Somerville, MA; Fiscal Impact Analysis

Brick Bottom, Somerville, MA (photo by Principle Group)

“Don’t break the City,” the Mayor told the Economic Development and Planning Departments. To make financially sound, long-term policy decisions, the administration needed a clear understanding of the fiscal impacts of proposed Neighborhood Plans and their associated zoning changes.

With multiple planning projects underway and new studies regularly emerging, the City retained G Kellogg & Co to develop an algorithm and spreadsheet tool to assess the fiscal impact of various development scenarios. Implementing pre-Covid plans during the pandemic raised specific concerns about land uses shifting from commercial to residential development — and the financial strain that could create. G Kellogg & Co built a flexible model and analyzed multiple scenarios in two neighborhoods: Brick Bottom and Assembly Square. The analysis estimated revenues from development fees, linkage fees, real estate taxes, and other income sources, comparing them to the cost of servicing different land uses. Particular attention was given to the fiscal demands of residential development, including educational costs. The model also evaluated whether development revenues could cover the City’s public infrastructure needs, from stormwater management upgrades to the potential cost of a new school.