Infrastructure & Environment

The Boys of Sprawl

Free-market think tanks are working hard to convince Americans that Smart Growth is a stupid idea.
by | May 2000

Bellbrook, Ohio, is the kind of place most urban planners hate. A melange of single-family houses with big yards and a strip mall stretching across what once was farm land 12 miles south of Dayton, it is a classic case of urban sprawl. But Samuel Staley looks at the place and sees something beautiful: He sees the magic of the free market at work.

"This is no soulless suburb," insists Staley, who is the deputy director of the Reason Public Policy Institute, a market-oriented think tank based in Los Angeles. A lifelong resident of Bellbrook, he has watched his hometown grow from a rural village into a crowded suburban area. Where many bemoan the loss of open space to the seemingly random spread of subdivisions and shopping centers, Staley points to a perfectly logical--and benign--pattern of development.

"If you fly over this, you see it's completely planned," he says, sitting in his truck in a vast parking lot in front of Sugarcreek Plaza, a large strip mall not far from the old village center. The mall lies in a former cornfield just off Interstate 675, which gives commuters access to downtown Dayton and other suburbs to the north, or to Interstate 75 and the expanding Cincinnati region about 45 miles to the south.

Behind the mall is a new multi-family housing development. Scattered beyond is an array of older subdivisions with ranch-style brick houses on half-acre plots and newer ones with two-story homes on lots that are only slightly smaller. You can't get anywhere in Bellbrook without a car, but stores are generally close, and parking spaces are abundant. And the regional shopping malls can attract enough customers to support high-quantity, low-cost retailers like Wal-Mart and Cub Foods. "The people who live here have choices," Sam Staley says, "and this is what they prefer."

Sam Staley doesn't strike anyone at first as an intense ideologue. His conservative dress and affable style would fit in well at the Chamber of Commerce (except, perhaps, for his single earring). He serves on the local planning board in Bellbrook, where city manager David Hamilton describes him as "thoughtful and pragmatic."

But Staley is an ideologue nevertheless. He is a passionate critic of the "Smart Growth" planning idea, which seeks to curb the creation of communities like Bellbrook outside of established urban areas. He is a member--perhaps the key member--of a network of such critics who are based at free-market think tanks that have sprung up everywhere from Tallahassee to Seattle. It is a close-knit group whose participants meet and correspond constantly, share arguments and strategies, and derive their funding from many of the same cadre of conservative sources.

These free-market activists have become involved in myriad issues in the past decade, but they increasingly are focusing on land use and the intensifying national debate over sprawl. The heart of their argument is that consumer demand--in particular, our strong appetite for large houses and big yards--is the dominant force shaping America's urban landscape. Government efforts to control urban growth, they say, are not only wrong but also doomed to fail because they ignore the enduring desire for a spread-out, car-centered way of life.

They generally admit they were caught flat-footed as the growth control movement grew into a potent force in the late 1990s. Now they are fighting it with a blizzard of books, conferences and pamphlets, striving to puncture what they consider dangerous "myths" about urban growth.

Does urban sprawl threaten farmland? Not at all, says Staley. Only 5.4 percent of the land in this country was developed as of 1997, so there is plenty to spare, he contends. What's more, low food prices suggest the U.S. has a surplus of farm capacity rather than a shortage. James Damask, research director of the Buckeye Institute, a conservative think tank based in Columbus, Ohio, attributes the decline in cropland and pasture acreage to improvements in agricultural productivity, not urban growth. He notes that almost as many acres of Ohio farmland reverted to forest acreage as were developed between 1949 and 1992.

Does urban sprawl contribute to traffic congestion? Of course not, economists Peter Gordon and Harry Richardson contend, in research published by the Cato Institute. As they see it, the dispersion of housing and jobs actually reduces congestion. They cite Census Bureau data that show commuting times, on average, have held at a tolerable 20-30 minutes even though more people are traveling more miles in more automobiles today than 10 years ago.

