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June 2007
Special Research Conference Issue: Plenary Sessions
Reforms needed to free—not force—market to provide alternatives to sprawl
Jonathan Levine
Picture a new low-density, auto-oriented development. To some, this is evidence of the market meeting buyers’ preferences; to others, it is a sign of market excess and an argument for government intervention. These are “polar opposites” of the land use debate, said Professor Jonathan Levine of the University of Michigan, but both are based on a false assumption: that the free market carves this pattern of urban form. In reality, he said, government regulations create this pattern—but because the regulations are packaged as local zoning laws, they are mistakenly perceived as “the free market.”
Levine, professor and chair of the Department of Urban and Regional Planning, made his remarks at the CTS Spring Luncheon on May 1, which was held as part of the 18th Annual CTS Transportation Research Conference.
The most common belief regarding transportation and land use, Levine said, is that Americans want sprawl, and the market is uninterested or incapable of providing alternatives. If this is true, then policy reforms would need to force the market to build transit-oriented, high-density development. These policies would be justified only if benefits, such as reduced pollution and obesity, could be proven. But because research on this is split, he said, “we lack the rationale for reform.”
Reality, however, suggests a new paradigm: The market prefers more compact development but government regulations exclude it. In this framework, Levine says, there is a robust market for alternatives to sprawl, driven by profit and changing demographics but constrained by municipal zoning. Policy reform would thus free the market to meet the rising demand for high-density development. Benefits would not need to be proven because this reform is an expansion—rather than restriction—of choice. Why does that matter? “It leads to two competing ideas,” he answered. “Sprawl as market failure or sprawl as government failure.”
The majority opinion of a number of research studies, some extending back decades, supports the view that local regulations accelerate sprawl. There are “scores of stories” of disputes between developers and communities about high-density restrictions, he said. In his own research, which included a national survey of developers, Levine found that most developers want to build at greater density than regulations allow in inner-suburban areas. In effect, Levine said, these policies amount to “government preference for one American Dream over competing versions of others.”
Compact redevelopment in Salonika, Greece
How does this happen? In a “clever redefinition,” Levine said, local regulations are viewed as a kind of market force. “Somehow, when we aggregate people at the local level, we don’t see it as government regulation,” he observed.
Local zoning laws can be motivated by a number of factors, such as reducing traffic or school overcrowding. Residents of wealthier areas may prefer zoning for large lots, believing this keeps low-income citizens from moving in to take advantage of higher levels of services. “I would also be remiss to omit the racial dimension,” Levine added.
Exclusionary zoning is considered acceptable because people can move to competing jurisdictions and markets. This view, however, “doesn’t acknowledge the extent to which the market is based on the draconian hand of zoning,” Levine said. It also doesn’t consider the huge costs imposed on residents and communities in terms of increased travel and commute time. “When we exclude people, we incur costs,” he said.
Unique in this country, Oregon is taking a different tack. Its transportation-planning rule states that local governments should adopt land use and subdivision regulations to reduce reliance on the auto and allow transit-oriented development (TOD). “The state is taking away the right to regulate out TOD,” he argued. “It is a market-enabling statute.”
Levine then illustrated how cities in other countries, such as Salonika, Greece, still exhibit very compact redevelopment. “This is the ordinary course of cities: they grow out, and they grow up—except those guided by U.S.-style zoning policies, which have short-circuited the ordinary course of urbanization,” he said.
In contrast is Sunnyvale, Calif., in Silicon Valley. Areas zoned for single-family housing were “zealously guarded by neighbors” as the region underwent a radical transformation, Levine said. Lots valued at $1 million commonly contain a $200,000 structure. Developers see huge potential profits—perhaps $5 million in structure per $1 million of land—but zoning means it can’t happen. What’s more, “the transportation impact is huge,” he said. “Commute costs are imposed on the rest of the world.”
In closing, Levine called for new ways of thinking about transportation and land use and for breaking out of institutional silos. Policy reform is needed not because of potential measurable benefits, but because of the huge interest in the population—estimated at 30 percent of households—in alternative development patterns. “It is incumbent upon us to seek those reforms to allow the market to express that preference,” he concluded.