Authors:
Robb Wolfson
Chris Galanty
Suzanne Usak
Faced
with growing populations and an ever-increasing need for services, local governments
are increasingly confronted with the need to balance economic development
opportunities with actions to protect the environment and natural resources.
Poorly planned development is threatening our environment, our health,
and our quality of life. Across the United States sprawl, scattered
development that increases traffic, 
threatens
local resources, and destroys open space, is taking a serious toll on the
landscape. But sprawl development is not inevitable. Hundreds of communities
are choosing to manage sprawl from poorly coordinated economic development
with growth management solutions. For communities weighing the consequences of
development, the question is how can economic growth be promoted while minimizing
the negative effects to our environment, health, and quality of life.
Achieving
both goals requires aggressive and coordinated planning which combine two
different policy approaches. First,
public policy should direct new economic growth only to existing urban areas
or areas designated for growth. Communities
are likely to find such focused growth, if planned appropriately, will not
only deflect growth from undeveloped areas but also will strengthen existing
neighborhoods and businesses. Secondly,
policy tools must also be enacted that support and perpetuate the rural economy
as much as possible in order to discourage the temptations that lead to development.
Many
state, regional, and local governments have instituted various programs embodying
both approaches but very few integrate them with their growth management program,
such as infrastructure improvements. This must change if communities are to divert
inevitable growth from today's undeveloped places.
Lastly,
communities that have achieved low-unemployment and broad economic growth
across classes may wish to rethink the focus of their 
economic
development programs altogether. Rather
than perpetually seeking new business and industry from outside the area further
straining a community's existing housing stock, roadways, shortage of service
workers, and intensifying growth pressures on rural areas, economic development
should prioritize efforts to maintain the health and needs of existing business
and industry (i.e., meeting infrastructure
needs). Such an effort is likely to
ensure continued economic satisfaction for a community's residents while also
not promoting a situation that leads to strain on its existing qualities.
Economic Development in Areas with Existing Development
The
purpose of each of these tools is to funnel new economic activity into areas
designated for growth or existing neighborhoods experiencing decline both
economically and socially. Ideally,
assisting a deteriorating neighborhood with focused economic activity will
reinvigorate it both 
economically
and socially, deflect new development that would have otherwise gone to the
urban fringe or rural areas, and save public tax dollars that would have been
used to build new infrastructure from scratch.
The
Comprehensive Plan is a document composed of written goals and policies
as well as maps used to guide the type, location, and quantity of development
in a community over a 10 or 20- year period based on existing conditions and
future hopes. A plan should include
goals for economic growth and how it can be contained within existing areas
or areas designated for growth.
Issues:
1. Usually only serves as a general visioning exercise
and starting point for growth management as not legally binding on subsequent
zoning and public decisions.
2. Must be updated on a regular basis to be effective.
Best
Practices/Examples:
Ø The State of Virginia and
Washington Illustrate Different Approaches to Comprehensive Plans
Recommendations:
1. Members of the public should be thoroughly encouraged
to participate in the comprehensive planning process, as it should serve as
a tool for a community to envision its future.
2. So it is more than an insignificant exercise, however,
states should thoroughly consider requiring that comprehensive plans meet
goals determined to be important to the state citizenry (i.e., need for open
space and economic growth). Once approved
by the state, the zoning and public decisions of localities should also be
required to comply with their comprehensive plan.
II.
Fiscal Impact Analysis
A
study of the projected short and long-term costs and revenues associated with
new development in a community. It can be used to evaluate the best time and
place for development to occur based on using existing utilities and rate
of development.
Issues:
1. It may be difficult to accurately determine true revenues
and costs involved with specific development proposals due to innumerable
impacts and effects of projects.
2. The results of a specific analysis are unlikely to be
automatically utilized for different project proposals or by other localities
due to the unique conditions and considerations that underlie each study.
Best
Practices/Examples:
Ø Examples of Fiscal Impact
Analysis of Virginia and Chicago, IL
Recommendations:
1. Fiscal impact analysis can provide a quantitative basis
for assessing whether proposed development would be an economic boon or bust.
2. It can provide evidence to legitimize the use of impact
fees.
3. It must be used cautiously as it may be difficult to
ascertain the true revenues and costs of a particular project.
III. Threshold Performance Standards
These guidance standards are incorporated
into a community's comprehensive plan specifying the level of public services
that must be provided for different types of development. Service levels can be set for schools, water,
sewer, roads, transit, libraries, and parks. Proposed development that will result in non-maintenance of these
standards can be denied approval.
