Economics and the Smart Growth Movement
By Gerrit J. Knaap
When Jon Cannon called to invite me to this conference he made it clear that he was seeking a wide range of perspectives and he was at the moment searching for someone to bring the perspective an economist. Hearing this, I had some reservations. Though all my degrees are in economics, I spent a year at the American Planning Association on its Smart Growth project and have generally supported land use reform. Thus, I was concerned I might not be able to bring the critical perspective Jon was seeking. But after agreeing to come and reading the paper by Timothy Beatley and Richard Collins, I was quite pleased to offer the critical perspective Jon was seeking.
The ideas presented by the Beatley-Collins paper are provocative. The paper focuses on two questions: (1) What is smart growth? and, (2) Is smart growth smart enough? To answer the first question, the paper defines smart growth as an antidote to sprawl. Sprawl, of course, is equally ill-defined, but what the paper makes clear is that smart growth is most fundamentally about two things: the efficient utilization of public infrastructure, including transportation infrastructure, and the preservation of urban open space. In response to the second question, “Is Smart Growth smart enough?” the answer given is no. Why? Because it is not based on the concept of sustainability or ecological footprints, it does not address the population explosion and it will not help curb excess consumption.
Though I enjoyed reading the discussion on these weighty issues, it reminded me of my undergraduate days when, after reading Herman Daley, Kenneth Boulding, and Nicholas GeorgescueRoegen, I thought I could save the world by refusing to wash my clothes or cut my hair. Of course, I have learned by now that such a strategy will not succeed. But neither will the important issues raised by Beatley and Collins be solved by relying on the set of policies that fall under the rubric of smart growth.
Smart growth is not about sustainability, which in my view is not a useful concept for growth management policy. No city has ever been self sufficient, and any city can be sustainable as long as it has access to external resources. Of course, external resources are limited, but consideration of these resource constraints elevates the scope of the issue beyond questions of urban growth management.
Smart growth is also not about ecological footprints. The concept of the ecological footprint extends far beyond issues of urban growth. The ecological footprint of U.S. citizens is certainly larger than the land they consume for urban uses, which, in percentage terms, is in fact quite small. I might add that farmland preservation, a common goal among smart growth advocates, certainly does not reduce the urban ecological footprint.
Smart growth is also not about population growth per se, and it is only partly about the population of cities. The no-growth policies advocated in the 1960s and 1970s have largely disappeared from the smart growth agenda. Finally, the smart growth movement is not about excess consumption. The movement is concerned with reducing vehicle miles traveled and consuming less urban space per person, but at the same time, smart growth is not about more recycling, producing fewer hydrocarbons, or even reducing reliance on fossil fuels. An increase in the gas tax, which might be the most effective means of achieving smart growth objectives, is not on the smart growth agenda.
So, given this, just what is smart growth? Smart growth is about the spatial organization of cities or, more pragmatically, the pattern of new urban development. It reflects a collection of interests pursuing mutually agreeable goals through mutually acceptable means. The collection of interests active in urban growth management has always included three major factions: homeowners, environmentalists, and the real estate industry (broadly defined to include realtors, homebuilders, developers, banks, savings and loans, and so forth.) These are the major players who define the elements of smart growth.
So what are their mutual goals? They include open space protection, reducing traffic congestion, maintaining public infrastructure, providing affordable housing, and more. This goes to show that there are a lot of goals on which the three major constituencies can agree, at least in the abstract. But what are the mutual means, or the mutual tools for implementing smart growth? Frankly, there are few, if any. Here are some of the particular sticking points: Should development be contained inside growth boundaries? Should impact fees be used to pay for infrastructure? Should zoning be used to increase densities in urban neighborhoods? Should roads be financed through tolls? When it comes to specific policy instruments such as these, the coalition tends to fall apart.
