Reid EwingConference for Sustainable Communities

September 26, 2011

SMART GROWTH TOOLSAn Analysis of the efficacy of state and local regulatory efforts

“Despite their considerable promise for reducing sprawl, growth

management programs remain controversial because there is little rigorous empirical evidence of their

effectiveness”

Carruthers (1992)

Introduction

• Urban Growth Boundaries

• Transfer of Development Rights

• Minimum Lot Size Regulations

• Adequate Public Facilities Ordinances

• State Growth Management Programs

• Priority Funding Areas

• Form-based Codes

• Impact Fees

Introduction

SMART GROWTH TOOLS

Municipalities, counties and many states have adopted a remarkable variety of smart growth efforts over the last few decades in an effort to stem sprawl. However, while well-intentioned, many of these policies have been associated with the expansion of sprawl in many areas (Cowan 2006).

This presentation will analyze 10 common smart tools and the existing literature surrounding each measure in an effort to provide a better understanding of the overall efficacy of such regulatory efforts in curbing urban sprawl. The tools analyzed include:

From Much Larger Toolbox

50 Studies, Maybe

Most Qualitative

We do not find support for the proposition that regional smart growth per se dampens growth measured in terms of population change.

Or Weakly Quantitative

Are They Really Comparable?

Kline’s Reanalysis

Few Rigorous Studies

Landis (2006)

Levine (1999)

Never Evaluated

Urban Growth Boundaries

Urban Growth BoundariesINTRODUCTION

• Urban growth boundaries constrain or prohibit most forms of development outside of a designated boundary (usually centered around an urban center) in an effort to contain sprawl development and preserve agricultural and forest lands.

• Urban growth boundaries (UGBs) vary widely in scope and regulatory power, depending on the state or local jurisdiction. The State of Oregon is noted for its comprehensive and stringent UGB framework, while Tennessee’s UGB guidelines are largely advisory in nature.

• Several major U.S. metropolitan areas have instituted urban growth boundaries including Miami-Dade County, Fla., Portland, Ore., Boulder, Colo., Lexington, Ky., Seattle, Wash., and Minneapolis-St. Paul, Minn.

Urban Growth Boundaries

ADVANTAGESUrban growth boundaries have been identified as one of the most effective and efficient mechanisms to curb sprawl and promote infill and central city development. Effective UGB frameworks have been associated with reductions in vehicle miles travelled and the revitalization of community and neighborhood centers.

SHORTCOMINGSCritics contend that urban growth boundaries drive up housing costs and price out low income and minority populations. Some argue that boundaries serve to block growth in many areas, moving development to less regulated jurisdictions.

Pendall & Puentes

Pendall

Nelson

Wassmer

2008

1999

2004

2002

YES

YES

YES

YES

Urban Containment associated with reduced sprawl, lower

central city poverty rates and higher levels of inclusion for

minorities.

Analysis of several growth management tools found urban

containment most effective at slowing the advance of sprawl.

Areas with urban containment measures more effective at

spurring central city redevelopment than non-containment

areas.

Urban containment effective in mitigating the effects of retail

decentralization spurred by local reliance on sales tax

revenues.

Urban Growth BoundariesLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Urban Growth BoundariesLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Cho et al.

Brueckner & Helsley

Nelson et al.

Wassmer

2008

2011

2004

2006

MIXED

YES

YES

YES

Under urban containment in Tennessee, development

slowed in urban districts but increased in rural areas

where boundaries did not play a role in land values.

Same market factors causing urban blight also drive

urban sprawl. Optimally placed growth boundaries will

curb sprawl and promote central city reinvestment.

Urban containment successfully shifts development

from exurban and rural areas to suburban and

particularly in urban districts.

Restrictive urban growth boundaries are effective in

limiting the growth in square mileage of urban areas.

Urban Growth BoundariesCASE STUDY: Portland, Oregon

The State of Oregon passed legislation requiring the creation of urban growth boundaries in 1973. The law also required municipalities to cooperate in designating boundaries. Since the implementation of UGBs, the Portland area has continued to grow (the City of Portland alone posted a 40 percent growth rate), while studies indicate that the region has been successful in preserving agricultural and forestland from development.

Portland vs. Raleigh

0

5

10

15

20

25

1980 1985 1990 1995 2000 2005 2010

VM

T p

er c

apit

aPortland OR-WA Raleigh-Durham NC

VMT Growth

Transfer of Development Rights

Transfer of Development RightsINTRODUCTION

• Allows the transfer of development from one parcel to another. ‘Sending parcel’ is preserved from development while the ‘receiving parcel’ is developed more intensely than is permitted under baseline zoning.