Issues:
Threshold Performance Standards may largely
be dismissed, subjective measures though they usually have some basis in scientific
data (i.e., determination of what constitutes traffic congestion in a particular
place is subjective).
Best
Practices/Examples:
Recommendations:
Performance standards can
be used to restrict growth for certain periods of time. Enforcement is key to make performance standards
work as effective growth management tools. Florida has failed to enforce its law despite its strong potential.
IV.
Land Use and Utility Coordination
This
strategy requires development to occur in areas already
served by existing utilities or areas planned to be served by utilities in
order to prevent leapfrog development and continuous demands for service extensions.
Issues:
State laws and court decisions adopting
the view that these services are public utility enterprises that cannot be
limited by disassociated public policies can limit the use of this tool.
Denying new rural homeowners water and
sewage extensions may actually lead to worse environmental conditions as they
dig wells and septic tanks instead.
Best
Practices/Examples:
Recommendations:
1. Utility extension boundaries can be very powerful growth
restriction tools but their ultimate effectiveness is probably directly tied
to the amount of policy coordination at a more regional level (i.e., Lexington/Fayette
County, KY).
2. To prevent courts and state legislatures from overturning
a locality’s “Blue Line”, it would be useful to incorporate use of this tool
with fiscal impact analysis to scientifically justify why it is not in a locality’s
interest to extend utility lines beyond a certain point.
V. Enterprise Zones
Programs
at the federal, state, and local levels to promote economic development in
needy and rundown areas with the use of tax incentives, regulatory waivers,
infrastructure improvements, and brownfield revitalization.
Issues:
1. Several case studies suggest governments give more benefits
to companies to locate in a certain area than are actually recovered from
tax revenues and other economic benefits.
2. Enterprise Zones may be labeled as corporate welfare
as many of these inducements are not actually needed to get a company to settle
in the area anyway and the public money would be better spent improving schools
and creating more livable and attractive communities.
Best
Practices/Examples:
Ø
The State of Alabama Attracts the Only
Mercedes Automobile Plant in The U.S.
Ø
Redevelopment of a Factory to the Headquarters
for the Newspaper in Davenport, Iowa
Recommendations:
Careful attention must be paid in formulating
estimates of costs and benefits received from enterprise zone programs to
ensure such programs will provide the desired economic returns.
Community
areas targeted for enterprise zone must be carefully evaluated prior to instituting
development efforts to determine which business and employment opportunities
are most appropriate. This evaluation
should focus on community objectives and resources.
VI. Tax Increment Financing (TIF)
A
program designed to leverage private investment for economic development projects
in a manner that enhances the benefits accrued to the public interest. Tax
increment financing is a technique for financing a capital project from the
stream of revenue generated by the project.
TIF has long been associated with urban renewal projects, but some
states allow the use of TIF for virtually any developmental project. Tax increment financing is statutorily authorized
in 46 states. Practices vary greatly, but generally allow a governing body
to create TIF without the consent of overlapping jurisdictions.
(For a list of those states see: http://www.ncsl.org/programs/econ/TIF.htm)
Issues:
TIFs only apply to a specific geographic
location, not the entire region.
Best Practices/Examples:
Ø
Tax-Increment District for Financing
a Downtown Development Project
Recommendations:
TIFs are an effective mechanism for rejuvenating
blighted areas. They are often viewed
as essential in initiating the redevelopment of a downtown area.
VII. Focused Economic Development in Growth Areas
As expansion of the urban area is an inevitable outcome
of a growing society, the focus of this section is to provide some case studies,
tools, potential obstacles to overcome, and lessons learned in order to encourage
growth to occur in focused areas. Rapid
development is financially draining to town, city, county, and municipal governments.
Growth, when unchecked, can lead to more traffic jams, increased pollution,
overcrowding, loss of open space, and as well as poorly planned community
spaces. It is hoped that the descriptions below will
help to alleviate, or at least lessen, these threats.
Tysons Corner Before 
Zoning – Zoning ordinances specify written requirements and standards for permitted
uses of buildings, the height and size of buildings, the size of yards, parking
and signs and fences, among others. The purpose is to separate land uses that are seen as incompatible.
The separation of uses aids growth management by separating uses such
as agricultural and rural from residential and industrial.
