Development:

CSG's Schwartz, NCPPR's Almasi debate the smart growth movement, property rights

The Virginia Supreme Court just threw out controversial slow-growth regulations passed by Loudoun County, Virginia. The ruling could allow more than 50,000 homes to be built in a county that is trying to contain rapid suburban development. And in November, Oregon voters passed a property rights measure that some feel could be fatal to that state's strict development limits. Oregon is often cited by "smart growth" advocates as a model for combating sprawl. What does all this mean for the "smart growth" movement? Stewart Schwartz of the Coalition for Smarter Growth, and David Almasi, director of the National Center for Public Policy Research, join OnPoint to discuss the state of the battle over sprawl, smart growth and property rights.

Transcript

Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Today we're joined by Mr. Stuart Schwartz, the executive director for the Coalition for Smarter Growth and David Almasi, the executive director for Public Policy Research at the National Center. Also joining us is Brian Stempeck, the E&E Daily senior reporter and also a reporter for Greenwire. Thank you both for being here.

Stuart Schwartz: Thank you.

David Almasi: Thank you.

Colin Sullivan: Our topic today is smart growth versus property rights. Mr. Schwartz I'd like to start with you. There's an interesting case going on in Oregon right now. Can you talk to me about what's going on in Oregon and why it's important for the future of antisprawl smart growth?

Stuart Schwartz: We actually work in the D.C. region, my group, so I'm observing it from afar to tell you the truth, a referendum before the voters that threatens to undo many of the smart growth laws that have been achieved in the state of Oregon. Laws that actually made Oregon, in our view, a very competitive state and a great place to live. It's attracted lots of folks. Portland has revitalized and it's one of the more popular cities in America. You have great preserved forests and farms in the state, so much of that could be at risk. My understanding of Proposition 37 is that local governments would actually have to compensate landowners for their decisions, zoning decisions, and if not, provide waivers to allow certain development proposals to go forward.

Brian Stempeck: This is basically having a huge effect. For people who don't know, Portland is the city, they basically drew a circle around the city, an urban growth boundary and said, "You can't build or develop outside of this boundary." So now for people who want to develop on that fringe, some of that farmland, now some of the cities are being forced to perhaps reimburse them. There's also some talk about this going nationwide. Could this be impacting some of your efforts in Maryland and Virginia in trying to get smart growth going there as well?

Stuart Schwartz: Not necessarily, we haven't, there's some things that we do differently here certainly in the work that we do. We think there's a threat to smart growth, mainly industry based, to these provisions, but what really is still out there is the community frustration with growth, with the loss of open space, with the traffic congestion it creates and with its cost. That's not going away and as a community we still have to work together to figure out how to address growth and how to create great communities.

Colin Sullivan: Mr. Almasi, a lot of property rights advocates, like yourself, are big fans of Oregon Measure 37. Can you talk about why?

David Almasi: Well, it reinforces the Fifth Amendment to the Constitution, which says, "You can't take private property for a public use without just compensation." So if anything, this Measure 37 simply reinterprets the Constitution the way it was meant to be interpreted and allows people that have had property, that have had every intention to develop the property or put it to some kind of use, to be able to use it.

Stuart Schwartz: Actually, what David and his group is doing is actually substituting their judgment for that of the learned justices of the Supreme Court, which have never gone this far in their interpretation of the Fifth Amendment takings clause of the Constitution. This is something almost like regulatory takings, where you're compensated for almost any diminution in value of your property. Ever since we've had a society, and one of the reasons we have a society is to protect property rights because if anyone were to assert absolute property rights against another we're back into that state of nature, we might as well be on the frontier and all have to be armed. So property rights goes both ways, and I fear that with this law many communities, many neighbors will lose important protections and important public process in terms of how their community grows and their property rights will be affected by some of the absolutism that this creates.

David Almasi: But the way that the Constitution is written it says, "You can't take private property for public use without just compensation." There's no extra comma that says, "unless you're building a hospital, unless you're containing growth." If we had this for the First Amendment we wouldn't stand up for it. The press would never want to stand for it or any other of the amendments, so we shouldn't be letting the Fifth Amendment go by the wayside while all the other amendments are enforced.

Brian Stempeck: At the same time, what we're looking at here is Oregon's law, they're seen at the most progressive state in the country on urban planning, on smart-growth restrictions, which they've been doing for the past 30 years. A lot of people would say it's been effective.

Stuart Schwartz: Yes.

