! UNIVERSITY OF CALIFORNIA Santa Barbara Smart Growth Machines: The Political Economy of Sustainable Place A Dissertation Submitted in partial satisfaction of the requirements for the degree Doctor of Philosophy in Sociology by Erik Solevad Nielsen Committee in charge: Professor Richard Appelbaum (Chair) Professor Raymond Clemencon Professor Richard Flacks Professor Fernando Lopez Alves Professor Simone Pulver September 2014
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The dissertation of Erik Solevad Nielsen is approved. _____________________________________________ Richard Appelbaum, Committee Chair _____________________________________________ Raymond Clemencon _____________________________________________ Richard Flac ks _____________________________________________ Fernando Lopez Alves _____________________________________________ Simone Pulver June 2014
! """ Smart Growth Machines: The Political Economy of Sustainable Place Copyright 2014 by Erik Solevad Nielsen
! iv ACKNOWLEDGEMENTS My dissertation would not have been completed without the help and support of the five members of my dissertation c ommittee. During my time at the University of California Santa Barbara, I have benefited greatly from the guidance of my chair Richard Appelbaum and received constructively critical feedback from him on my work as it progressed. Rich saw potential in me and offered me the chance to teach a three hundred student introductory course on global studies as my first class at UCSB. We also collaborated on several chapters of a sociology textbook. These were tremendously rewarding experiences. Rich also introduced me to Raymond Clemencon who hired me onto the staff of the Journal of Environment and Development. As Managing Editor of the journal, I was able hone my analytical skills and gain a greater understanding of professional scholarship. Raymond provided thoughtful reviews of my sc holarly work and supported my public presentations. He encouraged me to step outside of the ivory tower to consider what my work meant for urban and environmental policy. I have also been fortunate enough to receive Simone Pulver's guidance and frequent f eedback on my papers, ideas, and aims. I spent many hours in her office reviewing the connections between theoretical statements and empirical data. My work is much more empirically refined and theoretically precise as a result of those meetings.
! v Dick Fla cks has been an inspiration since we first met in 2010. His lifetime of activism blended with his pragmatic understanding of history and social change demonstrated to me the capability of educators' to work for the greater good while still conducting top notch scholarly research. His wife Mickey also deserves my gratitude as she met with me several times to discuss the politics of housing and development issues in Santa Barbara. I have known and worked with Fernando Lopez Alves for several years. I have always admired his ability to think c omparatively and historically. Fernando's classes introduced me to various methods of composing sociological research, and his door has al ways been open during the times of high stress over the years. I would also lik e to thank Harvey Molotch, whose theory I have spent the last five years considering on a near daily basis. I am indebted for our conversations over coffee, via email, and at conferences. Harvey read early drafts of Chapter VI, the smart growth machine cha pter. He felt it was a good contribution and gave me thoughtful, helpful, and kind feedback. Unfortunately, my friend and former committee member Bill Freudenburg passed away before I started my research. He passed away shortly after my dissertation rese arch began. We were, however, able to meet and go over my initial ideas. Interestingly, he told me that the provision of parking would probably be one of the most consequential aspects of my research Bill was the first person from UCSB whom I spoke with a nd the possibility of working with him was one of the reasons
! vi that I applied to the graduate program. We both hailed from Nebraska and had that Midwestern bond. I served as his Teaching Assistant several times and believed his passionate lecture s truly cha nged my life; I like to think that Bill taught me how to teach. I miss him dearly. I am grateful for the nominations and support that the UCSB Department of Sociology has provided me. My awards and fellowships allowed me to conduct my fieldwork research i n th e Portland Metro Area. I was able to further develop my pedagogical skills. I am especially thankful to Maria Charles, Denise Segura, John Mohr, Verta Taylor and other professors in sociology who helped me find my niche when I f irst arrived at UCSB. I am eternally grateful to the staff who have worked in the Department of Sociology, particularly Sharon Applegate, but also Mary Drake and Lisa Blanco. I am indebted to my former committee members at the University of Ka nsas. Professors Joane Nagel, my chair, David N. Smith and Bob Antonio taught me how to critically evaluate texts and empirical data. I must also acknowledge my former professors at Dana College, my undergraduate institution. David Hoppe, my psychology professor, convinced me to stay in c ollege at a time when I was considering other plans. Frank Taylor, my first sociology professor, who passed away in 2009, started me on this sociological journey. Laura LaM arr, my second sociology professor, helped me immensely by urging me to submit paper s to conferences as an undergraduate. She guided me into professional life.
! vii This dissertation is dedicated to my family spread across the country and the world. My partner, Jami Joelle Nielsen, has been steadfast in her support of my passion for sociolog ical endeavors. She has relaxed me and energized me. Her undying love has lifted me and carried me forward through many trying times. Jami has r eviewed my work, alerted me to relevant books or articles, and helped me see the world differently. I have alway s been interested and concerned for the environment, but Jami's passion for righting environmental wrongs changed the trajectory of my own scholarship. I am forever grateful to be wed to such an amazing person. Now, as her art takes off, I look forward to following her as she follows her own creative passions. My mother, Patricia Nielsen, has been incredibly supportive of all my endeavors throughout my life. Her strength has been an inspiration to me and has helped me face uncertainties with confidence an d resolve. My sister, Sonja Anne Nielsen Adams, has always shown interest in what I am researching and teaching. She works as a social wor ker and, again, her strength inspires me My brother in law Emerson has been a perfect addition to our family and I lo ve him like a brother. Our discussions on new economic ideas have provoked many thoughts that surface in my own work. Finally, this dissertation is dedicated to my father, Thomas Solevad Nielsen, who unfortunately will not be able to read it. In late June of 2010, shortly after my dissertation topic was chosen, he passed away. It was sudden and completely
! viii unexpected. It was all the more jarring because Father's Day was the last time that I spoke with him. I dedicate my dissertation to my Dad because he and my Mom raised me to explore my curiosity and they encouraged me to both fight for the downtrodden and protect the natural environment. He was a librarian, politician, journalist, surveyor, and a small business owner in addition to being a father. My Dad i nstilled in me a craving for tacking intellectually complex problems. I often considered him an extra committee member. I am eternally grateful for the twenty nine years I was able to spend with him.