By this separation a certain degree of open space will remain conserved
and development will only occur in the areas that the local government designates,
through their zoning ordinances, that are capable of sustaining future development.
There are three types of zoning to concentrate economic development
in specific areas:
Cluster Zoning - Allows groups of buildings on small lots in one part of the site in
order to preserve open space on the remainder of the site. This type of zoning typically lowers the minimum
lot and yard sizes required.
Overlay Zoning – A zoning district that is applied over one or more other zoning districts
in order to allow certain conditions, such as historical buildings, wetlands,
or downtown residential use.
Incentive Zoning – These are zoning provisions that encourage, but do
not require, developers to provide certain qualities in their developments
in return for benefits such as higher density or fast approval of applications.
These incentives are most often used in downtown areas to gain open
space, special building features, or public art in connection with approved
developments.
Issues:
Some localities throughout the country
do not have zoning ordinances and do not regulate development in their jurisdictions.
Traditional
zoning lacks the flexibility needed today so several alternative approaches
have been developed, such as cluster zoning, overlay zoning, and incentive
zoning.
Traditional
zoning prevents mixed-use environments which are more pedestrian friendly
and supportive of transit.
Incentive
zoning relies on real estate market activity and pricing levels to produce
results.
Best
Practices/Examples:
Ø The Hammocks, FL Illustrates How Cluster Zoning Creates Green
Space and Increases Density
Ø Arlington, VA Uses Overlay Zoning to Protect Affordable Housing
Along Metro Corridors
Ø Using Incentive Zoning to Generate Construction of Office Complexes
and Hotels
Recommendations:
1. Zoning is helpful to local governments wishing to maintain
open space by zoning agricultural and forest land at an extremely low density
to discourage development.
2. Separation of uses promotes development in areas the
government has designated that are able to contain the growth associated with
increased economic development.
3. Economic development is not only commercial development—it
also includes industries such as tourism, agriculture, and forestry.
VIII.
Targeted Development Areas
These
are areas designated for growth by the local government. The area is chosen due to the services available
in the area because of local zoning regulations or comprehensive plans.
These areas are used as priority funding areas, urban growth boundaries,
brownfields redevelopment, or transfer of development rights.
Urban Growth Boundaries - Under this program local governments estimate the
amount of land needed to accommodate new development over a specified period
of time. A line is then drawn around
this area, designating where new development can occur during the time period. These time periods are usually specified as
20 years, long enough to be taken seriously, but short enough to accommodate
changes that must be made. The benefits
of urban growth boundaries are not so much the designating of growth areas
but in forcing localities to assess the long-term effects of unplanned development. Urban growth boundaries also allow localities
to target money to transportation, schools and other public services.
Brownfield Redevelopment – Brownfields
are defined as abandoned, under-utilized industrial and commercial land where
redevelopment is complicated by environmental conditions. While less toxic than superfund sites, brownfields
are significantly more contaminated than new, greenfield sites.
The US Department of Housing and Urban Development estimates that there
are approximately 450,000 brownfield sites in the country.
Recently, most states are realizing the economic benefits of cleaning
up brownfield sites and redeveloping them.
Only four states (Wyoming, New York, North Dakota, and South Dakota)
do not have a regulatory format for cleaning these sites.
(www.sprawlwatch.org)
Transfer of Development Rights – separating the right to build on a piece of land from
the ownership of the land itself, and transferring that right to another piece
of land.
Issues:
1. It is often difficult to get political consensus of
the Targeted Development Area application.
Political coalitions may be in opposition to these areas.
2. Frequently with Transfer of Development Rights there
is a lack of acceptance of the increased density in the targeted receiving
area at the time when the transfer is proposed.
Community groups in targeted areas rally against the increased development
pressure.
Best
Practices/Examples:
Ø Priority Funding for Areas Targeted
for Growth
Ø
Portland Urban Growth Boundaries Saved
25 Million Acres of Forest and Farm Land
Ø
Maryland’s Brownfield Redevelopment Program
Gives Developers Incentives
Ø
New Jersey Permits Towns to Allow Developers to Meet Minimum
Lot Size
Recommendations:
1. Development within a locality can be targeted to areas
where it is most sensible. These are
areas that have public services, such as water and sewer, or are areas that
are the most logical expansion of these services.
2. Force local government officials to assess the long-term
effects of development decisions and not just the immediate, monetary benefits
of increased economic development.
