"Smart Growth" Policies Hurt

by Ryan Balis
National Policy Analysis

June 2006

It is not uncommon to find workers in the Washington, DC area who suffer a two-hour commute each way to their jobs.  Some travel from as far as West Virginia or Pennsylvania.1  In many cases, the cause is not preference but finance.  Simply put: There is lack of affordable housing in the region.2  It is a problem nationally, not just in our nation's capital.

Steep increases in property values are often attributed to a robust real estate market or an area's appeal for living, working and attracting business.3  However, another more flagrant and largely overlooked cause is so-called "smart growth" planning.  There is mounting evidence that smart growth policies have already prevented thousands of American households from their claim of the American Dream of owning their own home.

Designed as an environmentally-sensitive response to perceived suburban overcrowding or "sprawl," smart growth policies crowd housing units together into clusters of dense, skyward structures.  In over 100 cities and regions across America, smart growth plans have been implemented on a false premise that growth should be controlled by concentrating it. 4  These new "American utopias," as smart growth proponents have called them, claim to offer "mixed use" amenities of urban life, whereby transportation, retail shops and dwellings are intertwined.5

Environmental groups such as the Sierra Club and NIMBY suburbanites support these policies because they want to protect open space.6  They claim that concentrating people together through restrictive urban growth boundaries encourages mass transit use, reduces automobile dependence, cuts air pollution and preserves the "aesthetic and natural assets of communities."7

But smart growth development restrictions pose a distinct problem for regions experiencing population growth.  The overall shortage of housing can create affordability and quality of life problems for families entering the housing market, particularly those with low and moderate incomes and upwardly mobile minorities.

The problem is largely overlooked but could have far-reaching consequences. According to an econometric report commissioned by The National Center for Public Policy Research, one million households who bought homes between 1992 and 2002 would not have been able to do so had smart growth policies such as those found in Portland, Oregon been extended nationwide.  Smart growth proponents consider Portland's policies a model for other metropolitan areas.  Of this displaced group, a disproportionate number - 260,000 - would have been black. 8

Just How Smart?

Smart growth can even create the sprawl it is intended to prevent.  Steven Greenhut, an opinion writer for the Orange County Register, points out that those "who want a bigger place [that may be unavailable because of smart growth policies] simply move away, thus promoting the sprawl that Smart Growthers are trying to stop."9

In November 2004, Bozeman, Montana residents passed a $10 million taxpayer-funded "land trust" bond in an effort to help halt "sprawl" in the fast-growing but traditionally small college town.  County officials use the fund to bait local ranchers into forfeiting development rights on their estates - in effect, creating a green development buffer.  In an area awash with open space, this buffer cuts off affordable housing to many residents who now are forced to move to the lower-cost and distant countryside and to commute into town.10

Smart growth can also be seen as a crude attempt to exclude less affluent and, in particular, minority residents from communities.  Development restrictions in Richland County, South Carolina prevent much of the county's prime farmland - owned for generations by descendents of black sharecroppers - from being subdivided.  County planners and environmentalists say they wanted to prevent the rapid commercial growth in nearby Columbia from spreading to the farmland, ruining the county's traditionally rural character. 11

In reality, their policy keeps black property owners from selling their land to small business developers or giving property to their children.12 

Segregation has ended, but today these families face a new economic form by being denied the wealth from the selling of their own land.

Smart growth proponents cry out that building more suburban homes would exacerbate already clogged roads, schools and neighborhoods.13  But how responsible is a policy that has some residents resorting to extreme measures simply to find a space to sleep at night?

