Raleigh is getting Serious about data-driven land use decisions
Based on staff presentations to Council (September 16, 2025 and October 21, 2025), along with a pending RFP just published, the City is hiring a consultant to build a fiscal impact, or “cost of growth,” analytics tool. Using a fiscal impact tool will change how Raleigh analyzes annexations, rezonings, and various City growth patterns in the context of enhancing the City’s fiscal resilience. The change seems to be part of a broader effort focused more on fiscal impact and less on the traditional case-by-case/transactional approach used by most municipalities.
Why “cost of growth” is on the table now
For decades, North Carolina cities could use involuntary annexation to bring new areas into their boundaries. This authority helped municipalities plan how and where to extend their geographic boundaries. Most larger cities like Raleigh used involuntary annexation to refine how they intended to grow in the short-, medium-, and long-term based on the ability to serve areas with all required public infrastructure. However, this involuntary annexation authority was essentially eliminated by the Annexation Reform Act of 2011 (HB 845).
Since then, annexation has been entirely voluntary for property owners and discretionary for cities. As a result, the Raleigh City Council has been making case by case decisions about whether it makes financial and policy sense to bring new areas into the City and extend urban services. This transactional approach to annexation imposed on cities has made implementing long-range land use plans more difficult.
At the same time, Raleigh’s current 2030 Comprehensive Plan (adopted in 2019 and updated in 2019) sets a clear growth vision: focus new development in centers and along major corridors, rather than pushing sprawl farther out. When the plan was drafted, City leaders talked openly about funneling roughly 60% of new development into downtown, major growth centers, and key corridors in order to curb sprawl and reduce long-term infrastructure costs.
Where does that leave Raleigh today?
City staff recently finished phase I and have started working on phase II of Raleigh’s Next Comprehensive Plan. When adopted, it will establish policies for where and how the City should grow through 2050.
In that context, a cost-of-growth tool can help decisionmakers and residents answer a simple yet critical question:
When Raleigh adds new homes, businesses, streets, sidewalks, parks and pipes in different parts of the City, is it building a fiscally resilient foundation or is it taking on long-term costs not fully understood and that may be unsustainable?
To begin to answer that question, the City issued a request for proposal (RFP) on March 11 seeking a consultant to design and help implement a cost-of-growth analysis tool for Raleigh. The work will be integrated into the next Comprehensive Plan and supported by an in-house project management team led by planning staff, with GIS, data, and IT support from other City departments. While the exact methodology will be determined through the RFP, here are some likely features:
1. Focus on annexation and varying development patterns across the City
The study will consider how different types and locations of development affect City finances, with special attention to:
The proposed scope of work includes the following components:
Evaluate anticipated costs of serving Raleigh residents under different development scenarios;
Forecast capital needs over the next 20 years based on clear level-of-service (LOS) standards;
Estimate population growth, land development, including annexation of areas along the City’s edge;
Analyze the fiscal impacts of different development patterns (e.g., compact, mixed-use growth centers and corridors vs. low-density greenfield projects);
Estimate the tax value and tax revenue of various growth patterns in Raleigh; and
The incremental and marginal costs of serving varying types of development patterns. What does it cost to add one more subdivision, one more pump station, a new park or one more mile of road and pipe.
City finance staff already prepare 10-year forecasts for annexation petitions, but they do not have an adequate tool for comparing the cost of providing services in different parts of the City with varying development patterns. The new tool is meant to address that gap.
2. A Citywide, map-based fiscal model
Ideally, the tool will lean heavily on data analytics and mapping, drawing on the City’s GIS capacity and IT team. To that end, it will likely:
Combine land use, annexation history, and infrastructure data;
Estimate long-term service and capital costs for different growth scenarios; and
Compare those costs to projected revenues (property tax, fees, and possibly other revenue sources like sales-tax).