Some evidence of the divergence of specific interests is evident from examining the goals of national groups involved in the smart growth movement. From the Environmental Protection Agency's perspective, the smart growth movement is largely about the preservation of open space and reducing vehicle miles traveled. The Urban Land Institute, an association of large developers, is mostly interested in mixed-use development and infrastructure provision. The American Planning Association, for its part, is largely interested in statutory reform and increasing the influence of planning.
Therefore, above all, smart growth must be understood as a political process, the outcome of which depends on the players involved and the relative power and prowess of those players. The debate over urban growth boundaries (UGBs) in Portland provides an example. Portland, as Beatley and Collins suggest, is often offered as the model of what's both good and bad about smart growth. From the view of the development community, Portland's UGB has caused real estate prices to escalate thereby reducing housing affordability. Environmentalists say Portland's UGB has led to an increase in urban densities and helped to preserve farmland.
Looking at the details yields little evidence to support either point of view. Oregon law requires that UGB's must be drawn to contain a twenty-year supply of developable land every four to seven years. The math then is simple: if the UGB must initially have a twenty-year supply of developable land, and must be expanded every four to seven years to replenish its twenty-year supply, then at all times the UGB must have a thirteen-year excess land supply. A UGB with thirteen years of excess supply is not likely to facilitate compact urban growth, nor is it likely to have tremendous effects on land values. In part because it has a UGB, however, Portland has made great strides in downtown revitalization, transportation-oriented development, encouraging urban infill, and open space preservation. But despite these strides, over the past twenty years, even though Portland's UGB has expanded only two percent and its population has grown fifty percent, its urban footprint has grown thirty percent. Thus, after twenty years of extensive planning and exemplary growth management, Portland has become a highly attractive city, but it is far from solving the problems of sustainability, population growth, or conspicuous consumption.
In sum, Beatley and Collins got the answer to their first question right. Smart growth is largely about open space protection, infrastructure provision, and urban livability. But the answer to the second question depends on your point of view. Those who expect smart growth to serve the interests of deep ecology will be disappointed. The goals of deep ecology are not among those on which the pertinent interest groups can agree. Those who expect smart growth to end or slow the process of urban growth will also be disappointed. Urban growth is caused by rising population, rising incomes, and falling transportation costs. Smart growth policies willat best have only a minor influence on this process. Those with low expectations for smart growth, those who expect smart growth to provide marginally more urban open space, more transit-oriented and mixed-use development, and better-managed public infrastructure, may be pleasantly surprised.
The ideas presented by the Beatley-Collins paper are provocative. The paper focuses on two questions: (1) What is smart growth? and, (2) Is smart growth smart enough? To answer the first question, the paper defines smart growth as an antidote to sprawl. Sprawl, of course, is equally ill-defined, but what the paper makes clear is that smart growth is most fundamentally about two things: the efficient utilization of public infrastructure, including transportation infrastructure, and the preservation of urban open space. In response to the second question, “Is Smart Growth smart enough?” the answer given is no. Why? Because it is not based on the concept of sustainability or ecological footprints, it does not address the population explosion and it will not help curb excess consumption.
Though I enjoyed reading the discussion on these weighty issues, it reminded me of my undergraduate days when, after reading Herman Daley, Kenneth Boulding, and Nicholas GeorgescueRoegen, I thought I could save the world by refusing to wash my clothes or cut my hair. Of course, I have learned by now that such a strategy will not succeed. But neither will the important issues raised by Beatley and Collins be solved by relying on the set of policies that fall under the rubric of smart growth.
Smart growth is not about sustainability, which in my view is not a useful concept for growth management policy. No city has ever been self sufficient, and any city can be sustainable as long as it has access to external resources. Of course, external resources are limited, but consideration of these resource constraints elevates the scope of the issue beyond questions of urban growth management.
Smart growth is also not about ecological footprints. The concept of the ecological footprint extends far beyond issues of urban growth. The ecological footprint of U.S. citizens is certainly larger than the land they consume for urban uses, which, in percentage terms, is in fact quite small. I might add that farmland preservation, a common goal among smart growth advocates, certainly does not reduce the urban ecological footprint.
