The Developer's Role in Coprovision, Cofinancing, and Coproduction of Urban Infrastructure and Services

Abstract

Municipalities are increasingly shifting costs for urban infrastructure and services to private developers through the use of exactions. A complex system of conjoint arrangements has resulted in which a firm, in bargaining over the conditions of a development permit, may agree to provide and operate a water system, where the use of a facility with a city, or participate in a joint commercial venture with a local government. This exaction process has placed many developers in relationships that are analogous to those of citizen coproviders, cofinancers, and coproducers of public goods and services. In addition to public benefits, a number of potential social costs can be identified with these developer-based relations and suggest that there may be analogous costs involving citizen-governmental conjoint activities. These include equity issues concerning who benefits from developer provided infrastructure and services, whether extensive reliance on cost shifts to developers and on revenue generated from joint commercial ventures can compromise the public interest, and whether implicit demands by cities for exactions is reducing truly voluntary contri butions of a public nature by developers.