3. The tool must evolve
No analytical tool is perpetually accurate. A cost-of-growth tool must start with current assumptions about construction costs, service levels, and revenue structures. As conditions change, the model becomes less precise. Therefore, it will be most effective at evaluating near and medium-term decisions, especially annexation and major land use policy choices. And to maintain its precision, the tool should be reviewed and updated every 5–10 years, likely in conjunction with future Comprehensive Plan updates.
How Might Such a Tool be Used?
1. Informing annexation decisions
Raleigh continues to receive voluntary annexation petitions as development pressure pushes outward. A recent Council discussion included the pausing of some annexations while a cost-of-growth analysis is completed, underscoring the importance of this issue to City Council.
Using the tool, staff will be able to:
Estimate the marginal fiscal impact of annexing a given area;
Compare that area to alternative locations or patterns of growth; and
Give Council a clearer picture of how each annexation contributes to or erodes the City’s fiscal resilience.
2. Supporting rezoning and development review
The cost-of-growth tool is intended to:
Provide consistent fiscal information for major rezonings where infrastructure and service needs are significant;
Help staff and Council evaluate how well a proposal aligns with the City’s growth framework, especially the goal of concentrating growth around regional centers and frequent transit corridors; and
Tie individual cases back to Citywide fiscal and infrastructure realities, not just traffic counts or building height.
3. Stress-testing the next Comprehensive Plan
Perhaps the most important use of the tool will be at the policy level, as Raleigh develops its next Comprehensive Plan. The current 2030 Plan sets a high-level direction regarding things like compact growth around regional centers and along corridors with planned multimodal transportation networks. However, the current 2030 Comprehensive Plan doesn’t include a detailed, Citywide fiscal model illustrating the long-term costs of different development patterns.
The new fiscal impact tool could help:
Validate whether Raleigh’s existing growth framework is fiscally resilient;
Compare alternative scenarios (for example, more growth in existing corridors vs. more greenfield annexation vs. more regional center development); and
Quantify the capital needs and future maintenance costs associated with varying development models in terms of transportation, trash collection, water and sewer, parks, fire, and police.
In other words, the Comprehensive Plan won’t just say where Raleigh should grow. It will start to also answer how the costs of growth compare among different scenarios and whether Raleigh’s municipal revenue structure can support those costs.
4. Shifting the City from transactional to more data-driven land use decisions
For years Raleigh’s land use decisions have been deeply transactional:
One annexation petition at a time;
One rezoning at a time; and
One capital project at a time.
When relying mostly on the transactional approach to land use decisions, residents and Council are often left arguing about the need for buffering/landscaping, a traffic light here or there, the height of a single building, without any compelling data about how a particular land use decision fits within an overall growth framework and whether the ultimate decision improves or detracts from the City’s fiscal sustainability.
The cost-of-growth tool represents a shift to a more data-driven approach:
Citywide lens, not just parcel by parcel. Instead of treating each new land use decision in isolation, the model will show how many miles of pipe, lane-miles of road and sidewalk, and where/how operating costs stack up.
Comparing varying growth scenarios. Council will be able to compare different patterns of growth using a common set of assumptions, rather than relying so heavily on competing narratives from applicants, opponents and other stakeholders.
Integration with other work. Raleigh is already using cost-of-service models in areas like water and sewer rate setting to promote equity among users. Extending this logic to land use decisions is a next logical step.
This doesn’t mean fiscal impact becomes the only criterion. Issues like housing affordability, displacement, climate resilience, and racial equity still matter enormously. RaleighForward’s existing work on housing, density, displacement, and transit will remain just as relevant. But it does mean those conversations can be grounded in a much clearer understanding of the financial tradeoffs.
RaleighForward will continue to follow this work closely as the RFP is processed, a consultant is selected, and the first round of analysis begins. Done well, Raleigh’s cost-of-growth tool should help decisionmakers move from arguing parcel by parcel to planning for a fiscally resilient future by linking land use decisions to broader fiscal impacts and the policies adopted in the next Comprehensive Plan.