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Summarizes research estimating the effect of municipal service pricing on local objectives. Pricing policy can be used to shape urban development in accordance with community objectives by allocating the cost of service to various segments of the community. The present research focused on the pricing of capital facilities to serve new residential development. Quantitative estimates of the impact of alternative pricing policies on the city's fiscal position, the spatial location of new developments, and the restraint of growth were made in a case study conducted in Santa Clara County, California. The policies' impact on low-cost housing and residential density is examined in a more general discussion. Pricing policy was found to be a strong influence in achieving the fiscal position objective, a medium influence in directing the spatial location of development, and a weak influence in deterring growth, promoting low-cost housing, and encouraging more dense development. (See also R-1878/2, R-1878/3, R-1878/4.)

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