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The fiscal impacts of residential sprawl

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Title:
The fiscal impacts of residential sprawl an appraisal of development patterns on Colorado's front range
Creator:
Heavin, Jane Dolores
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English
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474 leaves : illustrations ; 28 cm

Subjects

Subjects / Keywords:
Housing development -- Front Range (Colorado and Wyoming) ( lcsh )
Fiscal policy -- Front Range (Colorado and Wyoming) ( lcsh )
Land use -- Front Range (Colorado and Wyoming) ( lcsh )
Municipal services -- Finance -- Colorado ( lcsh )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

Notes

Bibliography:
Includes bibliographical references (leaves 442-454).
General Note:
Department of Urban and Regional Planning
Statement of Responsibility:
by Jane Dolores Heavin.

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University of Colorado Denver
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Auraria Library
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
40462326 ( OCLC )
ocm40462326
Classification:
LD1190.A78 1998m .H34 ( lcc )

Full Text
THE FISCAL IMPACTS OF RESIDENTIAL SPRAWL:
AN APPRAISAL OF DEVELOPMENT PATTERNS
ON COLORADO'S FRONT RANGE
Jane Heavin
University of Colorado at Denver
1996


THE FISCAL IMPACTS OF RESIDENTIAL SPRAWL:
AN APPRAISAL OF DEVELOPMENT PATTERNS
ON COLORADO'S FRONT RANGE
by
Jane Dolores Heavin
B.A., Ohio State University
A thesis submitted to the
Department of Urban and Regional Planning
University of Colorado at Denver
in partial fulfillment
of the requirements for the degree of
Master of Urban and Regional Planning
1996


This thesis for the Master of Urban and Regional Planning
degree by
Jane Dolores Heavin
has been approved for the
Department of Urban and Regional Planning
by
Thomas Clark
Date


Heavin, Jane Dolores (M.U.R.P., Urban and Regional Planning)
The Fiscal Impacts of Residential Sprawl:
An Appraisal of Development Patterns on Colorado's Front Range
Thesis directed by Professor Thomas A. Clark
ABSTRACT
In Colorado, the fiscal effects of density and residential development
patterns are important not only because the state has recently experienced
rapid population growth, but also because growth rates, rivaling those of the
early 1980s, may continue into the foreseeable future. Moreover, since
1992, all levels of government within Colorado must manage their finances
within the constraints of Amendment One.
This study tested the null hypothesis that neither density nor
development patterns produce fiscal impacts on the residential share of
costs and revenues of local governments. The fiscal effects of net density
and undeveloped land area on the estimated, residential share of municipal
costs for services, capital improvements, debt service, and revenue were
statistically examined in a sample of thirty-four Front Range municipalities,
and a sub-sample of eighteen small communities. Four case studies were
conducted to ascertain the fiscal impacts of their annual, residential
development activities between 1984 and 1990.
Previous studies of the fiscal implications of development patterns and


growth management programs were reviewed. While their findings were
not absolute, taken together, they do provide evidence that compact,
contiguous development is fiscally advantageous for local governments.
The functional requirements of any methodological approach preclude
unequivocal conclusions. Any study of this type must choose its variables
from a number of ever changing, interrelated factors, which affect public
costs and revenues. It must also make many assumptions, for instance,
about existing capacity of infrastructure, standards for public services, and
linkages between and among the variables.
Within its structural limitations, this study did find evidence that density
and development patterns do produce discernible fiscal effects, particularly
in small municipalities. The findings suggest that more compact, contiguous
development patterns provide fiscal efficiency for both the per capita costs
of the local provision of services and facilities to residential uses and the per
capita revenues generated from residential uses.
In addition to fiscal impacts, it is generally acknowledged that
development patterns produce environmental, social, and political impacts;
the potential for "sprawl" patterns to create disadvantageous consequences
is especially of concern. To provide an overview of how "sprawl" may
affect, and be restrained, in Colorado, some of these concerns and
alternative planning strategies have been briefly outlined.
IV


This abstract accurately represents the content of the candidate's
thesis. I recommend its publication.
Thomas A. Clark, Professor
v


TABLE OF CONTENTS
CHAPTER PAGE
1. THE SIGNIFICANCE AND RELEVANCY OF RESIDENTIAL
GROWTH PATTERNS AND THEIR POTENTIAL
FISCAL EFFECTS ON LOCAL GOVERNMENTS
Introduction............................................... 1
Relevancy of the Study.................................. 6
Population Growth in Colorado........................... 8
Amendment One and the Implications of
Tax and Spending Limitations.............................. 11
Potential Implications of Amendment One .................. 14-
References ............................................. 16
2. THE FISCAL IMPACTS OF URBAN DEVELOPMENT
PATTERNS A REVIEW OF THE LITERATURE
Urban Sprawl and Growth Management...................... 18
Defining the Term "Urban Sprawl" ......................... 20
The Economic, Social and Environmental
Impacts of Sprawl........................................ 23
Sprawl Development and Density............................ 32
Direct Costs Associated with Sprawl...................... 36
The Costs of Municipal Services in Residential Areas 37
The Costs of Sprawl................................ 40
Critiques of The Costs of Sprawl................... 45
Public Service Costs of Alternative Development
Patterns: A Review of the Evidence .............. 47
Municipal Service Pricing: Impact of Fiscal Position . 48
Search for Efficient Growth Patterns .............. 49
vi


CHAPTER
PAGE
2. Costs of Alternative Development Patterns:
A Review of the Literature .................... 50
Summary................................................... 56
Growth Management Issues and Studies ..................... 56
History of Local Growth Management Programs............ 57
Growth Management Issues.................................. 60
State/Regional Growth Management Programs................. 73
Fiscal Efficiency of Regional Growth Management........... 82
State/Regional Planning in Colorado....................... 83
Regional Planning in the Denver Metro Area............. 91
Summary and Conclusions of the Literature Review......... 95
References............................................... 104
3. DO THE DENSITY LEVELS OF DEVELOPMENT PATTERNS
AFFECT PUBLIC COSTS AND REVENUES?
- HYPOTHESIS AND METHODOLOGY
\
Overview of Study .................................. 109
Hypothesis.......................................... 111
Scope of Study and Methodology ..................... 119
Study Area and Data.......................... 119
Previous Studies ............................. 124
Approach to This Study ....................... 125
The Case Studies.................................... 142
Summary........................................... 148
References............................:............150
vii


CHAPTER PAGE
4. THE FISCAL EFFECTS OF RESIDENTIAL DEVELOPMENT
PATTERNS ON PUBLIC COSTS AND REVENUES -
- FINDINGS AND ANALYSIS
Introduction.............................................. 153
Findings from the Study for Per Capita Costs............. 160
Fiscal Effects of Net Density on the Estimated
Residential Share of Per Capita Costs.............. 162
Fiscal Effects of Undeveloped Land on the Estimated
Residential Share of Per Capita Costs.............. 182
Fiscal Effects of Income Status and
Rate of Growth on the Estimated Residential Share
of Per Capita Costs ............................... 196
Findings for Per Capita Revenue and Net Effects.......... 202
Fiscal Effects of Net Density on the Estimated
Residential Share of Revenue and Net Effects .... 205
Fiscal Effects of Undeveloped Land on the Estimated
Residential Share of Revenue and Net Effects .... 219
Fiscal Effects of Income Status and
Rate of Development on the Estimated Residential
Share of Revenue and Net Effects................... 227
Detailed Findings From the Case Studies ................. 232
Castle Rock, Colorado ............................. 234
Findings from Fiscal Impact Analysis .... 241
Analysis and Conclusions . . ............. 277
Parker, Colorado................................... 283
Findings from Fiscal Impact Analysis....... 291
Analysis and Conclusions................... 320
viii


CHAPTER
PAGE
4. Louisville, Colorado ........................... 325
Findings from Fiscal Impact Analysis.....332
Analysis and Conclusions ....................361
Thornton, Colorado .............................. 366
Findings from Fiscal Impact Analysis ........374
Analysis and Conclusions ................... 407
References............................................... 412
5. THE FISCAL IMPACTS OF RESIDENTIAL DEVELOPMENT
PATTERNS ON PUBLIC COSTS AND REVENUES
- CONCLUSIONS
How Is Sprawl Identified ................................ 416
Concerns About Development Patterns ..................... 417
Hypothesis and Methodology .............................. 419
Findings and Conclusions .............................. 422
State and Regional Planning Programs..................... 430
Planning in Colorado .................................... 435
Final Comments........................................... 437
References .............................................. 440
BIBLIOGRAPHY.................................................... 442
APPENDIX
Demographic and Development Data ........................ 456
Fiscal Data.............................................. 459
Definitions of Variables ................................ 463
Variables in Statistical Tests .......................... 465
IX


CHAPTER
PAGE
APPENDIX
Variables in Case Studies................................. 469
Castle Rock, Colorado..................................... 471
Parker, Colorado.......................................... 472
Louisville, Colorado ................................... 473
Thornton, Colorado ....................................... 474
x


LIST OF FIGURES
NUMBER PAGE
1.01 Coping with Growth .................................... 8
1.02 Projected Population Growth in Colorado................... 10
2.01 Neighborhood/Community Analyses
from The Costs of Sprawl ............................... 43
2.02 Concepts Often Incorporated into State/Regional
Comprehensive Growth Management Programs ............... 76
2.03 Vision Statement from Metro Vision 2020 ............... 93
3.01 The Front Range Study Area
Municipalities in the Sample.............................. 120
3.02 Basic Equations-Bivariate Correlation.................... 129
3.03 Basic Equations-Multiple Regression ..................... 130
3.04 Equations for Estimating Per Capita Taxes
and Other Own Source Revenues for Statistical Analyses . 141
3.05 Equations for Estimating Per Capita Taxes
and Other Own Source Revenues for Case Studies ...... 142
4.01 Urban Areas in Douglas County ....................* . 223
4.02 Castle Rock Boundaries and Planning Area, 1984-1990 . 226
4.03 Castle Rock Major Subdivisions
Approved between 1984 and 1990 ......................... 228
4.04 Castle Rock Aerial View, 1990 ......................... 239
4.05 Parker Boundaries and Planning Area, 1984-1990 ........ 274
4.06 Parker Urban Service Area, 1990 ....................... 275
4.07 Parker Major Subdivisions
Approved between 1984 and 1990 ... I.................... 276
4.08 Parker Aerial View, 1990 .............................. 285
XI


NUMBER
PAGE
4.09 Louisville Boundaries, 1984 and 1990 ...................... ^29
4.10 Louisville Urban Service Area, 1990 ..................... 33-].
4.11 Louisville Major Subdivisions
Approved between 1984 and 1990 ............................332
4.12 Louisville Aerial View, 1990 .............................. 342
4.13 Thornton Boundaries, 1984 and 1990 ...................... 3-7 -j
4.14 Thornton Urban Service Area . ........................ 372
4.15 Thornton Major Subdivisions
Approved between 1984 and 1990 ...............................373
4.16 Thornton Aerial View, 1990 334
A.01 Definitions of Fiscal Variables.............................. 463
A.02 Variables in Statistical Tests................................ 465
A.03 Variables in Case Studies..................................... 469
xii


CHAPTER 1
SIGNIFICANCE AND RELEVANCY OF THE POTENTIAL
FISCAL EFFECTS OF RESIDENTIAL GROWTH PATTERNS
FOR LOCAL GOVERNMENTS
Introduction
The growth patterns of residential development in urban areas have
significance for all local governments because of their potential to affect the
established quality of life, the environment, and public costs and revenues,
which are the subject of this study. The fiscal effects on the costs of
providing public services and infrastructure are especially of interest to
communities in Colorado, where there has been a recent surge of growth
coupled with tax and spending limitations enacted in 1992. If growth
increases public costs, and does not generate compensative revenues, local
governments and their residents could find that they have additional fiscal
burdens to manage (Ladd 1994).
The examination of the fiscal variations produced in public costs by
alternative patterns of development began in 1955 with the publication of
The Cost of Municipal Services in Residential Areas. There were then two
major concerns about development patterns. First, was their effects on the
cost of housing, and second, was their effects on the fiscal position of local
1


governments. During the last ten years, the concerns about the latter have
been intensified by taxpayers' resistance to increases in tax rates,
substantial cutbacks in federal aid to local governments, on-going, rapid
population growth, and the demise of the "growth is good" ethic (Frank
1989, 7).
If a community's costs for public services and infrastructure are less,
then, concurrently, its demand for revenue, could also be presumed to be
less. One of the primary premises of modern urban planning is that
contiguous, compact development promotes the efficient delivery of public
services and use of infrastructure, and planners routinely employ regulatory
policies and codes, such as comprehensive plans, growth management
techniques, and zoning, to encourage such development and to discourage
"sprawl." Efficient, as used in the context of this study, refers to
development which pays the specific costs it incurs for the provision of
public services and capital facilities, except where equity considerations
outweigh direct, fiscal considerations (James Duncan & Associates 1989,
1-14).
Sprawl type developments typically consume large quantities of land
which might be better utilized by the continuation of existing uses until it is
required for contiguous development by future growth. Frequently, sprawl
patterns leave intervening vacant land, which may, or may not, be built out
2