! ix VITA OF ERIK SOLEVAD NIELSEN JUNE 2014 EDUCATION Bachelor of Arts; Psychology and Sociology, Dana College, 2004 Master of Arts; Sociology, Magna Cum Laude, University of Kansas, 2006 Doctor of Philosophy; Sociology, University of California, Santa Barbara, 2014 (expected). PUBLICATIONS Ni elsen, Erik Solevad. (Forthcoming). "Smart Growth Machines: The Ecological Modernization of Urban Political Economy." Research in Urban Studies: Sustainable Cities: Global Concerns/Urban Efforts 15. Nielsen, Erik. 2008."Ethnic Boundaries and Conflict in Darfur: An Event Structure Hypothesis." Ethnicities, 8(4): 427 462. SELECTED CONFERENCE PRESENTATIONS 2014 "Sustainable Urban Development: Lessons from California and Oregon," Global Studies Conference, UC Santa Barbara. 2013 "Smart Growth Machines and the Great Recessio n," Urban Affairs Association, San Francisco 2012 "Assembling Urban Sustainability: New Urbanism in California and Oregon," Society for the Social Study of Science, Copenhagen School of Business, Frederiksberg, Denmark. 2006 "Ethnic Boundaries in Darfur: From Economic Fluidity to Militarized Rigidity." American Sociological Association annual meeting, Montreal, Canada. 2005 "Ethnosexual Cleansing in Darfur." Midwest Sociological Society annua l meeting, Minneapolis, MN. 200 3 "Power, Structure, and Postmodernism in S ystems of Learning." Nebraska Undergraduate Sociological Symposium, Doane College, NE. 2003 "Welfare Reform and the Structural Poverty of Single Mothers in the Inner City." Midwest Sociological Society, Chicago, IL.
! x COURSES TAUGHT Urban Society Introduction to Sociology Introduction to Global and International Studies Environmental Justice and Sustainable Communities Sociology of Family SELECTED HONORS AND AWARDS 2012 Dean's Advancement Fellowship, Universi ty of California, Santa Barbara 2011 Outstanding Young Alumnus Award, Dana College Alumni and Friends Association 2011 Humanities and Social Science Research Grant, University of California, Santa Barbara 2011 Sociology Departmental Fellowship, Uni versit y of California, Santa Barbara 2010 Dean's Fellow, University of California, Santa Barbara 2007 Outstanding Graduate Research Project, College of Liberal Arts and Sciences, University of Kansas 2003 Second Place, Paper Competition, Nebraska Undergraduate Sociological Symposium, Doane College 2003 American Sociological Association Honors Program 2002 First Place, Paper Competition, Nebraska Undergraduate Sociological Symposium, University of Nebraska, Kearney RESEARCH ASSISTANTSHIPS 2012 Research Assistant W.W. Norton & Company 2005 Research Assistant Policy Research Institute, University of Kansas SELECTED PROFESSIONAL EXPERIENCE 2013 University of California, Santa Barbara, Research Men torship Program 2013 Fiji Education Development Corporation, Board of Directors 2009 Journal of Environment and Development, Managing Editor
! xi ABSTRACT Smart Growth Machines: The Political Economy of Sustainable Place by Erik Solevad Nielsen American urban development is characterized by urban sprawl : the low density, single family housing and separated land uses that are dependent on automobile transportation. Sprawl has negative affects for the environment and for social health. In the last twenty years, planners and developers have adopted smart growth principles. Smart growth is a land use philosophy and practice that promotes higher density housing, mixed use neighborhoods, more open spaces, transit alternatives to the automobile, and soci al equity through mixed income neighborhoods. It is viewed as an alternative to sprawl. The research project first examines the structural and cultural features of communities that both support and oppose smart growth development. This dissertation then examines whether or not smart growth represents a break from the practices of conventional urban development, long theorized as a growth machine The growth machine describes the collusion of land use interests
! xii with local government to direct economic growth The purpose of this inquiry is to determine if there is an empirically distinct smart growth machine A comparative approach is applied to twelve cities in Southern California and Oregon. Ten smart growth projects (SGPs) in four cities with in California and Oregon were identified and semi structured interviews were held with the respective developers, architects and civic officials who were involved in the implementation process. Comparative, descriptive and grounded approaches were use d to generate themes from interviews and other data sources. The dissertation culminates with a concluding chapter that briefly assesses the findings and their implications for social science, economic practice, and public policy.
! x iii Table of Contents I. Introduction ................................ ................................ ................................ .............. 1 A. Introduction to Smart Growth ................................ ................................ ............... 1 B. Theoretical Frames ................................ ................................ ................................ 2 C. Research Questions ................................ ................................ ............................... 4 D. Assumptions ................................ ................................ ................................ .......... 4 E. Gaps in the Literature ................................ ................................ ............................ 5 F. Layout of the Dissertation ................................ ................................ ..................... 6 II. The Theoretical and Empirical Origins of Smart Growth Machines ................ 9 A. Introduction ................................ ................................ ................................ ........... 9 B. Urban and Environmental Sociology ................................ ................................ .. 11 Treadmill of Production ................................ ................................ ....................... 11 Ecological Modernization Theory ................................ ................................ ....... 12 Urban Political Economy ................................ ................................ ..................... 14 Urban Growth Machine ................................ ................................ ....................... 19 Neoliberalism ................................ ................................ ................................ ....... 21 C. Organization Studies, Markets, and Entrepreneurialism ................................ ..... 23 Organization Studies ................................ ................................ ............................ 23 Markets ................................ ................................ ................................ ................ 26 Entrepreneurialism ................................ ................................ ............................... 28 D. Green Building and Communities of Practice ................................ ................... 30 E. The Political Economy of Sprawl ................................ ................................ ....... 32 F. Smart Growth, New Urbanism, and Regionalism ................................ .............. 36 G. Smart Growth versus Sprawl ................................ ................................ ............. 40 H. Smart" Regulations ................................ ................................ .......................... 43 I. Theoretical Bridges to be Built ................................ ................................ ........... 45 III. Research Design and Methods ................................ ................................ ........... 47 A. Introduction ................................ ................................ ................................ ......... 47 B. Rationale for Research Design ................................ ................................ ............ 48 C. Case Selection and Units of Analysis ................................ ................................ 49 D. Interviews and Coding ................................ ................................ ........................ 52 E. Research Question 1 ................................ ................................ ............................ 53 F. Research Question 2 ................................ ................................ ............................ 5 5 G. Research Question 3 ................................ ................................ ............................ 5 6 H. Issues of Generalizability ................................ ................................ .................... 5 7 I. Contributions of the Study ................................ ................................ .................... 58 IV. Regions, Cities, and Urban Growth: California and Oregon .......................... 59 A. California Urban Growth Management ................................ .............................. 59
