Fiscal Rules of Thumb

Rule #1: Even with online sales, common commercial land uses generate higher municipal revenues and more positive net impacts than residential uses. However, businesses are dependent on a nearby support population to operate, so a balanced mix is needed.

Rule #2: Higher-density housing uses infrastructure more efficiently, so infrastructure-related costs per unit are lower.

Rule #3: Medium- and high-density housing generally have a more positive fiscal impact to cities than lower density single family housing.

Rule #4: At minimum required densities, FHIZ can generate $25,000 per acre and HOPZ can generate $6,000 per acre in annual TIF revenue to fund eligible upfront costs.

FHIZ and HOPZ help new housing pay for its infrastructure needs upfront. These tools use future tax growth from a project to help fund roads, utilities, and other capital costs, reducing or eliminating the need for city subsidy while allowing needed housing to move forward. At minimum required densities, FHIZ can generate $25,000 per acre and HOPZ can generate $6,000 per acre in annual TIF revenue to fund eligible upfront costs. Assuming a bond rate of 4.0 percent and a 20-year term, a 10-acre FHIZ would generate revenues to support a bond of approximately $3 million.