ANN ARBOR, MI — With more and more high-rises sprouting downtown and new subdivisions taking shape, city leaders are again discussing and debating issues around growth.

Is the city reliant on the property tax revenue that comes from new development?

And, if so, is perpetual growth sustainable?

“We keep hearing very simplistically that we have to keep building high-rises so that we can fund our expenditures,” Council Member Kathy Griswold, D-2nd Ward, said during City Council’s annual budget planning session Monday, Dec. 9.

“How many more high-rises do we need?” she asked.

Revenue from new construction is key to balancing the city’s budget as costs rise, because the city’s property tax growth is otherwise limited, said Tom Crawford, the city’s chief financial officer.

The city’s taxable value increased from $5.1 billion to $5.8 billion in the last few years, reflecting a strong level of new construction, he said.

Revenue from new construction downtown “has been material,” Crawford said, though he didn’t cite exact figures.

Crawford presented a budget forecast for the 2020-21 fiscal year, showing $112.4 million in general fund expenses and $112.3 million in revenue, drawing down reserves slightly to $17.5 million.

Growth isn’t the only way to achieve a healthy economy, said Council Member Jack Eaton, D-4th Ward, arguing the city can’t grow its way out of its problems.

“Every time we add 1,000 people to our population, they consume all of the services that we provide and it drives our expenditures up as well,” he said. “So, I really hope that when we talk about economic development, we’re really looking for some sort of equilibrium rather than just endless growth. That’s not sustainable.”

Ann Arbor’s population was estimated at just under 122,000 last year, up about 8,000 since 2010, according to census figures.

Council Member Jeff Hayner, D-1st Ward, made a case for “zero growth” in a recent email to his colleagues.

Just a few days after council voted 9-2 to approve a 19-story high-rise, which he opposed, Hayner wrote to the entire council, the city’s administration and the city’s sustainability manager to suggest they read an article titled “In Defense of Degrowth.”

New ways of thinking are needed if the city has any real hope of solving the climate emergency, Hayner said.

“We cannot continue to pursue Economic Development and Growth - even ‘green’ versions of these – if we hope to make real change. The math behind Continuous Growth dooms us to failure,” he wrote.

Every person added to the area brings with them a carbon load and resource consumption, Hayner said.

“We don’t need more growth, or smart growth, or green growth. We need Zero Growth. That should be our goal,” he wrote.

“I know that some will argue having a person live a monk-like, car-free, net-zero lifestyle in an Ann Arbor high-rise is superior to that same person living a traditional western lifestyle elsewhere,” he added. “That may be so, but very few choose to live that way, even as a percentage of our supposedly enlightened populace.”

Hayner said Monday night he wants a full accounting of the costs of growth, not just the tax revenue it brings, and he thinks the city should insist on growth that’s sustainable.

All successful cities grow, said Mayor Christopher Taylor.

“We’ve heard the chief financial officer of the city state very clearly that we’ve balanced our budget on new construction,” he said. “Without new construction in the city of Ann Arbor, our budget would be a disaster. City services would be sharply diminished.”

Council Member Julie Grand, D-3rd Ward, encouraged her colleagues to listen to the experts.

“Because I am disturbed hearing pushes for zero growth in our community,” she said. “That’s how we die as a community.”

Griswold said she’s not against development, but she agrees there are costs to growth that should be quantified.

“Sometimes it’s like ‘we have to grow or we’ll die, so we have to keep building,’ but we don’t have a detailed discussion about what infrastructure is going to be needed,” she said.

“I mean, as simple as when the toilets flush in a high-rise, what load does that put on our sewer system?”

Doug Kelbaugh, a University of Michigan urban planning professor, gave a presentation on “Green Density in the Core” at Monday’s meeting. As cities get bigger, they get more sustainable, he said, citing statistics that per-capita carbon emissions are more than double in low-density areas compared to high-density areas.

“This is unbelievably good news for the planet, because we’re urbanizing and cities are much better,” he said.

Kelbaugh encouraged city officials to consider steps to mitigate the “urban heat island effect” as the city grows, like using lighter-colored pavement and painting building rooftops white to reflect sun.

He also recommends looking at which streets are unnecessarily wide and narrowing them, replacing some of the asphalt with grass, trees, shrubs and other vegetation. That not only helps fight climate change, but can reduce city costs, he said.

He also recommends installing solar panels, considering transit solutions like a bus-rapid-transit system with dedicated lanes and making the city more walkable and bikeable.

As cities get bigger, income and wealth increase faster than population, Kelbaugh said, encouraging city leaders to also find affordable housing solutions to address economic segregation.

“Ann Arbor ranks near the bottom nationally in economic segregation, primarily due to the high cost of housing. I mean, we’re as bad as it gets for economic segregation,” he said.

“We need more infill housing that’s compact, efficient, walkable, bikeable and transit-served.”

According to information presented Monday, city leaders have identified affordable housing and climate action as top priorities, while ranking economic development as a low priority.

Teresa Gillotti of the Washtenaw County Office of Community and Economic Development presented a new online dashboard, showing 4,216 affordable housing units countywide.

Several hundred have been lost in recent years and more are at risk of going away as rent restrictions are lifted and apartments transition to market-rate, Gillotti said.

About 191 new affordable housing units are planned to come online in the next three years, including 167 in Ann Arbor, but only 6% of the 25,721 rental units in Ann Arbor are affordable, Gillotti said.

About 35% of the designated affordable housing units in the county are in Ann Arbor, while 47% of all rental units in the county are in Ann Arbor, Gillotti told council.

The numbers are still in draft form and will be finalized with the formal release of the dashboard in the coming weeks, Gillotti said.

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