• Local governments designate sending and receiving zones. Traditionally, rural lands, farmland, historic districts, forests and areas of open space are designated sending zones, while town centers and previously developed corridors are receiving areas.

• Participating in local systems for the transfer of development rights is entirely voluntary in nature.

Courtesy: James City, Virg.

Transfer of Development Rights

ADVANTAGESAs a voluntary system, transfers of development rights avoid many of the political controversies of land use regulations while offering a potentially powerful growth management tool. TDR programs provide private sources of funding for conservation efforts and make development more predictable by eliminating the need for variances.

SHORTCOMINGSIn spite of a 35-year history, transfer of development rights (TDR) has made little headway in most communities across the United States. TDR programs often require increased administration (many jurisdiction choose to set up community TDR banks) and public education efforts, which can strain funding and resources from local planning departments. Allowing densities higher than permitted under baseline zoning can also prove controversial in many communities.

Brabec & Smith

Johnston & Madison

Machemer & Kaplowitz

2001

1997

2004

YES

NO

MIXED

TDR program in Montgomery County, Md. more effective

in preserving land and less costly to taxpayers than PDR

and cluster development programs in other jurisdictions.

TDR programs will not accomplish large-scale land

preservation needed for agricultural and environmental

protection.

TDR program success contingent upon several key factors

including local and regional development demands, program

leadership and the implementation of a TDR bank.

Transfer of Development RightsLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Transfer of Development RightsCASE STUDY: Grand Central Terminal, New York, N.Y.

When the Penn Central Transportation Co. proposed a 53-story addition for New York City’s famed and historic Grand Central Terminal, the city worried that the addition would irreparably harm the character of the structure. In order to preserve the building’s architectural integrity, New York allowed Penn Central to transfer the development rights to adjacent buildings, allowing the company to exceed height limits in place for the area.

Adequate Public Facilities Ordinances

Adequate Public Facilities OrdinancesINTRODUCTION

• An adequate public facilities ordinance (APFO) conditions new development approvals to the availability and adequacy of public facilities and services, ensuring that development does not take place unless the necessary infrastructure is already in place to support it.

• APFOs allow municipalities to defer developments approvals if public facilities would not be adequate to support it at buildout.

• Many APFOs focus solely on road and sewer construction, while others are more comprehensive and cover a full range of public services, including local school systems and emergency services.

Adequate Public Facilities Ordinances

ADVANTAGESAPFOs allow communities to maintain control over timing of new development and insures that capital improvement programs are strongly linked with a community’s general plan. APFOs can also encourage infill and contiguous development in that it acts as a powerful incentive in locating development where infrastructure is already in place.

SHORTCOMINGSCritics contend that APFOs can actually encourage sprawl development and dependence on automobile travel by forcing developers to finance road expansion efforts. APFOs can also complicate the development approval process and may discourage affordable housing because extra costs levied on developer will likely be passed on to homebuyers.

Freilich & White

Turnbull

Ott & Read

.

1991

2004

2006

YES

NO

MIXED

APFOs do not contribute to urban sprawl by forcing

development beyond enacting jurisdiction. APFOs likely to

encourage development around existing infrastructure.

Knowledge of impending APFO implementation spurs

developers to develop land more quickly and aggressively

along the urban fringe.

APFOs can promote development in remote locations if

developers determine that market conditions will not allow

them to pass on extra APFO costs to home-buyers.

However, APFO regulations which waive requirements for infill

and mixed-use development can be effective in curbing

sprawl.

Adequate Public Facilities OrdinancesLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Adequate Public Facilities OrdinancesCASE STUDY: Rockville, Md.

• Rockville has implemented a Comprehensive Transportation Review as a foundation of its APFO, focusing on auto, pedestrian, transit and bicycle levels of service as well as Transportation Demand Management.

• Development within designated Transit-Oriented Areas (TOA) is subject to different standards than other areas of the city. Development within TOAs can claim larger credits for multimodal transportation improvements. Congestion standards are also less rigorous within TOAs. Developments with few peak-hour car trips are exempt from meeting LOS standards for automobile travel.

Impact Fees

Impact FeesINTRODUCTION

• An impact fee is a one-time charge levied on new development to fund the construction or expansion of local infrastructure and capital improvements.

• Impact fees are popular in communities experiencing significant population gains as a tool to offset the economic costs of growth.