Is leapfrog development--in which new subdivisions spring up in rural areas, leaving large vacant parcels stranded between cities and open countryside--inefficient? Hardly, argues Randall G. Holcombe, chairman of the Research Advisory Council of the James Madison Institute for Public Policy Studies in Florida. "Leapfrog development," he explains, "helps produce tracts of centrally located, undeveloped land. Once leapfrogged, that land has an improved location because it is centrally located, encouraging higher density development... Discouraging leapfrog development results in lower-density development in the long run, and increases the type of sprawl that the policy was intended to reduce."

For all the intensity the marketeers can muster on these subjects, though, their most intense passion is directed against mass transportation. Mass transit, all of them complain, is an expensive boondoggle that never will attract a happily dispersed population back to downtown areas. It would be cheaper to lease cars for all transit riders than to build 24 of the 25 new light rail and metro systems proposed in the United States, contends Wendell Cox, a consultant based in Belleville, Illinois. Cox, who maintains two robust Web pages, has been published by the Heritage Foundation, and is frequently quoted by numerous smaller state-level think tanks, says he isn't really pro-sprawl, he's "pro-choice" when it comes to urban development. "People should be permitted to live and work where they like," he asserts.

Cox's ideological allies make a similar point about cities in general. They question how many of today's young people will ever wish to live a more urbanized life. "The history of western civilization...has been the history of the ever-expanding sphere of private life," says Steven Hayward, who works for the San Francisco- based Pacific Research Institute. "The increasingly affluent baby boom generation wants to live in a relaxed-fit house to go with their relaxed-fit blue jeans, which is why the average size of new homes is one-third larger than it was in 1970, while average household size continues to shrink."

If mass transit is the single most dangerous idea to many of the free marketeers, there is little doubt about what they consider the single most dangerous place. It is Portland, Oregon, the city so often cited by New Urbanists and urban planners as the national capital of Smart Growth. With its strong land-use controls, urban growth boundary and heavy commitment to light rail transit, Portland strikes the marketeers as a genuine assault on human liberty. Portland residents face "the greatest coercion ever applied to an American city," frets Randal O'Toole, who runs a small think tank he calls the Thoreau Institute from the small Pacific-coast town of Bandon, Oregon.

According to O'Toole, Portland's land-use laws are forcing people to live in more densely populated neighborhoods than they would choose on their own, to abandon hopes of living in single-family homes and to pay so much for transportation that property taxes will have to be raised to "unprecedented levels."

Sam Staley also has weighed in on Portland, arguing that the city's growth boundary is driving up real estate prices and making housing less affordable. Meanwhile, a second Oregonian, John Charles of Portland's Cascade Policy Institute, argues that the city's land-use regulations are bound to fail in the end, and low-density suburbia will have the ultimate victory. "Technological innovation is breaking down geographical barriers at a rapid pace," he notes. "These innovations are giving Americans more choices with regard to where and how they live, work and recreate. This means people will increasingly scatter themselves across the landscape, continuing a trend that has been under way for most of this century."

If you are someone who believes in Smart Growth, or in public land-use planning of any significant sort, the arguments of Staley, Charles, O'Toole and company will likely seem highly misleading, to say the least.

The odds are you will see these critics as relentlessly ideological and prone to stretch the facts, conveniently ignoring all the ways that previous government policies--from home mortgage deductions to subsidies for new roads, sewer and water systems--have helped shape the so-called "free" demand for suburban lifestyles. What's more, you may say, the marketeers falsely paint Smart Growth as a heavy-handed effort to impose regulation, when in truth, Smart Growth involves a wide range of ideas that have nothing to do with regulation, from changing the way local governments plan public investment to encouraging the purchase and sale of development rights. "They believe that if you throw gasoline on the fire you increase illumination," charges G.B. Arrington, former director of strategic and long-range planning for Portland's transit authority.

And you might even see some partisan mischief in the whole free- market assault. Bruce Katz, director of the Center on Urban and Metropolitan Policy at the Brookings Institution in Washington, believes conservative think tanks oppose Smart Growth ideas in part simply because Vice President Al Gore decided to champion them. "Conservatives did not want to cede the issue in the middle of a presidential campaign," he says.

The marketeers don't really dispute the negative nature of what they put out. They simply say they are acting aggressively to prevent pernicious ideas from spreading before it's too late. "We're 10 years behind the anti-sprawl forces," says David Bowes, executive vice president of the Cato Institute. "We had to start by trying to head off bad policies."