by later infill development, and since they may also feature large lot zoning
and be located at greater distances from central facilities, it is thought that
these patterns increase costs for public facilities and services. The concept
seems instinctively correct: development spread out requires more miles of
roads, sewer pipes, and water pipes than development clustered in a smaller
area. Yet, this thesis rests on a frail foundation of empirical and theoretical
research (Porter 1989, 6).
This study investigates the relative significance of net density and its
development form on the estimated, residential share of public costs,
revenues, and their net differences at the local level of government. Its
alternative hypothesis is that net density and its form produce discernible,
fiscal effects on public costs and revenues derived from residential
development. The net, fiscal effects of compact, contiguous patterns are
expected to be found advantageous for local governments. However,
because of the number of factors which influence public costs and revenues
and the many assumptions which must be made by any study of this
nature, it is impossible to reach absolute conclusions.
This study assumes that the fiscal significance of net density and its
form is relative to the many other factors which impact public costs and
revenues. Some of these factors are zoning regulations, the size of an
urban area, political priorities, and the socio-economic characteristics of the
3


residents. All of these, and other factors, vary simultaneously over time.
Methods of fiscal impact analysis were applied to data associated with
actual development in thirty-four, Front Range localities in 1984 and 1990
to estimate the residential share of local costs and revenues, on a per capita
basis. The fiscal data included current operations, annualized capital outlay,
debt service, property and sales tax revenue, and other own source revenue.
The data for the independent variables included: net density, undeveloped
area, and the approximated, average price and age of single family homes,
representing, respectively, the income status of residents and the rate of
development.
Bivariate correlation and multiple regression equations tested for the
degree of association between the variables and the predictive value of the
independent variables in various combinations of the influencing factors
associated with actual development patterns. They do not specifically
reflect the fiscal effects of growth, although all of the localities in the
sample experienced population growth between 1984 and 1990. Identical
tests were conducted on a subset of eighteen localities with populations
under 10,000 in 1990 to find if the effects of density were more discernible
in smaller communities.
In order to test for the fiscal effects of net density on the estimated
costs and revenues associated with annual, residential growth increments,
4


modified case studies were conducted utilizing annual, fiscal and
demographic data from 1984 through 1990, for Castle Rock, Louisville,
Parker, and Thornton. These communities have distinct patterns of
development, ranging from scattered, very low density, to contiguous and
compact, high density.
This paper is organized into five chapters. Chapter 1, this introduction,
comments on the relevancy of the study, including population growth in
Colorado and the possible fiscal implications of Amendment One, which
restricts spending and taxation at all levels of government in Colorado.
Chapter 2, as a background for this study, reviews literature and
previous studies on sprawl type development patterns and growth
management programs. This review defines "good" and "bad" sprawl and
includes both the indirect social, economic, and environmental costs and the
direct, public costs associated with patterns of sprawl.
While local planning strategies may promote contiguous development
within local boundaries, an unintended consequence may be more distant,
discontinuous development outside their boundaries. If local regulatory
and/or political climates are too restrictive in their accommodations for
growth or if local growth caps or other controls are enacted, developers will
tend to seek areas, often farther out on the urban fringe, that are more
receptive to approving any plans for development. Regional planning can
5


effectively resolve inter-local land use disputes and coordinate the use of
infrastructure. Its policies can be designed to discourage the
environmentally inappropriate, discontinuous progression of outlying
scattered pockets of development, commonly referred to as "urban sprawl"
(Clark 1995, 5). As alternatives to allowing sprawl development to occur
or to continue, local and state/regional growth management programs are
reviewed in terms of their evolution, efficiency, and critical issues, such as
their potential to artificially increase housing costs. Inasmuch as the study
area is located on Colorado's Front Range and growth management is of
current political interest in the area, the history and status of growth
management in the State and the Denver metropolitan area are also
reviewed.
Chapter 3 explains this study's hypothesis, expectations for its findings,
its methodology, and data set. The data analyses and findings are
presented in Chapter 4. The conclusions drawn from this study are reported
in Chapter 5.
Relevancy of Study
Two simultaneous events make this study timely. First, Colorado's
population has been growing rapidly; 1994 marked the third straight year
that the State's population has grown by almost 100,000 people (Roberts
1994, 1 [A]). There has been a recent "push" of interstate migrants to
6


Although it is not expected that the State's growth rate will return to that
of the early 1980s, the realities of a demographic ascent are that it could
inflate population by as much as fifty percent in the next twenty-five years
(Clark 1995, 1). As a consequence of this growth, the number and rate of
new developments being proposed and built have increased. A study of the
fiscal impacts associated with existing residential development patterns may
provide additional insight for the evaluation of future proposals.
Second, local governments have been fiscally constrained since 1992
when voters approved Amendment One, which limits their spending and
restricts their power to generate revenue through taxation. The Colorado
Municipal League conducts a yearly survey to determine what its member
municipalities consider to be their major fiscal problems. Of the 167
member cities and towns that responded to the survey in 1994, 56 percent
indicated that they saw "coping with growth" as a major fiscal problem.
This is over twice the percent of member municipalities which responded to
the 1991 survey that "coping with growth" was a major fiscal problem
(Colorado Municipal League 1994, 8). Figure 1.01 on the next page shows
these survey responses.
The following sections outline Colorado's recent growth and the
implications of Amendment One.
7


FIGURE 1.01
Coping with Growth .
CS____________________
1M1 1M2 m3 1M4
Percent of cities and towns identifying
'Coping with Growth' as a major fiscal
problem on Colorado Municipal League's
surveys from 1991 to 1994.
Population Growth in Colorado
The Census Bureau reported that there were 3.6 million people in
Colorado in 1994 and that the state has a growth rate of 2.9 percent per
year (Dentry 1994, 2[C]). The Denver-Boulder-Greeiey Consolidated
Metropolitan Statistical Area (CMSA) had a total population in 1990 of
1,848,319 people; the percent of growth between 1980 and 1990 was
14.2, which reflects a net in-migration of 2.3 percent and a natural increase
of 11.9 percent (Speare 1993, 32-34).
According to the Colorado Department of Revenue, more people moved
to Colorado in 1993 than in any other of the past twenty years. In that
year, the net in-migration showed an increase of 70,300 residents.
Certainly, some of this growth can be attributed to the state's healthy
economy, which was listed as third in the country. There were 68,600 jobs
8


created in the state in 1993, the largest annual increase since 1984. Many
people were attracted to the Denver metropolitan area by high paying
positions in the building trades at such projects as the Denver International
Airport, Coors Field, and the Denver Public Library (Conner 1994, 23[A]);
these projects are now essentially completed.
Some economists predict that as the national economy continues to
improve, Colorado's growth rate will abate to about 1.0 percent by 2000.
There have been indications that other regions are in recovery. For
instance, the New York Times reported that New York City, Long Island,
and Connecticut have seen the effects of a general economic turnaround
from the worst downturn since the Depression (Redburn 1994, 1[Y] and
16[Y]). Figure 1.02, page 10, graphically displays the actual and projected
growth rates in Colorado from 1980 through 2000 (Colorado Municipal
League 1994, 8).
Growth within the Denver CSMA occurred in the smaller cities and
towns, but not in Denver itself, which lost 5.1 percent of its total population
between 1980 and 1990. During the 1980s, immigration was more
important in overall metropolitan growth and in the related changes in racial
and ethnic composition than in the previous decade. Less skilled, minority
workers were more likely to remain in larger cities than the more skilled,
white population. Denver is an example of this trend; it had 63.4 percent
9


FIGURE 1.02
of the African American population and 53.0 percent of all other minority
groups. However, large areas, such as Denver, that serve as national or
regional centers of finance, information, medical, and education centers, all
grew more rapidly than the metropolitan average in the 1980s. It is
anticipated that the growth shift towards larger metropolitan areas will
continue through the 1990s (Speare 1993, 32-34).
The "economic rent" model explains, in part, the population growth in
suburban and fringe areas. The model relates the location of land uses to
the value of urban land. If a household is to minimize both space and
transportation costs, it will have to locate in an area with higher densities,
close to employment. However, if a household wants more space, it will
probably have to locate where land is less expensive and potentially farther
from employment (Yeates 1990, 127-136).
10


Amendment One and the Implications
of Tax and Spending Limitations
Although Amendment One was not in effect during the study period,
it is relevant to the current importance of the fiscal effects of residential
growth patterns in Colorado. The ballot title and submission clause for
Amendment One read, in part:
...to require voter approval for certain state and local government tax revenue
increases and debt; to restrict property, income, and other taxes; to limit the
rate of increase in state and local government spending...
The amendment applies to all levels of governments within the State.
Generally, it requires voter approval for any new taxes, tax rate increases,
increases in mill levies above those in the prior year, the extension of an
expiring tax, any changes which cause a gain in net tax revenue, and for
assuming multiple year debt. The amendment does not include funds from
impact fees or other development-related exactions or revenue from
intergovernmental transfers (Morrow 1995).
The expenditures of local governments are limited to the prior year
level, adjusted for changes in the Denver-Boulder Consumer Price Index plus
net growth factors based on the prior year. For the state, the net growth
factor is the percent of change in state population; for local governments,
it is the net percentage of change in actual value of all real property. This
formula enlarges and extends the fiscal impacts of any decreases in a
community's local economic base for several years. Other features of
11


Amendment One require districts to set aside escalating amounts of money
for emergency reserves and to refund, in an unspecified manner, any excess
revenues at the end of a fiscal year (Colorado Municipal League 1992).
Since the passage in 1992 of Amendment One, the funding for the
provision for infrastructure and public services has become of great concern
to local governments. They have less authority to generate the revenue
required to maintain service standards. Either general economic conditions
or political pressures may cause a decrease in property assessments. Prior
to Amendment One, if a decrease occurred, local governments could
generate the same revenue by increasing mill levies, but now they must
receive voter approval to do so. Since the formulae extend the fiscal
impacts of decreases for several years, the decline, in forty-two counties,
of a total of $215.6 million of residential assessments between 1992 and
1993 had the potential to cause cutbacks in services and the
postponements of capital improvement projects.
Looking specifically at the ten Front Range counties, there was a slight
net increase of $47.9 million, or .2 percent. The growth which occurred in
Boulder, Jefferson, and Douglas counties helped to compensate for the large
losses in Adams and Arapahoe counties. The 1994 Colorado Municipal
League's annual survey on municipal finances found that tax limits were a
major fiscal problem for 73 percent of its members who responded and that
12


spending limits had created fiscal problems for 78 percent of those
responding.
The total consequences of Amendment One cannot yet be fully
evaluated, but if declining assessments lead to reduced revenue, local
governments will be forced to seek funds from other sources (Colorado
Public Expenditure Council 1994). Local governments may attempt to
return certain "state mandated" programs, such as social services, to the
state. Weld County sued the state to return its fiscal responsibility for
social services back to the state. Denver District Judge Morris B. Hoffman
agreed with the county's claim, but the decision was not upheld on appeal.
If, in the future, judicial decisions were to be in favor of similar claims by
counties, they could cost the state large sums of money each year.
Fiscal planning issues will continue to significantly affect municipalities
and the state government. As fiscal constraints become a permanent
reality, the state and local governments may be forced to establish priorities
to determine future budget levels for services (Rose 1982, 251 -256). Even
if Colorado's general fund revenues continue to grow, the state legislature
will have to make hard decisions about increases in general fund
appropriations for education, social services, Medicaid, corrections, and
other state supported institutions. Tom Norton, President of the Colorado
Senate in 1994 wrote in an editorial that (Norton 1994, 7[B]):
13


If we ignore the need for long-range planning to meet the dual challenges
of Amendment 1 and the demand for public services, all Coloradans will
suffer because of the unnecessary decline of our economy.
Potential Implications of Amendment One
Research in other states, which have a history with tax and spending
limitations, suggests that when local jurisdictions have encountered fiscal
constraints, they have first attempted to increase their intergovernmental
revenues, which, in Colorado, are exempted from Amendment One. Where
these efforts were successful, local expenditures and service levels were
sustained without the need for local tax increases.
However, in communities where intergovernmental transfers did not
compensate for the shortfall in revenue, expenditure reductions were made
first and disproportionately in programs, even in high priority services,
totally funded from local revenue. Programs partially funded through
transfers were less likely to be severely curtailed unless local, matching
funds were required. Although it was found that frequently expenditure
cuts were threatened in highly visible and vital services, expenditure
reductions were actually made in areas where the public would not
immediately recognize the eventual outcomes of delays in spending or
cutbacks. While municipalities in other states have used a variety of means
to hide and mitigate the effects of expenditure reductions, it should not be
inferred that major reductions can be absorbed without lowering levels of
14


service (Rose 1982, 247-256).
One reason that cities may try to postpone the public awareness of the
effects of spending reductions is that tax and spending limitations may
occur independently of any public desire to reduce government services. In
fact, numerous surveys in states where tax and expenditure limitations have
been passed suggest that citizens were satisfied with the level of public
services and often desired more, but were simply unwilling to pay for them
(Joyce 1991, 241).
Limitations on the ability of state and local governments to raise
revenue through taxation and to spend that revenue have dramatic, long-
term implications not only for the delivery of governmental services and
infrastructure, but also for the nature, location, and extent of future growth
and development (Rose 1982, 6). Throughout the United States, concerns
about the costs of development patterns have continued to grow because
of taxpayers' resistance to increases in taxes and the substantial cutbacks
in federal aid to local governments (Frank 1989, 7).
In Chapter 2, there is a review of the literature on the public costs
associated with development patterns, urban sprawl in particular. A review
of growth management issues, studies, and programs is included since it is
a planning alternative that may restrain the fiscal and other costs identified
with development.
15


