Sunday, August 23, 2009

Zoning, Land Speculation, Benefits and Externalized Costs

At Green on Green in Higganum the other day, zoning was a hot topic. A self-identified environmental scientist came over to the 1000 Friends booth and told me he was entirely opposed to smart growth. When I said I thought that an odd reaction from a person with his background, and asked why he had such strong negative opinions, he told me a story. He said he’d invested his retirement savings in a large piece of undeveloped land. Some time after he’d closed on the property, the town updated its zoning. Now, he said, he won’t be able as-of-right to subdivide the parcel into as many lots as he’d hoped.

A member of the land trust came by later and said the land trust was very active. New subdivision regulations require developers to set aside a certain percentage of the land as open space. A number of developers have offered protected parcels to the land trust. He said the trust had refused a number of parcels it had been offered because the land would be nearly impossible to steward and was of questionable value as open space. He described housing lots cut out like gerrymandered political districts with disconnected dregs left to make up the requisite open space set aside.

In the case of the first man, it’s a shame his investment didn’t go the way he hoped. It’s very sad, as anyone can attest who’s watched his/her their stock portfolio in the last couple of years, when our speculative investments don’t perform as we thought they should.

Because the zoning code was changed, he ceased to be able to externalize the negative short and long-run costs of unsustainable development.

Good zoning delivers positive outcomes. It should make it easy to build in the right places, build the right structures, meet design and engineering standards, all while protecting the private investments of land owners and delivering public good.

Does your town’s zoning code regulate to achieve the outcomes its citizens want today and into the future? Does it preference the desires of current land speculators or protect future generations from their externalized costs?

The environmental scientist’s investment didn’t give him the return he’d hoped for, but the zoning change should mean that when he subdivides his property, he will receive the return the real estate market will deliver. There will also be a positive return to the natural water system by maintaining open space for aquifer recharge, it will aid in cooling the planet through the carbon sequestration benefits provided by tree foliage, it will maintain the viability of interconnected species that rely on contiguous and varied habitat of a suitable size, and it may even boost the tourism economy and quality of life for residents of the town and the state.

Unfortunately, the comments of the land trust member led me to wonder if the new code is adequate to achieving the desired results.


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  2. Should we be structuring ourselves to reward land speculators, or to discourage speculation?

    Should we be structuring ourselves to encourage prompt re-development of underused vacant land downtown, or to reward those who would like to profit from developing fringe land, or selling it to those who would develop it?

    Zoning is clearly part of the story, but unless we align our economic incentives with where we want to go, the profit motive will do endruns around it.

    Let's make the ongoing redevelopment of the downtown something that the private sector gets rewarded for doing. When we reward fringe development, we get fringe development.

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