! xiv 1. History ................................ ................................ ................................ .............. 60 2. Population Growth ................................ ................................ ........................... 6 1 3. Southern California ................................ ................................ .......................... 6 3 4. California Land use structure ................................ ................................ .......... 6 4 a. Zoning ................................ ................................ ................................ ........... 6 5 b. General Plan ................................ ................................ ................................ .. 66 c. Tax Revolt and Fiscal Crises ................................ ................................ ......... 6 7 d. California Environmental Quality Act (CEQA) ................................ ........... 6 9 e. Exactions and Impact Fe es ................................ ................................ ............ 71 f. Development Caps ................................ ................................ ......................... 70 5. California Cities and Growth Controls ................................ ............................ 72 a. San Luis Obispo ................................ ................................ ............................ 73 b. Santa Maria ................................ ................................ ................................ ... 76 c. Santa Barbara ................................ ................................ ................................ 77 d. Ventura ................................ ................................ ................................ .......... 83 e. Oxnard ................................ ................................ ................................ ........... 85 f. Camarillo ................................ ................................ ................................ ....... 86 g Thousand Oaks ................................ ................................ .............................. 87 B. Oregon Urban Growth and Management ................................ ............................... 88 1. History ................................ ................................ ................................ .............. 89 2. Oregon Growth Manag e ment ................................ ................................ .......... 90 a. Senate Bill 10 ................................ ................................ ................................ 90 b. Senate Bill 100 ................................ ................................ .............................. 90 c. Urban Growth Boundaries ................................ ................................ ............ 91 3. Portland ................................ ................................ ................................ ............ 92 a. Portland Development Commission ................................ ............................. 93 b. Metro ................................ ................................ ................................ ............. 94 c. Metro TOD Program and Region 2040 ................................ ......................... 95 4. Oregon Cities and Growth Controls ................................ ................................ 98 a. Beavert on ................................ ................................ ................................ ...... 98 b. Tigard ................................ ................................ ................................ ............ 99 c. Lake Oswego ................................ ................................ ................................ 99 d. Milwaukie ................................ ................................ ................................ ... 100 e. Gresham ................................ ................................ ................................ ...... 102 V. A Qualitative Comparative Analysis of Smart Growth Regions .................... 104 A. Introduction ................................ ................................ ................................ ....... 104 B. Raw Data Table ................................ ................................ ................................ 104 C. Operationalization of Outcomes ................................ ................................ ........ 105 1. Proportion of the Workforce in the Creative Class ................................ ........ 106 2. Housing Affordability ................................ ................................ .................... 107 3. Income ................................ ................................ ................................ ............ 108 4. Population Growth ................................ ................................ ......................... 108 5. Political Leanings ................................ ................................ ........................... 109
! xv D. Smart Growth Cities ................................ ................................ .......................... 109 E. Raw Table to Binary ................................ ................................ .......................... 110 F. Minimization Explanation ................................ ................................ ................. 111 G. Interpreting Configurations ................................ ................................ ............... 1 11 H. Configuration 1 ................................ ................................ ................................ 111 I. Configuration 2 ................................ ................................ ................................ ... 113 J. Conclusion ................................ ................................ ................................ .......... 117 VI. The Smart Growth Machine ................................ ................................ ............. 118 A. Introduction ................................ ................................ ................................ ....... 118 B. Entrepreneurialism ................................ ................................ ............................ 119 1. Political and Economic, Individual and Institutional ................................ ..... 120 2. Santa Barbara ................................ ................................ ................................ 122 3. Ventura ................................ ................................ ................................ ........... 123 4. The Portland Metro TOD Program ................................ ................................ 128 5. Detection of Opportunities ................................ ................................ ............. 135 C. Socio technical Expertise and the Buildability of Smart Growth ..................... 137 1. Upfront Costs ................................ ................................ ................................ 138 2. Return on Investment ................................ ................................ ..................... 142 3. Technical Expertise ................................ ................................ ........................ 145 D. Smart Regulations ................................ ................................ ............................. 148 E. Conclusion ................................ ................................ ................................ ......... 156 VII. Smart Growth and Narratives of Feasibility ................................ ................. 158 A. Introduction ................................ ................................ ................................ ....... 158 B. Governments and Markets, Liberalism and Neoliberalism ............................... 158 C. Financial Feasibility: Commerce and the Great Recession ............................... 170 D. Knowledge Gaps Between Social Actors ................................ ......................... 178 E. The Feasibility of High density Depends on its Desirability by Community ... 181 F. Conclusion ................................ ................................ ................................ ......... 184 VIII. Conclusion ................................ ................................ ................................ ....... 186 References ................................ ................................ ................................ .................. 194 Appendix A: Research Design and Methods ................................ ............................. 209 Appendix B: Cities and Smart Growth Projects ................................ ....................... 209 Appendix C: Polic y and Project Timelines ................................ ................................ 210 Appendix D: Raw Data ................................ ................................ ............................. 213 Appendix E: Registered Voters in Democratic and Republican Parties .................... 214 Appendix F: Binary Conversion ................................ ................................ ............... 21 4 Appendix G: Solution Formulas ................................ ................................ ................ 216 Appendix H: Cities and Smart Growth Projects ................................ ....................... 216