Brian Stempeck: Portland has a pretty impressive downtown. They really have rebuilt a lot of the, kind of, poorly renovated areas. Doesn't this law, this proposition, have the potential to undo all that and what some of the people might say is very positive developments in a city that otherwise might not have been redeveloped in a meaningful way?

David Almasi: Well one of the things we have to look at is that the property values in Oregon, in the Portland area have gone up. To a degree that its making it very unaffordable for a lot of people. That's the same thing that we're having happen here in the Washington, D.C., area. I got a property tax assessment the other day, my house has gone up, in six years it's gone up over twice what I paid for it.

Brian Stempeck: But some of that is market. We don't have growth boundaries in Washington.

Stuart Schwartz: I have to agree. I mean, right, there's no difference, we're seeing very little difference. In fact property values often go up in places without growth boundaries higher than other places. In fact, most of the recent research about Portland has shown that its property values and affordability is in the middle range of most of the communities in the country and certainly much better than a lot of the West Coast cities that don't have growth boundaries. So it is still a very affordable place. One of the reasons the D.C. region is having a challenge is, first of all, it's a great job generator. The federal government is spending more money than ever. More people are coming to take advantage of those jobs, but it's interest rates, it's the mortgage subsidies and so forth, have all contributed to these increases in property, in prices that people are facing. It has nothing to do with the growth boundary.

David Almasi: We're going to have people that want to come into this area and they want to have a house and they want to have a single-family home and you have barriers to entry into the system, you're going to have a problem --

Brian Stempeck: But at the same time, we don't have the same barriers in Washington or in Boston or New York. Those areas are also seeing rapid growth in the housing prices, whereas Portland's not. I mean, how do explain the difference, the disparity there?

David Almasi: Well see now to go into here, we've got Fairfax County which has created, I think, it's 400,000 jobs recently, but they've only had 200,000 units of housing built. So you have a problem right there and the place that's going to hurt the most is for the people who want to get into the market, young families, the minorities were moving up the economic ladder, the other people that are just getting up on their feet and they wanna buy, young families want to buy a single-family home. They can't do that anymore. They're forced into situations that they don't want to be in. So one of the things they're going to do is they're going to move out further and further and that's going cause even more sprawl.

Stuart Schwartz: Well again, there's no such thing as a growth boundary in the D.C. region so you can't blame smart growth for this problem. In fact, the environmental community and the smart growth community have been leading the way in promoting development in places like Fairfax, close to jobs so that people can have shorter commutes and more time with their families. We're doing that all the time. We're working with neighbors because it has to be well designed, but we need development of transit and we're supporting it and recently at a conference, 300 people attended a reality check conference here in the D.C. region. People supported more housing close to jobs near transit and revitalization of cities.

Brian Stempeck: Well let's talk about some of the local policies for little while. The Washington Post recently, couple months ago, did a three-part series looking at Maryland, which is considered also a very progressive state when it comes to urban planning, and what The Washington Post found was all the policies put into place by Governor Glendening, former Governor Glendening, didn't do much. The overall density of Maryland hasn't changed. A lot of the development that they were hoping to aim in certain areas around transit hasn't worked. I mean, isn't that a failure of some of the policies that were put in place?

Stuart Schwartz: Well that's not entirely true. I mean, first of all, do you turn around 50 years of planning and zoning policy in America in a couple of years or one governor's term? Absolutely not. What we're seeing in the D.C. region is some of the highest prices are in the city, near transit, Arlington, Alexandria, Bethesda, Maryland, the inner suburbs, near transit because of the high demand for it. We're seeing real change and very rapid change in our region. Yes, we're seeing the outer suburban growth as well, but we're seeing a big shift. Part of it is changing demographics. We have more empty nesters, people without children, tired of mowing the lawns, young professionals looking for great communities and that's really driving the demand for great walkable smart growth communities.

Brian Stempeck: David, what's your take on the effectiveness of some of the smart growth policies in Maryland and Oregon?

David Almasi: I think it's raising the housing prices, and it's sending people further and further out. I know that when I bought my house six years ago we were lucky. We got right next to the Beltway. If I tried to find that kind of place again today I'd be going to Fredericksburg or, I mean, there's commuter communities for Washington and Pennsylvania now. I'd be going further and further out.

Stuart Schwartz: Name one smart-growth policy that has affected housing in Fairfax County negatively.

David Almasi: I won't go with Fairfax County because I know Loudon County, we've been talking about rural crescents and things like that to stop people from building more houses.