REFERENCES
Clark, Thomas A. 1995. "Colorado Land Use: Conditions, Trends, and
Policy Options." Denver, CO: University of Colorado at Denver.
Colorado Municipal League. 1994. 1994 Financial Condition of Colorado
Municipalities. Denver, CO: Colorado Municipal League.
______. 1992. Summary of Amendment #1 -Taxpayers' Bill of Rights.
Denver, CO: Colorado Municipal League.
Colorado Public Expenditure Council. 1994. Taxpayer Report XL
(February).
Conner, Chance. 1994. "Colorado Magnet for Job Hunters," The Denver
Post. 26 March, 1(A) and 23(A).
Dentry, Ed. 1994. "Growth Slowly Killing Colorado." Davton Daily News.
29 January, 2(C).
Frank, James E. 1989. The Costs of Alternative Development Patterns.
Washington, D.C.: Urban Land Institute.
James Duncan and Associates, Van Horn Gray Associations, Ivey Bennet,
Harris, and Walls, Inc., and Wade-Trim. Inc. 1989. The Search
for Efficient Urban Growth Patterns: Technical Appendices.
Austin, TX: Florida Department of Community Affairs.
Joyce, Philip G. 1991. "The Changing Fiscal Structure of the Sate and
Local Public Sector: The Impact of Tax and Expenditure Limitations,"
Public Administrative Review 51 (May/June): 241.
Ladd, Helen. 1994. "Effects of Population on Local Spending and
Taxes." People Versus Places. Norton, R.D., ed. Greenwich, CT: JAI
Press.
Morrow, Richard. 1995. Denver Council of Regional Governments.
25 September 1995, interview by author, Denver, CO.
Norton, Thomas, President of the Colorado Senate. 1994. The Denver
Post. 29 January, 7(B).
16


Porter, Douglas. 1992. "Looking Back. Goodbye Ramapo. Hello, Yakima
and Isle of Palms." Planning (July) 58: 14-15.
Redburn, Thomas. 1994. New York Region Finally Climbing Out of
Recession," New York Times. 12 June, 1 (Y) and 16(Y).
Roberts, Jeffrey. 1994. "Colorado Grows by 92,383," The Denver
Post. 26 March, 1(A) and 23(A).
Rose, Jerome G. 1982. Tax and Expenditure Limitations: How to
Implement and Live Within Them. Piscataway, NJ: Center for Urban
Policy Research.
Speare, Alden. 1993. Changes in Urban Growth Patterns 1980-90.
Cambridge, MA: Lincoln Institute of Land Policy.
Steiner, Frederick. 1994. "Sprawl Can Be Good." Planning 60 (July): 14-
17.
Yeates, Maurice. 1990. The North American Citv. 4th ed. New York, NY:
Harper & Row, Publishers.
17


CHAPTER 2
THE FISCAL IMPACTS OF URBAN DEVELOPMENT PATTERNS
A REVIEW OF THE LITERATURE
Urban Sprawl and Growth Management
The residential movement to the suburbs and urban fringes began after
World War II. This movement, driven, in part, by the "baby boomers'" need
for housing, was encouraged by national and state policies which created
both greater access to transportation and financial assistance programs
designed to promote single family home ownership (Yeates 1990, 140-
141).
Since the movement to urban fringe areas began, concerns have been
expressed about the economic efficiency and environmental effects of the
various development patterns being established there. During the 1950s
and 1960s, there were critics who opposed land use policies which
maximized, rather than minimized, the diversion of land from agriculture and
other uses. They argued that suburban land use regulations, which
sanctioned low density development and the rigorous separation of different
kinds of land uses, raised the per capita costs of providing infrastructure and
contributed to automobile dependency (Chinitz 1990, 6). Today, these
concerns still include such issues as: the efficiency of low density resulting
18


from large lot zoning, the effects of juxtaposing conflicting land uses, and
the efficiency of "leapfrogging," where scattered residential and commercial
developments are interspersed with unused open space (Real Estate
Research Corporation 1974, 26-27).
The potential fiscal impacts of residential density on per capita, public
costs and revenues are the primary focus of this study. This review of the
literature examines previous studies of fiscal impacts, generated by different
forms of urban growth on public costs, and reports on their findings. As an
introduction to these studies, this Chapter first defines the term "urban
sprawl" and comments on some of the common economic, social, and
environmental effects which may be associated with sprawl and relates
these to events affecting Colorado and the Front Range study area. It then
considers the relationship between sprawl and density.
inasmuch as growth management is recognized as the planning
alternative designed to discourage sprawl type development, this Chapter
also defines "growth management," and summarizes the issues associated
with its policies and practices and describes some of the prior studies on
local and state/regional growth management programs and their findings.
Further, since this study examines communities on Colorado's Front Range,
an outline of the history and status of the State's planning efforts and the
regional planning for the Denver metropolitan area are included.
19


Defining the Term "Urban Sprawl"
In 1962, Clawson characterized sprawl as the lack of continuity in
urban expansion;" the term's implication is that an urbanized area is larger
than it otherwise would be, because undeveloped tracts remain interspersed
among developed subdivisions. A more recent dictionary definition of urban
sprawl is the "gradual spread of urban dwellings, businesses, and industry
to relatively undeveloped land near a city" (Websters II 1984,1270).
A simple, explicit definition for the term "urban sprawl" is somewhat
illusive because it is used to describe a variety of low density patterns of
growth and development (Peiser 1989, 193). These patterns are generally
identified by scattered or leapfrog development, ribbon or strip development,
and/or large expanses of low density, single dimensional development
(DeGrove 1992, 18). Scattered development is a pattern of suburban
growth in which development prematurely locates or "leapfrogs" past
vacant land into relatively undeveloped areas. Ribbon or strip development
refers particularly to the commercial growth, which occurs, frequently
uncontrolled, along major arterials and highways (Yeates 1990, 244).
Often, poorly planned and/or untimely developments that occur in urban
fringes and rural areas are described as "urban sprawl." These
developments are usually characterized by a noticeable lack of coordination
beyond the immediate neighborhood (Windsor 1979, 280), and a large
20


consumption of land, which may include the misappropriation of land
importantfor environmental, historic, agricultural, or other reasons (DeGrove
1992, 18). Frequently, there are extended distances between typical
sprawl developments and urban employment centers and central public
facilities (James Duncan and Associates, et.al. 1989, 1-13).
Premature, untimely "sprawl" development on urban fringe areas may
require local governments to expand the capacity of infrastructure and
services, at potentially increased costs, in order to provide essential support
to the development. In the past, there has been an erroneous planning
assumption that the facilities and public services needed to accommodate
the impacts of development would occur simultaneously or shortly after the
development occurred (DeGrove 1992, 163), but during periods of rapid
growth, local governments are not necessarily capable of expanding their
infrastructure to adequately support new growth, especially at a distance
from existing facilities. When development is allowed to outstrip the
provision of public facilities and services, the results are congestion and
lower levels of service which penalize old and new residents alike (So &
Getzels 1988, 223).
Generally, dispersed, noncontiguous patterns are negatively perceived
and classified as sprawl, but it is important to note that the form of any
development should be considered in the overall context of its area's
21


attributes and constraints and the site's specific characteristics. There is an
argument that the real issue is not whether settlement should be dispersed
or not, or high or low density, but whether any development form is
sustainable and ecologically sound. Depending upon the circumstances,
such as the need to conserve water or the preservation of open space, high,
low, and even ultra low density settlements may be realistic and even
desirable, if done with quality, equity, and environmental sensitivity (Steiner
1994, 14-17).
Clustering is one example of environmentally appropriate, efficient, and
sometimes, dispersed development. Although cluster developments may
"leapfrog," the dwelling units are grouped on certain portions of a site, and
other areas, either in common or under single ownership, remain as public
open space and free from development. Either single-family detached or
attached housing units may be clustered on those portions of the site best
suited for development.
Clustering is an environmentally sound concept not only because it
preserves open space and other important natural features but also because
it uses the most appropriate areas for development and prevents
development in inappropriate areas such as flood plains, steep terrain, or
unstable soil. In Colorado, one of the reasons subdivision reform is being
sought is to encourage cluster development as part of the effort to preserve
22


large tracts of land for agricultural use, wildlife habitats, and open space
(Powers 1994, 7).
It is also suggested that clustering is economically sound because its
higher density reduces infrastructure costs and permits designs that may
save more energy than conventional ones. Consumers, particularly in
metropolitan areas, have found this higher density pattern to be satisfactory
and more affordable than conventional residential development (So and
Getzels 1988, 245-247).
To summarize, "sprawl" refers to the unplanned, poorly planned, and/or
the untimely spread of a variety of low density, noncontiguous development
patterns on urban fringes. These patterns are generally assumed to afford
little consideration for the conservation of land, resources, or the
environment. However, the appropriateness of any development pattern,
including those that may share some of the characteristics of "sprawl,"
must be evaluated within the broad context of the area's environment,
resources, and natural features.
The Economic. Social and Environmental Impacts of Sprawl
Although this study's primary focus was finding the fiscal impacts of
existing Front Range residential development patterns on the public costs
and revenues associated with them, some of the economic, social, and
23


environmental ramifications of sprawl are sufficiently interrelated to the
fiscal ones to warrant being addressed briefly.
Economic impacts. There are many ways that sprawl may affect local
and regional economies, but at least two of these are particularly significant
for Colorado and the Front Range. One is the effect of sprawl on
agricultural capacity; the other is its impact on the economies of central
cities.
Sprawl often consumes land that was previously used for agriculture.
Obviously, farmers and ranchers are directly impacted financially, but the
conversion of agricultural land also affects a state's or region's economic
stability, the cost of government, and the cost and quality of food.
Agriculture is important to Colorado's economy. Agriculture generates
sales of more than $11 billion per year and 80,000 jobs in the state. In
1992, the total value of farm real estate and other farm assets were $15.8
billion compared to a total debt of only $2.8 billion.
Despite the economic significance of agriculture to the state, since
1978, Colorado farm land has declined by 1,270,000 acres, or an average
of 90,000 acres per year; between 1959 and 1992, Front Range farm land
declined by 1.9 million acres. During this time, eastern Colorado, farther
from urban areas, gained 342,000 acres of crop land, mostly by irrigating
rangeland with finite supplies of groundwater from the Ogallala Aquifer.
24


As fringe development continues, the Front Range is losing not only its
agricultural economic base but also the aesthetic value that diversity and
open space add to the landscape. Raising crops and livestock near urban
and recreation areas helps Colorado to retain a historic connection with its
western heritage (Colorado Department of Agriculture and the Governor's
Task Force on Agricultural Lands 1995). Working landscapes have been
shaped by human activities, but, in cooperation with nature, over a length
of time, they seem comparable to natural ones (Garreau 1991, 392).
The continuation of agricultural land uses on urban fringes helps to
prevent leapfrog development without creating perpetual, static green belts
or other growth boundaries which preclude a natural, systematic process for
accommodating contiguous growth. It can allow for the reservation of land,
without public expense, until the requirements of growth demand that the
agricultural uses be incrementally replaced for urban expansion. In the
meantime, agricultural land is privately owned and maintained, but its visual,
historic, and ecological benefits are shared by all residents and visitors to
the state (Clark 1995).
Much of the agricultural land has been lost to single family residential
development. In Colorado, the major responsibility for determining how
growth impacts agricultural land rests with local governments. Currently,
forty-nine of Colorado's sixty-three counties have adopted a comprehensive
25


plan; only eighteen have explicit policies to retain agricultural land or water
sources (Colorado Department of Agriculture and the Governor's Task Force
on Agricultural Lands 1995).
Sprawl also affects the economies of central cities and their residents.
It tends to diminish the advantageous fiscal effects of economies of scale
for the delivery of public services and infrastructure. The provision of
duplicative facilities, with excess capacity, to serve fringe development may
necessitate the reallocation of funds needed to maintain the standards for
infrastructure, public services, and school systems in older, metropolitan
core areas.
Many scholars and policy makers believe that a major cause of the
poverty in central cities is the gap between where poor people live and the
growth of employment that is occurring in the suburbs. The metropolitan
poor tend to be concentrated in central cities, but more and more,
employment opportunities are occurring in fringe areas which may not be
accessible to many inner-city residents because they cannot afford to
commute to work by automobile. Public transportation may not be
available, and even if it is, the commute may be impractical and time
consuming (Lincoln Institute of Land Policy 1994, 2).
Because the detrimental impacts on cities are the same regardless of
the causes of peripheral development, it is noteworthy that the economy of
26


