Is the per-user cost of municipal services higher in low-density neighborhoods?
Urban sprawl, which creates lower-density suburban communities, is associated with higher per-user costs for municipal services like water, sanitation, electricity, public transport, waste management and policing, according to a 2018 report published by the Organization for Economic Cooperation and Development. “Significant subsidies” are required to cover the cost of these services, and providing them “exerts pressure on local public finance.”
Sometimes, taxpayers in denser urban neighborhoods may directly subsidize services for suburbanites. According to 2019 tax data from Denver, denser, older neighborhoods close to downtown generate millions of dollars in surplus revenues that help cover costs for less-concentrated, relatively wealthy neighborhoods where property tax receipts can’t fund all the infrastructure needs.