! xvi Appendix I: Smart Growth Machine versus Sprawl oriented Growth Machine ....... 217 Appendix J: Buildability ................................ ................................ ........................... 218 Appendix K: The Beranger Storefront, Gresham ................................ ...................... 219 Appendix L: Central Point, Gresham ................................ ................................ ........ 220 Appendix M: The Crossings, Gresham ................................ ................................ ..... 220 Appendix N: North Main Village, Mi lwaukie ................................ ........................... 221 Appendix O: Pacific Pointe, Ventura ................................ ................................ ........ 221 Appendix P: The WAV Courtyard, Ventura ................................ .............................. 222 Appendix Q: Pacific Pointe, Ventura, Vacant Storefront ................................ .......... 222
! # I: Introduction: The Feasibility of Growing Smarter A. Introduction to Smart Growth Can urban growth get "smart?" That is the question that faces city planners, civil engineers, and developers across the world. "Smart" is a term which encompasses a range of behaviors, but is often used to denote the sustainable, efficient technological fe atures of a given socio technical system or product line. In urban studies, "smart growth" suggests an alternative to the widely acknowledged problems with urban sprawl. But does smart growth disrupt the practices of urban development enough to usher in an ecological restructuring of the built environment? Is smart growth more likely in certain communities rather than others? Is smart growth feasible? The challenge of managing urban growth is daunting. It is estimated that there are roughly 170,000 commer cial spaces and 1.8 million residential homes built each year in the US (Henn and Hoffman, 2013). Moreover, it is projected that by 2030, anywhere between 62 105 million housing units will be in demand depending on demographics (NAS, 2009). Moreover, balan cing social equity and environmental protection will be one of the most difficult challenges facing cities and communities in managing this growth (IPCC, 2007; Brown, 2009; Urry, 2011). Research on local carbon emissions indicates that places that promote "economic growth" and low cost sprawling development produce higher levels of CO 2 emissions (Calthorpe, 2012). In the last twenty years many urban planners and practitioners have begun to argue that
! 2 building higher density housing with greater regional tra nsit connectivity can reduce CO 2 emissions and provide greater economic stability (NAS, 2009; Fuller and Crawford, 2011; Calthorpe, 2012). Planners, scholars, and social movement activists increasingly view compact urban design as a necessary response to the spatial mismatch caused by the low density, single use development sprawled across urban landscapes (Wolch, et. al., 2004) Urban sprawl is associated with a host of detrimental social and environmental costs: increased CO 2 emissions, devastation of na tural habitats, automobile and oil dependency, and spatial fragmentation. Many city planning divisions have integrated the principles of smart growth into their planning repertoire (Downs, 2004 ) although fewer have implemented many smart growth policies. B. Theoretical Frames It is not known whether the actors and organizations that develop smart growth projects differ substantially from those that constitute the conventional real estate industry and develop sprawl The growth machine theory captures the collusion of government officials and property developing actors and institutions. It states that these groups coalesce to generate profit and revenue maximization through the intensification of land development. The driving motivation of this dissertation is to determine if the social actors and institutions that are developing s mart growth projects (SGPs) conduct business substantially differently from the organizations described in decades of growth machine studies. It is recognized, however, that smart growth organizations operate in a capitalist system and must still pursue growth.
! 3 Smart growth is consistent with the ideas and practices of ecological modernization Ecological modernization theorists and practitioners maintain that the modernization pr ocess must be furthered by an enlightened market orientation This reconstitution of markets, they suggest, could ecologically restructure liberal capitalism to be less damaging to the environment (J ÂŠ nicke, 2008). They advocate for the implementation of smart regulations that combine restrictions with incentives as the most feasible way to change industrial practices Within environmental sociology the conventional growth coalitions exemplify the polar opposite conception of modern capitalism: the tread mill of production (ToP) The treadmill of production is a critique of the inability of capitalist industrialism to stop the acceleration resource extraction, commodity production, and wasteful consumption. ToP theorists are generally pessimistic about the capabilities for an industrial society to change markets to prioritize environmental conservation over capital accumulation Theorists that use the ToP in their analyses, generally exhibit skepticism of ecological modernization theory ( Pellow, et. al., 2 000; Weinberg, et. al., 2000). Drawing from these theoretical frameworks, the dissertation explores actors and organizations involved in smart growth project ( SGP ) development Specifically, the dissertation investigates the social actors and institutio ns that plan and develop smart growth in small to medium size cities located in two regions: the Portland Metro region of Oregon and the South Coast of California.
! 4 C. Research Questions There are three questions that animate this dissertation: (1) What broad socio economic conditions are found in cities that have built smart growth projects? (2) Are there differences between smart growth coalitions and the conventional growth machine? Is there a distinct smart growth machine? (3) Is smart gr owth feasible? The first two questions drove the initial dissertation research while the third question emerged from the fieldwork as a set of narratives on the viability of smart growth in the contemporary real estate industry. D. Assumptions In 2008, after reviewing literature on smart growth I first became interested in the possibilities for smart growth policies in the U S It appeared that mixed use, transit oriented development could provide a possible solution to many of the social and e nvironmental problems caused by urban sprawl. Based on the literature review and a cursory examination of smart growth literature, there were four primary assumptions regarding this study: First, smart growth practitioners would have other motivations tha n profit. I t was hypothesized that those who decided to take a risk on this type of development would have motivations besides simply making money. This c ould represent a break from the conventional growth machine. Second, al though planners and developers may be motivated by other reasons than profit, the growth machine theory suggests
! 5 that raising rents is still the highest motivator for land development. It was assumed that developers would still need to induce private investment and generate profit regar dless of their normative outlooks. Third, it was assumed that of the twelve cities examined, those that had the highest levels of the workforce belonging to an artisan class would have the highest degree of smart growth development. Research has shown t hat the creative classes often prefer to live in places with urban and environmental amenities and greater transit options than are offered in ty pical suburban communities (Nevarez, 2003; Florida, 200 5 ). Finally, given the increasing popularity of walkable neighborhoods, it was assumed that these projects would be fairly successful. Smart growth projects are often placed in major transit corridors. Activists and consultants have vigorously promote d smart growth and thus it was assumed that there c ould be po tentially dozens of smart growth projects in the selected cities. E. Gaps in the Literature This dissertation forges new ground by using a political economy analysis of the relationship between local governments, the real estate industry, and sustainable urban development There are surprisingly few sociological stud ies of the real estate industry (Kimmelberg, 2010) Yet it is an enormously powerful industry that builds cities, designs living spaces, and accumulates or loses tremendous amounts of money This industrial sector is ripe for further sociological exploration. Moreover, if the findings suggest that an ecological restructuring of urban development is underway sociologists must then modify their own accounts of urban development.
