Atlantic Cities

What's the True Cost of Incorporation?

What's the True Cost of Incorporation?
The Woodlands

Between its construction boom and the slow greening of a city awash in oil money, it’s easy to see why Houston is one of the nation’s fastest growing cities. But bustling metro area suburbs like the Woodlands also play a large part in the city’s continued economic recovery and population growth spurt.

In the past decade, the population of the lush, sprawling suburb has doubled, up from 56,000 in 2000 to 112,000 in 2011. Yet despite being a fully functional town that is home to more than 100,000 people, The Woodlands isn’t a proper city. The master-planned community is still known as a township or CDP, a census-designated place, and is one of the few surviving relics of the post-Levittown suburban planning boom that still boasts annual growth.

George P. Mitchell, the Texas billionaire best known for pioneering the controversial horizontal natural gas drilling process known as fracking, conceived of and founded The Woodlands in 1974 as an extension of his corporation, Mitchell Oil and Development. Initially meant to be a bedroom community for Houston execs, the plethora of pristine public pools and shady evergreen-lined streets soon attracted shipping and oil corporations looking for new workspace.

By 2000, more than one-third of Houston-area office space under construction was in The Woodlands. In the past 12 years, the likes of Chevron Phillips, ExxonMobil, and Maersk have since started or completed construction on massive corporate campuses, expansion matched only by the commercial boom along the township’s central waterway, which is lined with restaurants, boutiques, and outdoor event pavilions. Today, daily commuters into The Woodlands outnumber those who leave for work elsewhere.

Why does this matter? For one, The Woodlands is one of the nation’s best case studies when it comes to weighing the costs and benefits of incorporation. According to Bruce Tough, Chairman of the township’s seven-member Board of Directors, his community boasts an unprecedented level of success when it comes to governance, public services, and environmental excellence. Just 20 years after it was founded, the township had won a Special Award for Excellence from the Urban Land Institute and a LivCom Nations in Bloom Gold Award. Residents enjoy more than 190 miles of hiking and biking paths. A little over 20 percent of the township’s acreage is set aside for green space, greenbelts, and golf courses.

Perhaps most impressive and unlike similar new town developments that also received federal development aid in the 1970s—the most notable are Columbia, Maryland and Reston, Virginia—The Woodlands was the only community that didn’t default on its government loans but instead survived and thrived. While these other communities still of course exist, The Woodlands remains the hallmark example of new urbanism.

Unlike similarly successful (and now former) townships including Irvine, California, The Woodlands has reliably refused to incorporate as either a standalone city or part of Houston, even as the issue is raised every few years by developers, residents, or the city of Houston, which provides municipal services such as waste removal, water, and local law enforcement from the sheriff’s department. Tough points to the township’s one-of-a-kind public service provider agreement with Houston and the fact that the township is run more like a business than a municipal government as the primary reasons why The Woodlands doesn’t need to incorporate. Houston agrees not to annex The Woodlands during the next 50 years. In exchange, The Woodlands continues to make service payments to Houston.

Among residents, the question of incorporating is primarily a financial concern. Research indicates that becoming a standalone city could raise property taxes in The Woodlands from 32.5 cents up to anywhere from 58.14 cents to a staggering 81.5 cents per $100 valuation. (By comparison, the property tax rate in Houston hovers around 63 cents.) The costs would include road maintenance, setting up new sewage and water provisions, and establishing a separate police department. Estimates for just those few basic services reach into the hundreds of millions, costs residents fear would be added to their annual tax bills.

Nick Wolda, the township’s Director of Community Relations, notes that the major drawback for an area with such explosive growth is the lack of a city council with the authority to create and uphold ordinances. Tough agrees and draws comparisons to New York City’s law banning sugary beverages larger than 16 ounces, an ordinance he personally deems ridiculous but sees as a useful example of a local law that The Woodlands has no way of proposing, passing, or upholding. As the township continues to build out toward a goal of 130,000 residents, he believes reexamining the need for local ordinances and the power to enforce them will become a key issue.

For now, The Woodlands residents can relax. For its population, the township has one of the lowest tax rates in the United States but more and better services than similar counterparts. There is no local income tax charged in The Woodlands, and Texas is one of seven states without state income tax. The bulk of their tax money comes from sales tax levied against visitors who flock to the downtown promenade and amphitheater.

As long as communities like The Woodlands continue to expand, the definition of these types of places will change and may inspire more communities of a similar nature. Just this year, the Census Bureau designated the area around The Woodlands and Montgomery County seat Conroe as one giant "large urbanized transit area," making it eligible for federal transportation funding.

In August, The Woodlands Board of Directors voted to delay a vote on incorporation until after 2014, the first chance the township would have to make the irreversible decision to forever change its governance structure, be absorbed by Houston, or exist in perpetuity as a township. Bruce Tough may call The Woodlands a "model for cities of the future," but it doesn’t necessarily have to be one.

Brittany Shoot has written for Time, Mental Floss, Ms., and Salon. A former Bostonian and Copenhagener, she currently lives in downtown San Francisco. All posts »

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