expensive housing. Though it may ultimately cost the locality more to service it than it generates in taxes in the long run, cities and counties are under tremendous pressure to approve development (Chapple, 2018 ). California’s nonpartisan Legislative Analyst’s Office estimates that in addition to the 100,000–140,000 units that California is expected to build on an annual basis in the coming years, the state would likely need approximately 100,000 additional units annually (almost entirely in more expensive coastal communities) to mitigate problems with housing affordability caused by supply constraints (Cooper et al, 2016 ).…”

Factors Aggregating Ability and the Regional Differences among China’s Urban Agglomerations

“…An urban agglomeration is a highly developed urbanized area consisted of integrated cities [2], similar to various terms including megalopolis [3], metropolitan belt [4], urban clusters [5], metropolitan regions [6], metropolitan areas [7], and others. Although it is still difficult to obtain a unified definition, it is generally viewed as an urbanized area filled by an integration of cities with huge population density and close interaction flows.…”

“…shows the difference and hierarchical distribution of the factors aggregating ability among 19 urban agglomerations in China based on Equation(6). Statistically, as shown inFigure 3a, the difference of factors aggregating ability among the 19 cases isn't relatively significant, except for the first-rank Yangtze River Delta urban agglomeration.…”