central Denver has been subject not only to suburban and exurban growth
but also state law which makes annexation very difficult for Denver. In
1974, Colorado enacted Amendments No. 1 (the Poundstone Amendment)
and No. 5 to the "Municipal Annexation Act of 1965." Amendment No. 1
removed from the City and County of Denver the annexation procedures
relating to municipalities and replaced them with the more difficult
annexation procedures relating to counties; Amendment No. 5 established
the Boundary Control Commission which must first approve any request for
annexation of territory by the City and County of Denver (City and County
of Denver, 1976).
The eventual, unfortunate consequences of continuing to expand
growth in outlying areas may be a society that is perpetually, deeply, and
clearly divided by geography along the lines of class and race (Easley 1992,
1-2).
Social impacts/sense of community. It has been suggested that sprawl
may diminish the sense of community identity (Clark 1995). Tony Hiss, a
writer for the New Yorker magazine, commented on the interaction
between people and places:
The places we spend our time affect the people we are and can become. These
places have an impact on our sense of self, our sense of safety, the kind of work
we get done, the ways we interact with other people, even our ability to function
as citizens in a democracy (Garreau 1991, 391.)
Despite an increasing amount of research on the social and cognitive
27


structure of cities, there are still many unsolved questions and little
consensus on the relationships between cities, their images, and people's
behavior, but it may be simplistic to assume that the form of communities
has no impact on human behavior. For instance, a recent comparison study
of ten year old youngsters in a small Vermont town and a new suburb in
Orange County shows that the children in Vermont had three times the
mobility, in terms of distances and places they could go on their own than
those in Orange County, who watched four times as much television as the
Vermont children (Calthorpe 1993, 9-10).
Social theorists, planners, and design professionals have criticized the
lost sense of community since the 1970s (Nasar and Julian 1995, 178), and
believe this loss is responsible for many of today's urban problems. After
World War II, Americans moved to the suburbs largely for privacy, mobility,
security, and single family home ownership. Increasingly, the residents in
these suburban and exurban areas are experiencing isolation, congestion,
and rising crime rates.
Although it is difficult to quantitatively determine the social implications
of residential sprawl (Calthorpe 1993, 9-18), the growing trend toward
gated communities may be evidence of some of the residents'
dissatisfaction with the status quo; their unintended consequences may be
to further reduce social contacts and the civic responsibilities associated
28


with living within a community-at-large (Blakely and Snyder 1995, 1-3).
A sense of community may be derived from a geographically defined
territory, such as a neighborhood or town (Nasar and Julian 1995, 178-
179). Because of sprawl patterns, it may be that cities, suburbs, and
peripheral areas will continue to evolve in forms that diminish opportunities
for creating and maintaining a sense of community (Calthorpe 1993, 9).
Environmental impacts. The environment is also affected by sprawl.
"Unmanaged" growth can deplete the capacity of the environment to
support economic activity. If sprawl cannot sustain a high standard of living
and an acceptable quality of life, which presumably motivated people to
move to fringe areas in the first place, then there will be negative economic
repercussions.
Sprawl impacts the environment by the amount of land it requires for
development. Among the indirect costs of sprawl are the inappropriate uses
of marginal and sensitive lands. For example, draining wetlands for building
sites may disrupt natural flood control systems and contribute to water
pollution. At the very least, these conditions are expensive to repair or
remedy, if they even can be. As land is used up on the fringe for residential
and commercial uses, it becomes scarcer and more costly, and housing
affordability once again becomes a problem, and new, less expensive land
ever farther beyond the fringe, is typically then targeted for development
29


(Easley 1992, 1-2).
Air quality is another environmental condition affected by sprawl
development. The Clean Air Act and the Intermodal Surface Transportation
and Efficiency Act (ISTEA) recognize that air pollution resulting from auto
dependence is a serious problem that must be corrected. The 1990
amendments to the Clean Air Act are predicted to cut carbon monoxide,
nitrous oxide, and hydrocarbons by ten percent by the year 2000.
However, despite the tightened tailpipe emission standards, sprawl-induced
increases are projected to make these same pollutants thirty percent worse
in 2010 than they were in 1989 (Calthorpe 1993, 35).
Since the national recognition of clean air as a social goal, there has
been a rethinking of land-use patterns which encourage automobile
transportation. Low density developments and the spatial separation of
different kinds of land uses generate intensive demands for travel (Chinitz
1990, 3-4). The connection between air quality and development patterns
is that by reducing the number of vehicle miles and hours traveled, air
quality will be improved. One approach to improving air quality suggests
that increasing urban densities will lead to greater use of rapid transit and
other alternatives to the automobile (Metro Vision 2020 1992, 21).
Commercial development and employers have adapted to serve
suburban, automobile dependent residents; the results are shopping malls,
30


retail centers, and office buildings in suburban communities and fringe areas
(Easley 1992, 1-2). In 1970, only 25 percent of offices were located in
suburban areas; by 1993, almost 60 percent of them were (Myers 1993,
11). The decentralization of employment has led to 62 percent of all
workers having intra-suburban commutes, which may or may not be of
greater distances than those to central city locations (Chinitz 1990, 6-7),
but between 1980 and 1990, the aggregate number of "vehicle miles
traveled" in the United States increased by more than 40 percent, partially
because there were more workers who commuted to work alone in an
automobile (Lincoln Institute of Land Policy 1994, 2). Because it is not
economically feasible to provide public transportation to and between fringe
developments, automobile dependence and traffic congestion increases, and
air quality is further threatened.
In the Denver metropolitan area, air pollution violates health standards
and reduces the areas's excellent visibility. The high altitude of the area and
its location in the South Platte Valley create natural conditions which
exacerbate its air pollution problems beyond those of metropolitan areas of
similar size. Because the automobile is a major source for the most
significant air pollutants, the travel patterns in the region are currently under
review.
Another concern, about which there are differences of opinion, is the
31


relationship between sprawl development patterns and levels of urban
density at build out.
Sprawl Development and Density
The impact of discontinuous or sprawl development on density is
important because uniformly, low density urban development is considered
to be inefficient in part, because of the effects previously mentioned in this
paper. However, in spite of the possible inefficiencies of low density,
sprawl development, there are those who suggest that in a freely
functioning urban land market, such discontinuous patterns will eventually
promote higher levels of density when infill development does occur. The
primary premise of this position is that infill sites have higher land values
which will consequently produce higher density development. The
underlying assumption is that the value of vacant, infill parcels increases
faster than the value of land on the fringe because of their agglomeration of
benefits accrued by earlier residents and because development risks are
lower in more established, built locations.
Ohls and Pines were among the proponents of this argument. In 1975,
they asserted that under certain market conditions, discontinuous
development might be efficient because, if land prices were higher on infill
sites, higher densities would have to be achieved in order to make later
32


development profitable. Ottensmann, in 1977, made a similar argument
that faster growing cities would have more sprawl, but that they would be
denser in those areas that were actually developed.
He explained that:
When expectations about future development potential are high, more land
will be withheld from development, land values will be higher, and the
densities in developed areas will be higher.
Richard Peiser also hypothesized that discontinuous development could
lead to higher densities in subdivisions built in the same locality and price
range as earlier subdivisions. He tested his hypothesis that land values on
vacant infill parcels increase faster than land values on the urban fringe and,
consequently, generate higher densities, by examining growth patterns in
Montgomery County, Maryland; Fairfax County, Virginia; and Dallas, Texas.
Based on the findings of his regression model, he concluded that in those
cities which allowed higher densities on infill parcels, discontinuous
development might lead to higher densities than were likely to occur where
discontinuous development was prevented by sequential development
policies (Peiser 1989, 193-203).
However, Peiser was aware that public policies and financing methods
directly affect the availability of development sites by controlling their
access to, and costs for, urban services and utilities. He indicated a
concern that if new residents, especially on the urban fringe, did not pay
33


their full share of the total costs for development, that the underpricing of
these homes would inadvertently increase sprawl beyond any of its potential
benefits. He pointed out that:
While sprawl may be unjustly maligned for generating low density
development, the potential benefits of discontinuous growth nevertheless
depend on the full-cost pricing of development. If discontinuous
development is subsidized by utility companies, highway programs, or
municipal contributions, sprawl patterns of development may be spread
over so large an area that inefficiencies associated with sprawl would
outweigh any potential benefits from higher density infill development
(Peiser 1989, 193-203).
There are grounds for arguments opposing the view that sprawl may
potentially be efficient because it increases density over time. One, this
position seems to assume that sprawl must occur in order for interior land
values to rise, but there are both demand and supply side explanations for
price differences in housing whether or not noncontiguous development has
occurred (Engle, Navarro, and Carson 1992, 269). As the results of other
studies demonstrate, public amenities and neighborhood characteristics are
important determinants of housing and land values, and nearly all studies of
housing values indicate that amenities and disamenities are capitalized into
housing and land prices regardless of their locations (Fischel 1990, 16).
Two, an alternative explanation for the higher density levels found on infill
sites may be that those who can afford to do so, seek out locations on the
urban fringe where large lots with lower density are available. Three, while
higher land prices do increase the overall cost of development, the market
34


place and developers, within the constraints of public policy and zoning,
determine the timing, type of development, and profit margins. In other
words, even if there are higher land prices on later development, there is a
possibility that low density, infill development will occur.
Even if the argument for higher density, infill development is accepted,
it does not acknowledge the potential difficulties with infill development.
The possible problems encountered by this type of urban development
include: the economic and social ramifications of gentrification,
deteriorating schools, racial tensions, and economic stagnation. Higher
density suburban infill may have to overcome different problems.
Frequently, zoning codes and no-growth or slow growth neighborhood
groups preclude increases in density and mixed-use development (Calthorpe
1993, 31-32). The political feasibility of later infill development is a real
issue because of the serious opposition it may encounter from existing
residents and commercial enterprises.
Since the economy on the Front Range has improved, there is evidence
that organized resistance to infill development is increasing in many
communities. Lakewood, Colorado's fourth largest city, is an example. In
the recent past, voters there have defeated two rezoning proposals and
organized against proposals for new, infill housing developments on vacant
land in established residential neighborhoods. Lakewood residents against
35


new residential and commercial development have formed a group called
"Neighbors for Truth," which elected four City Council members in 1994.
Although Lakewood officials, neighborhood groups, and developers have
resolved some of their conflicts, the future of infill development is still
uncertain there. In the meantime, development is occurring farther away
from existing boundaries in areas which are politically more receptive to it
(Brimberg 1994, 1 [C] and 6[C]). As this example from Lakewood
demonstrates, if significant growth is to occur as suburban infill, a change
in public policies, infrastructure, and attitudes will be necessary (Calthorpe
1993, 31-32).
These comments conclude this introduction to the review of the
literature. Reports of previous studies of the impacts of development
patterns on public costs for services and infrastructure follow.
The Direct Public Costs Associated with Sprawl
A primary premise of modern urban planning is that compact
development promotes the efficient use of infrastructure and, conversely,
that urban sprawl increases costs for public facilities and services. This
concept seems intuitively correct: development spread out requires more
miles of roads, sewers, and water pipes than development clustered into
smaller areas. In terms of providing public services, it is assumed that the
36


cost of supplying an additional unit of service increases as residential
density decreases and that the per unit cost of supplying local services
increases with distance from central sources, but the empirical and
theoretical research to support this premise is not extensive (Frank 1989,
5). However, in the past, negative relationships have been found between
density and the costs for infrastructure and public services (Sullivan 1985,
17-18).
The Costs of Municipal Services in Residential Areas
The study of the costs of municipal services associated with alternative
patterns of development began in 1955 with the publication of Wheaton
and Schussheim's The Cost of Municipal Services in Residential Areas which
examined the effects of development patterns on the cost of housing and
on the fiscal position of local governments.
Their methodology was as important as their findings because it
established the need to distinguish between capital investments, that is, the
purchasing of assets which provide service over an extended period of time,
and operating and maintenance costs, or the recurring purchases of
continuing services. Their scheme pointed out that capital investments, and
other balance sheet accounts, must be annualized if they are to be summed
with expense accounts for operating and maintenance costs for an
37


equivalent period of time.
Their classification scheme facilitated assigning the correct accounting
costs to a set of users in proportion to their utilization of the facility's
capacity. The distinction between "precipitated costs," those costs over
and above predevelopment costs, and the costs of inherited facilities is
important in the comparison between short-and long-term marginal costs
and average costs. When unused capacity is available for use by new
development, precipitated costs will be low, but long-term average costs
and long-term marginal costs will be unaffected.
The study also stressed the importance, in evaluating the costs for
infrastructure, of recognizing the implications of marginal cost, average cost
at current utilization, and average cost at full utilization. The distinction is
whether the costs of a currently oversized facility should be allocated only
among current users or the total potential users at buildout. The former
allocation is the actual cost burden to the community's taxpayers of
carrying the facility's excess capacity; whereas the latter allocation will
result in the lowest average cost, but it will not occur until the facility's
capacity is virtually used up and expansion for new capacity is imminent
(Frank 1989, 5-11).
Wheaton and Schussheim's estimates, in 1987 dollars, for the capital
costs of supplying infrastructure to single family dwellings in three eastern
38


