Chapter 3.19
A Failure of Fairness - Planning in the Pacific Northwest
(Oregon Planners' Journal, November-December, 1999)
By Richard H. Carson
At the end of the twentieth century the great land use planning experiments in the Pacific Northwest states of Oregon and Washington have made great strides in dealing with negative impacts of traditional unplanned human settlements - called "sprawl." However, it is time that we admit to the failures of controlled growth and talk of possible remedies we can undertake in the future. It is especially important to talk about such problems now, before other states and local governments outside the Pacific Northwest try to mimic our public policy successes and before the presidential election rhetoric about "Smart Growth" begins.
Oregon's experiment began in 1973 with the establishment of "Statewide Planning Goals", and Washington's began with the "Growth Management Act" of 1990. Both were products of a time when citizens still believed that big government was the best agent of positive social change. Oregon's governor Tom McCall was on of the last charismatic leaders from an age when people would heed the call for social change from Presidents like John F. Kennedy and Lyndon Baines Johnson.
Let's start with the premise that statewide land use planning (i.e., growth management) as practiced in these two states was one of the best public policy decisions made in America in the twentieth century. The use of urban growth boundaries: (1) supported the urban infill needed to make for a more cost-efficient delivery of infrastructure inside the boundary, (2) helped encourage rebuilding in inner cities by reducing the flight to the suburbs, and (3) protected farm lands, forest and natural areas outside the boundaries.
The economic reality is that urban growth boundaries create an abrupt and artificial financial impact. The land economics of urban sprawl are that the further away you are from the city or suburban centers, then the less value the land has. Travel distances, as well as the lack of urban services and amenities, all drive down land values. The loss of value follows a very predictable drive-time gradient. Land located within thirty minutes is at a premium and land over an hour is less desirable.
Within urban growth boundaries most of the land is priced the same. So is all the land outside the boundary. Land that is two miles outside the boundary costs about the same as land 15 miles away. This means that there is a financial windfall and wipeout depending on which side of the boundary your property ends up on. The government legislative act of adding land to the boundary and later annexing it to the city multiples its value some nine-fold. The opposite decision to downzone a property means a massive financial loss to the owner.
Unfortunately, neither state land use experiment had any social or economic fairness. Specifically they lacked:
- Responsiveness to the existing capitalist system where the marketplace produces the most cost-efficient products. Land supply, location and even buildability were handed over to government land use planners who had little real world experience in property development or the siting needs of industry and commerce.
- Fiscal equity, social justice, or even respect for the economic property rights of people living in the rural areas. Note that I didn't say the legal or constitutional property rights of others. The U.S. Supreme Court long ago decided that as long as government left some small value to your property, then a massive downzoning did not constitute an economic "taking."
The public policy of down-zoning farm and forest areas by using minimum building lots of 40-80 acres is supported by the credible argument that these types of operations could not continue to exist in the face of rising land values pushed by sprawl. Similarly there is a credible argument for the protection of natural areas and wildlife habitat given the current realities of a growing list of endangered species such as the spotted owl and the wild salmon.
However, much of the rural landscape is none of the above. It is simply unproductive and fragmented rural residential properties. The argument to date is that such areas need to be developed with rural character - as opposed to urban character. However, this argument fails to have any meaningful justification or nexus. What it really means is that we are going to force development in urban areas in order to maintain a rural residential land museum that has the bucolic and pastoral character that city folks like to drive through. Rural areas have become a kind of enormous destination resort and amusement park for city dwellers. In the past such properties developed as one to five acre parcels, which was the minimum area that could support a septic field and a well. Today they are allowed only 5, 10 and 20 acre minimum lot sizes. The 10 and 20-acre lot sizes are often used to buffer resource areas.
If we want to bring some fiscal and social justice into the current statewide planning systems, then we have only two choices. We can either buy the property or the development rights of the rural landowners, or we can create a system by which such development rights can be bought and sold in the market place. The latter is commonly called the "transfer of development rights" (TDRs).
The option to buy development rights is difficult given the anti-tax and anti-government trends of the last 15 years. Governments can't afford and citizens won't support such a massive fiscal investment. One possibility would be for local governments to capture part of the nine-fold windfall since they create it. This money could then be reallocated by buying the development rights of rural residential owners. This idea works because there is a legal nexus that connects the fiscal windfall to the person annexing into the urban area to the fiscal wipeout of the person remaining in the rural area.
What about transferring development rights from rural areas to urban areas? In order to accomplish this we need to take three steps:
1)
Determine what the developability of rural residential land would have been without the downzoning. That is to determine how many lots any given property would have been physically able to accommodate given the limitations on soils for septic systems and on water availability from wells. The truth is that not all rural land is equal in terms of buildability. We would also need to net out the environmental constraints of floodplains, unstable slopes, and wildlife habitat.
(2)Allow the property owner to transfer development rights for residential units on a residential unit for residential unit basis. If you could have developed five lots, but were downzoned to two, then you could sell three to an urban developer for either single family or multi-family developments.
(3)Allow the urban developer to use TDRs to: (a) increase the density of an existing project over and above the minimum zoning requirements, (b) expand the urban growth boundary to build new residential units, or (c) upzone property to a higher use. The latter could mean upzoning residential property to commercial or industrial uses.
In the case of Dolan vs. the City of Tigard, the U.S. Supreme Court found that any government exaction must have a "rough proportionality" between the level of the exaction and the property owner's actual impact on the community. In other words, the best land use planning system is one built on social and economic fairness for everyone.
Richard H. Carson is an elected board member of the Oregon Chapter of the American Planning Association and Editor of the Oregon Planners' Journal. He was previously director of planning for Metro and currently is director of community development for Clark County, Washington.
(Editor's note: In this month's issue is an article I wrote that was published this October in the APA state chapter newsletters of the Northern California, Texas and North Carolina. I have reprinted here, in part, because I received three responses one from each state).
