Out of Control Policy Blog

Smart Growth, Slow Growth

Those who still believe that Smart Growth is sustainable should take a look at a revealing analysis of Santa Barbara, California in the Los Angeles Times. The average home price has risen to $1.1 million since 1969 when the county enacted strict environmental regulations and tough growth management laws. After 30 years, the city

*ranks among the least affordable in California
*has virtually stagnant population growth in the city of Santa Barbara
*is experiencing rapidly rising congestion
*is expeeriencing an exodus of businesses to more affordable areas

Some people may claim that this isn't necessarily Smart Growth. Santa Barbara is practicing "slow growth" (although in effect it's no growth). But this ignores the main point.

The reason Santa Barbara is experiencing shockingly high housing inflation and a commercial exodus of middle-class and non-retail business is not because of semantics. Its because Santa Barbara enacted policies that restricted housing supply and land development, driving prices up. Prices went up because land wasn't available for development, and development regulations imposed higher costs.

The result? Anyone except the those with household incomes in the top 6% have to live somewhere else. They clog the roads (which haven't been upgraded) trying to get to their jobs in Santa Barbara. They fuel housing development far away from the city because its the only way they can get it.

These effects are the consequence of strict growth management laws, not their intent. It doesn't matter whether we call it Smart Growth or just plain old growth management. If the approval process restricts supply or imposes higher construction costs, these results are inevitable. The Soviet Union and Cuba were not able to legislate away market dynamics, so we shouldn't expect city and county councils in the U.S. to do it either. Policies that result in higher housing costs are simply not sustainable as urban development policy.

Samuel Staley is Research Fellow


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