• Twenty-six U.S. states have passed impact fee enabling legislation. Impact fees are most prevalent along the Eastern seaboard and the Western United States.

Impact Fees

ADVANTAGESImpact fees represent an investment in a community and spur economic investment through the timely expansion of new infrastructure, supporters argue. Because property taxes charged to new developments are not nearly sufficient to cover capital expansion, impact fees operate as an innovative mechanism to protect taxpayers from the additional costs associated with growth.

SHORTCOMINGSCritics contend that impact fees represent a tax on capital and stifle economic development. Impact fees charged to developers are simply passed on to homebuyers, they argue, and result in increased housing costs and act as a barrier for the construction of affordable housing.

Brueckner

Downs

Burge &

Ihlanfeldt

2000

1999

2003

YES

NO

MIXED

Ordinarily, new development does not pay for theinfrastructure costs it generates. Impact fees are acorrective action that can curb sprawl.

Impact fees are likely to be passed on to home-buyers and

increase pressure for developers to build more expensive,

large lot residential development.

Public service impact fees tied to increase in construction of

multifamily housing in Florida. Sewer/water impact fees tied

to reduction in residential construction throughout

metropolitan area.

Impact FeesLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Impact FeesCASE STUDY: Salt Lake City, Utah

• Determining that impact fees may discourage the construction of affordable housing, Salt Lake City implemented an impact fee schedule designed to foster affordable housing growth and infill redevelopment.

Tax Increment Financing

Tax Increment Financing

• Tax increment financing allows municipalities to divert a proportion of tax revenues from a designated area and invest those funds to subsidize new development through infrastructure investments and other public services.

• Forty-nine U.S. states and the District of Columbia have passed enabling legislation permitting tax increment financing. Arizona is the only state not to permit TIF districts.

• An economic tool that has grown extensively in popularity since it was first introduced by California in 1952, TIF was initially only permitted within specially designated urban and economically depressed areas in an effort to stimulate redevelopment in areas that would otherwise be very unattractive to such investments. Today TIF is utilized liberally in many areas, even in rural and undeveloped regions.

Tax Increment Financing

“With towns handing out TIF like bubble gum, St. Louis may be getting over-stored, while developments are under-taxed. Projects that make no sense get built because of tax breaks.” - St. Louis Post-Dispatch Editorial , 2008

SHORTCOMINGS

Critics charge that tax increment financing has evolved from a mechanism designed to help economically depressed and blighted urban areas to a poorly regulated and widely abused method of financing sprawl patterns of development largely situated along the urban fringe. Critics argue the TIF acts as a kind of corporate welfare while shifting tax revenues away from schools and other public services.

ADVANTAGES

Tax increment financing has been identified as an important tool to facilitate new development, particularly in blighted districts or areas where the costs of infrastructure investments would prove too costly for developers to finance. When utilized effectively, tax increments financing has helped yield new infill development and redevelopment efforts in urban areas across the country.

LeRoy

Dye & Merriman

Knavel

Briffault

2008

2006

2002

2010

NO

NO

NO

MIXED

TIF now generously funds development that should notrequire tax subsidies, including significant sprawl patterns of development on the urban fringe.

TIF-funded commercial districts slow commercial value

growth in non-TIF areas. Policymakers are likely over-using

TIF for projects that already have broad market support.

No enforcement of TIF implementation in Wisconsin led to

abuse of program, financing of sprawl in previously

undeveloped areas.

While TIF is widely abused in its current form to finance

sprawl, if tailored narrowly with stringent enforcement

mechanisms, TIF can be extremely effective in promoting

infill in areas where such development would not take place.

Tax Increment FinancingLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Tax Increment Financing

CASE STUDY 1: Power and Light District, Kansas City, Mo.

The City of Kansas City, Mo. utilized tax-increment financing to help fund the redevelopment of a blighted nine-block area of its downtown in to a vibrant shopping and entertainment district. The $850 million mixed-use project is one of the largest single developments ever constructed in the Midwestern United States.

“A shining example of urban renewal and

public/private partnership at its best.”

-Urban Land Institute

Tax Increment Financing

CASE STUDY 2: Wal-Mart, Kansas City, Mo.

In 2005, Kansas City approved a TIF district to assist in the redevelopment of the Blue Ridge Mall, a struggling old shopping complex in the city. Wal-Mart agreed to open a store in the district in exchange for a $9.1 million tax subsidy package. One day after the new store opened, Wal-Mart closed an existing store in the city.

“TIF is supposed to encourage new development -- not shuffle it from one neighborhood to the next.”

