The Price of Urban Growth Controls

San Diego should avoid growth boundaries

Urban growth boundaries may be one of the hottest land-use planning tools to break onto the political landscape in 30 years. State and local officials across the nation have extolled the virtues of using them to contain suburbanization and revitalize city centers.

In California, San Jose and about a dozen other cities have already adopted some form of a growth boundary to limit new development, and the idea is picking up steam:

  • This fall, San Diego County voters will have a chance to vote on a 50-mile limit on new development.
  • In Milipitas, an urban growth boundary has been proposed to block development and annexation on its hillsides for 20 years.
  • The Petaluma city council will also soon decide whether to place on the ballot an initiative to put a 20-year limit on annexation and development of rural land.

In almost all cases, advocates point to Portland, Oregon as the pioneer and most successful example of a growth boundary’s effectiveness. There, says the emerging conventional wisdom, foresight and a strong planning ethic have forged an urban policy that has netted one of the nation’s healthiest and most livable communities.

Before San Diego policymakers and citizens jump onto this version of the land-use planning bandwagon, however, they should take a critical look at what has actually been accomplished. The reality is far less persuasive than its press.

Portland’s much heralded growth boundary literally a line in the land outside of which growth is heavily discouraged or even prohibited has become a pawn in a largely political gambit to drastically change the physical and social character of the Portland area. The boundary was initially considered a tool for “in-fill” developing vacant land in already built up areas. Created in 1979, about 35% of the initial the growth boundary’s land area was vacant, and the boundary was expected to accommodate at least 20 years of projected growth. Once filled, the boundary was supposed to expand to release additional land for development.

Metro, Portland’s regional planning authority, has not increased the boundary sufficiently to meet new demand. Although 4,800 acres were added last fall, this represents an increase of just 2%. Meanwhile, the region’s population is expected to grow by 80% to 2.7 million people by 2040. Metro is now mandating dramatically higher population densities in existing cities to accommodate projected population growth.

The growth boundary is already significantly impacting local housing prices. A Portland State University economist found that Portland’s housing prices rose by 63.8% from 1990-95, faster than the U.S. median of 18.2% and 50 other large metropolitan areas including Denver, Nashville, San Antonio, Chicago, Charlotte, Phoenix, Jacksonville, Orlando and Houston. Land prices in Portland have more than doubled since 1990.

This raises another troubling aspect of regional planning: Portland’s regional plan represents a vision that does not square with the obvious preferences of many citizens. Portlanders, like residents in other parts of the country including San Diego, clearly prefer lower density residential living.

This poses a serious challenge to the ethical foundations of regional planning. If Metro’s plan is fully implemented and boundary is not expanded, residents will be forced to live in more crowded cities, smaller houses, and more congested neighborhoods in order to conform to Metro’s vision of what Portland “ought” to be.

The population of San Diego County has increased by 32,000 people annually since 1990. At this pace, the county will need to accommodate 800,000 new residents over next 25 years, an increase of 29.4%. If an urban growth boundary prevents land from being developed for new housing and businesses, residents run the risk of seriously eroding their quality of life as densities increase and housing becomes less affordable.

All this might be worth it if the growth boundary helped preserve open space. Of course, open space is protected outside the boundary since property owners can’t sell it for development even if they wanted to. Open space inside the boundary where most people live is not.

In fact, the whole point is to reduce open space and urban farmland within the boundary. In Portland, a local government is attempting to rezone a golf course for high density, mixed use development to meet Metro’s density requirements. John Charles, environmental policy director for the Cascade Policy Institute in Portland also notes “growth boundaries cause such a shortage of land that developers will eventually do in-fill projects on odd-shaped parcels and other lands that would not ordinarily become developed. This loss should not be minimized because vacant lots have almost as much value as parklands for many urban residents.”

Spontaneous market forces naturally direct land developers to meet consumer preferences for homes and communities through the profit and loss system. By releasing land for new development based on what homeowners want, and what property owners and farmers are freely willing to sell it for, real estate markets ensure an adequate and affordable housing market while also retaining open space. Urban growth boundaries are unlikely to be as effective for most people living in the region.

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.”