Advancing the Connection between Public Lands and Municipal Finance

This study examines the underexplored nexus between the management of public lands and the fiscal health of municipalities, with a focus on Richmond, Virginia. Employing a diverse methodology that integrates a thorough inventory of public assets, alongside statistical regression and advanced machine learning techniques, the research unveils the latent fiscal potential of urban public lands. Through the identification of 1,600 distinct public parcels, constituting over 12 percent of Richmond’s total area, this working paper highlights a significant underutilization of these lands, particularly the 42 percent that remain undeveloped. The analysis presents a compelling case for the strategic development of a subset of these parcels, illustrating its potential to significantly augment urban development and bolster municipal revenues through property tax contributions.

The findings offer compelling evidence for policymakers on the latent fiscal benefits of judicious public land development. The use of advanced analytical methods, such as hedonic modeling and Random Forest simulations, provides a deep dive into the potential uplift in property values, forecasting an incremental property value of approximately $530.4 million across various simulated development scenarios. This substantial increase in property value translates into a potential $6.37 million in new annual tax revenue, with broader positive impacts on adjacent private parcels. The research underscores the strategic importance of public lands in urban planning, advocating for a balanced approach that maximizes fiscal returns while ensuring the sustainable and equitable use of urban spaces. This work sets a precedent for cities grappling with fiscal constraints, offering a roadmap for leveraging public assets to foster urban revitalization and financial stability.