Smart growth is also not about population growth per se, and it is only partly about the population of cities. The no-growth policies advocated in the 1960s and 1970s have largely disappeared from the smart growth agenda. Finally, the smart growth movement is not about excess consumption. The movement is concerned with reducing vehicle miles traveled and consuming less urban space per person, but at the same time, smart growth is not about more recycling, producing fewer hydrocarbons, or even reducing reliance on fossil fuels. An increase in the gas tax, which might be the most effective means of achieving smart growth objectives, is not on the smart growth agenda.
So, given this, just what is smart growth? Smart growth is about the spatial organization of cities or, more pragmatically, the pattern of new urban development. It reflects a collection of interests pursuing mutually agreeable goals through mutually acceptable means. The collection of interests active in urban growth management has always included three major factions: homeowners, environmentalists, and the real estate industry (broadly defined to include realtors, homebuilders, developers, banks, savings and loans, and so forth.) These are the major players who define the elements of smart growth.
So what are their mutual goals? They include open space protection, reducing traffic congestion, maintaining public infrastructure, providing affordable housing, and more. This goes to show that there are a lot of goals on which the three major constituencies can agree, at least in the abstract. But what are the mutual means, or the mutual tools for implementing smart growth? Frankly, there are few, if any. Here are some of the particular sticking points: Should development be contained inside growth boundaries? Should impact fees be used to pay for infrastructure? Should zoning be used to increase densities in urban neighborhoods? Should roads be financed through tolls? When it comes to specific policy instruments such as these, the coalition tends to fall apart.
Some evidence of the divergence of specific interests is evident from examining the goals of national groups involved in the smart growth movement. From the Environmental Protection Agency's perspective, the smart growth movement is largely about the preservation of open space and reducing vehicle miles traveled. The Urban Land Institute, an association of large developers, is mostly interested in mixed-use development and infrastructure provision. The American Planning Association, for its part, is largely interested in statutory reform and increasing the influence of planning.
Therefore, above all, smart growth must be understood as a political process, the outcome of which depends on the players involved and the relative power and prowess of those players. The debate over urban growth boundaries (UGBs) in Portland provides an example. Portland, as Beatley and Collins suggest, is often offered as the model of what's both good and bad about smart growth. From the view of the development community, Portland's UGB has caused real estate prices to escalate thereby reducing housing affordability. Environmentalists say Portland's UGB has led to an increase in urban densities and helped to preserve farmland.
Looking at the details yields little evidence to support either point of view. Oregon law requires that UGB's must be drawn to contain a twenty-year supply of developable land every four to seven years. The math then is simple: if the UGB must initially have a twenty-year supply of developable land, and must be expanded every four to seven years to replenish its twenty-year supply, then at all times the UGB must have a thirteen-year excess land supply. A UGB with thirteen years of excess supply is not likely to facilitate compact urban growth, nor is it likely to have tremendous effects on land values. In part because it has a UGB, however, Portland has made great strides in downtown revitalization, transportation-oriented development, encouraging urban infill, and open space preservation. But despite these strides, over the past twenty years, even though Portland's UGB has expanded only two percent and its population has grown fifty percent, its urban footprint has grown thirty percent. Thus, after twenty years of extensive planning and exemplary growth management, Portland has become a highly attractive city, but it is far from solving the problems of sustainability, population growth, or conspicuous consumption.
In sum, Beatley and Collins got the answer to their first question right. Smart growth is largely about open space protection, infrastructure provision, and urban livability. But the answer to the second question depends on your point of view. Those who expect smart growth to serve the interests of deep ecology will be disappointed. The goals of deep ecology are not among those on which the pertinent interest groups can agree. Those who expect smart growth to end or slow the process of urban growth will also be disappointed. Urban growth is caused by rising population, rising incomes, and falling transportation costs. Smart growth policies willat best have only a minor influence on this process. Those with low expectations for smart growth, those who expect smart growth to provide marginally more urban open space, more transit-oriented and mixed-use development, and better-managed public infrastructure, may be pleasantly surprised.