communities, with a narrow range of densities, ranged from a low of
$27,224 per dwelling unit to a high of $33,024. The $5,800 spread in the
cost of municipal capital facilities, including those provided by the
developer, was attributed to population characteristics, municipal standards
for services, and lot size. Operating and maintenance costs varied similarly
and were about 50 percent that of the annualized capital costs.
The development's location relative to available capacities in schools,
streets, sewers, water, and fire systems produced the greatest variation
ranging in 1987 dollars from $543 to $9,242 per single family dwelling.
Since there was greater variation in excess capacity among the three
municipalities, location of the development had the largest effect on the
costs of these facilities. Scattered, small infill developments produced the
lowest precipitated costs of all, presumably because they maximized the use
of the available capacity in the existing infrastructure.
The study also found that for multi-family developments, total municipal
costs, in 1987 dollars, were almost $8,000 less than the least costly single-
family development and over $13,000 less than the most expensive one,
even though the multi-family development was located in a city with more
costly standards for streets. The savings resulted from the reduction in
length of streets and utility lines per dwelling.
Because the study found that municipal precipitated costs fluctuated
39


much more with location than did the developers' costs, the authors
j
concluded that municipalities should be sensitive to the fact that in locations
where existing capacity is available, there will be less immediate public
investment required (Frank 1989, 16-19).
The Costs of Sprawl
The Costs of Sprawl, prepared by The Real Estate Research
Corporation, is probably the most well-known of all the studies of
development patterns, and it did the most to change the public's attitude
towards sprawl when it was published in 1975 (Chinitz 1990, 6). The
report was commissioned by the U.S. Council on Environmental Quality, the
Department of Housing and Urban Development, and the Environmental
Protection Agency so that they could have:
...a comprehensive assessment of the environmental and economic effects
of alternative housing types and patterns of land development on the urban
fringe (Real Estate Research Corporation 1974, 1-27).
The study attempted to isolate the variable of density from its .usual
correlates of structural age, layout, and low income population in order to
measure some of the most serious consequences of urban form (Altshuler
1977, 207). The research efforts concentrated on calculating the costs
associated with commonly proposed development patterns for the "urban
fringe" and determining the extent to which these costs were affected by
such factors as differences in population, floor area, and developed acreage
40


among the different development types. The report projected public and
private expenditures over a ten year period for different development
patterns and analyzed the variances in these costs.
The study encompassed development at both neighborhood and
community levels. The authors proposed six neighborhood prototypes, each
with 1,000 dwelling units and populations ranging from 2,825 and 3,520.
The housing types included: 1) single-family, conventional; 2) single-family,
clustered; 3) townhouses, clustered; 4) walk-up apartments; 5) high-rise
apartments; and 6) a 20 percent mix of each type of housing. These
prototypes were given typical suburban fringe characteristics including
physical environments and land costs. Requirements and costs for housing
construction, land use, schools, public facilities, transportation, and utilities
were developed from commonly accepted standards (Real Estate Research
Corporation 1974, 1-35).
The six community prototypes, each with 10,000 dwelling units and a
population of 33,000, were based on the neighborhood prototypes and
reflected conventional suburban planning, complete planning, and a
combination of the two. The Costs of Sprawl assumed no external
relationships between the community prototypes and the rest of the
metropolitan area or costs for facilities beyond the prototypes. For instance,
there were no cost estimates for roads to employment centers, transmission
41


lines to sewage treatment facilities, or transmission lines for water (Frank
1989, 30).
The prototypes used in the research were:
1) A 20 percent mix, planned community.
2) A 20 percent mix, combination planned and sprawl community.
3) A 20 percent sprawl community.
4) A 75 percent single-family, planned, conventional community.
5) A 75 percent single-family, conventional, 25 percent single-family
clustered, sprawl community.
6) A 10 percent single-family clustered, 20 percent townhouses, 30 percent
walk-ups, and 40 percent high-rise apartments, planned community (Real
Estate Research Corporation 1974, 27-32).
Figure 2.01 on page 43 shows the analyses which were undertaken at
both the neighborhood and community levels.
It was of specific interest to this study that the report concluded that
costs were especially significant for the proportion of total costs which were
likely to be incurred at the local government level.
42


FIGURE 2.01
SUMMARY OF THE NEIGHBORHOOD AND COMMUNITY ANALYSES
FROM THE COSTS OF SPRAWL
(Real Estate Research Corporation 1974, 32)
Costs and Issues
Investigated by the Study Neighborhood Level Community Level
Direct Cost Analyses Residential, Open Space and Same as for neighborhood plus
(Capital and Operating Recreation, Schools, Public Facilities and Services
Transportation: Streets and
Roads, and Utilities
Annual Development
Costs
Environmental Effects
Personal Effects
Incidence of Cost
Land Cost Analysis
None
Analysis of increments of development over
over ten year period
Air Pollution, Water Pollution, Air Pollution, Water Pollution, Noise,
Noise Vegetation and Wildlife, Visual Effects,
Water and Energy Consumption
Discretionary Time, Psychic Costs Travel Time, Traffic Accidents, Crime, and
Psychic Costs
Analysis of who bears the costs of Same as for the neighborhood analysis
development, both initially and
ultimately
Analysis of the effect of land Same as for the neighborhood analysis
costs on total development costs
Sensitivity Analysis
Additional Analysis
Implications of:
(a) Constant population,
regardless of housing
(b) Variation in socio-
economic characteristics
of residents
(c) Constant 100 acre site
Implications of:
(a) Increased community size
(b) Variation in site characteristics:
soil, slope, ground cover, ground
and surface water, and climate
None (a) Comparative environmental
analysis of communities
I and III on given site.
(b) Abatement of adverse
environmental effects, including
alternative waste disposal
techniques
43


Some of the study's pertinent conclusions are outlined below:
1) The greatest cost advantages occurred when higher density planned
developments were contrasted with low density sprawl. Compared to low
density sprawl, the amount of total capital costs borne by local government
could decrease by almost 50 percent for high density planned communities.
Operating and maintenance costs borne by local government could
decrease by 13 percent.
2) Total capital costs for a planned community development for 10,000
dwelling units saved 4 percent over sprawl development with the same
housing mix. The non-housing savings were found in land costs and roads
and utility connections because leapfrogging," was eliminated.
3) Planned development was likely to decrease local governments' total
capital cost by as much as one-third because a larger proportion of land
and facilities for open space, roads, and utilities was likely to be provided
by developers.
4) The on-going operating and maintenance costs of most public services
such as education, recreation, sewage treatment, water supply, general
government, police and fire protection, were largely based on population
size rather than development pattern or even housing type. For utilities,
sewer, water, gas, electricity, telephone, on-going costs were based on
consumption of resources and production of wastes. The savings to local
governments in operating costs between planned and sprawl development
were between 5 and 6 percent of total costs.
The major conclusion of the study was that, for a fixed number of
households, "sprawl" was the most expensive residential form, in terms of
economic costs, environmental costs, natural resource consumption, and
many types of personal costs. The study indicated that better planning
would reduce costs in all the alternative patterns and acknowledged that
increasing density would increase some costs, but not proportionately to the
increased number of households which could live on a given site (Real
Estate Research Corporation 1974, 7).
The Costs of Sprawl had a major impact when it was published and has
44


been generally accepted as an authoritative reference by the planning
community (Altshuler 1977, 207). However, its assumptions and
methodology were not without criticism.
Critiques of 'The Costs of Sprawl'
Alan Altshuler. In 1977, Alan Altshuler published a critique of The
Costs of Sprawl. In it, he challenged some of the report's assumptions and
findings. One, he noted that previous analyses of built communities had
concluded that the residents of high density communities seemed to require
more expensive packages of community services than those who lived at
low densities, and he thought that the earlier results contradicted the
assumptions about the prototypes, which were not calibrated against the
experience of actual communities. Two, Altshuler was concerned that no
cost estimates accompanied the report's assumptions about mass transit,
maintenance of vacant land, or paid staffs for high rise apartments. He
went on to explain that in spite of these omissions, the estimated savings
were $238.00 a year per household as a result of careful planning and
density increasing from 3.5 to 19.0 units per acre. Three, Altshuler
questioned the capital cost comparisons because the authors of The Costs
of Sprawl gave different floor areas to the various types of dwellings. The
high density community was assumed to have units which were 34 percent
45


smaller, on average, than those in the two low density communities
(Altshuler 1977, 208).
Duane Windsor. Duane Windsor, an Administrative Science Professor
at Rice University, also published an article critical of The Costs of Sprawl.
He identified the methodology used in The Costs of Sprawl as its principal
defect because it failed to isolate density and planning from other significant
sources of variation in development costs. As an example, Windsor cited
the report's contradictory assumptions between the neighborhood and
community levels of analyses. In the neighborhood prototypes, only the
number of dwelling units was static. Population size, demographic
composition, land use requirements, and the sizes of dwelling units were
varied. However, in the community prototypes, there was a reversal of
assumptions in that dwelling units were still of different sizes, but
population size and demographic composition were held constant (Windsor
1979, 279-290).
When Windsor recalculated the summary figures from The Costs of
Sprawl using a constant assumption of 1,200 square feet of floor space, a
constant coefficient of 1.1 pupils per dwelling unit, and filled in the
bypassed land in the 6,000 acre community, he found, all in 1987 dollars,
that the costs of infrastructure for neighborhood facilities ranged from
$16,358 for high rise apartments to $25,583 for single-family, conventional
46


development. His costs for community facilities ranged from $25,893 for
high density, planned development to $32,561 for low density, sprawl
development. These figures compare respectively to $25,286 and $37,863
for the same communities in the original study.
The Public Service Costs of Alternative
Development Patterns: A Review of the Evidence
Paul Downing and Richard Gustely in 1977 supplemented the detailed
data in The Costs of Sprawl with some of their own material to explicitly
address the question of the costs resulting from locating developments at
different distances from existing facilities. The costs of development
associated with neighborhood density were summarized, and the costs for
water supply, storm drainage, and sanitary sewers were examined in terms
of distance. The annualized capital costs per mile of distance from central
facilities for 1,000 dwelling units were found, in 1987 dollars, to be
$48,510 for water, $13,921 for drainage, and $27,403 for sewers. These
figures convert to capital outlay costs per mile, per dwelling unit of $518,
$149, and $293 respectively.
The implications drawn from this study were that new developments
locating ten miles from all three central facilities would have an allocated
capital cost of $9,600 for distance related costs over and above central
facility and neighborhood access costs.
47


Municipal Service Pricing: Impact of Fiscal Position
One study, funded by the National Science Foundation, which focused
on the costs of public facilities external to a newly developed community
was done in Gilroy, California. Municipal Service Pricing: Impact of Fiscal
Position, published in 1975, by Dougharty, Tapella, and Sumner estimated
the costs of expected growth for Gilroy for the next fifteen years. They
added 20,000 people to the existing population of 13,000 under three
alternative patterns of growth: compact, scattered, and leapfrog. Compact
growth assumed that the nearly 6,000 new dwellings would be located
adjacent to the perimeter of existing growth; whereas the scattered and
leapfrog growth concepts allowed new development up to two miles and
five miles, respectively, beyond the existing perimeter. Site densities were
kept constant at Gilroy's maximums for different types of dwellings, and the
proportions of housing types were kept constant and matched those that
existed in Gilroy at the time of the study.
Costs were estimated for fire stations, streets, sanitary sewers, and
flood control structures. For these facilities, the study accounted for both
existing available capacities and the installations required for additional
capacity and the extension of their systems. Since the estimates were for
a fifteen year time period, the tendency was toward full allocation of costs
by the end of the period of analysis. Because new development could
48


locate up to five miles from the Gilroy's existing perimeter, much of the
variation in costs resulted from distance rather than the availability of
unused capacity. In 1987 dollars, compact development was $2,078;
leapfrog was $9,885, and scattered was $11,581 per dwelling unit. The
large variation in precipitated off-site costs, which were attributable to the
location of the new development in relationship to the existing community,
dramatically demonstrated the fiscal significance of contiguous development
(Frank 1989, 31-35).
The Search for Efficient Urban Growth Patterns
One of the more recent studies, The Search for Efficient Urban Growth
Patterns, completed in 1989, was conducted for the Governor's Task Force
on Urban Growth Patterns in Florida; its purpose was to identify how public
policies encourage or discourage efficiency in the provision of public
services to accommodate growth. The research was designed to identify
and quantify the public costs and cost efficiency of five existing
development patterns found in Florida. The urban forms examined by the
study were: scattered, contiguous, linear, satellite, and compact. The
service systems which were analyzed in each area included: roadways,
education, wastewater, potable water, solid waste, law enforcement, fire
protection/emergency rescue, parks, and libraries.
49


This was one of the first studies to evaluate the capital and operating
costs and revenues of actual urban growth patterns. Fiscal impacts were
examined through eight case studies of sub-areas, deemed to be typical, of
locally recognized, discreet areas which were not political entities.
Originally, the study was to utilize a thirty-year life cycle costing approach,
but during the research phase this was modified because the necessary
information was not available. Instead, costs and revenues were calculated
only for the 1987 base year, and internal and site development costs were
excluded.
Based on the revenue to cost ratios derived from the case studies, it
was concluded, that contiguous, higher density, infill development was
more cost efficient than scattered, linear, and lower density sprawl type
development (James Duncan and Associates 1989, I 3-21). The study's
findings for the annualized, per lane costs of streets and the annualized, per
capita costs for law enforcement, fire and rescue services, and parks are
reported on Table 2.01, on the next page. The revenue to cost ratios are
shown on Table 2.02 on page 52 (James Duncan and Associates 1989, Il-
ls, IX-13).
The Costs of Alternative Development Patterns
a Review of the Literature
James E. Frank, also in conjunction with Florida's Task Force on Urban
50


