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Democracy on the Front Lines
City Administrator’s Blog
Walter Denton
September 13, 2007
I have written about this before, but growth and development are consistent issues around here. In O’Fallon, we have had recent controversies over the Creekside Promenade retail center and Rasp Farm subdivision. Our neighbors to the south (Shiloh) are now faced with a proposal to develop 500 acres of residential, multi-family, commercial, and retail that would close a golf course and relocate a city park. School districts are building schools to handle the new students.
This brings up a question I have heard often over the years: Why can’t the City just say “no” to new residential development? O’Fallon’s rapid growth has strained City services and is causing crowded schools. Can we just put up a “no vacancy” sign and let us catch up with the growth that has already occurred? As you might expect, the answer is complicated but it can be divided into two categories – private property rights and utility control.
It is a foundational concept in our U.S. Constitution that people have inherent private property rights. This includes the right of individuals to buy and sell their land for development purposes. Local governments have the ability to establish zoning for land within their realm of authority, but if the land is generally appropriate for a certain use then people can develop it for that use. This is the case with much of the land in the northwest quadrant of the city along Milburn School Road. The land is flat and suitable for residential development. The City government cannot prohibit the farmers from selling their land to the developers.
However, what developers need most are utilities. Residential subdivisions need water and sewer (especially sewer). The City can control the nature and pace of development by the placement of its water and sewer lines. This is effective in O’Fallon in the northern and eastern sections of our territory where we have exclusive sewer control, but in the aforementioned northwest quadrant we have neither water nor sewer control. That area is under the jurisdiction of the Caseyville Township Sewer District, which extended sewer lines there about four years ago and
fueled the residential feeding frenzy. And while we have water lines in the area, the Village of Caseyville also runs a rural water district and has water lines running through there as well. Moreover, all of the undeveloped land is currently unincorporated so the City does not have zoning control either.
So here is the scenario: a developer can theoretically purchase a farm along Milburn School Road, get their residential zoning from the County Zoning Board, get their sewer from Caseyville Township, get their water from the Village of Caseyville, and they will not need to ask the City’s permission to develop their subdivision. The subdivision could exist outside of the city limits, yet still be within the boundaries of O’Fallon schools and benefit from most of our City services.
Therefore, we are more in a position of regulating the quality of the development than the existence of the development itself. We don’t have the leverage to stop the development from occurring, so we do the best we can to ensure the homes and infrastructure are well built and to get the development to pay for itself. We charge annexation fees of $2,250 per unit to pay for street and infrastructure improvements, there is a park land dedication requirement to establish green space in new subdivisions, and we charge permit fees to pay for the reviews and inspections.
That said, the pace of new subdivisions has slowed significantly. The City has approved only 69 new home lots over the past year. The home construction you are seeing now is the inventory that has already been approved. Over the past five years, more than 1,000 home lots were approved, and at our current rate it will take around four years to build down the inventory. There will probably be about 250 new homes this year in O’Fallon, which is far below our 2005 record of 384 but is equal to our 10-year average. With the recent real estate downtown, we do not expect to see many new subdivisions proposed as homebuilders build through the large inventory.
Commercial and retail development has always been an important component of our development strategy. You may not be aware that only 2% of our General Fund budget comes from property tax and 54% comes from sales tax. The City of O'Fallon has aggressively pursued retail development over the years, resulting in the Wal Mart Supercenter, Sam's Club, Home Depot, and American TV & Appliance. In particular, we have targeted car dealers because they provide high sales tax revenue per unit sold and are have low demand on City services. We anticipate the new BMW and Harley Davidson dealerships will provide significant new sales tax revenue. In addition, a new Hilton Garden Inn and Conference Center are under construction that we hope will stimulate further commercial activity in O'Fallon.
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