! 6 Urban sociolo gists frequently employ single or very small n case stud ies when examining urban development This dissertation experiments with a novel approach to comparative urban research Qualitative Comparative Analysis (QCA) is employed to assess the social conditi o ns in the twelve cities. F. Layout of the Dissertation The dissertation is laid out as follows. T he literature on urban political economy and environmental sociology is assessed in Chapter II Organization studies and entrepreneurial theories are also drawn on for the present inquiry. The political economy of urban sprawl and the emergence of smart growth are likewise detailed. Ecological modernization theorists insist that a series of smart regulations are needed to guide product markets. This logic is examined as it mirrors the case made by smart growth proponents. The chapter culminates with a discussion of theoretical bridges to be built. Chapter III presents the research design, the logic of case selection, and methods of data collection. QCA is u sed to answer the first research question. Interview data and in depth case knowledge were used to address the second and third research questions. The primary source of data in this dissertation came from the interviews with developers, city officials, ar chitects, planners, and other growth machine actors. The chapter ends with a brief elaboration of the contributions that this dissertation makes. The histories of the cases are discussed in Chapter IV. This chapter provides a history of land use and urba n growth in California and Oregon. A broad account is
! 7 given that presents the pressures from urban expansion faced by these cities The history and organizational structure of the Portland Metro is described in de tail. The individual histories and growth m anagement policies implemented by the twelve cities are briefly summated. This chapter supplies the proper background for an in depth understanding of development. In Chapter V, the QCA set up is recounted. Th e chapter addresses the first research questi on on the social characteristics of smart growth cities. Descriptive statistics on social conditions were extracted from the 2000 and 2010 U.S. Census. The chapter is a lso a methodological experiment in addition to a brief analysis of the socio demographics of the smart growth cities It was intended to sort the cases to determine if smart growth cities share certain social attributes. Chapter VI examines the ways in which the smart growth machine differs from the growth machine. It describes the themes that eme rged during interview s and field work. Specifically, this chapter explains how entrepreneurialism, expertise on green building and smart regulations are three areas o f distinction if not disruption Chapter VII examines several narratives on the feasibility of smart growth. Participants had varied responses on whether smart growth is financially o r politically possible. Several smart growth projects that are studied in this dissertation faced fierce public opposition. Planners and developers encountered many hurdles during the development process The Great Recession also figured prominently in the timeline of smart growth development. The market crash hit the smart g rowth projects which resulted in foreclosures for two projects There is disagreement on
! 8 whether the se financial problems are result of the market crash or if they reflect a failed smart growth model. This chapter culminates with a brief concluding summar y. The research questions are reassessed in Chapter VIII and the theories are discussed in light of the empirical evidence that was gathered. The chapter concludes the dissertation with a discussion on the contributions that this path of inquiry makes to soc iological theory and urban and environmental policies and practice s writ large. This chapter also briefly points to next steps for scholarship and policy formation.
! 9 II. The Theoretical and Empirical Origins of Smart Growth Machines A. Introduction From the vantage point of sociological theory, there seem to be a few starting points for an investigation of smart growth. Urban and environmental sociologists both use system level political economy the ories to frame and test hypotheses on industrial development. Withi n environmental sociology these include ecological modernization and the treadmill of production. Ecological modernization is a theoretical standpoint wherein liberal capitalism can be reco nfigured toward solving ecological problems and leaving a benign impact on ecosystems. T he treadmill of production, in contrast, focuses on how economic growth and capital accumulation disallow the transformation of industrial systems Within urban sociolo gy, the most appropriate urban political economy theory to utilize is the growth machine, which focuses specifically on the ways in which urban elite s maneuver planning and development to expand economic growth by intensifying land use to maximize property value From economic sociology, entrepreneurial theories help ascertain whether or not innovative smart growth practices can disrupt conventional urban development In the late 1970s and early 1980s, a group of German scholars concerned with industrialization and its de leterious environmental impacts postulated theories on how the industrial economy could change its trajectory toward something more susta inable. Their ideas are characterized as "ecological modernization" and were popularized by European intellectual and policy circles The work of Spargaaren and
! 10 Mol (1992) translated and articulated the theories to an English speaking audience They argued that further modernization could counter the negative impacts of the modern economy but only if oriented toward ecologically sustainable goals S olar energy wind farms, "clean" chemicals, and other sectors associated with the "green economy" represent the ethos of ec ological modernization. There are, however, strong critiques of ecological modernization "Treadmill of P roduction" (ToP) theorists, who believe that the current economic system is incompatible with environmental protection, accuse the ecological modernists of greenwashing industrial practice They insist that ecological modernization practices do not significantly changing the "treadmill of production and consumption" that modern society runs on ( Pellow et. al., 2000; Weinberg, et. al., 2000; Rosa and York, 2003). The battles between the treadmill and ecological modernization have been overblown U ltimately it is a false dichotomy In reality, organizational behavior is far more complex ( Fisher and Freudenburg, 2001; Fisher, 2002; Pulver, 2007). Mo reover, p romoters of ecological modernization also realize that technological fixes and markets may be necessary for an ecological restructuring, but are not sufficient ( J ÂŠ nicke 2008). Nonetheless, the need for an ecological restructuring of modern societ y is well grasped by environmental sociologists First a n elaboration of the treadmill of production and ecological modernization is provided. Second, urban political economy theories are explored including the growth machine theory. Third, organization studies markets and entrepreneurial theory are discussed to more precisely theorize relationships within
! 11 local growth coalitions This review of relevant social theories is followed by an explication of sprawl and smart growth. Finally, this chapter concludes with a discussion of the smart growth machine B. Urban and Environmental Sociology U rb an and environmental sociologists have not provided much analysis of the actors within the political economy of sustainable urban development Environmental sociology has historically framed urbanization as a stand in for modernity itself. Both sub disciplines evolved parallel frameworks of the growth machine and the treadmill of production to characterize the dominant mode of economic action. ( Clement, 2010 ). The concept of economic growth is significant for both urban and environmental sociologists theoretical ly and empirically 1. Treadmill of Production Schnaiberg (1980) developed the "treadmill of production" theory to frame the broader trends inheren t in modern production and consumption systems perpetuate resource extraction, ecological despoliation, and global pollution This perspective argues that industrial, capitalist modernization extend s the conditions for further ca pital accumulation by expanding production which lead to increased ecological d evastation; the grim conclusion is that society cannot easily step off this treadmill. The ToP fell out of predominance during the early twenty first century as ecological moder nization became more popular amongst policy makers and sustainability practitioners (York and Rosa, 2003) T he treadmill of production,
