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Pros and Cons of New Development

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Townscape has been on a five year run of consistent growth. The economy has since begun a downturn and the city government must now decide whether to place a hold on future growth. As a member of the city council you have been asked to consider the pros and cons of new development and its impact on current services. Consider the following questions:

---Does the city need to place a moratorium on any future building projects?
---Does the potential new revenue outweigh the additional burden?
---What is the political climate for new ventures?
---What is the impact if the city located adjacent to Townscape is willing to take on additional projects and share some of the same area resources?

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Townscape has been on a five year run of consistent growth. The economy has since begun a downturn and the city government must now decide whether to place a hold on future growth.

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---Does the city need to place a moratorium on any future building projects?

I do not think that placing a moratorium on any future building projects is a good idea, unless the city government is facing a huge liquidity crunch and is considering capital rationing to limit the resources for future projects and divert such resources for the completion of existing ones. However, given the fact that economy has begun a downturn, the investment on new projects will actually pump in money into the economy and thus, try to boost the economic conditions in the city. If the city will moratorium on any future ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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