Stuart Schwartz: Well we have 39,000 houses that have not yet been built in Loudon County that have already been approved to be built and haven't been built and if they're building 5,000, 6,000 a year there's still a few years of that and there's additional capacity to double the size of the county to --

David Almasi: But 5,000 or 6,000 ... are not going to get the amount of jobs that are being created. You're going to have people moving into this area, looking for places to live in they're not going to find them because they don't have --

Stuart Schwartz: They have room to double the population --

Brian Stempeck: Let's go back to Oregon for a second. Talk about how some of these policies actually go into effect. You have this Oregon policy that is basically being overturned by this proposition and other states are saying they're going to follow suit. There's real evidence that this is going to happen elsewhere. Isn't this a problem for the national smart-growth movement for the --

Stuart Schwartz: It's not a problem for the national smart-growth movement. It's a problem for every community in America. Do you want a gas station next you? You're going to get a gas station next you if the government can't compensate --

Brian Stempeck: That's not smart growth that's just basic zoning.

Stuart Schwartz: But that's what still happening. They're not just undoing smart growth, they're undoing zoning with this. There is no money in our, we don't have enough money at the federal, state and local level to compensate every land owner for every decision that affects the value of a property. They're undoing environmental laws, health laws, safety laws, not just zoning laws by the effect of this legislation. That's a real problem.

Colin Sullivan: Mr. Almasi are we likely to see another Measure 37 in other states out West, especially Washington, Montana --

David Almasi: Sure. In places where the government has been restrictive and is taking away people's property rights you're going to see a rebellion. We've seen that in Oregon. We've seen that in other places around the country, and its going to continue to happen as long as the government is trying to take away people's rights.

Colin Sullivan: Was it a blow, what the Oregon attorney general said, I believe, it was yesterday he said, basically, a land owner who is entitled to sell his land under Measure 37, who owned his land before 1973, can't then pass on that right to a developer. Is that a blow to property rights advocates like yourself?

David Almasi: It certainly would be an impediment, but I don't think that we have a lot of people out there just hoping to sell their rural farms to turn them into nuclear power plants or gas stations or something like that. It's simply that some people want to be able to sometimes just pass the land onto their children. They want to subdivide it for their children and that's, in some places, in South Carolina in particular, you've had smart-growth laws that have said, "No, you can't give your land to your children because it would be impeding the smart-growth policies."

Stuart Schwartz: I don't believe that is the case. There's nothing that affects inheritance whatsoever in this and in fact, you can pass on your land. In fact, a number of different policies including purchase and development rights as well as conservation easements have actually allowed people to realize value from their land while also passing on to their heirs, protecting farmland for future generations and income generating properties that are farms. As for the government taking away property rights, most often the government is providing value to landowners. We provide it with our police and fire services, the infrastructures, schools, roads, water and sewer. You know, perhaps, the opponents of smart growth would like, in this case, from now on that all new development pay the full cost of all service demands that they create because that would be the fair way to do it. Flip it and turn it on its head.

Colin Sullivan: What's the real driving force behind measures like Measure 37? I mean, you say landowners, you say farm owners, but isn't it the timber companies that are driving this kind of thing? I mean, what would you say that? Who's really behind the sorts of measures?

David Almasi: I think it's a grassroots movement among the citizenry. I mean, people are finding that they can't use their property and they're angry about that because they've tended to that property, they've taken care of it for so long, sometimes with the intention of some day being able to sell it and then they're finding they can't do it.

Stuart Schwartz: I think the big, from what I've heard from our friends in Oregon, is the big movers were the big timber companies, big industry, who, you know, everybody's in the real estate business now whether you're a tech company for you're in timber. Everybody in America is in real estate given the subsidies for real estate nowadays and they wanted to reap windfall profits. In fact, it's going to be folks like the big box retailers who are probably going to get the greatest windfall out of this. What are you going to do? Are they going to say no to the big box retailer, that they can't develop in that particular property, the big Wal-Mart next to a neighborhood? But you can't say no, now you have to compensate them. It just doesn't make any sense.

Colin Sullivan: What do you then say then to the small land owner who wants to sell his land, but is not able to? Someone in Oregon, a truly, a small farmer that wants to go out, that is prevented from doing what he wants to do as Mr. Almasi said.