! 12 however, is still drawn upon to refute eager adoptions of ecological modernization (Pellow, et. al., 2000) Buttel (2004 ) sees the ToP as "arguably the single most important sociological concept and theory to have emerged within North American environmental sociology ." Scholars who argue fervently in favor of the treadmill approach can easily point to many examples of the modern economy intensifying resource extraction and environmental pollution. E conomic growth the acceleration of the treadmill, remains a core driver of contemporary capitalism, despite the 2007 2008 economic collapse and the growing acceptance of cli mate change. The treadmill of production continues moving. 2. Ecological Modernization Theory Ecological modernization theory challenges the pessimistic view (ToP) by arguing that a shift in the modernization process can counter enviro nmental problems caused by the economy. Innovation of environmental technology is the key characteristic of ecological modernization theory and practice (Mol, 1997; Fisher and Freuden burg, 2003). T here are however, three structural components that ecological modernization requires: institutional reflexivity, entrepreneurs as agents of ecological restructuring, and a state framework that enables "smart" environmental regulation s (Mol, 1997; J ÂŠ nicke, 200 8). Fisher and Freudenburg (2001 ) identify entrepreneurs and political c oalitions as the two primary actors of ecological modernization; they seek a "win win" situation for both the economy and the environment. Examples of
! 13 ecological modernization include technology based solutions such as waste treatment in Danish cities, win d farms, and solar energy (Jacobsen, 2006). Ecological modernization and the treadmill of production have not systematically studied the same industry, except for contrasting analyses of urban recycling programs. Studies by Sheinberg (2003) and Weinberg et. al. (2000) have examined urban recycling programs as processes of ecological modernization and the treadmill of production, respectively 1 Weinberg et. al. (2000), in a case study of urban recycling in Chicago, argue that the recycling program perpetua ted a treadmill of production by becoming a large scale, industrialized process which led to the shutdown of local, less industrial ized re use programs. In contrast, Sheinberg (2003) conducted a historical study of recycling in the US and found that Chicago may not be representative of the broader trend toward ecologically oriented institutions. The conclu sions depend largely on how one defines the very abstract theoretical categories of "treadmill of production" and "ecological modernization." Fisher and Freudenburg (2001 ) concluded that only refined articulation s of empirical analysis can determine where economic process es fall within this diametric spectrum. Both theories share the topic of political economy They both recognize that market economies operate within a sta te framework and that this i s the proper context in which to examine coupled economi c and ecological processes. Their theories !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 1 Weinberg et. al. (2000) ultimately argued that the treadmill of production is a more accurate from than ecological modernization for urban recycling. For a broader discussion of the treadmill of production and the growth machine see Clement (2010).
! 14 sharply diverge o n the future trajectory of the economy Ecological modernists argue that a market based, technological ly driven economy accompanied by state regulatory guidance can sharply reduce industrial harm Deindustrialization is viewed as unrealistic. Tr eadmill theorists often argue that deindustrialization is the only viable option to prevent social and environmental ruin ( Schnaiberg, 1980 ) 3. Urban Political Economy Where do es urban political economy fit into this spectrum of system level theories? Are urban development institutions treadmills of production or agents of ecological modernization? The following section discusses the historical development of urban political economy and its relationship to the growth imperative of capitalism (Antonio, 2009) Political economy research focuses on the unevenness of power and influence amongst political and economic institutions Urban political economy applies this critical lens to urban development studies There are several different urban political economy theories : urban regime studies focus on the arrangement of stake holding insti tutions Marxist approaches view cities as sites of capital accumulation Many of these are macro perspectives that seek to explain trends in global urban development. Marxist theories in particular, have examined how real estate capital is used and invest ed in the global economy (Lefebvre, 1970; Harvey, 1973; Gotham, 2006). The following paragraphs discuss how political economy theorists have conceptualized the relationship between city officials and the real estate industry
! 15 The macro structural standpoint generally Marxist, conceives urban development as part of a broader spatial capitalism that uses government to promote capital accumulation. Lefebvre, a Marxist social philosopher, is generally acknowledged as one of the first practitioners of the new urban political economy perspect ive (Feagin, 1998 ). Gottdiener and Hutchinson (2011) argue that Lefebvre's use of space is more theoretically precise than scholars have recognized as it refers to the specific functions of labor and capital at the urban scale Lefebvre (1970) theorizes these relations by explaining different "circuits of capital." The first is the primary circuit which consists of raw materials, machinery, transportation systems, as well as labor. This circuit can be seen as the m aterial movement that makes up the economic action of society : the migration of labor, the building of factories, stores, and residences, transportation routes, commodity production chains, and other material dimensions of the economy. Lefebvre and Harvey argued that the surplus value that was created from the primary circuit was invested into the secondary circuit. The secondary circuit consists of financial capital flows into undeveloped land and or is invest ed in the already built environment. Real estat e companies, developers, banks as well as governmental monetary organizations comprise the secondary circuit (Feagin, 1998). The British geographer David Harvey pursued a similar line of inquiry. Harvey's initial contribution was to argue for a Marxist theoretical revolution in urban studies. He postulate d that moder n urbanization ought to be seen as a uniquely new form of capital accumulation. For many years Harvey was one of the few urban
! 16 scholar s who gave theoretical attention to real estate markets The more recent work of Gotham (2006) has applied circuits of capital research to the development of the global mortgage market. They argue that as capital was accumulate d during the 1970s and 1980s, it needed to be reinvested into the primary circuit. City building and construction were the obvious place to invest (Gotham, 2006) This expanded the primary circuit and also propel led the secondary circuit ; development induc es financial capital Gotham's (2006) analysis of the globalization of finance is notable for being one of the few sweeping theoretical and empirical statements on how financial capital is interwoven in to real estate markets and construction processes The building and construction sector consists of a nebulous web of government programs industry associations, banks, transportation agencies, insurance companies, construction companies, architecture and design firms, and other specialized organizations Land value is uniquely situated for speculative markets. Property investors speculate what the value of land could be based on the projected amount of return on investment or the revenue to be garnered from specific uses. Speculation has been at the core o f American capitalism and its national development 2 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 2 Real estate development has been at the forefront of American capitalism since the eighteenth century. Many of the early American revolutionaries were engaged in real estate speculation and increasin gly came into conflict with King George III of England. George Washington, Thomas Jefferson, and Patrick Henry, among others, bought many lots for plantations and slave quarters, but for speculative purposes. During the nineteenth century, real estate capi talism gained steam with construction of cross continental railroads. The placement of Omaha, Nebraska was the result of competing real estate and railroad speculators, Abraham Lincoln being one of the competing speculators (Feagin, 1998: 142).
