Municipal investment in open space and farmland is usually less costly than allowing development, though the cost savings may not be seen for several years. This resource paper gives several case studies throughout New Jersey.
Municipal investment in open space and farmland is usually less costly than allowing development. Amongst the examples given is Mansfield Township, NJ, where every new residential unit has a net negative fiscal impact of $1,866 per year while preservation of the same land through the county farmland preservation program would result only in a one-time cost of $3,000. Farmland costs $0.27 in services for every $1.00 it generates in taxes as compared to residential land, which requires $1.48 in services for every $1.00 it generates in taxes.
The savings in the provision of public services may be seen in the long term. In 2003, a study was conducted of a 208-acre natural area that was originally slated to be developed with 39 homes. If that area had been developed, it would have cost the Township $1.9 million over 20 years. It cost $2.7 million to protect. However, after the 20-year loan used to pay the preservation costs is paid, the protected open space, has only minor upkeep costs such as trail maintenance. If it had been developed, it would continue to cost $100,000/year indefinitely.
Although many municipalities believe that commercial and light industrial development will lower overall tax rates, these types of developments can have unforeseen costs. A 1992 study of the 39 towns in Morris County found that commercial development failed to lower taxes. Reasons for this include courts increasingly ruling in favor of companies that appeal for tax relief, employees moving in and requiring services, and office buildings not changing hands as often as residential buildings, so their taxable value doesn’t come as close to inflation.