Understanding the Fiscal Benefits of Protecting Horse Farms and Open Space
Updated in 2026 from an earlier article by Allen M. Prindle and Thomas W. Blaine
When communities consider the future of their rural landscapes, decisions about land use are often framed around questions of growth, development, and increased tax revenue. However, an important question is often overlooked:
Do all forms of development generate enough revenue to cover the public services they require?
The Cost of Community Services (COCS) approach helps communities answer this question by examining the relationship between local government revenues generated by different land uses and the costs associated with providing public services.
For horse owners, agricultural producers, landowners, and community leaders working to protect open space, COCS studies provide an important economic perspective: preserving working lands and open space can be a fiscally responsible land-use strategy, not just an environmental or scenic one.
What Are Cost of Community Services Studies?
COCS studies examine the fiscal impacts of diverse types of land uses by comparing the public revenues generated by those uses with the costs of providing community services.
The COCS approach was developed and widely advanced in the 1980s through the work of organizations such as the American Farmland Trust (AFT), which conducted some of the earliest studies examining the relationship between land use, community services, and local government budgets. Since then, COCS studies have been conducted by researchers, planners, and communities across the country, with findings that have consistently helped communities better understand the fiscal implications of different development patterns.
Most COCS studies evaluate three broad categories of land use:
- Residential development
- Commercial and industrial development
- Agricultural and open-space lands
The purpose is to determine whether each land-use category generates enough revenue to offset the services it requires, including schools, roads, emergency services, infrastructure, and local government operations.
AFT developed COCS studies as a tool to help communities evaluate the fiscal contributions of agricultural and open-space lands compared with residential, commercial, and industrial land uses. Since then, researchers and communities across the country have conducted COCS studies using similar methodologies, and their findings repeatedly have demonstrated the fiscal value of working lands and open space.
Understanding the COCS Ratio
A common way to summarize COCS findings is through a ratio comparing the cost of services required by a land-use category with the revenue generated.
- A ratio of 1.0 means that the land use generates approximately enough revenue to cover the cost of services provided.
- A ratio greater than 1.0 means the cost of services exceeds the revenue generated.
- A ratio of less than 1.0 means the land use generates more revenue than the services required.
How Do Different Land Uses Compare?
COCS studies conducted in communities across the country have consistently shown that diverse types of land uses have different fiscal impacts. While results vary depending on local conditions, the overall pattern is clear: residential development often requires more in public services than it generates in revenue, while commercial, industrial, agricultural, and open space uses generally generate more revenue than they require in public services.
| Land-Use Category | General COCS Finding |
| Residential development | Often requires more in public services than it generates in tax and other revenues |
| Commercial and industrial development | Generates more revenue than the services required |
| Agricultural and open-space land | Typically generates more revenue than the services required and generally has among the lowest demands for public services |
Residential development often has the greatest fiscal impact because it creates demand for services such as public schools, roads, emergency response, and infrastructure expansion.
Commercial and industrial development, including manufacturing uses, generally has a more favorable fiscal balance because these uses typically generate tax revenue without creating the same level of service demands associated with residential growth.
Agricultural and open-space lands, including many horse farms, also generally have a positive fiscal impact. Because these lands can require fewer public services, they often contribute more in revenues than the cost of services they require.
These findings do not suggest that all development is undesirable or that communities should prevent growth. Rather, COCS studies provide communities with valuable information when evaluating the long-term fiscal consequences of different land-use decisions.
Why This Matters for Horse Farms
Horse farms are an important part of many agricultural and rural landscapes. Although their primary purpose may be equine-related rather than traditional crop production, many horse properties function as working lands that provide significant community benefits.
Protecting horse farms and other agricultural lands can help communities:
- Maintain open space and scenic landscapes
- Preserve rural character and community identity
- Support agricultural economies and equine-related businesses
- Protect wildlife habitat and environmental resources
- Reduce pressure for additional residential development
- Support recreation, tourism, and quality-of-life benefits
For many communities, horse farms are part of the landscape systems that contribute to local economies and community character.
Why Cost of Community Services Matter to Horse Communities
When communities evaluate future growth, the question is not simply how much revenue new development generates. The more important question is whether that revenue covers the cost of the services required. COCS studies provide communities with another tool to evaluate the long-term fiscal impacts of land-use decisions.
Why Do COCS Results Differ Among Communities?
Although COCS studies have shown consistent patterns, results vary depending on local conditions.
Factors that can influence findings include:
- Local tax structures
- School funding systems
- Land values
- Infrastructure capacity
- Population characteristics
- Development patterns
- Community growth rates
For example, a community with higher-value homes occupied primarily by retirees may experience different costs than a rapidly growing community with many families and school-age children.
COCS studies should therefore be considered one tool among many when communities evaluate future land-use decisions.
Beyond the Numbers: The Broader Value of Open Space
While COCS studies focus primarily on fiscal impacts, communities recognize that agricultural and open-space lands provide benefits that extend beyond direct financial calculations.
These benefits may include:
- Scenic viewsheds
- Water-quality protection
- Wildlife habitat
- Recreation opportunities
- Agricultural production
- Community character
- Rural quality of life
For horse communities, these benefits are particularly important because equine operations depend on access to connected rural landscapes, trails, hay-producing lands, and compatible neighboring land uses.
Limitations and Considerations
COCS studies have also been the subject of discussion and debate.
Some critics note that these studies may not capture all economic impacts associated with new development, such as local spending, workforce contributions, and economic activity generated by new residents.
Others argue that conservation and open-space protection provide benefits that are difficult to measure financially.
These discussions reinforce the importance of using multiple planning tools, including:
- Fiscal impact studies
- Economic impact analysis
- Agricultural viability assessments
- Infrastructure planning
- Conservation planning
COCS studies are not intended to make land-use decisions by themselves, but they provide valuable information about the long-term costs and benefits of different development patterns.
Implications for Community Planning
One of the most important lessons from COCS research is that communities should carefully evaluate the full impacts of land-use decisions.
Residential development may increase tax revenues, but it can also create significant long-term demands for public services. Agricultural and open-space lands, including many horse farms, can provide important fiscal, environmental, and community benefits while requiring fewer public services.
As communities face increasing development pressure, protecting working lands and open space should be viewed not only as a conservation priority but also as a smart community planning strategy.
For horse owners and equine organizations, understanding the economic value of open space strengthens the case for policies that protect the land needed for horses, agriculture, and rural communities.
Related ELCR Resources
Agricultural Districts: A Tool for Protecting Horse Farms and Working Lands
Beyond the Urban Edge: Protecting Horse Farms in a Changing Landscape
Where Will Our Horses’ Hay Come From?
Other Resources:
American Farmland Trust: Cost of Community Services Studies
