Effective Sprawl Solutions Found in Market, Not Regional Planning

Sierra Club gets it wrong on sprawl

The Sierra Club’s recent ranking of states on their anti-sprawl efforts is one of those lists where it makes sense to be at the bottom. Many of the strategies the Sierra Club identifies are either ineffective or have important unintended, negative side effects.

The index is heavily weighted toward one approach to curbing sprawl: government control and regulation of land use. Of the 21 criteria used to gauge anti-sprawl efforts, only three have a market-oriented slant.

The Sierra Club gives high marks to states such as Oregon, Maryland, and Vermont because they have strong statewide growth management laws that manipulate land development, regardless of what consumers and families want. These states also require various forms of comprehensive planning and anti-market strategies such as urban growth boundaries, so local governments have much less (if any) real discretion over local land-use and transportation planning.

The Sierra Club hedges its bet on market-oriented policies. For example, purchase of development rights (PDR) programs allow private parties to buy and sell the future development rights to property. But states without tax-funded programs are marked down.

Currently, 41 percent of Michigan’s farm land is enrolled in the Public Act 116 tax-credit program. This voluntary program allows farmers to seek tax credits if they agree not to develop property. The program is more efficient than standard PDR programs because it is flexible. As land uses change and cities develop, farmers can opt out and develop their property (at the expiration of their agreement).

Some of the club’s criteria are also largely irrelevant for addressing sprawl issues. One criteria is how much money is spent on public transit such as buses and trains. Yet, public transit, especially rail transit, has had no appreciable impact on congestion, air pollution or regional land-use patterns. In metropolitan Detroit, public transit accounts for just 1 percent of all trips. Even if transit ridership doubled, the impact on automobile use and land development would be negligible.

More important, states that have implemented anti-sprawl legislation are not emerging as the nirvana of growth management. Lot sizes in Portland, Ore., have plummeted from one fifth of an acre to an average of one-eighth of an acre in the 1990s, while townhouse and apartment building permits have risen from 25 percent of all permits in 1992 to 49 percent in 1997.

At the same time, Portland transformed itself from one of the most affordable mid-size housing markets on the West Coast to one of the most expensive. Lot prices more than doubled, while inflation increased by 52.5 percent. While some pressures on housing prices are beyond the control of local policymakers, the regional planning agency could expand the growth boundary to moderate housing prices but chooses not to.

Of course, all this presupposes policymakers need to address the problems of suburbanization. A 50-state analysis by the Reason Public Policy Institute found that the sprawl index, an indicator comparing the rate of urbanization with population growth, has moderated significantly since the 1970s. Michigan’s ranking fell from the 15th highest sprawl index in the nation to 22nd without adopting heavy-handed state planning.

Farmland loss also moderated, falling from 10.2 percent in the 1970s to 4 percent in the 1990s. Meanwhile, Oregon’s sprawl index increased, pushing it from 46th to 35th.

State and local policymakers would be better off looking at ways to improve the efficiency of the land market rather than trump it through comprehensive land-use planning. These strategies include full-cost pricing for public services, developer provision of on-site infrastructure such as roads and water, and reforming zoning codes to allow for market-driven densities and mixed uses. These strategies would more effectively match resources with consumer preferences for more diverse and specific kinds of housing and neighborhoods.

Samuel Staley is director of urban and land use policy at Reason Foundation and co-editor of the book “Smarter Growth: Market-Based Strategies for Land-Use Planning in the 21st Century.”