TABLE 2.01
ANNUAL COSTS IN 1987 FOR CAPITAL IMPROVEMENTS AND OPERATIONS IN STUDY AREAS
from THE SEARCH FOR EFFICIENT URBAN GROWTH PATTERNS
Detailed Study Area Urban Form Dwelling Units per Acre Annual. Per Lane Mile Costs for Capital Improvements & Operations for Streets Annual Per Capita Costs for Capital Expenditures 8t Operations for Law Enforcement Annual Per Capita Costs for Capital Improvements 8t Operations for Fire 8t Rescue Services Annual Per Capita Costs Capital Expenditures 8t Operations for Parks and Recreation
Kendall Drive Linear 4.5 $1,156.00 $426.00 $ 70.00 $312.00
University Drive Linear 2.6 $1,047.00 $588.00 $140.00
Wellington Scattered 3.4 $1,029.00 $137.00 $137.00 $ 64.00
Catonment Scattered 0.7 $1,029.00 $ 73.00 $ 41.00 $ 1.00
Countryside Contiguous 6.5 $1,142.00 $139.00 $109.00 $180.00
Southpoint Contiguous 3.4 $1,116.00 $152.00 $ 90.00 $ 69.00
Tampa Palms Satellite 4.0 $ 942.00 $231.00 $114.00 $ 76.00
Downtown Orlando Compact 36.2 $1,686.00 $246.00 $288.00 $234.00
51


TABLE 2.02
ANNUAL REVENUE TO COST RATIOS IN 1987 FOR CAPITAL IMPROVEMENTS AND OPERATIONS IN CASE STUDIES
from THE SEARCH FOR EFFICIENT URBAN GROWTH PATTERNS
Detailed Study Area Urban Form Dwelling Unit per Acre REVENUE TO COST RATIO Annual, Per Lane Mile Costs for Capital Improvements & Operations for Streets REVENUE TO COST RATIO Annual Per Capita Costs for Capital Expenditures & Operations for Law Enforcement REVENUE TO COST RATIO Annual Per Capita Costs Capital Expenditures & Operations for Fire & Rescue Services REVENUE TO COST RATIO Annual Per Capita Costs for Capital Expenditures 8c Operations for Parks 8t Recreation
Kendall Drive Linear 4.5 0.56 1.14 0.87 0.61
University Drive Linear 2.6 0.74 0.6B 0.77
Wellington Scattered 3,4 0.56 0.70 0.65 1.14
Catonment Scattered 0.7 0.39 1.09 1.90 0.00
Countryside Contiguous 6.5 0.94 1.09 1.07 0.95
Southpoint Contiguous 3.4 0,47 5.32 5.17 0.80
Tampa Palms Satellite 4.0 0.96 1.05 1.05 1.54
Downtown Orlando Compact 36.2 0.67 1.15 0.51 0.91
52


Growth Patterns, compiled and published a review of the literature on
alternative development patterns in 1989. Working from a summary of the
total capital costs in all of the studies, he concluded that the total cost for
three dwellings per acre, noncontiguous sprawl development was slightly
more than $35,000 per dwelling unit for central sewerage and water, full
curb and gutter, and urban drainage. Moreover, he calculated that if
development were located ten miles from the sewage treatment plant, the
central water source, the receiving body of water, and the major
concentration of employment, almost $15,000 per dwelling unit was added
to the cost, for a total of $48,000 per dwelling, excluding housing and land
costs. In the case of estate zoning, one dwelling unit per four acres, with
full improvement standards and located ten miles from all central services,
Frank estimated that the total cost surpassed $92,000 per dwelling unit.
He also projected that the costs of infrastructure, including streets,
utilities, schools, and the costs for leapfrogging could be reduced to about
$24,000 per unit if there were twelve dwelling units per acre located close
to central facilities and employment centers and by including multi-family
housing in equal proportion to conventional single family and cluster units.
He also estimated that the costs for the same facilities could be reduced to
approximately $23,000 per unit if the twelve dwelling units per acre
included a mixture of housing types in locations contiguous to existing
53


development.
An important implication that may be derived from Frank's estimates,
is that in most communities, costs beyond the neighborhood level are not
fully passed on to the consumer and are subsequently not being included as
part of the home's purchase price. The result is the over consumption of
housing for which it is costly to provide infrastructure and which inevitably
must be subsidized by the more efficient development for which the
provision of services is less expensive.
This underpricing occurs in spite of the fact that new development
creates pressures for new public investment unless there is existing excess
capacity available (Frank 1989, 32-42). Although impact fees, dedications,
and other exactions are means of funding the capital facilities required by
new development, often such charges are imposed to recover only the costs
of constructing a particular facility rather than the costs of all system-wide
improvements necessitated by growth, and some new subdivisions may be
excluded either because of their size or type of development (So and Getzels
1988, 218-220). In Colorado, impact fees may be attached to the
subdivision process, but developers, who do large lot subdivisions outside
this process, are often not required to pay these fees. This creates a double
standard and an incentive not to go through the subdivision process unless,
as some communities have done, additional fees are attached to the building
54


permit process (Northwest Colorado Council of Governments 1994, 7).
One way to reduce the consumption of underpriced housing is through
the use of graduated impact fees. These fees are based upon pricing
policies that charge locations which are more expensive to serve a higher
price for capital facilities than less expensive ones; hence, these policies
remove at least some of the subsidies inherent in average cost pricing
formulae that encourage inefficient development patterns. Graduated fees
charge for facilities on the basis of the cost incurred by the development
and use market forces to direct growth into patterns which help to maximize
the use of existing facilities (Florida Department of Community Affairs
1989).
In his review, Frank pointed out that none of the studies done in the last
thirty years were totally free of technical problems or reached unassailable
conclusions. In part, this can be attributed to the multiple approaches and
many combinations of variables that can be used to research the fiscal
impacts of development patterns. Each approach and methodology requires
that at least a minimum number of assumptions be made in order to
translate all of the factors which impact the built environment into strictly
quantifiable terms. For instance, Windsor's substitution of his own
assumptions for the original ones in The Costs of Sprawl changed the
amounts of the estimated costs for infrastructure, but they were still less
55


for higher density development. As Frank emphasized, all of the studies did
reach similar conclusions: development spread out at low densities
increased the costs of public facilities (Frank 1989, 32-42).
Summary
Inasmuch as all of the findings in these studies conclude that lower
density development and greater distance from public facilities increase the
capital costs and operating expenses, it would seem appropriate to
investigate planning alternatives which would mitigate the potential fiscal
impacts of sprawl type development.
Growth management programs attempt to direct local or regional
growth in order to reduce its fiscal and other costs and to maximize its
advantageous benefits. The background, issues, and fiscal implications of
growth management will be reviewed next.
Growth Management Issues and Studies
Growth management, accurately defined, and as used in this paper,
means a commitment to proactively and carefully plan for the growth that
comes to an area in order to minimize any of the negative fiscal,
environmental, and/or social impacts of that growth. It seeks to maintain
conditions generally accepted as a desirable "quality of life." Today, local,
regional, and state growth management programs include strategies that are
56


intended to discourage urban sprawl (DeGrove 1992, 1) and to establish an
ongoing equilibrium between development and conservation, progress and
equity, and the demand for public services and infrastructure with the
availability of revenues to meet those demands. Growth management is an
active, on-going planning process for efficient land use, in contrast to
zoning, which is static and meant to define an area at build out (Chinitz
1990, 6).
History of Local Growth Management Programs
In the 1960s, every town wanted new industry, new construction, and
more people. However, by the early 1970s, communities began to become
aware that growth at any cost was not advantageous. Even though new
growth produced additional tax revenues, it also generated demands for
more public services and infrastructure, which, in some cases, were more
costly than the additional revenues. Even when new growth was not a
fiscal problem, it caused other unsatisfactory impacts, such as the
overcrowding of schools, water and/or air pollution, and/or traffic
congestion. After these negative impacts were recognized, local planning
policies started to incorporate growth management programs to direct
development in ways that would achieve community goals in a cost-
effective manner (So and Getzels 1988, 68-69). These policies mandated
57


higher densities in compact urban areas, and they explored ways to improve
urban design to win public support for moderate densities that were
residential^ desirable and environmentally friendly (DeGrove 1992, 2-3).
They were intended to influence the rate, amount, type, location, and/or
quality of future development (Godschalk et al. 1979, 9).
Growth Management v. Growth Controls. Within the historical context
of growth management programs, it is important to make the distinction
between these programs and growth controls. The term "growth
management" came into use in 1975 when the Urban Land Institute
published a collection of readings, Management and Control of Growth.
Since the term's origination, it has often been mistakenly identified as being
synonymous with rigid growth controls, especially the no-growth or slow-
growth programs established in cities and counties in California. However,
during the last fifteen years, the term has evolved into being interpreted as
neither pro-growth nor anti-growth. It has also come to include a vision of
"sustainability," which refers to development which respects the
environment (Steiner 1994, 14).
Growth management programs, which rarely exist without political
leadership and established comprehensive planning, are designed to balance
the support required for growth in residential, commercial, and industrial
development with the protection of the natural and built environment of an
58


area and to plan for the timely provision of needed services and
infrastructure (DeGrove 1992, 1-2). Growth management can encourage
higher densities, help to maintain the identity of a locality, and promote
sound municipal finances (Niebanck 1989, 118).
On the other hand, growth controls, such as building caps, are designed
simply to restrict population growth and housing construction, and to keep
economic growth below levels that would naturally occur in an
unconstrained real estate market (Landis 1992,490-491). Numerical caps
oversimplify the issue of growth, which is not just how many people live in
a community, but how well they live in it (Neibanck 1989, 118-119).
Growth control ordinances, often enacted through public initiatives, are
frequently adopted independently of and superimposed on other existing
land use planning policies (Landis 1992, 490-491). Growth controls often
receive voter approval because they are believed to provide benefits to the
majority of residents at the expense of only limited business interests
(Fischel 1989, 53-54). As an example, residents of Parker, Colorado
circulated petitions to have an initiative, "The Managed Growth Ordinance
of Parker," put on the ballot on April 5, 1994. The initiative would have
limited the allocation of building permits and established an arbitrary
permitting schedule. Although this initiative did not make the ballot (The
Talk of the Town 1994, 1-2), a similar measure was passed at a special
59


election in February, 1995. Another example is the "Election Reform
Amendment" which, if voters had approved it in November, 1994, could
have forestalled the issuance of a development or building permit anywhere
in Colorado for as long as two years, if only a few people had been opposed
a specific project (Ewegen 1994, 7, [B]). Control measures, such as these,
frequently fail to produce their anticipated outcomes, creating the
temptation to try to enact other ones without ever taking a comprehensive
approach to planning (Landis 1992, 490-491).
Growth Management Issues
Although growth management programs are considered appropriate
public policy, there is disagreement about their social and fiscal efficiency.
In part, the debate may be attributed to confusing growth management with
growth controls and to the misgivings about the underlying motives of local
growth management programs, many of which have been established in
relatively affluent, small cities and suburban communities. However, there
are also substantive concerns about local programs which include their
implications for the availability of affordable housing and their possibilities
to produce disadvantageous social, economic, and/or physical impacts on
other communities or an entire region (Fischel 1989, 34-35).
The social issue. The potential, whether intentional or not, to exclude
60


minorities and the economically disadvantaged by limiting the supply of
affordable housing, is especially an issue of concern about local growth
management programs. The basis for this stems from the questionable uses
of local zoning authority which have occurred in the past (DeHaven-Smith
1984, 413). Whether the typical American pattern of the rich living in the
suburbs is caused primarily by financial means and individual preferences or
discrimination is disputed since neighborhood segregation by income
developed before there were local land use regulations. But, to the extent
that any land use regulations increase the cost of housing, one side effect,
intentional or not, is the exclusion of minorities and people of lesser financial
means (Fischel 1989, 34-35).
In a survey conducted in Riverside, California in 1981, discriminant
analysis was used to categorize supporters and opponents of a measure to
limit residential development. The survey found that support was not
related to income, financial status, or education and that neither supporters
nor opponents saw the issue in terms of its effects on housing prices.
Another survey conducted in eight Iowa metropolitan areas and four cases
studies done by Johnson, reached similar conclusions. There was no
evidence of intent to exclude minorities or lower-income groups or to
protect property values. Nonetheless, discrimination may still be an
unidentified, underlying factor (Deakin 1989, 8-14).
61


