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V. Market-Oriented Planning Of Type 3 - Planning To Protect The Interests Of The Current Property Owners

This interpretation, and the one discussed in the next section, is primarily inspired by American discussions about planning. The starting point is that the local government has strong zoning instruments that make it possible to determine future land uses. This tool is under the control of the majority of the citizens in the municipality, and they are assumed to use this tool to improve their economic situation. Fischel (2000, p.404; 1992, p.17) writes:

"I regard zoning as a collective property right that is used by the municipality to maximize the net worth of those in control of the political apparatus."

"many studies show that adoption of more restrictive zoning reduces the value of undeveloped suburban land subject to the restrictions and increases the value of already developed homes."

Similar views can be found in Pogodzinski and Sass (1990).

In this ideal-type, which we call American Style market-oriented planning, the municipality has no specific long run vision, and they do not have financial resources to carry out any major investments on their own. The strategy of the local government is instead to use their control over land use to force developers to pay for different kinds of infrastructure that are needed. Fischel (2000, p. 412) notes:

"modern courts have expanded the range of services that developers may be required to pay for or provide directly"

Mäntysalo (1999, p. 188) makes the same observation for Finland:

"A typical form of Finnish public-private partnerships are land use agreements where the property owners submit to carrying more financial burdens than what is obligatory according to the Building Code."

In this way, the current property owners can reduce their tax burden and protect/increase their property values.

The basic characteristics of this type of market-oriented planning are summarised in Table 4.

TABLE 4: Market-oriented Planning: Type 3 - American Style

Component The position of the local government
Visions Weak
Legal rights Strong
Financial resources Weak

The difference between the New Nordic Style and this American Style of market-oriented planning concerns who formulates the visions for the development of the city, or for a specific part of the city. Is the process driven by initiatives taken by the local government ,or by initiatives taken by the business sector? In reality there is of course a continuum of alternatives, and not just two polar cases. Notice that the local government has a much more important role in American Style market-oriented planning compared to Thatcher Style planning.

To illustrate the difference between the American Style and the Thatcher Style of market-oriented planning, we can look at the following hypothetical case. Assume that a developer finds that it would be profitable to build a large shopping center aimed at middle and low-income households within the borders of a municipality mostly inhabited by high-income households on rather large estates. In a system of Thatcher Style planning this kind of project might be possible to carry out, but it might not be allowed in the American Style. The majority of the current property owners might think that the project would be bad for them, even if the developer pays a reasonable share of the profits to the local government.

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