! 17 Feagin (1998: 143 144) argues that the accommodation of commercial int erests formed the basis of American urban design : The basic land unit selected was often the one best suited to business purposes in a capitalist system individual lots set into a grid pattern of lot and block development. Lots narrow at the front and long at the side such dimensions reflected land values calculated in terms of front footage. New towns and cities could be planned into s tandardized lots and blocks without any special surveying skills. Such lot block rectangularism was appropriate for the divisi on and sale of land for profit. Speculators are more interested in the oscillation of property value than in what is actually bui lt on the property M olotch and Logan (2007) identify structural speculators : the real estate agents, banks, developers, etc. who try to actively affect the price structure of land markets. Structural speculators use their specialized knowledge of property local law, price and tax changes, and political connections, to actively affect current and future land val ues (Logan and Molotch, 2007). Structural speculators join their interests with those of the local growth interests, providing the linkage between local, national, and global processes (Molotch, 1999). Pincetl (1999) examined how real estate mogul Donald Bren and the Irvine Ranc h Development Company bought vast tracts of land in Orange County that they held and later built into sprawling subdivision s. They lobbied government officials to favor this sort of development across the US. This sort of structural speculation encourages the expansion of real estate development : US cities with more rapid rates of housing construction have higher, not lower, housing costs, even when demand factors are statistically controlled. New construction leads local markets to a new higher pricing structure rather than equilibrating a
! 18 previous one. More money entering an area's real estate market not only results in more structures being built but also increases the price of land and, quite plausibly, the rents on previously existing buildings. Thus higher investment levels can push the entire price structure up (Logan and Molotch, 2007: 24). Landbanking is a common fo rm of structural speculation. It occurs when a development firm buys up land and holds it, while waiting for the value of the land to rise in response to the adjacent city development (Feagin and Parker, 1990). This often influence s the subsequent developm ent of the area. Very few organiz ations have the financial resources to engage in landbanking. Larger real estate firms or government agencies usually practice it Lending institutions (banks and other financiers) have considerable power in deciding what gets built (Gyourko and Rybyzinski, 2000). They include banks, insurance companies, and other private companies. The type of investor also can lead to different development decisions. Short term s peculators purchase tracts of land outside urban areas, subd ivid e them and sell them to other companies to develop thereby generating profit very soon after the initial investment Long t erm investors are often willing and sometime s expect to take losses for several years after a project's completion, but they are structured to handle risk over time being larger firms with wider stock portfolios To make money, s tructural speculators and investors join in the local growth machinery entrenched organizational and personal relationships of builders, developers architects, planners, and political representatives who share a desire to increase returns on investment and raise revenue
! 19 4. Urban Growth Machine The growth machine remains one of the most influential theories in urban political economy. It stat es, s imply, that coalitions of elites in government and in local business form to engender economic growth through the intensification of real estate development (Molotch, 1976 1993 ). The growth machine theory focuses on the outcome of decisions made by local urban elites who are interested in generating capital from urban development The key finding of growth coalition studies is that coalitions of real estate and political interests still dictate the basic parameters of urban form even if there are alterations in urban form (Molotch and Logan, 2007). Molotch has consistently argued that the growth machine theory represents a middle ground approach that links the larger political economy to the agency of local actors and institutions. It is closer t o Weber's "means of administration" tha n Marx's "means of production." The treadmill of production as a social process, is promoted and enabled by local growth machines at the urban scale. The traditional growth machine is an essential feature of the tre admill of production (Buttel, 1997). While regulations can alter the form of urban growth, they rarely impede the ingrained cultural ideal of growth support (Warner and Molotch, 2000). The growth machine is a political, cultural, and economic construct. It is a fairly straightforward thesis and it can be used as a tool kit to study the relationship between urban growth and elite interests at different locales. The growth machine as it has been conceptualized is uniquely American, yet can be useful for
! 20 i llustrating urban development outside of the US (Molotch, 1999) Studies have put the growth machine in a g lobal comparative perspective (Mo lotch, 1993 ) Research findings on growth coalitions in Japan contradicted some of the assumptions of the growth mac hine thesis (Broadbent, 1990 ). For instance, in Japan the national state has much more centralized authority over land use decisions than in the US Local government officials and local private land based elites were less decisive than the ruling national political party, the Liberal Democratic Party (LDP), a s well as corporate elites. A study of a major transportation project in Milan, Italy also found that unlike in the US, there was a noted absence of structural speculators and private sector predominan ce. In the US, major transit projects are often accompanied by acrimonious public debate (Molotch, et. al., 2000) between residents, governments, and different private interests. Much to their surprise, the authors found that the traditional growth coaliti on interests were ill informed and generally disinterested in the project. Prominent members of the different political parties, on the other hand, were much more thoroughly informed about the project. Vicari and Molotch (1990 ) found that the various political parties and officials had the most influence over urban development in Milan. Strikingly, the political officials did not see private developers playing a significant role in the process. This is in stark contrast to US growth machine wherein pri vate developers are foundational to the process of urban development.