The "spillover" effects of local growth management. Another debatable
issue is that local programs may create spillover effects by using legitimate
goals to promote the interests of the local community at the expense of
regional objectives or neighboring communities. Starting in 1916 with New
York, the states authorized municipalities to exercise zoning for the "health,
safety, morals, or the general welfare" of their residents. Since then it has
sometimes been utilized to advance local gains and to avoid responsibility
for accepting needed, but locally unpopular, public and private facilities
without regard for the detrimental impacts these decisions might have on
others in the area (Dehaven-Smith 1984, 413).
Spillover effects become significant when there is only local regulation
of developments with primarily local benefits, but mainly regional costs, or
developments with regional benefits, but primarily local costs (Altshuler
1994, 6). As examples, the community financially responsible for the
improvements and maintenance of an open space also enjoyed by other
communities may issue a development permit for that open space (Chinitz
1990, 5). Or, a power plant's unattractive transmission towers may
interfere with a community's aesthetic quality and view shed, but the plant
may create lower electricity costs that would facilitate regional economic
development (Fischel 1989, 205-206).
Some local governments implement reasonably effective growth
62


management systems, but others do not, and the absence of a viable
system or an ineffective system has the potential to produce undesirable
spillover effects in neighboring jurisdictions (Gale 1992, 425). The Gleeson
study examined fifty-five, identifiable growth management techniques,
assembled and used in various combinations by thirteen cities, counties, and
townships. It found that the local systems included in the study were
generally unorganized and focused on local problem solving with inadequate
attention to the externalities that they created elsewhere and ignored other
levels of government (Godschalk et al. 1979, 10).
Today, however, people are more aware of and, sensitive to, the
externalities or "spillover effects," of local decisions and recognize that what
happens in the region or in a nearby community affects what happens in
their own. This greater public awareness of state, regional, and municipal
actions helps to assure that responsible and equitable land use decisions will
be made at all levels of governments (DeHaven-Smith 1984, 413).
Spillover effects in Colorado. Partisan politics has left the state's Land
Use Commission with very little authority to coordinate land use policies
between jurisdictions; the history of which is explained later in this Chapter.
As a result, there are conflicts and spillovers which occur between
municipalities and between municipalities and other layers of government
(DeGrove 1984, 331-333). Interviews with officials from cities and towns
63


on the Front Range indicate that their jurisdictions are sometimes pressured
into approving dubious fringe development projects and annexing land
because they believe that the alternative is that another layer of government
will approve the project, leaving them with additional expenses, but no new
revenues.
The potential effects of local growth management on sprawl. Another
issue about local growth management programs is that although they may
produce compact development within individual municipalities, they may
also contribute to urban sprawl in metropolitan areas because developers
will opt for sites in exurban or rural communities where the political climate
is more favorable and the requirements for development approvals are less
strict and less costly (Fischel 1989, 56).
Many decisions about development and preservation cannot be carried
out by local governments working alone, and they tend to be unsuccessful
in dealing adequately with growth issues that transcend municipal
boundaries (Bollens 1992, 455). Such fragmented land-use decisions by
different jurisdictions can produce accumulative effects which aggravate
such problems as traffic congestion, air and water pollution, affordable
housing, and urban sprawl at the regional level (Altshuler 1994, 4-5).
The effectiveness of local growth management measures seems to be
context and site specific; subsequently, it is difficult to accurately draw
64


conclusions that may be applied generally to all local growth management
programs. Nevertheless, if the programs are to achieve their objectives and
produce their anticipated benefits, they must be well-considered in advance
and be incorporated with the overall planning for the community. Even with
efficient local programs, it is important to note that they may generate
impacts which negatively affect neighboring communities or the region as
a whole (Deakin 1989, 8-14).
The effects of growth management on housing costs. Much of the
current controversy about local growth management programs is about if,
and by how much, they cause an artificial rise in the price of housing (Katz
and Rosen 1987, 151-153). It has been suggested that local ordinances
and zoning regulations which block construction of affordable and
multifamily housing and time-consuming permitting processes may have a
greater impact on costs than local growth management programs and raise
housing costs more than is necessary (Downs 1992, 419).
Economists suggest that the cost of housing may be affected by
increasing the cost of construction, by monopolistically controlling supply,
and/or by encouraging builders to shift to building more expensive homes
with higher profit margins (Landis 1992, 497). A basic price model
hypothesizes that the price of any individual house is a function of its
structural characteristics, neighborhood characteristics, local fiscal
65


characteristics, and the land use policies of the jurisdiction in which it is
located (Katz and Rosen 1987, 151-153). It is also acknowledged that
higher housing prices may result from either demand stimulation or supply
restriction.
The problem with evaluating growth management as a supply restriction
is that it is hard to know what the true supply curve looks like when market
conditions naturally change over time. In addition, growth management is
especially difficult to assess because a restriction in housing supply may
actually stimulate demand for reasons that have nothing to do with
monopolistic control (Fischel 1989, 1). However, the effect of growth
controls on housing in some communities seems simple to predict. These
communities, predominantly in California, vote for initiatives to reduce
future residential development substantially below the existing permitted
level and below the rate that their vacant land inventory could reasonably
sustain (Katz and Rosen 1987, 150-151).
If land use regulations reduce the supply of housing in a metropolitan
area, one potential effect may be to increase home prices above those that
would have prevailed in a competitive real estate market with no growth-
related restrictions, but there are other factors besides land use regulations
which determine the cost of housing in a given area (Katz and Rosen 1987,
151-153). Communities which are effectively protected by growth
66


management may be more desirable places to live and subsequently have
higher housing prices, partially because of the accrued value of added
amenities, such as parks, streetscaping, and open space, and partially
because of the constraints on supply (Chinitz 1990, 7-8). Although there
is evidence that both effects exist, there are no studies which specifically
separate the value of amenities from monopolistic effects. Growth
management may create residential amenities at the community and
neighborhood levels, and for rapidly growing communities, they may prevent
impending disamenities. These amenities, which raise housing values, must
be accounted for in any evaluation of the impact of growth management on
housing costs. If a community has a monopoly on available building sites,
one cannot distinguish whether the increase in total land value is derived
from additional amenities for which home buyers are willing to pay more, or
if supply restrictions have driven up the prices of the existing homes and
remaining vacant land.
Another difficulty with the studies which have been done to test the
effect of local growth regulations on housing costs is that they do not
identify why some communities adopt growth controls and others do not.
The type of government and the market conditions in which growth controls
are adopted must be taken into account in any empirical work along these
lines. If only those communities where rapid growth, which inherently
67


causes housing prices to rise, adopt growth management programs; then it
becomes very difficult to determine the extent of the influence of growth
management on housing costs (Fischel 1989, 32-51).
Studies of Effects of Growth Management on Housing Costs
Studies which have attempted to estimate the impact of growth
controls and growth management on housing costs have produced mixed
and inconclusive findings because many of the variables which affect
housing costs are interrelated and difficult to identify and quantify
individually.
These studies have concluded that land-use regulations, especially
growth controls, do impact housing costs (Katz and Rosen 1987, 150-151).
One study found that an area that withdrew 20 percent of its suburban land
from development had a housing price inflation that was 6 percent higher
than in nearby unrestricted cities. In this study, the critical, highly
significant, independent variable was an index of growth restrictions. It
explained almost 40 percent of the variation in housing prices among the
metropolitan areas in the study (Fischel 1989, 38-39). Other empirical
evidence also indicates that growth controls tend to raise the value of
housing and sites on which development is still allowed and lower the value
of undeveloped land and properties that might be profitably redeveloped.
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On the other hand, another study found that growth management did
not affect the overall supply of housing. In cities such as Redlands and
Livermore, California, the primary long-term effect of growth management
was found to have evened out the rates of development; that is, activity
was reduced during boom years and redistributed to otherwise lean years
(Fischel 1989, 1-35).
Local spillover effects also may affect property values. Two variables
determine the extent, direction, and type of spatial spillover. One is the
degree to which consumers can find substitutes to residences whose prices
are rising because of regulations; the other is the characteristics of those
substitutes (Feitelson 1993, 461-463).
The effects of spillovers are complicated and difficult to detect in
conventional research designs although they have been tested by looking at
housing prices outside of the restrictive communities (Chinitz 1990, 7-8).
Henry Pollakowski and Susan Wachter determined that districts adjacent to
more restrictive districts had higher housing prices in Montgomery County,
Maryland. The implication is that spillover effects from zoning are probably
caused by monopolistic scarcity (Fischel 1989, 36). However, case studies
of the data on home prices in seven communities in California produced
contradictory results. The analysis of median sale prices for all new and
existing family homes within each community concluded that home
69


prices need not be systematically higher or increase faster in cities with
growth controls than in pro-growth cities. The study offered three possible
explanations for these findings: one, the controls were not really that
effective; two, there were adequate spillover opportunities in other nearby
communities; and three, the effects of the local controls were quite small
relative to other regional forces which raised or depressed housing costs
(Landis 1992, 497-499).
Two types of studies have attempted to determine the metropolitan-
wide effects of growth controls. One tests directly for the influence of
growth controls, and the other tests for monopoly power. A study of the
first type, of particular interest because it involved a modern program of
comprehensive growth management, was conducted to test the influence
of urban growth boundaries in Portland, Oregon, where urban areas are
required to define growth boundaries around their perimeters to prevent
sprawl development. Portland has two such boundaries: an outer perimeter
beyond which no development is allowed until the year 2000 and an inner
boundary outside of which development can occur only at local option until
the land inside has been fully developed. Knapp observed 455 undeveloped,
single-family home sites from inside and outside the boundaries. He found
that in the two Portland area counties, Washington and Clackamus, land
outside the outer growth boundary sold for significantly less than land inside
70


the boundary. Inasmuch as the distance from the Portland CBD had been
accounted for separately, the inference was that the twenty year delay in
development reduced the land values outside the outer boundary. The
findings for the inner boundary were mixed. In the more affluent
Washington County, the inner growth boundary was also shown to be a
constraint, but not in Clackamus (Fischel 1989, 23-24).
Since land values in Oregon cities differ little from the land values in
other comparable cities in the western United States, one could conclude
that Oregon's planning program has not resulted in excessively high housing
costs even though it favors compact urban growth and that statewide
planning has not caused residents to suffer housing costs higher than those
in neighboring states (Knapp and Nelson 1992, 95-96). One explanation for
this is that the boundaries redistributed only speculative land values without
affecting the overall supply (Knapp and Nelson 1992, 93-94).
The other type of intermetropolitan study asks if the structure of
government appears to be competitive or monopolistic. The hypothesis is
that metropolitan areas that have relatively few governments will tend to
have higher housing prices. Two studies found that areas with more
concentrated government structures tend to have higher housing prices, but
there was not a strong correlation in either study. In fact, in one of the
studies, natural restrictions were responsible for three times as much
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variation in housing prices as was monopoly power (Fischel 1992, 39-40).
Viewed from a larger metropolitan perspective, growth management may be
no more anomalous to supply response than a market-driven trend toward
larger houses (Landis 1992, 497).
It has been stated that no study, regardless how large, could make an
estimate of the detailed quantitative effects of local regulations on housing
costs because of the diversity of local market conditions, regulations, and
zoning that affect housing costs (Downs 1992, 420). The review of the
few aforementioned studies shows the difficulty in clarifying the relationship
between growth management and housing costs. Growth management
policies, either to the extent they were adopted to direct growth that was
already occurring or to the extent that their results may produce positive
benefits, tend to be associated with increases in home prices, but this cause
and effect relationship has not been established.
In response to some of the concerns mentioned above, about local
planning for growth and land use regulations, ten states have enacted state-
wide growth management programs and another five have programs for
specific regions. Issues and studies of these programs are reported in the
next section.
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State/Reqional Growth Management Programs
Proponents of growth management, especially environmental groups,
recognized a need for programs beyond the local government level. This
conclusion was supported by recommendations from three national
commissions that linked local growth policies to larger scale social,
economic, and environmental problems in the country (Bollens 1992, 459).
Initially, these state and regional land use regulations were stimulated
primarily by local environmental politics and a desire to preserve agricultural
land, but they have evolved to reflect as much concern over highway
congestion, affordable housing, and infrastructure finance as environmental
protection and resource conservation (Meeks 601).
State growth management programs are intended to respond to the
problems created by fragmented, local governmental decisions and to
coordinate the efficient utilization of land and available resources. The
recognition of intermunicipal spillovers generated by duplications and
conflicts between local governments was the economically persuasive
rationale for having a higher layer of land use regulation and served as an
impetus for the reallocation of land use authority and responsibilities at
state, regional, and local levels (Godschalk et al. 1979, 10). State
intervention into land use planning has involved three approaches, either
singly or in combination: regulation of particular types of development.
73


regulation of particular geographic areas, and/or state mandated planning to
control local zoning (deHaven-Smith 1984, 413-415).
Issues addressed by state/reqional programs. State/regional growth
management programs incorporate a variety of provisions to achieve their
objectives which include the coordination of government's capacity to
supply infrastructure and public services with the public's demand for them,
the preservation of fiscal stability, the provision of housing opportunities,
especially for those with low and moderate incomes, the creation of jobs,
the protection of the natural environment, and the continuance of the
existing life styles of individual communities. The emphasis is not on
stopping growth, but on directing it and mitigating its fiscal and
environmental impacts (Godschalk et al. 1979, 8). Table 2.03 on the next
page lists the states which have either state or substate regional growth
management initiatives and Figure 2.02, on the following page, outlines
some of the provisions which are often included.
Two of the concepts in these programs are consistency and
concurrency. Consistency requires congruity in land use policies between
levels of government, compatibility between plans of proximate jurisdictions,
and constancy in the plan elements within communities. Concurrency
assures that adequate infrastructure will be available in a timely manner to
serve new development before it is approved (Bollens 1992, 455-463).
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TABLE 2.03
STATES WITH STATEWIDE OR REGIONAL
GROWTH MANAGEMENT INITIATIVES IN THE UNITED STATES
(Clark, 1994)
STATE YEAR(S) LEGISLATION WENT STATEWIDE, IF APPLICABLE SUBSTATE AREA OR REGION COVERED FURTHER INNOVATION CONSIDERED
Hawaii 1961, 1963, 1978 No
Vermont 1970,1988, 1990 No
Florida 1972,1980, 1984, 1985 Coastal Areas No
Oregon 1973 Portland No
New Jersey 1985,1989 Pinelands No
Maine 1988 No
Rhode Island 1988 No
Georgia 1989 No
Washington 1990, 1991 Puget Sound No
Maryland 1991, 1992 Critical Areas No
California San Francisco and Critical Areas Yes
Massachusetts Cape Cod Yes
New York Adirondak Park Yes
North Carolina Coastal Areas Yes
Virginia Critical Areas Yes
Colorado Yes
Connecticut Yes
Pennsylvania Yes
West Virginia Yes
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FIGURE 2.02
CONCEPTS OFTEN INCORPORATED INTO STATE/REGIONAL
COMPREHENSIVE GROWTH MANAGEMENT PROGRAMS
Requirement for strong incentives for comprehensive local land use and
infrastructure planning.
Formal procedures for intergovernmental coordination.
Regional/state review and approval of local plans.
State financial assistance for planning.
Consistency requirements with zoning and/or state plans.
State agency consistency with local plans.
Public participation requirements.
Negotiation or mediation procedures.
Explicit goals to which all plans must conform.
Urban growth boundaries.
Impact fee authority.
Real estate transfer taxes/fees.
Critical area designations.
Developments of state or regional significance.
Authorization of development agreements (Meeks 602-603).