Anti-sprawl leaders, confident that they represent a genuine grassroots concern about patterns of urban growth, do not profess to be threatened by the challenge so far. "We have developed a rapid- response mechanism for responding to groups like these," says Deron Lovaas, who represents the Sierra Club in an anti-sprawl coalition. "But we usually don't need it. They don't get much coverage in the media."

Meanwhile, some of the free-market activists, concerned that an exclusively negative approach will marginalize them in the debate over urban growth, are starting to acknowledge that there is such a thing as legitimate concern about "spill-over" effects of growth. "To tell people they're being a bunch of self-indulgent twits is not a winning argument," concedes Ronald Utt, senior research fellow at the Washington-based Heritage Foundation.

Seeking to get back on top of the policy debate, Heritage is publishing a "Citizen's Guide to Smart Growth," which Utt says puts sprawl in perspective and proposes concrete ideas to reduce harmful side-effects of growth. A similar, perhaps more academic, project is under way at Florida State University's DeVoe L. Moore Center, which was launched in 1998 with a $5 million grant from a Tallahassee land developer disillusioned with government regulation. And back in Ohio, Staley is compiling a new report describing market-oriented strategies for dealing with land-use issues.

More than anything else, these strategies involve pricing mechanisms. To reduce suburban traffic congestion, for example, the free- marketeers propose equipping cars with transponders that would enable highway managers to charge variable fees for using roads. The theory is that fees would be higher to drive during rush hour, so some people would stay off the roads during busy times, and that would reduce congestion.

Or a full-cost pricing system could be developed for infrastructure. Currently, the fees developers pay for road, sewer and water improvements generally fall well below the full costs of serving new subdivisions. If developers had to pay the full costs, they might be encouraged to build in developed areas, where infrastructure already exists.

Performance-based zoning is another favorite. Many critics on both sides of the sprawl debate believe that current zoning regulations-- such as minimum lot sizes, strict separation of commercial and residential land uses, and requirements that retailers provide large amounts of parking space--all encourage sprawl. Performance-based zoning would eliminate these rules, and in its place, zoning authorities would address concerns about individual developments on a case-by-case basis, requiring developers to design their projects in ways that don't harm nearby property owners. Where that system failed, private property owners could file civil lawsuits against developers who create nuisances; Oregon's John Charles thinks local governments should be able to bring lawsuits on behalf of private landowners under common law concepts of trespass and nuisance.

Finally, there is privatization. Free marketeers such as Staley believe that public transit is inherently inefficient, and that private enterprise could do a better job. They are especially enamored of small-scale, highly flexible, on-demand transportation services, such as taxis or jitneys, and frequently argue that private ownership of roads would leader to a better match of supply and demand. And many also would apply a privatization strategy to land conservation and the preservation of open-space areas. In the view of some free-market purists, private individuals who want to preserve open space should simply buy the land they want to preserve, although some would acquiesce to limited government purchases as well.

Perhaps the best-kept secret in the entire sprawl debate is that Smart Growth advocates believe at least some of the free-market ideas are worth trying. "A lot of sprawling development would come to a halt if all the costs were internalized," says the Sierra Club's Deron Lovaas. Similarly, Kaid Benfield, of the Natural Resources Defense Council, believes anti-sprawl forces and their critics could find common ground on proposals to eliminate subsidies and to reform zoning regulations. Benfield, who debated Staley at a forum in Minneapolis last year, said he was impressed with his adversary. "There is definitely a sharp difference between us on things like growth boundaries," he says, "but I think we both came away thinking there is a basis for working together."

The trouble is that most of the free-market answers to sprawl would require a massive effort--both technical and political--to enact. James Swaney, an environmental economist at Wright State University in Dayton (and a former teacher of Sam Staley's), says economists generally have not attempted to determine the full infrastructure costs associated with new development, for instance. "Conceptually, it's a good idea," he says. "But it would be difficult even to determine what the long-term costs are, and it would be very difficult to do politically."

