![In a column published in early August [1999], Walter Williams urges states to establish federal-tax escrow accounts in which they would deposit and hold federal taxes collected from their citizens.](https://josephbast.com/wp-content/uploads/1999/09/Kids-Marbles.jpg)
Few issues are more important to us than where we live.
Where we live can determine where we work and what kind of work we do. It determines the schools our children attend, the parks they play in, and the safety of the neighborhoods they walk in. Where we live has a lot to do with our choice of hobbies, who we socialize with, how much time we spend with relatives, and who our life-long friends will be.
Fulfilling the American Dream
According to opinion research, some 88 percent of adults in the U.S. prefer to live in single-family detached houses. To a remarkable degree, America’s real estate industry has met that challenge: Home ownership has risen from 44 percent to 66 percent in the last 50 years. There are now some 69 million homeowners in the U.S.
The very success of markets in meeting the nation’s housing needs has triggered a backlash of sorts against homebuilders and developers. To meet the need for more and more housing, builders often must build across the street, down the road, or sometimes in the “backyards” of existing homeowners. That can mean less open space, spoiled scenic views, and longer commuting times.
The New Growth Management Movement
Opposition to new construction in established neighborhoods is not new. It goes by the well-known acronym NIMBY, which stands for “Not In My Back Yard.” But in recent years, the NIMBY syndrome has grown more pronounced, more politically potent, and more sophisticated. It has “morphed” into the “managed growth movement” or, sometimes, the “no growth movement.”
This new movement is quickly becoming a threat to the American dream of home ownership.
While the NIMBY movements of the 1970s and 1980s tended to be local, based on aesthetics or taste, and nonpolitical, the managed growth movement of the 1990s is national, based on environmental and economic concerns, and (at least at the national level) quite political. These changes occurred because some new groups and individuals joined the debate, among them environmental activists, urban planners, and ambitious politicians.
Advocates of growth management propose to limit growth or stop it entirely by giving state and regional governments the authority to prevent communities from competing with one another for new tax bases. They also support “urban growth boundaries,” ala Portland, Oregon, that encourage or require high-density development inside the boundaries, and discourage or prohibit development outside the boundaries. Higher fees and taxes on new development, and more public spending on open land and mass transit, round out the growth management agenda.
This set of policy prescriptions often sails under the misleading banner, “Smart Growth.” In reality, there is nothing smart about it at all. It is just a collection of the same pro-government, anti-personal freedom, and anti-business proposals we’ve seen many times before.
Sprawl Is a Process
If we really want to achieve “smart growth,” we must begin by understanding that sprawl is not a place, but a process.
My Webster’s dictionary defines sprawl as “to spread awkwardly or without a regular pattern; to take up more space than is necessary.” Without knowing how or why a particular community arrived at its current pattern of land use, we cannot judge whether it is “regular” or takes more space than is “necessary.”
These are matters defined by past transactions shaped by rights and voluntary choices. Much of the knowledge concerning these transactions is stored in the heads of local residents and isn’t accessible to some planning commissioner or elected official.
Growth becomes “sprawl” when its pattern does not conform to the plans and legitimate expectations of those who live and use the land in question. This can happen when actors use force to interfere with the property rights others. Too much space is used when owners are kept from developing their land to the degree that willing buyers and investors would support, and when buyers use force to collect the money needed to acquire valuable land and then leave it under-developed.
These things seldom happen when government is kept small and accountable. When private interests try to impose their will on others, they are usually restrained by tort law, punished by criminal law, and made to surrender their property to competitors able to put it to more productive use. Governments, alas, do not operate under similar constraints.
Government is nearly always the cause of sprawl. It causes sprawl with overly restrictive zoning ordinances and building codes, adopted by municipal officials to maximize tax revenues while minimizing the demand for public services. It causes sprawl by destroying, in the name of urban “redevelopment,” affordable housing and low-rent retail space in urban areas. And government’s hand is plainly evident when high crime rates, lousy public schools, and neglected infrastructure force people to move to the suburbs to raise their families.
Free-market Smart Growth
Viewing sprawl as a process rather than a place reveals that growth management isn’t an alternative to sprawl, but rather just another dose of the poison that causes sprawl in the first place. Not surprisingly, then, growth management fails to achieve the stated goals of Smart Growth.
The table below summarizes how a free-market approach to urban planning does a better job fighting sprawl than does growth management. It should be apparent who has the better claim to the Smart Growth title.
| Free Markets Versus Growth Management: Which One is Really “Smart Growth”? | ||
| Objective | How growth management fails to accomplish the objective | How free-market smart growth accomplishes the objective |
| 1. Use land more efficiently. | Growth management relies on the same techniques–zoning, bureaucracy, central planning, and cross subsidies–that cause sprawl. | Empirical evidence as well as theory show that when efficiency is an objective, markets invariably outperform government bureaucracies. |
| 2. Achieve fair and sufficient financing for infrastructure. | State and federal subsidies are spent less carefully than dollars raised from local taxpayers. “Impact fees” on new homes are often excessive and arbitrary. Taxing automobiles to subsidize mass transit is unfair, wasteful, and distorts incentives. | Taxes that are collected locally are most likely to be spent wisely. Competition among communities for business and residents helps ensure accountability. Problems with the timing of tax payments from new homes and financing long-lived capital projects are readily solved. |
| 3. Promote inner-city and inner-suburban development. | Growth management policies attempt to erect barriers to keep families and businesses from leaving cities, rather than correcting the problems that cause middle-class flight. | Repealing counterproductive government regulations and red tape, privatizing public services, and cutting taxes are proven strategies for sparking new residential development in cities that have tried them. |
| 4. Preserve open space and the environment. | Urban growth boundaries create open space in the wrong places–far away from where anyone can enjoy them. Strict environmental regulations have fueled the exodus from cities to suburban “greenfields.” | Questions of where and how much open space should be preserved depend critically on local values and tradeoffs, which are best revealed by a price system and most likely to be acted on under the regime of incentives created by free markets, not politics. |
| 5. Preserve choice for consumers. | Statewide comprehensive land use planning and much of zoning and building code regulation impose one-size-fits-all rules that are incompatible with consumer choice. | The spontaneous evolution of small towns, big cities, and suburbs offers combinations of price, services, and access to opportunities that satisfy people with widely different needs and lifestyles. |
| Source: The five objectives are from the Environmental Protection Agency’s definition of “Smart Growth.” | ||
Vice President Al Gore believes Washington should play a bigger role in deciding where we live. His proposal runs counter to everything we’ve learned about big government in the past two decades.
Governors from both political parties support “Smart Growth” initiatives–not too surprising since they gain power when state bureaucracies expand and public spending increases. Environmental groups such as the Sierra Club support growth management, but their records show little concern for the quality of human life.
Groups and individuals who favor freedom of choice in housing should be alarmed by the growth management movement. We need to work together to defend private and local decision-making regarding land use and housing from regulators and taxers at all levels of government.
The Heartland Institute has launched a project, called “Where We Live,” that builds on the pro-market and pro-smart growth approach described in this essay. We are drawing expertise from a panel of nationally prominent experts on urban planning. If this effort is of interest to you, I hope you will decide to participate.
