"Sewer it, and they will come": the folly of sewers as an economic development tool

[Dan]

The political subdivisions that I work with succumbed many years ago to the "zone it, and they will come" school of economic development. They believed if they provided acres and acres --- really, square miles and square miles -- of commercial zoned land, property values would skyrocket, and commercial development would come knocking at their door. It was a failed policy. With no demand for commercial development, the only result was depressed real estate prices, and what little development that took place was scattered low-end commercial uses such as mini-storage, used car lots, and other marginal businesses that could eke out an existence compared to other places where plans were stronger and better championed, commercial zoned parcels were scarcer, and land prices were higher.

Today those same communities are being enticed by the belief "sewer it, and they will come", thinking that providing sewer service everywhere will draw higher-end businesses. I'm trying to convince them that this may be another failed policy. First, it's inside-out planning; a comp plan should identify the best areas for development areas, and priority given to sewer extension in those areas, rather than rumored or "napkin drawing over lunch" plans of sewer extensions dictating the direction of the plan. Secondly, without the rooftops and demand, commercial land values will remain depressed, and the demand for higher-end uses will remain low; the result will probably be more of the same

I'm looking for case studies, plans, or examples that show "sewer it, and they will come" isn't a sure-fire economic development solution; that sewer won't necessarily guarantee higher-end development where the demand isn't there.

[zman]

I think 2 years ago, we tied into the sewer system of the Town Next Door and provided an extension to developable areas between our town and theirs.
While we did not use this as out sole economic development tool, it does help a little bit in attracting development.

[Cardinal]

Sewer is a near necessity for economic development. In repeated empirical studies it has been shown to have the most impact, or to me one of the most significant contributors to business attraction. On the other hand, sewering everything in the hope of development is a foolish policy. These communities should be targeting their investment, based on criteria such as selecting the most promising business sites, seeking to develop whole business districts rather than scattered sites, encouraging redevelopment, minimizing infrastructure costs, etc.

I am seeing communities here take the same approach as you mention. They put just about every undeveloped piece of land in a TIF district, then run miles of new water and sewer in the hope that they can entice development to occur. It is sad to see how poorly they understand the market. They will invest millions with no promise of increment to pay it off, when a much smaller, strategic investment would provide a better pay-off.

[Suburb Repairman]

Cardinal can probably take care of your empirical stuff. I can't think of any great specific examples of the sewer economic development policy you described completely blowing up in their faces. The only cities in Texas that come to mind that seem likely to have done something like that are Wichita Falls, Victoria, any East Texas town, maybe Lubbock. That is all me throwing darts at cities that seem to act desperate for economic development. Part of Victoria's policy was actually to use their capacity to pollute as an enticement.

As for my opinion, sewer service is not something that will necessarily attract economic development. However, the lack of sewer service or ability to get it there quickly/painlessly will depress an area.

In Texas, most areas are growing so rapidly that cities can take the high risk manuever of throwing sewer service out to random areas as an enticement. But somewhere that tends to be economically depressed (i.e. Northeast Ohio) doesn't have that growth momentum already going for it.

[Brocktoon]

Developers want land that is shovel ready. They do not want to deal with a large infrastructure extension process before they can begin construction. Like everyone else has stated, laying sewer just to have it there will not generate development. When a jurisdiction does do a speculative sewer expansion it should be well planned.

In Battle Creek, MI they extended their sewer and water lines out into the adjacent township for a commercial development. Since the infrastructure was in place development occurred along the area creating a commercial center. The down side was most of the development was in the township and not the city.

[Cardinal]

As for my opinion, sewer service is not something that will necessarily attract economic development. However, the lack of sewer service or ability to get it there quickly/painlessly will depress an area.

Yes, I should have stated it better. The studies show a strong relationship between the availability of sewers and new development.

[randy2029]

And of course, the development that follows infrastructure does not necessarily translate into positive "economic" development. I worked for a city that TIFed greenfields to build trunk sewer lines and roads. What did they get there? Why, big box stores of course.

What was the "economic" development? Maybe some marginal increase in total retail activity, but to what extent did it just shift retail expenditures from existing retail stores to the new Walmart et al?