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Pros and Cons of Commercial Development in Rural Communities

May 25, 2022

It is sometimes hard to imagine the stark differences between our rural communities and our largest American cities. Population density and demand for housing in our largest cities often create confusion and distrust in rural communities. Some of the easiest ways to look at the urban fringe involve the way we think about commercial development in our rural communities and urban areas.

For example, the state of Montana is home to roughly 1.1 million residents across 147,040 square miles of land according to the last census. That is a whole lot of land for opportunity! On the other hand, a city like Los Angeles is only 503 square miles in size, but home to more than 4 million residents per the last US Census. 

To put this into perspective, the median residential home lot in 2010 used to be 10,500 sqft, but in 2020 homeowners have lost yard space by 18 percent. As developers make the most of the land in the urban areas to meet the high demand for housing, there is a growing awareness that the dollar doesn’t stretch as far today. Many have begun to rethink how close they need to be to the inner city and start seeking out larger yard space.

The battle is at a full head now. I’ve been in social media groups where rural communities have consulted lawyers to consider pushing back on the governing bodies in desperate attempts to keep the city growth from coming into their town. At the same time, other groups are embracing the growth and understanding that in order to have a lower tax bracket there need to be more rooftops to share in the community paid services. 

There are pros and cons to commercial development for all rural communities, and your community may find itself in agreement with one side or even both.

Pros of Expanded Commercial Development:

  • Taxation relief 
  • More robust social services such as police, fire stations, health care centers
  • Better jobs with higher wages
  • Increased variety of small business owners, restaurant choices, shopping, and entertainment
  • More competition provides stability in pricing, better service, and more reliable business practices
  • Population growth leads to more opportunities personally and professionally
  • More political power

Cons of Expanded Commercial Development: 

  • Loss of rural feeling in small towns; gravel roads to blacktop
  • Struggle to carry on the built-in knowledge of farming and ranching
  • Increased prices for those that do not want to sell. Equity only matters if you want to sell, if not, you end up paying more.
  • More people can result in changes in social structures and separations between old and new residents.

What do growing pains look like? Well, they can certainly make for some interesting discussions at the morning doughnut shop in rural towns. They also mean that developers are beginning to look at the wide-open spaces of rural communities and see opportunities for growth in these areas where population density is far lower and where residents are eager to go.

One great example of this is Idaho. Idaho has become a desirable destination as residents from California, Oregon, and Washington consider it for numerous reasons. Some of those reasons include the strong network and business connections present in Boise, but beyond Boise, residents are looking at suburbs further outside of the larger community to lower their cost of living.

Recently, as part of the Build Back Better plan, $1 billion dollars was scheduled to be distributed regionally to help build out new agricultural and resource districts, aerospace and defense facilities, advanced manufacturing, transportation, and much more. 

For the states themselves, this represents a huge investment in bringing large companies into rural communities and expanding the economic engine in locations that have been looking for new ways to attract employers.

When USDA Secretary Tom Vilsack announced $5.2 billion dollars in rural development to build businesses and expand everything from water treatment to internet services, rural communities had a few questions.

Would the developers change the way of life they were used to, or would they simply improve services that these communities had been missing?

The fight between developers and agriculture has been ongoing for decades. The New York Times opined about the issue as far back as 1988 when farmers believed that the Reagan administration had over-empowered developers to take over land. Farmers, still reeling from the impact of no buyback under Agriculture Secretary John R. Block in 1982, struggled to recover. 

As a result, decades upon decades of blame and anger continued to build up in rural communities, passed on from generation to generation. It is an issue that has created political animosity among family members, and friends and impacted business.

The end result managed to change the makeup of rural communities. In an analysis for the US Bureau of Economic Analysis in 2019, the Trump administration discovered that the economies of rural communities in America were now comprised of 9.9% manufacturing and 9.7% agriculture. The steady growth of manufacturing in these communities led developers to find new ways to take advantage of the available workforce and great locations.

Is Commercial Development Right For Your Rural Community?

Successful developers look at numerous factors to make sure they stay successful. One such factor would be the ease of access to various modes of transportation, and the demand for these services. With this in mind, rural communities started to look far more attractive for their construction efforts.

New residents in rural communities want amenities, such as the ease of ordering online from Amazon, Target, Walmart, or any other store. These “e-tailers” looked at large numbers of customers in wide geographic spaces and the lack of nearby warehouses and realized the last mile expense could quickly eat away at profits. Meanwhile, putting warehouses in areas where it was cheaper to build a warehouse and in more accessible locations meant companies could save money.

Rural communities worried that developers would devastate and change their towns, but as new residents poured in, the development of housing and commercial space continually increased their revenue and produced opportunities for their children – not a bad trade.      

Communities will make decisions for themselves as to what limits they will put on development, and many of those decisions will come from local and state governments. The landowner often lives by a far older interpretation: my land is my castle, and I will sell it to whomever I please.

No single answer will be the perfect solution for every community. As long as our population and needs continue to grow, we will all face tough questions about how we build and maintain our communities. It will be up to every rural community to discern if commercial development is right for their town. Every rural community could be faced with encroaching commercial development at any moment, and preparing for these conversations is the right solution.

About the Author
Being a Transitional Commercial Land Professional, a registered lobbyist, and a former elected official, I develop land, write policy, and create new opportunities by writing legislation and protecting landowners. In my home life, I tend to horses and cattle beef ranching. Selling land is more than just a listing. The due diligence, different contracts, and disclosures required to prepare the land for its showcase take a skilled land expert to make sure everything is being transferred with the sale and you are getting the highest and best value the land can produce. If you are in the Kansas City area and want to make this your next place to buy land, I would love to show you the best BBQ places the locals know and help you find the right piece of land.