Similarly, Stuart Meck, of the American Planning Association, says he tried performance-based zoning six years ago as planning director in Oxford, Ohio. "It's very difficult," he says. "Zoning ordinances are deeply ingrained. They are the result of many political compromises, and nobody wants to tinker with them." Meanwhile, although a few experiments with congestion pricing are under way, they are too new to offer conclusive evidence as to the potential impact or political feasibility of the idea.

Given the challenge of making market-oriented strategies work to reduce sprawl, and the relative satisfaction most of the marketeers have with current urban growth patterns, it's hard to imagine who would be willing to do the hard political organizing needed to make them a reality. Indeed, some Smart Growth advocates question whether even the marketeers are committed to their alternative strategies. Speaking of Oregon's Randal O'Toole and John Charles, for instance, Ethan Seltzer, director of Portland Metropolitan Studies at Portland State University and a former head of the Oregon Environmental Council, fumes: "Neither of them has worked at the local level, or been responsible for bringing a wide range of interests to the table."

On the other hand, if Staley and his allies are correct that urban sprawl accurately reflects the market decisions of millions of Americans who buy homes and cars every year, it is difficult to imagine how any aggressive Smart Growth policies designed to rein in sprawl can succeed, either--a point Staley gleefully makes. "The idea we can design our future just isn't realistic," he says, "as long as we have a system that recognizes property rights."

As Staley sees it, the real estate market finely calibrates new development to the precise preferences of Americans. He cites a new Bellbrook subdivision with two-story houses on one-third acre lots. "In this area, if you put these houses on one-quarter acre lots, they wouldn't sell," he says.

Not all the research in land-use policy backs up the contention that the present system is giving consumers exactly what they want, however. "Whenever ordinary citizens are shown slides of [standard suburban] development versus the `New Urbanism'--village greens, mixed uses, houses with picket fences a few feet from the street--they almost always express a preference for the latter," notes Paul Gottlieb, of the Center for Regional Economic Issues at Case Western Reserve University, "Why, then, don't we see more of them?"

Gottlieb believes "a massive amount of risk aversion" keeps developers from building and consumers from buying different kinds of housing. But he says most economists have failed to analyze this possible "market failure." Indeed, he says, Smart Growth advocates in general have all but abandoned the economic side of the debate. "Most people who talk about Smart Growth talk about aesthetics, design, social issues and environmental issues," Gottlieb says. "Their instinct is not to talk about market forces." In his opinion, they should start talking about them.

Gottlieb has tried to help that process along. Last year, for example, he helped bring a group of public officials, Smart Growth advocates and business leaders to his university to examine urban growth issues. "People kept coming back to the idea that there is a missing piece in our discussion of this issue," Gottlieb recalls. The missing piece, he insists, is the consumer. In his view, Smart Growth advocates have done an effective job of cataloging the failures of the current land-use system. But they have done little to educate consumers on how their individual decisions--to seek a big house on a big lot, to move out of a neighborhood when minorities move in, to drive a sports utility vehicle, to look for a home "in the country"-- can add up to societal outcomes that neither they nor their neighbors particularly want.

In the recognition that economics and market forces are crucial pieces of the land-use puzzle, one can begin to see ways the two currently hostile sides ultimately might find some common ground.

Sam Staley is a case in point. On the one hand, he has impeccable free-market credentials. As a student at right-leaning George Mason University, he studied Austrian economics, which sees government intervention as inherently destructive; and his work for the Buckeye Institute and Reason have provided the anti-Smart Growth forces with some of their evidence to refute claims that the nation is running out of farm land or open space. But Staley is himself an urban planner by training, and at times he even speaks approvingly of New Urbanism as a design concept that could bring people back to downtown areas. Indeed, he argues that removing market impediments such as zoning would lead to higher-density development than currently occurs in most suburbs-- not as dense as some Smart Growth advocates would want, but an improvement over current patterns of sprawl.

But although the potential for working together may exist, it exists so far only in theory. The two sides debate on, generating a lot of heat but rarely connecting. Think-tank activists who have little interest in changing current patterns of urban growth continue to pin their arguments on faith in the market, while those who seek change pay scant attention to market dynamics. As G.B. Arrington, the former transit planner in Portland, puts it: "We are like ships passing in the night."

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