A troubling example involved a Waldorf, Maryland woman who was arrested in 2004 on child endangerment charges for locking her four and five year old daughters in a commercial storage unit while she worked during the day and spent nights at her mother's home.  Felicia M. Dorsey pleaded guilty for moving into the $65 a month space, which does not have running water, with her daughters for three nights after being evicted from her Waldorf apartment and unable find space at a homeless shelter.14

Unfortunately, Dorsey is not alone in seeking such makeshift shelter.  Sheds, cars, trailers and even the woods are sometimes the only affordable option for families.15

In Maryland's Charles County, where Dorsey and her daughters lived, the median rent for a two-bedroom apartment was $1,218 the year she was evicted.16  The median home price in 2005 was $298,000 - up from $237,000 in 2004.17  As housing prices continue to climb in growth-restricted areas, the $58 to $149 per month it costs to rent storage shelter, depending on its size, is an attractive alternative for those squeezed out of their homes.18 

Far from creating a utopia, smart growth planning perverts the housing market with "grand designs" that limit choice of housing types and locations.19  Reducing the supply of homes while demand increases drives home prices to unprecedented levels.

Unleash the Market

Instead of a top-down approach, there must be a market-based solution that is both mindful of long-term development impacts and is flexible enough to distinguish among the different housing needs of all residents.

Dr. Samuel Staley of the Buckeye Institute, for instance, proposes that consumers - not politicians or bureaucrats - determine appropriate housing densities through "performance zoning."  Development would correspond to various standards that are community-established such as appropriate levels of road congestion or home vacancy levels. 20

The greatest advantage to a flexible and voluntarily-imposed solution is that it would not unnecessarily drive up home prices.  The cost of housing would instead be a reflection of a number of demand pressures.

Smart growth has a woeful record of pricing-out affordable housing for many middle income Americans.  The smartest way to put housing back into reach is to let the market determine the supply and demand that planners are now dictating.

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Ryan Balis is a policy analyst for The National Center for Public Policy Research.

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Footnotes:
1 Peter Whoriskey, "Washington's Road to Outward Growth," Washington Post, August 9, 2004, p. A1; "Commuting Trends and Patterns in the Washington Region," Trends Alert No. 5, George Mason University Center for Regional Analysis, Fairfax, Virginia, September 2, 2003, available at www.cra-gmu.org/alerts/Trends5-commuting.doc as of April 12, 2006.

2 Tim Craig, "Md. Home Valuations Increase Sharply," Washington Post, January 6, 2005, p. A1; Annie Gowen, "Arlington Property Values Up 24 Percent," Washington Post, January 19, 2005, p. B1; David Cho, "Fairfax Revenue May Go To Housing," Washington Post, January 25, 2005, p. B1; Joshua Partlow, "Report Urges Affordable Housing in Charles," Washington Post, January 14, 2005, p. B4; D'Vera Cohn, "Housing Shrinks As Need Grows," Washington Post, January 13, 2005, p. B1; Michael Laris, "Loudon Heralds Soaring Home Prices - and Tax Bills," Washington Post, January 12, 2005, p. B8; Mark Fisher, "Good Intentions Often Falter When It's Time to Build," Washington Post,  January 11, 2005, p. B1.
 
Analysis provided by the National Association of Home Builders ranks the Washington, DC Metro region (DC-MD-VA) as the 116th most affordable metro region nationally (FQ3 2004).  Rankings were based on comparisons of median family incomes and median home sale prices in 162 metro regions across America.  See "The NAHB/Wells Fargo Housing Opportunity Index: Regional Listing by Affordability Rank," National Association of Home Builders, Washington, DC, January 6, 2005, available at http://www.nahb.org/fileUpload_details.aspx?contentID=537 as of April 12, 2006.

3 Tim Craig, "Md. Home Valuations Increase Sharply," Washington Post, January 6, 2005, p. A1; Annie Gowen, "Arlington Property Values Up 24 Percent," Washington Post, January 19, 2005, p. B1; Eric M. Weiss, "D.C. Council Might Require More Affordable Housing Units," Washington Post, January 26, 2005, p. B1
.
4 John K. Carlisle, "Suburban Snob Politics Fuels 'Smart Growth' Land-Use Movement," National Policy Analysis No. 312, The National Center for Public Policy Research, Washington, DC, October 2000, available at http://www.nationalcenter.org/NPA312.html as of April 12, 2006.

5 "America's New Utopias," Economist, September 1, 2001; Randal O'Toole, "The Folly of 'Smart Growth,'" Regulation, Fall 2001, p. 20, available at www.cato.org/pubs/regulation/regv24n3/otoole.pdf as of April 12, 2006.

