Real Estate Tip – Development Density: Three Key Contributors to Public Infrastructure

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Good development requires good public infrastructure. In selecting sites for U.S. Green Building Council’s Leadership in Energy and Environmental Design certification, developers earn points for nearby public transit, walking access to a variety of services, minimizing new parking space creation, and avoiding the need to use new land area for private water and sewer systems. The goal of this point system is, in large part, to encourage greater development density.

In a Fall 2013 Real Estate Review article, Maryland Attorney David Freishtat reminds us that public infrastructure, and the opportunity for greater development density, has been created through a changing mix of three things:

Taxation and Bonding

The political will to create new public infrastructure is often expressed directly at the ballot box for bond initiatives or through the legislative budgeting process. While “popular” and “new tax” are rarely found in the same sentence, new public money is often the only way to bring increased public services and greater development density to a particular area.

Zoning

Commercial tenants seeking space that a new drive-less generation of employees and customers demand are looking for landlords who can benefit from appropriate zoning changes. These changes allow greater than standard density for anything from green construction, to the dedication of some land for public use, to offsets on other land owned by the same landlord, to agreed staging or timing of phases of the development.

Eminent Domain

As of 2005, eminent domain in Maine cannot be used for private development, for private for-profit businesses or for the enhancement of tax revenue. This change places a greater burden on zoning to encourage levels of development density that preserve open space and reduce the expense of highway, sewer, water and power line sprawl.

The politics associated with these changes can be stormy but more and more developers seem willing to weather that storm in the cause of sustainable growth and development. If proximity to public infrastructure and services is important to you as a tenant, owner or developer, do not let existing density requirements deter you from considering your first choice location. Discuss pursuing zoning changes that encourage greater density with legal counsel and your project development team.