Cost Benefit Analysis
Municipalities are massively invested in real estate; well over 80% of municipal revenue is generated by property tax, deed transfer tax, development charges, permit fees and the like. Yet municipalities rarely consider real estate economics when making planning decisions; a behavior akin to investing one’s retirement savings without consideration of expected returns.
“Growth is good” is the prevailing wisdom. But is it? The plain assumption that development always pays for itself is being rightly questioned. Increasingly, communities are considering the fiscal impact of development; how the expected revenue, capital and operating costs of development affect municipal budgets, and by extension, tax rates. This issue is especially pertinent to the communities of Atlantic Canada where demographic and migration trends continue to erode the existing tax base.
While development is critical to community vitality, the way communities grow is a perennial civic conversation. A robust discussion is important; it is especially fruitful when supplemented with objective analysis. We are uniquely equipped to deliver that analysis. Our understanding of real estate valuation, demographic and market analysis in Atlantic Canada is unparalleled. Combined with the anticipated capital and operating costs of a development proposal, we can provide a realistic model of a development proposal’s fiscal performance, and its net present value (NPV) impact on the municipality’s budget.