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Urban planning is taking on an increasingly prominent role in urban development and land-use as planners attempt to extend this influence to the regional and state levels (see Stein 1993). The cases of Oregon and Florida, in particular, are lauded as examples of "effective" statewide planning because they feature strong, centralized control over land development and effective enforcement of state planning goals. The catchword, notes one observer of the growth in regional planning, is "consistency" (DeGrove & Metzger, 1993, 6): cities, villages, and townships are required by law to create master plans (usually with 10 to 20 year time horizons) that are consistent with the planning goals and objectives established by the state.

A crucial tenet of contemporary growth management is that markets need to be guided by the public sector to maximize the public interest. This is most evident in the ongoing debates over urban "sprawl" and farmland preservation. Concern over farmland preservation was one of the primary reasons Oregon implemented regional planning and urban growth boundaries (Howe, 1993, 61-75). Concern over sprawl was one of the primary reasons Florida adopted its statewide growth management system in the mid-1980s (Holcombe 1990; Ewing 1997).

Most planning architects envision an "ideal" plan as one that is:

  • comprehensive, encompassing all types of land uses (e.g., residential, commercial, industrial, and open space);
  • internally consistent, to avoid contradictions such as accommodating commercial development in a residential community;
  • rational and information-based, leaving little up to the spontaneous evolution of the market or community;
  • future-oriented, with a long time horizon, often 20 or more years;
  • goal-oriented, with specific priorities, to identify trade-offs and encourage political decisions over future development.

Moreover, the ideal plan would steer otherwise unfettered private activities into "socially useful" (however defined) directions.

While planning ideals are lofty, reality has diverged from those ideals. One indicator is the cost of implementing the plans. Surveys of the impact of zoning and other land-use controls suggest local regulations add 20 percent to 30 percent to the cost of housing (Shlay and Rossi 1981; Karlin 1982; Katz and Rosen 1987; Lillydahl and Singell 1987; Atash 1990). Moreover, planners are so absorbed by the "business of planning"--the implementation and enforcement of the master plan--that they rarely have time to focus on larger issues such as strategic planning. A survey of 178 California cities, for example, found that land-use permit processing and rezonings accounted for almost 60 percent of planners’ time (Dalton 1989, 156). Planners spent less than 10 percent of their time in general plan preparation. Hence, small, unobtrusive uses can be frozen out of development because zoning codes and comprehensive plans are not updated to reflect contemporary trends and realities.

In one case in a Midwestern suburb, for example, a veterinary clinic that would have served small domestic animals on an outpatient basis was prevented from moving into a community because local zoning would not accommodate a change in use. The preferred property was on a major traffic artery leading into the city’s historic downtown. The building, however, was a home and the property was zoned residential. Community growth and evolving land-uses along the corridor reduced the viability of the building as a residential use. However, the community’s zoning code would not allow the small, unobtrusive commercial use of the property as a veterinary clinic without also creating legal entitlements to develop the property for more intrusive uses such as video or convenience stores. Although this particular property would likely not be suitable for those particular uses, shortages of land availability for those uses (also a byproduct of zoning) may well have encouraged the redevelopment of the residential building for more intensive, high traffic purposes. As a result, the planning board rejected the rezoning request. The community lost a viable business that would have maintained the residential character of the neighborhood and the property owner (a retiree) was unable to capitalize on the full market value of his home.

Of course, urban land-use rules and plans come in many forms. They range from the simple--zoning ordinances that set forth broad and general land-use designations such as "residential," "commercial," and "industrial"--to the complex and highly prescriptive. For example, by the 1980s, New York City had added over 2,500 amendments to its zoning laws, which had received no comprehensive overhaul since the 1950s (Staley 1994,47; Salins 1993, 40-9). Plans also run the gamut from simple zoning rules to long-term and highly detailed, top-down general plans.

