How zoning flexibility could help local economy
THE GOVERNOR'S recent announcement that he will cut aid to cities and towns comes on the heels of the disappearance of other once stable sources of revenue that communities relied on to balance their budgets. Lagging building construction, declining automobile sales, and cutbacks in business travel have dramatically reduced revenue from building permit fees, and auto excise and hotel taxes. Moreover, this winter's numerous snowstorms have caused most communities to overspend their snow and ice budgets.
With Proposition 2 1/2 overrides unlikely in today's economic climate, municipal leaders face huge challenges.
But one component of municipal revenue that is not subject to the cap imposed by Proposition 2 1/2 is tax revenue raised from new real estate development. While many community officials will be focusing on cutbacks over the coming months and how to make ends meet, an opportunity exists for municipalities to think creatively about future economic growth.
Though some may question the need to focus on this at a time when few projects are being constructed due to the economy, now is the best time to establish a framework to encourage development and be better equipped to respond to developer interest when the economy turns around.
Part of that effort would be to encourage flexible zoning that allows a developer to respond to the actual interest that may exist in the marketplace. For example, to be successful today, a suburban office park needs to provide amenities and allow for uses that were seldom seen 30 years ago. These include restaurants, retail amenities, and fitness facilities, as well as parking garages to help preserve green space. Yet, in many communities where office space is allowed, the office zoning does not permit these other uses.
Biotechnology, which many agree is the future of our economic success, is often not addressed in many zoning bylaws, and if it is, not with the level of certainty that biotechnology companies require to proceed with a project. While a community could sit back and wait for such a proposal before it seeks to alter its zoning, most developers will instead look to locate in communities that have already created the zoning framework that allows their concept.
For this to be successful, many will need to re-think how to respond to development. Yes, development needs to be reasonable in scope and size, and its impacts need to be mitigated in order for it to be successful for both the developer and the community. But far too often, development in many communities is met with skepticism, if not immediate opposition.
A proposal to transform a vacant industrial building into a first-class office building is shot down because of traffic concerns. Yet this same project would create hundreds of construction jobs and permanent jobs for local residents, and increase the tax base of the town. I suspect there are many communities that have turned away development proposals within the past few years and now look back on what could have been, acknowledging that the additional $500,000 in annual tax revenue from that office building would come in handy right now - even if it meant drivers would have to sit at that red light for an additional six seconds.
Today's economic climate presents many challenges and has forced local officials to think creatively about how they can govern with dwindling resources. While certainly not the entire solution, part of that effort should be to use this transitional period to establish a regulatory framework that encourages responsible development. By doing so, communities can help to insulate themselves from the painful sting of future local aid cuts.
Mark Vaughan is a senior partner at Riemer & Braunstein's real estate practice and former member of the Stoneham Board of Selectmen. 