Smart Growth Fails In First Electoral Effort

Peter G. Miller
OurBroker®

As these words are written we have yet to determine who will be our next President, but such indecision does not apply to various "smart growth" initiatives which were on the ballot in several states. They lost.

Give the public credit: Voters had the opportunity to pass measures which would have substantially curbed the rights of property owners in the name of some imaginary greater good. But Arizona's Proposition 202 and Amendment 24 in Colorado were each rejected, evidence that voters read and understand such proposals.

The Colorado proposal would have amended the state Constitution to so that the "management of development" would only be allowed "within areas committed to development or within future growth areas in accordance with voter-approved growth area maps, requiring such local governments to delineate areas committed to development, requiring local governments proposing a future growth area to submit a growth area map to a vote at a regular election, specifying the content of growth impact disclosures to be distributed to voters in connection with such elections, and specifying the type of allowed action or development within growth areas, committed areas, or outside such areas."

The new rule would vastly increase home construction costs and other development not just inside "growth" areas -- wherever they might be or however they might be defined -- but also "outside such areas." If we combine "growth" areas with property "outside such areas" we have now included every square inch in the entire state.

In Arizona, Proposition 202 says that the legislation's purpose is "to provide local voters with direct control over adoption and amendment of these plans, to effectively manage development, and to limit urban sprawl."

Such public participation, of course, did not apply to the proposal's development. The Arizona Republic tells us that "the broadest ballot measure on the control of urban growth in American history afforded citizens no public hearings at which to comment on its content. No public committee analyzed its potential consequences. No town halls were dedicated to its language. For good or ill, it is the product of well-intentioned (but, in our view, misguided) environmentalists and their legal advisers who are committed to halting urban growth at any cost."

It's a curious thing, but when we talk about "smart growth" we never seem willing to allow those who already have large houses on large lots to use their property more productively. We could, for example, allow homeowners to build rental units in attics and basements, or readily permit the development of additional housing on current lots. Instead we aim at those who have yet to move into an area, as though "first come, first serve" is a useful -- and non-discriminatory -- development model.

The end result of "smart growth" policies is fairly plain: less construction, higher home values, and more congestion because fewer roads will be built.

But wait, don't "higher" home values sound good? Sure -- at least until you move or your friends, co-workers, or children want to buy for themselves.

And -- according to the Census Bureau -- minority citizens have a lower household income than whites. This means as real estate prices rise, blacks and Hispanics are disproportionately less and less able to afford homes. Thus, one by-product of no growth policies is to limit opportunities for entry-level buyers, especially minorities.

The reality is that local expansion cannot be controlled without cost, some locations are more desirable than others, and there is no evidence that "smart growth" policies will produce preferred results.

We have had zoning rules for decades and they have not solved the problem of growth which is selectively unwanted by some. Such failures should not be unexpected. While the volume of land is generally not subject to expansion (the Dutch have shown that acreage can be enlarged, but at great cost), population growth is unconstrained. More people in the same volume of land produces high-density usage.

Instead of a system which relies on trial lawyers and needless costs to stop growth, we need to seriously consider whether current zoning concepts should be continued. As an alternative to "no growth," why not "no zoning."

A cynic might argue that the effect of today's zoning requirements is to assure that those who make political contributions magically and consistently obtain the variances and exceptions needed to develop their property, while small land owners somehow seem less successful. If zoning rules are ended, it means only that property ownership will become more risky and that values will be determined by market forces rather than political manipulation.

The next time someone proposes a "smart growth" initiative -- and no doubt such proposals will arise in the future -- it might be useful to ask where supporters and their lawyers live and the size of their lots. You can bet they're already well-settled, an opportunity they would deny to others.

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Question Of The Week

Q How do you measure the success of a buyer broker?

A One could look at the list price of a property and the final sale price, and then suggest that if the final price is lower the buyer broker has performed well.

However, this is not a complete or even a good measure of the broker's performance. To see why, imagine that two identical townhouses in the same development are each sold for $200,000. The sale prices are identical are the same but what about the terms? If one buyer also got a new roof, replacement carpet, and a $5,000 seller contribution at closing, that purchaser would plainly have the better deal -- even though the sale prices for both properties are identical.

But let's go further and say that the use of a buyer broker resulted in no price reduction and no enhanced terms. Representation is still a good idea because buyers on their own could surely have done worse.

The bottom line is that homebuyers generally benefit when someone with experience and training is in their corner.

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Published: November 14, 2000

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Editor's Note: This article reflects the opinions of Peter G. Miller only and not necessarily the views of this or any other publication, organization or Website owner.