Nevertheless, planning rules are rarely developed within a market framework or context. More than a decade ago, planner Lloyd Rodwin (1981) recognized the ability of markets to organize and direct development activity in a productive and efficient way relative to urban planning. "In short," he wrote, "it does not take great insight today to see that, however inadequate the market may be, there is no reason to suppose that urban planners will necessarily do a better job, at least in the short or intermediate term. This reality of the inadequacy of planners and their tools offsets the other reality of the inadequacies of the market and price mechanism." (230)

A more telling insight on the importance of markets in urban development comes from Robert Cervero. Cervero argues that allowing people to live closer to their jobs, or bringing jobs closer to their homes, could mitigate air pollution and congestion. In a more recent analysis (Cervero 1996), he analyzed employment and residential patterns in the silicon valley to determine whether the "jobs-housing balance" was materializing. In general, he observed, the San Francisco Bay Area experienced a "general trend toward balance" attributable largely to "jobs moving to labor markets" (506). Imbalances worsened in cities with a job surplus since "housing capital generally did not follow jobs. . . . These outcomes, I conclude, are more a planning failure than a market failure. Notably, many well-to-do, job-surplus communities have restricted housing growth for either fiscal or exclusionary reasons." (506-7)

Many planning practitioners are beginning to recognize the limitations of planning as a discipline and profession. Even Oregon is beginning to feel the repercussions of regional planning as housing costs climb to record levels. These costs are in part a result of planners prohibiting development beyond arbitrary boundaries established by state and regional planning agencies (Mildner 1998).

Most U.S. ventures into land-use planning have experienced several common pitfalls. Altshuler’s (1994) taxonomy of these problems is useful as a summary.

  • Decision gridlock: current planning processes have often fostered delays, high regulatory costs, and litigation in response to the perceived erosion of rights to use property. Sometimes property owners are not permitted to develop their property at all because of local moratoria on building permits. At other times, approval can take years and include public referenda on the project.
  • Perversity: the planning process and zoning criteria sometimes result in unintended consequences such as unaffordable housing, increased traffic congestion, and loss of open space. These results perversely have occurred even when plans were designed to improve housing access, reduce traffic, and create open space. This is evident in Portland where the urban growth boundary has put upward pressure on prices by restricting the supply of developable land and city and regional planning authorities are now evaluating affordable housing strategies (Mildner 1998).
  • Incoherence: problem boundaries often don’t match jurisdictional boundaries, leaving few opportunities to limit spillover effects among communities. For example, Joel Garreau (1991) has described the emergence of some 181 "edge cities" over the past several decades, many of which do not lie within a single legal boundary.
  • Mismatch between static plans and dynamic economies: visionary end-state plans of the 1960s, 1970s and 1980s have failed to anticipate what the real world of the 1990s looks like. Planners failed to anticipate such changes as the feminist revolution and the emergence of dual-income households, the computer revolution, and workplace transformations into horizontal and often highly mobile organizations. Also unanticipated were just-in-time inventorying, telecommuting, and warehouse retailing, among many other changes in economic form and content. In addition to these shortcomings, modern planning has also spawned an unbounded politicization of decision-making regarding land use. This is because zoning confers development rights on property irrespective of neighborhood impacts and other potential nuisances (Nelson 1989; Fischel 1985). The example of the veterinary clinic is a practical reminder of how compatible uses can be rejected when local zoning confers legal development rights to other uses that might be potentially damaging to the local neighborhood without alternative recourse.
  • Zoning has effectively nullified private property rights with respect to land development: the decision to develop land is made through a legislative process. When land is developed through zoning, notes land-use lawyer Bernard Seigan, land-use decisions will be made politically. "Almost everyone except those who will directly benefit from the development, such as potential homeowners, tenants, and shoppers, can be expected to enter the fray," he observes (Seigan 1990, 154). As spheres of autonomy made possible by property rights have eroded, common law rules regarding rights, responsibilities, and "nuisance" protection have been replaced by statute law and land-use decisions by referenda, political jockeying, and majority rule. The prescriptive focus of plans, zoning, and other land-use and construction ordinances have invited battles over building details. In some cases, development plans have been rejected by planning boards because proposed houses did not have the right proportion of brick, used too much stucco siding, or could potentially increase traffic volumes. (Staley 1997, 124-83)

Importantly, despite these pitfalls and shortcomings, zoning and local planning serve important purposes. Initial zoning ordinances were justified on the impacts of nuisance uses on property values. Commercial and industrial uses could potentially create negative spillover effects that would reduce the value of residential properties and erode their quality of life. Zoning, it was argued, could mitigate these impacts by separating land uses. Zoning’s pervasiveness -- almost all major cities have zoning and comprehensive plans in place -- can be attributed to common concerns over nuisances, the political benefits of conferring development rights through a legislative system (see Clingermayer 1993), and widespread belief that central planning could solve urban problems by regulating land use and urban design.

To avoid the pitfalls of modern planning and zoning, an alternative must be proposed, debated and evaluated. The following sections present a vision and outline of an alternative, more market-compatible planning system.

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