6 Donella H. Meadows, "Stop Sprawl: Better Not Bigger," Global Citizen, March 4, 1999, available at http://www.sierraclub.org/sprawl/articles/meadows2.asp as of April 12, 2006; Marlon G. Boarnet and Andrew F. Haughwout, "Do Highways Matter?  Evidence and Policy Implications of Highways' Influence on Metropolitan Development," Brookings Institution, Washington, DC, August, 2000, available at http://www.brookings.edu/es/urban/boarnet.pdf as of April 12, 2006.

7 Roger K. Lewis, "Smart Growth's Misunderstood Message," Washington Post, Oct. 16, 2004, p. F9; O'Toole; Peter Whoriskey, "'Smart Growth' Gains Traction in Fairfax," Washington Post, Dec. 12, 2004, p. C8; Shelly Hill, "Richland County, S.C., Council Can't Reach Decision on Land-Use Rules," The State, April 5, 2004.
 
8 "Smart Growth and Its Effects on Housing Markets: The New Segregation," The National Center for Public Policy Research, Washington, DC, available at http://www.nationalcenter.org/NewSegregation.pdf as of April 12, 2006.

9 Steven Greenhut, "The Stupidity of Smart Growth," LewRockwell.com, November 23, 2004, available at http://www.lewrockwell.com/greenhut/greenhut37.html as of April 12, 2006.

10 Ibid.

11 Shelly Hill, "Rural Life Takes an Urban Turn on Outskirts of Columbia, S.C.," The State, December 5, 2004; Shelly Hill, "Residential Development in Northeast Richland County, S.C., Led Way in 2003," The State, August 4, 2004; Shelly Hill, "Richland County, S.C., Still Split on Land Development Rules," The State, September 26, 2003; Shelly Hill, "Subdivision of 650 Homes Is Proposed for Richland County, S.C., Site," The State, February 18, 2003; John Berlau, "'Smart Growth' Plan Riles Black Farmers," Insight, September 16, 2002, p. 21, available at http://www.mfaincorporated.com/todaysfarmer/past/940920.asp as of April 12, 2006.

12 Shelley Hill, "Richland County, S.C., Council Tackles Development Standards," The State, January 15, 2004; Editorial, "Not So Smart Growth," Wall Street Journal, November 28, 2003, available at http://www.propertyrightsresearch.org/articles6/not_so_smart_growth.htm as of April 12, 2006; David Almasi, "Elitist 'Environmental Justice' Bad News for Minorities," New Visions Commentary, The National Center for Public Policy Research, Washington, DC, April 2004, available at http://www.nationalcenter.org/P21NVAlmasiGreens404.html as of April 12, 2006.

13 Joshua Partlow," Report Urges Affordable Housing in Charles," Washington Post, January 14, 2005, p. B4.

14 Joshua Partlow and Susan Kinzie, "Girls in Shed Put a Face On Plight Of Homeless," Washington Post, December 2, 2004, p. T3; Adrienne T. Washington, "Warehouse of Need Won't Fit in a Storage Shed," Washington Times, November 23, 2004, p. B2; Arthur Santana, "Women Left Girls, Slept at Mother's," Washington Post, Nov. 23, 2004, p. B1.
  
15 Susan Kinzie and Joshua Partlow, "Storage Unit As Shelter Not Unique, Workers Say," Washington Post, November 24, 2004, p. A1.

16 Ibid.

17 Krissah Williams, "Charles County," Washington Post, March 26, 2006, available at http://www.washingtonpost.com/wp-dyn/content/article/2006/03/24/AR2006032400837_pf.html as of April 12, 2006.

18 Kinzie and Partlow.

19 Samuel R. Staley, "Reforming the Zoning Laws: A Guide to Smart Growth: Shattering Myths, Providing Solutions," eds. Jane S. Shaw and Ronald D. Utt (Washington, DC: The Heritage Foundation, 2000), pp. 61-75.

20 Ibid.

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