Local infrastructure (roads, water, sewer, sidewalks, etc.) can be a boon or a drain for municipal tax bases. Local water and sewer systems can enable denser development patterns that have a high taxable value per acre and make more efficient use of roads. Conversely, municipalities can end up in financial peril when local infrastructure systems are overbuilt and overextended. In municipalities with such services, commercial development is usually seen as a good use of land in terms of generating taxes, but multi-family or multi–story residential (or mixed-use) development is often in fact a better deal, generating significantly more value per acre than standard single-floor retail. Homes on small lots (¼-acre or less) also use municipal infrastructure more efficiently, leading to better fiscal health than homes on larger lots. Communities can look at the value of residential development in their own or surrounding communities to get a clearer picture of the ways that it can benefit the local tax base.
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