Stuart Schwartz: We've never stopped the sale of land. You can sell land. You can realize value from your land and in America you're seeing farmland is going up in value just like other land. Can you reap the same profits as putting 200 houses one particular parcel? No, but the government has never, until this piece of legislation, been asked to compensate people for prospective value of the land. You or I are not compensated if our stock doesn't go up and if some federal regulation affected the stock price of the stock we own, that's never happened before, is that where we're going to next?

Brian Stempeck: David, a lot of property rights groups would argue that when it comes to talking about denser development, smart growth type development, that's a private-sector responsibility really. If developers want to go out and build account lands in Gaithersburg type development with a lot of houses, kind of a traditional setting. That's a prerogative, people can buy it. Shouldn't the private sector be the ones handling this? I mean, why is this the responsibility of Portland to do or a city government actually do?

David Almasi: Well, I don't think it is. I mean, if people need housing, we need to have housing for them. Certainly, if we're talking about the homeless we're going to be compassionate. How about the single families, or the new family the wants to buy a home? Has one child, wants to have a kid, wants to have a yard, wants that have a dog, wants to live in a good school district, why can't we look out for them and be as compassionate to them as we are to those unfortunate enough to be on the street?

Brian Stempeck: There was one study, you recently authored a study, a little while back the year ago or so, saying that some of these smart-growth policies might actually have an effect on lower income people not being able to buy homes. Actually, it breaks down along racial lines too. Can you explain, kind of, the base of that for us?

David Almasi: Well, it's economics. Basically, that the people on the lower rungs of the economic ladder aren't going to be able to buy homes under more restrictive policies and that is generally African-Americans, Hispanics, who are just getting up the economic ladder. The African-American rate of homeownership is much lower than whites. Something like this might be an impediment to new home ownership.

Stuart Schwartz: Absolutely unconnected to the African-American homeownership issue. It's a whole different issue. In fact, the inequities we're seeing in the D.C. region is that the speculative development on the west side of the region, led by the business community, has taken jobs and investment away from the African-American communities on the east side of the D.C. region. So we have a county 60 percent African-American, sixth longest commutes in the nation because they don't have enough jobs and they're just right outside D.C. Yet we have 15 transit stations that we could take advantage of and what we're finding is the wealthier counties are actually gaining all the new infrastructure and we're not benefiting those folks. It's smart growth which is going to do a better job of creating better access to jobs for all communities. We're actually not saying no to housing. The problem, right now, has often been zoning policies by governments that are not smart growth, which is the creation of too much land in parking lots for strip retail and so forth. Talk about the Fairfax County, Virginia example, like many of our suburbs, look how much land we've consumed in retail and office parks and so forth that could be used for housing. That's what the smart-growth community is working on, more housing closer to jobs for people.

Colin Sullivan: Moving to the national level, what are some of the pieces of legislation on Capitol Hill that either one of you are tracking in terms of likely effect on smar- growth policies? The transportation bill, what kind of effect would that have on smart growth policies?

Stuart Schwartz: That's a real problem, it's become a big pork bill and it's a pork bill for big truckways, for big highways, that are extremely expansive and don't relieve people's congestion. It's undermining the funding for transit, so that's a piece of it.

Brian Stempeck: How is it undermining, I mean, it has like $60 billion for transit. How is that undermining transit?

Stuart Schwartz: Well that's far less than the funding that goes into highways.

Brian Stempeck: But that's always been the way, it's an 80/20 split, it's been that way for decades.

Stuart Schwartz: I realize that, I realize that, but we're also losing a lot of other programs that are great for linking transportation and development that were in the first ISTEA Bill of 1991, so really now, we're not actually developing a sensible transportation plan at the federal level that's really designed to relieve people's congestion, it's much more a bit of pork. I think the other thing we should talk about is housing policy, the cuts to the HUD program. If you're concerned about lower income communities you should be concerned about the significant cuts to the HUD housing programs for lower income communities. So even as we have additional subsidies for homeownership, which are great, we're not funding and taking care of the lowest income folks so they can have homes and places to live because we're cutting these HUD programs.

Colin Sullivan: Mr. Almasi, what's your take on the transportation bill first?

David Almasi: We haven't really been tracking that much legislation, so I really can't authoritatively discuss that, unfortunately.

Colin Sullivan: Mr. Almasi, Mr. Schwartz, thank you both for being here, I appreciate it. Brian thank you for being here.

Brian Stempeck: Thank you.

Colin Sullivan: Join us next week for another edition of OnPoint, until then I'm Colin Sullivan for E&ETV.

[End of Audio]

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