‘When Wal-Mart moved across town, its taxes stayed behind’

-The Pitch, 2011

"Two years ago Wal-Mart closed a large store in the Benjamin Plaza shopping area in South Kansas City

and opened a smaller store on the old Blue Ridge Mall site. The old store paid full taxes to the city. The new one pays only 50 percent of its taxes to the city."

-Kansas City Star, 2009

Maryland’s Priority Funding Areas

Priority Funding AreasINTRODUCTION

• Priority Funding Area (PFA) is a growth management tool unique to the State of Maryland which directs state spending (including for highway, water and sewer construction and economic development aid) to already developed cities and towns.

• PFAs apply to Maryland communities as they existed in 1997, areas inside the Washington and Baltimore beltways, and specially designated districts such as enterprise zones.

• Recent analyses have found that development continues at a faster rate outside of PFA boundaries than within, suggesting that the program requires structural reforms in order to prove more effective.

Priority Funding AreasLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Lewis et al.

Sohn & Knaap

Merret

Frece & Knaap

Hanlon et al.

2009

2010

2010

2007

2010

NO

NO

NO

NO

YES

Little evidence PFAs have significantly affected development patterns. Program hampered because PFAs are not wellintegrated in local land use practices.

Analysis found residential development continued largely unabated outside of PFA boundaries between 1998 and 2003.

Growth outside of PFAs in terms of rates of land cover,population and housing unit change “seems to be unscathed by smart growth measures.” Author notes “fundamental problems” with PFA implementation.

Authors identify several impediments to PFA effectiveness including irregular PFA sizes and shapes, incentives notpowerful enough and no penalty for non-compliance.

Authors used logit model to predict whether PFAs have been effective in guiding growth. Authors found agricultural lands outside of PFAs were less likely to be developed.

Form-based Codes

Form-based CodesINTRODUCTION

• Form-based code differs from traditional zoning by making a structure’s physical form, rather than a separation of uses, the dominant principle for municipal land use codes.

• Form-based codes still consider uses, but to a far lesser extent than traditional zoning. Efforts are made so that new development is compatible with its surroundings and mixed-use development is not discouraged.

• Several communities also permit high density development within designated boundaries, usually centered around public transit facilities or in city and neighborhood centers.

Form-based Codes

While growing in popularity, form-based codes remain fairly rare.

Hananouchi &

Nuworsoo

Burdette

Dancy

Sharp

Gaspers

2009

2004

2007

2004

2007

NO

YES

MIXED

YES

MIXED

Parking regulations within Miami’s central form-based codezone vary very little from those in Euclidean zoned parts ofthe city.

If implemented in tandem with reform of existing land-use

regulations, form-based code has clear potential to curb

sprawl and promote more pedestrian-friendly structures.

Form-based codes implemented in North Carolina are

inconsistent; while most promote good urban form and

pedestrian amenities, few allow for strong flexibility in uses.

Form-based code in Blacksburg, Va. would be more efficient

and effective in reaching goals of comprehensive plan than

existing zoning.

Form-based codes in Arlington, Va. and Columbus, Ohio

have enjoyed strong support but mixed results. City

departments disapprove of the code in Columbus while

Arlington has not attracted significant new development

since implementation.

Form-based CodesLITERATURE REVIEW

Author(s) Year Effective? Conclusion

Form-based CodesCASE STUDY: Arlington, VA

• Arlington, VA., a city which directly borders Washington, D.C., has successfully guided high intensity development around Metrorail stations, through innovative transit-oriented zoning centering a mix of building uses around stations.

• In the 1970s Arlington planners insisted that a subway line run underground through the city than as opposed to in an interstate highway median, allowing development to occur in the immediate vicinity of rail stations.

• More people now work in Arlington, once solidly a suburb, than in downtown Denver or Dallas.

Ten years ago, based on a matched-pair analysis of California jurisdictions with and without LGC&M programs, we concluded that such programs were neither as effective at controlling growth as their advocates had hoped, nor as injurious to housing affordability as their detractors claimed. The increased popularity of LGC&M programs and the development of improved impact-monitoring tools notwithstanding, we see little reason to alter that basic assessment.

Landis (2006)

Smart Growth Programs Matter But…

State growth management programs with strong consistency requirements and enforcement mechanisms hold much promise for reducing urban sprawl, while programs that do not require consistency and/or have weak enforcement mechanisms may inadvertently contribute to it.

Carruthers (2002)

Programs Vary in Effectiveness