The Rise and Decline of the "Smart Growth" Crusade

(Reprinted with permission from Innovation Briefs, Vol. 11, No. 4, July/August 2000. Contact Kenneth Orski at Urban Mobility Corporation for more information.)

Introduction

A year ago, the Sierra Club mounted a major anti-sprawl campaign in the hope of creating a grassroots movement that would catch the attention of politicians and lead to stricter growth controls. Vice President Gore picked up on the theme and made "smart growth" part of his early campaign rhetoric, hoping to capitalize on suburbanites' growing frustration with mounting traffic congestion and long commutes. But one year later, the crusade for smart growth appears to have lost steam.

Presidential candidate Al Gore has toned down his anti-growth rhetoric, having no doubt realized that there is no political capital to be gained in demonizing the suburbs where most of his potential electorate lives. Opinion surveys find no sign of a grassroots sentiment in support of growth controls. On the contrary, people seem to find the sprawling suburbs eminently livable despite lengthy commutes. Nor do demographic data show any changes in metropolitan development patterns. Indeed, a new study by the Department of Housing and Urban Development shows that the booming New Economy is fueling dispersal to the outer edges of metropolitan areas as never before. Three case studies illustrate the widening gap between the rhetoric of smart growth crusaders and the realities of metropolitan growth.

Maryland's Smart Growth Policy - A Paper Tiger?

Three years ago, Gov. Paris N. Glendening signed an innovative package of laws intended to stop unplanned growth in Maryland, particularly massive projects such as big-box retail stores that consume open space and generate traffic on the fringe of metropolitan areas. The intent behind the Smart Growth Areas Act, as the legislative initiative was named, was simple. Public funds should not be used to fuel development in areas that are not served by public water and sewer systems, roads and schools. Under the law, counties were to submit plans to the state showing where they want growth to occur. Projects that fall outside the boundaries of these "priority funding areas" would be ineligible for state assistance for public infrastructure.

Glendening first embraced the concept of smart growth after learning about the fight to stop Wal-Mart from coming to Chestertown, a rural community on the Eastern Shore in Maryland. The idea has since found favor with anti-sprawl activists as a national model, and Glendening has been selling its virtues around the country.

But what looked good in concept has proved to be a lot tougher in practice. Maryland's smart growth policy does not give the state power to veto a project. The state can only refuse to fund the necessary public infrastructure. But large developers and retail giants such as Wal-Mart do not need public money. They can finance the necessary roads and sewers themselves. The result is that in every town where attempts have been made to stop Wal-Mart (and there have been at least four such attempts), the giant discount store has won. "Smart growth is largely proving to be a paper tiger," one Maryland county official told us. "As long as developers are paying their own way, and the projects benefit the local economy, we will not stand in their way."

(Based in part on a report in The Washington Post, "Maryland Land Use Weapon Backfires," May 14, 2000.)

New Jersey's Growth Control Efforts Show Meager Results

In November 1998, New Jersey voters approved by a large majority a constitutional amendment to spend almost a billion dollars over a period of 10 years for open space acquisition. The measure aimed to preserve one million acres or half the state's undeveloped land, by buying it outright or paying owners to give up the right to develop it. In signing the measure, Governor Christine Todd Whitman said New Jersey would become a national model for controlling growth and protecting open spaces. But talking about sprawl and stopping it are two very different things.

New census figures released in March 2000 show formerly rural parts of New Jersey to be growing faster than any other part of the state. Representative of the situation is the failed effort to stop Merrill Lynch from building a 3.5 million square foot office campus (with room for expansion to 5.5 million square feet) in a cornfield in rural Hopewell, a corner of the state that looks more like Vermont than New Jersey. Governor Whitman gave the project her political and financial blessings. If she had any misgivings, they were muted when the company made it plain that it was ready to move its 3,500 jobs to neighboring Pennsylvania if it were not allowed to develop the Hopewell site. When state officials raised the possibility of building in a city like Trenton which has acres of unused industrial space, Merrill Lynch demurred, saying they wanted a suburban-style campus.

The Merrill Lynch episode is emblematic of the growth trends throughout the state of New Jersey. Of the 9.9 million square feet of office space authorized by local officials last year (1999), nearly two-thirds is being built in an outer ring of largely rural counties of Morris, Somerset, Hunterdon, Monmouth, Mercer and Ocean. Between 1986 and 1995, before the building boom began in earnest, Somerset County consumed 10 percent of its open space, Monmouth developed 9.1 percent, Mercer 8.8 percent. Despite Governor Whitman's and the state legislature's best intentions, the forces of growth are relentlessly pushing outward.

The New Demographics of Housing Demand

A strong economy, relatively low interest rates and new mortgage lending policies have made home ownership attainable to an ever-growing proportion of the population. Mortgage interest rates, though not as low as they were a year ago, are still under 8 percent. These low rates have coaxed many moderate-income buyers into the housing market, helping push home ownership in the first quarter of 2000 to a record 67.1% of all households, according to a new study by the Department of Housing and Urban Development, released on June 12.

Fueling the housing demand is the availability of new low-down-payment mortgages. The country's biggest mortgage buyers, Fannie Mae and Freddie Mac (which buy more than half of the nation's mortgage loans), have lowered the bar on down payments to open up opportunities for low-income households, traditionally left out of the housing market. About a third of the new mortgage loans made in 1999 were extended to borrowers with down payments of as little as three percent, according to the Mortgage Bankers Association of America. Partly as a result, minorities are buying homes as never before. Most of this demand is focused on housing in the outer suburbs where land is still comparatively cheap and mass production methods keep housing affordable.

Also contributing to the suburban housing demand is immigration. Unlike the early 1900s when immigrants flocked to the cities, many of the new immigrants are settling in the suburbs. Of immigrants who arrived between 1990 and 1998, 45 percent reside in suburbs, according to the HUD study. Just as low mortgage policies under the GI Bill of Rights encouraged the first wave of suburban migration in the 1950s, the new policies to promote home ownership among the have-nots are fueling the current wave of suburban expansion.

COMMENTARY

In the final analysis, the success of anti-sprawl efforts depends on whether a political constituency can be mustered to aggressively champion growth controls. Creation of just such a constituency was the goal of the Sierra Club and other conservation-minded forces. It was their hope that concern about the effects of sprawl - long commutes, loss of open spaces, daily traffic jams - would eventually energize millions of new activists to form a grassroots anti-sprawl movement. But leaders of the smart growth movement now grudgingly acknowledge that selling the benefits of denser development is harder than they thought.

Mainstream America does not appear prepared to embrace the values espoused by proponents of managed growth: living in old-fashioned town centers crammed with stores and apartments, owning homes on tiny lots, renouncing automobiles in favor of bicycles and transit. Young families looking for affordable housing seem unwilling to accept steeper housing prices, crowded schools, lack of privacy and other consequences of urban-like settings as the price of more orderly land use patterns. Maryland's and New Jersey's experience and the data from the new HUD study suggest that advocates of growth controls are losing the battle for the hearts and minds of suburban residents.

If some hate sprawl, it seems that many more hate its cure, density.