3. Transfer of Development Rights help landowners realize
the real estate value of their land without actually developing it.
4. Transfer of Development Rights show that rural forestry
and farming areas inherently have economic benefits.
IX. Agricultural and Forest Districts
These
are temporary districts that limit the development of the land in return for
use value taxation, where the owner will only be taxed for the actual use,
not the potential use. By acreage,
farmland is the most affected type of land by sprawl.
Farmers, however, are not likely to protect their own interests unless
there is a way of working with allies on a regional basis. Most people interested in growth management
have their 
own
interests in helping farmers preserve their land. The federal government has not done much to
preserve farmland, with the exception of the 1981 Farmland Protection Policy
Act, which is very limited in its effectiveness. Therefore, the responsibility of preserving farmland falls to the
states.
Issues:
Inner city business concerns may not realize
the ecological sensitivity of these areas.
Best
Practices/Examples:
Ø Agricultural and Forest Districts Allow Farmers to Set Aside Areas for Commercial Farming
Recommendations:
Special protections provided to farmers
encourages continued use of their land for farmland and alleviates some of
the pressure to sell their land to developers to get away from lawsuits, etc. Government organizations pursuing the preservation
of agricultural/forest districts should also be cognizant to prevent forest
fragmentation.
X.
Impact Fees/Exactions
Impact
fees and exactions are a cost assessment imposed against new development in
order to generate revenue to fund or recover the costs of reasonable public
facility improvements necessitated by the development. This tool must be imposed carefully to balance
the competing demands presented when dealing with the pros and cons of new
development. Exactions imposed during
subdivision review generally require developers to fund, build, and dedicate
for public use basic facilities required by residents of the new developments.
These types of exactions are quite common now and most developers include
the cost of exactions into their overall budgets.
Communities are now beginning to demand other sorts of amenities through
exactions. For example, developments in San Francisco
are required to contribute public art and day care facilities. In Arlington, Virginia, a developer had to
pay for installing a tunnel underneath a public street to the Metrorail station.
(Porter)
Issues:
1. Impact fees and exactions can only be used for capital
projects and not for operations, repair, or maintenance.
2. Impact fees are only a supplemental revenue tool to
be used in conjunction with the locality’s capital improvements program, and
they cannot be relied upon as guaranteed funding since they are dependent
upon the rate of growth.
Best
Practices/Examples:
Ø
Hjillsborough County, FL, Levies Impact
Fees for Residential Development
Recommendations:
Impacts fees and exactions encourage developers
to place projects in areas already served by public services to minimize the
development’s impact on the area, and therefore the amount of impact fees
they are required to pay.
XI. Purchase of Development Rights (PDR)
This
program is an effective tool to target economic development in certain areas.
With a PDR program a local government is allowed to create service
districts where the purchase of the development rights occurs so that the
land can be dedicated as easements for conservation, open space or agricultural
production. These service districts allow the locality implementing the program
to impose special assessments on a specific area that may be beneficial to
the community.
Issues:
1. Some governments require a dedicated source of stable
revenues for PDR programs. This is
an issue because most localities don’t have a dedicated source of funding
to establish such a program.
2. Most local governments simply do not have the funds
required for such a program and counties are further restricted in that they
cannot incur debt.
Best Practices/Examples:
Ø
Virginia Beach, VA has a Funded
PDR Program
Additional Resources
Essiks, D. Schmidt, H., Sullivan. Fiscal Costs and Public Safety
Risks of Low-Density Residential Development on Farmland. 1999.
Impact Fees
Page. Prepared by EMK Consultants
of Florida. http://emkfla.com/impactfees.htm
Planning
Commissioner’s Journals’ “Planners Web”; City and Regional Planning Resources. Prepared by Planning Commissioners. http://www.plannersweb.com/
Porter, Douglas R. 1997.
Managing Growth in America’s Communities. Washington, Island Press.
Smart Growth
Initiatives. Prepared
by the Maryland Office of Planning. http://www.op.state.md.us/smarthgrowth/initiatv.html
Sprawlwatch
Clearinghouse. Prepared
by Sprawlwatch Clearinghouse. http://www.sprawlwatch.com
Solving Sprawl.
Prepared
by the Sierra Club. http://www.sierraclub.org/sprawl/report98/costs.html
Virginia’s
Growth Management Tools. Prepared
by the Virginia Chapter of the American Planning Association. June 1999.