76


The availability of affordable housing is another major component of
state programs; some even suggest that it should be part of the required
infrastructure that should be met as development occurs. For instance, in
1985 New Jersey committed itself to a balanced growth strategy which
coincided with its State Supreme Court's Mt. Laurel decisions which
asserted that suburban communities had to accept their "fair share" of
regional housing needs, and zone land accordingly. The court's guide plan,
which was incorporated into the state program, was used to determine a
community's share of affordable housing. Florida is another example of a
state that has been able to translate broad social and economic goals into
well-focused regulations and programs which can be implemented. There,
programs especially emphasize the construction of affordable housing while
promoting compact development patterns.
State programs also promote economic development (DeGrove 1992,
1-35). For instance, the Vermont Act 200 states that "economic
development should be pursued so as to provide maximum economic benefit
with minimal environmental impact." Through state facility investment and
streamlining of environmental review, it encourages intensive, compact
growth in locally and regionally designated "growth centers," which must
have sufficient infrastructure capacity and population density to support
additional economic activity (Bollens 1992, 459-460).
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States with growth management programs have included procedures to
limit the impacts of spillovers generated at the local level and for conflict
resolution between municipalities, counties, and/or regional councils. The
Gleeson study, referred to earlier, concluded that intergovernmental
regulatory procedures and planning can facilitate the development of
responsible state growth programs that focus on a comprehensive balance
between the economic, social, and environmental needs of regions and the
local needs of communities (Bollens 1992, 455-463).
State programs have also taken into account the positive externalities
of regionally beneficial growth and seek to assure that local governments
accept their fair share of growth and the construction of appropriate
infrastructure. They also allow a higher level of government to intercede to
stop a community from approving a locally desired development if it would
impose substantial net costs beyond its own boundary (Fischel 1989, 205-
206).
The functional aspects of state programs. The primary elements which
determine the functional aspects and differentiate state programs are:
which entity does the planning, which plans and policies have strategic
priority, how plans effectuate actual change, and what means are used to
resolve disputes (Clark 1994, 425-426).
At a minimum, state statutes provide incentives for comprehensive,
78


local land use planning and some states actually mandate local planning
(Gale 1992b). Many states, like Florida and Oregon, attempt to balance
state and local concerns and enable the communities to retain considerable
land use authority within the planning framework. But, at the same time,
they have attempted to interject non-local land use goals and economic
activities by providing funding for and supervising local comprehensive plans
and their implementation (Altshuler 1994, 6).
State growth management, by regionalizing land use planning, has
prompted two important consequences. One, it has elevated political
interest and collective processes to a higher plane by increasing the size of
the electorate affected by land use decisions. The other is administrative.
It has shifted the structures for decisions about land use from being strictly
local to multi-local, generally within a hierarchy of regional and/or state
entities (Bollens 1993). Review boards, such as those established in Oregon
and Rhode Island, were specifically designed to settle disputes between
jurisdictions (Gale 1992, 427).
Political implications for state and regional programs. Although the
goals, policies, and implementation of state programs may be clearly stated,
political pressure is significant. There is an on-going debate about the
proper domain of public rights in private property; at issue is the type and
intensity of land use. The centralization of growth management is seen by
79


its proponents as a means to regionalize the "public interest1' in land use,
suggesting a more expansive norm for defining the public interest in the use
of private property. Their argument is that legal structures which allow for
regional decision-making confer a greater capacity for self-determination by
regional residents, help to internalize externalities, encompass broader
revenue bases, and extend land regulation to more remote perimeters.
Opponents, who tend to resist public encumbrances on private land, find in
centralization a regionalized "public" desirous of greater control and less
amenable to private influence.
In some cases, in order to garner the political support necessary to
enact growth management programs, these programs have had to
incorporate disparate goals into their planning policies. Key among statutory
concessions have been: limitations on the coverage of certain interests,
users, and spaces; provisions for local governments to opt-in and opt-out,
and severe constrictions of regulatory enforcement powers so that there are
few or no penalties for noncompliance.
Even given these concessions, enacting statewide growth management
legislation can offend the mutually opposed advocates of local control.
Frequently, citizens at-large support what they believe is the potential for
greater responsiveness from local governments; propertied interests seem
to find in local control greater opportunities to shape local policies in support
80


of private equity, including approvals for developments with potentially
disadvantageous fiscal or environmental effects.
The degree of deference paid localities in statewide growth
management statutes overreaches typical state constitutional standards in
order to curry favor with the advocates for local control of land use; this
political consideration may be based on a mistaken belief that they represent
the will of the electorate at large. The real estate and development
community is capable of orchestrating and sustaining prolonged opposition
and is often joined with municipal leagues and local elected officials and
staff in opposition to innovation in state land use planning. These groups
have inherent interests, though perhaps based upon achieving different
ends, in maintaining influence over local land regulation and to limiting non-
local oversight of their decisions.
The effectiveness of state and regional programs. The tradition of local
authority over land use has worked to stall growth management and
coordinated planning in many states. Established programs are still
evolving, and underfunding and backsliding are frequent. In many cases,
the gains realized through state-sanctioned regional growth management are
modest because the regulations lack the strength to compel compliance.
Whether the mechanisms of growth management actually achieve their
stated goals and reduce sprawl is the subject of continuing conjecture. The
81


answer depends upon whether localities act independently, under local
management, or together under regional growth management, and on how
the land market responds to the efforts to reduce space consumption.
Developers and other land users who are denied municipal access as a
result of growth limits have several options; the consequences of each are
contingent upon secondary factors. If land prices rise because of
constraints on supply, developers may either substitute other inputs for land
in the production of housing or opt for undeveloped, infill sites. In the short-
term, both alternatives may result in higher densities. However, over time,
land shortages within a built out perimeter may cause later development to
"leap frog" beyond the growth perimeter or to locate in other communities.
Regional growth management may be the only alternative that can
direct growth to effectively preclude this potential for sprawl in the long-
term. However, state and regional criteria for plan review have often been
found to be ambiguous because of numerous and potentially conflicting
goals and unspecified trade-offs. In some instances, state and regional
spatial plans were prohibited or optional; consequently, communities may
undermine the process if they choose to do so (Clark 1994, 425-443).
Fiscal efficiency of regional growth management. Another issue with
regional growth management programs is their ability to produce
advantageous fiscal effects on public costs. One recent study which was
82


done to test the fiscal efficiency of a regional growth management program
on public capital and service costs was "The Fiscal Health of Municipalities
Under Planned and Traditional Growth." It was published in 1992 as part
of the Impact Assessment of the New Jersey Interim State Development
and Redevelopment Plan. This study compared the Pinelands, an area of
approximately one million acres centered between Philadelphia and Atlantic
City in southern New Jersey, with similar communities, which did not have
growth management programs, outside the Pinelands. The Pinelands
implemented growth management policies in 1979. Using regression
analysis, the study examined per capita costs for debt service, capital
outlay, outstanding debt, and operating expenditures for 1980 and 1988
and the percent change in each of these over the eight year period.
This study concluded that its findings were similar to those of previous
studies. Operating expenses were not significantly affected by density, but
economies were found for infrastructure as reflected by the per capita
outstanding debt, which the study deemed an appropriate measure of
obligations accrued for investment in the construction of infrastructure for
long-term use (Burchell 1992, 37-54).
State/Reaional Planning in Colorado
Inasmuch as this paper's study area is located on Colorado's Front
83


Range, a digression is next made to include a brief history of the State's
planning efforts for growth. Then, since much of the study area is within
the boundaries of the Denver Regional Council of Governments, the history
and current status of their regional planning are also reviewed.
Planning for the accommodation of growth in Colorado has been a
periodic priority in response to the pace, pattern, and content of its growth
(Clark 1995). Nonetheless, it was one of the first states to attempt to
define a state role in land use. Part of the increased support for better land
use controls involved a general increase in citizen activism, particularly
environmental protection. Initially, growth in Colorado was welcomed for
producing benefits, including the development of Denver into a large,
sophisticated metropolitan area. However, as growth continued, especially
in the seven counties in Colorado's Front Range, the negative impacts of
some very substantial growth pressures began to be more and more evident
as Kirk Wickersham, Jr. pointed out then were:
...increased traffic snarls and air pollution, increased taxes to subsidize
public facilities for new areas, congestion in mountain recreation areas,
scars on the landscape, and increasingly, the lowest common denominator
of homogeneity of design in the commercial strips and housing tracts in
suburban fringe areas.
By the early 1970s, a majority of Coloradans were in-migrants. They
developed a "last-one-in" syndrome and became concerned about future
growth. At the same time, a number of real estate sales schemes for the
84


development of marginal lands were in progress in Colorado.
During the late 1960s and early 1970s, the State moved with a sense
of purpose to strengthen both the state and local roles in land use and
growth management. It passed air and water pollution control acts in 1966
and established a state planning function in the Governor's office in 1967.
The first state-wide comprehensive development plan, which established
goals, but little implementation, was prepared in 1969 (Clark 1995).
Under Republican Governor John A. Love, the legislature in 1970 passed the
Colorado Land Use Act and established a Colorado Land Use Commission,
charged with providing technical and financial assistance to local
governments to encourage them to engage in the planning process.
One of the important functions of this Commission and its staff was to
conduct most of the research and drafting of the legislation that resulted in
Senate Bill 35, adopted in 1971. This law was largely intended to slow
down sprawl on the urban fringes of the Front Range development area. It
required subdivision regulations to be developed in the unincorporated areas
of all counties in Colorado, but not in cities or other incorporated areas.
There are two major loopholes in the law: 1) it exempts all subdivisions of
land in parcels of thirty-five acres or larger, and 2) it gives the counties the
authority to exempt certain other subdivisions altogether.
In 1974, House Bill 1041 was passed with an amendment which
85


shifted the responsibility for identifying and designating land use matters of
state concern to local governments and review by the Department of Local
Affairs. Partisan politics greatly influenced this legislation which gave only
an ambiguous and uncertain mandate to the state to involve itself in the
planning process. Any state control was believed to be opposed by such
groups as the Association of County Commissioners, the Colorado
Association for Housing and Building, and the Rocky Mountain Developers
Association. A key lobbyist noted that:
...environmental groups supported a strong bill with a powerful state role,
while homebuilders, cattlemen, developers, and utilities would have
preferred no bill at all.
The simplicity of the law led to disagreements about whether there
really was a state role, especially to the extent that, in any set of
circumstances, the state could force a local government to take action
against its will. The Bill identified four areas of state interest: mineral
resource areas, natural hazard areas, areas having state-wide historical,
natural or archaeological importance, and areas around key facilities which
might have a "material effect upon the facility or surrounding community."
It also specified nine activities of state interest, most of which involved the
site selection and construction of various facilities for domestic water,
sewage treatment systems, solid waste disposal systems, and the siting and
development of new communities. Particularly in Colorado, where water is
86


scarce, the authority to control the location and extent of new water and
sewage systems is an important element in being able to establish growth
patterns.
If anywhere the state was given the indirect power to force local
governments to do anything, under any circumstances, it was under the
requirements of Section 407. This Section gives the Land Use Commission
authority to initiate identification designation and guidelines for matters of
state interest by making a "formal request" to a local government, after
which a public hearing must be held. There was a bargaining tool, in that
once the local government received the request, there was a moratorium on
development until designation and guidelines were finally determined. Thus,
the law did provide a means of avoiding ill-advised and hasty development.
Even though local governments could make their own decisions for land use,
the Commission could refer those decisions for judicial review in district
court and have the moratorium continued.
House Bill 1034, also passed in 1974, was in every sense a modern,
land use enabling statute for local governments. It gave local governments
broad authority to plan for and regulate the use of land within their
jurisdictions in order to mitigate hazards, protect wildlife, or preserve land
of historic and/or archaeological importance.
It specifically authorized several innovative land and growth
87