and benefits from the new development will be internalized. That is, a large jurisdiction can capture all of the positive effects on local revenues, including second- and subsequent-round effects. Because in a large jurisdiction it is unlikely that all existing local public services are being used at capacity, it seems highly probable that any specific new non-residential use must impose added costs far below the added revenue (unless that development has been elicited by substantial local tax concessions).
If fiscal zoning works as predicted, the negative equity consequences are fairly obvious. As some of the above comments suggest, the welfare costs in the form of negative externalities that planners write about are less obvious. I offer only one comment about this. Planners emphasize the transportation consequences of low-density development. Granted that low density zoning ('sprawl') does result in more vehicle miles of travel and perhaps in more time spent in travel (which is not necessarily the case, if low density permits higher average speeds), is this a welfare loss? It does seem that, in the United States, wages are quite low — relative to the regional averages — in a good many especially low density urban areas in the Sunbelt. Examples include Tucson, Colorado Springs, Abilene, Waco, Tallahassee, the Norfolk-Hampton Roads area in Virginia, and Columbus, Georgia. 4 This implies that the time costs of travel will be relatively low in such areas, despite the additional vehicle miles travelled.
Finally, there is the whole issue of whether land use control powers should be exercised by small local government units. It has never been evident that this is inherently equitable or efficient, unless we are dealing with a pure Tiebout world. There is also the question of legitimacy, which we are probably not professionally entitled to address.