! 21 An innovative analysis of county level data on carbon emissions used a series of independent variables population growth and levels of affluence, for insta nce to represent growth machin e activity and found that the growth orientations of these coalitions led to an increase in carbon emissions (Clement and Elliot, 2012). The authors acknowledge that many technological innovations can reduce emissions and other forms of environmental degra dation, but argue that focusing on the political economy of local places is as critically important perhaps more important than studying emerging technologies (Clement and Elliott, 2012). They also found that more affluent areas produced lower levels of CO 2 and suggested that groups with more social and financial capital are more likely to adopt green technologies, use less energy, and take part in more environmentally conscious lifestyles. More studies of this kind are warranted to determine what forms of growth, and at what level of analysis, are more likely to produce more green house gas emissions. 5. Neoliberalism One of the most salient features of recent capitalism is the adoption by governments and commercial enterprises of a set of pr actices called neoliberalism Neoliberalism is used loosely amongst academics and economic justice activists, but refers to a belief system that maintains that markets should be at the center of social life and that this requires the privatization of function traditiona lly performed by public institutions. Milton Friedman, the Chicago School economist, expressed that "neoliberalism" defined his views more accurately that the term "libertarianism," which is used more frequently in popular discourse (Jones, 2012). According to
! 22 Brenner et. al. ( 2000): "N eoliberalisation represents an historically specific, unevenly developed, hybrid, patterned tendency of market disciplinary regulatory restructuring." Milton Friedman, Friedrich von Hayek, and other neoliberals belie ved that market forces should structure social and political life and that government, liberal or illiberal, should not interfere The United States and Great Britain were the first countries to adopt neoliberal policies Although the two countries have d ifferent local political structures, studies of urban development in late twentieth century Britain found a neoliberal dynamic similar to that described in U S research. After the Second World War, urban development policy was a national concern and many of the largest firms were national industries. During the enactment of neoliberal privati zation, this situation changed. The Thatcher regime privatized several industries and encouraged public private partnerships (PPPs) in other ind ustrial sectors. Other studies came to similar conclusions on the relationship between neoliberalism and increased building activity in Britain (Peck and Tickell, 1995, 2002). Peck and Tickell (1995) examine d the effects of neoliberal policy on South East England. During most of the 1980s an economic boom occurred in South East England as incomes and property values rose in contrast to Northern England that saw declines in both. However, the deregulation restr uctured the South East into a service sector based economy that was less secured and lacked strong trade unio ns. By the end of the 1980s neoliberal spatial change hit the South East, shedding service sector jobs. This in turn led to a collapse of housing p rices and left many homeowners
! 23 with negative equity that was much worse than in the rest of the country. Peck and Tickell (1995) argue that a stronger regulatory system could have averted the crash by cooling an overheated economy C. Organization s, Market s and Entrepreneurial ism Urban political economy theories c ould be strengthened by a greater incorporation of organizational studies Both environmental and urban sociologists have noted the importance of inspecting organizational forms and actor behavior within institutional contexts ( Pulver, 2007; McQuarrie and Marwell, 2009; Schwom, 2009). A more precise analysis of relationships b etween agents and organizations is still needed Moreover organizational studies have largely ignored th e real estate and construction indust ry, which contribute 14% to GDP. A ccording to one survey of organization studies, only 0.3% of the literature focuses on real estate and construction (Henn and Hoffman, 2013). The lack of attention given to this indust ry is disconcerting 1. Organizations Urban studies initially examin ed organizations explicitly In the 1950s and 1960s, some of the first American research on urban organizations was conducted (Dahl, 1961; Hunter, 1953). Hunter (1953) outlined the local power elite as the business class in his analys i s of urban Atlanta. His research illuminated the collaborative relationship between the large business owners and local politicians. Pellucci and Pilisuk (1970) examined community power as consolidated in resource networks of inter organizational leaders Different organizations supplied different
! 24 needs, but were often encompassed within networks of association C ommunity pow er studies and pluralist analyse s revealed a local power structure in the United States but there were disagreements among analysts on who had more influence over urban affairs: business or political groups 3 ( Dahl, 1961). These approaches were later integrated into the growth machine and other more specific urban political economy t heories. The growth machine is useful for identifying the basic structure of local power, b ut as Kimmelberg (2010) has explained the actors and organizations within the machine are not sufficiently explored The growth machine is taken for granted as a n almost Weberian "ideal type," but researchers misleadingly suggest that private organizations, urban govern ments, and other growth interests, congeal as a mon olithic apparatus. Molotch (1976, 1993 ) himself has noted the divergent views of actors involved i n urban growth but too often the theory is used to pain t a broad brush across all urban development projects and organizations. In a set of interviews with real estate agents, Kimmelberg (2010) found that the growth machine is functionally fractious. The participants expressed that city officials often did not understand the mechanics of the building industry, such as the difficu lty of obtaining building loans !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 3 Pluralist analysis emerged in political science to challenge and refute community power studies. Their focus is best articulated by the title of Dahl's (1961) book, "Who Governs?" Hunter and Dahl came to different conclusions about power and decision makin g in urban areas. Dahl concluded that it was the mayor and the political party system that exerted the most influence over urban affairs. Later research refuted Dahl's methods, sample composition, and conclusions (Domhoff, 1979, Fainstein and Fainstein, 19 83; Sellers, 2000). Still, the argument that this case study was a microcosm of American political and urban affairs contained in Who Governs formed the basis of pluralist analysis.
! 25 This important study by Kimmelberg (2010) underscores the need for further organizational stud y of the urban growth machine and the real estate industry. The organizational field is a broad conceptual framework that can illustrate the similarities while giving attention to the differences amongst actors and institutions The organizational field represents the institutional context in which actors create and act on socially constructed meanings. It consists of the relationships between individuals, firms, and different levels of government and other contexts that struct ure modern life. There are two common ways in which the framework is applied. First, DiMaggio and Powell (1983) use the organizational field to describe the regulatory agencies, firms, and other organizations within institutional domains that, in aggregate form a field of action, in which they shape and mimic each other's form and behavior. The normative and cognitive systems that create meaning for an organization emanate from their position within this field of action. Organizational fields are the topol ogical landscape s in which social action occurs. The second use of organizational fields comes from Bourdieu (1989; 2000). He employed field analysis a concept from relational social psychology as a way in which to place social actors in relation to othe r individuals and organizations. In his final study, Bourdieu focused on the organizational field of the housing market in France during the 1970s. Actors within organizations have a habitus (a set of cultural predispositions) that is characterized by the ir socio technical expertise within the field: real estate officials, government housing authorities, advertising agencies, and so forth.
! 26 Organization studies have been criticized for conceptualizing the "organization" as an inert object. In the 1990s, o rganizational scholars turned their attention to the temporary nature of certain organizational forms. Lundin and S Âš lderholm (1995) used four concepts time, task, team and transition to analyze organizational boundaries and the different ways in which they are structured. The conceptual framework of the temporary organization has been applied to various industrial secto rs such as film production, the organization of catering events, and real esta te. (Packendorff, 1995; Betchky, 2006; Modig, 2007 ). Henn and Hoffman (2013) argue that recognizing the temporal nature of urban building is a basic starting point for organizati onal research on development. 2. Markets Sociologists have developed few general theories on markets. Markets have traditionally been within the domain of economics. S ociologists have focused on the political and economic groups that accumulate capital through markets. Yet, the analysis of market dynamics and its underlying social forces remains rudimentary (Swedberg, 2007) Conversely, many neoclassical and neoliberal economists' conception of markets has focused on the price formation performed by market exchanges while paying little heed to the social structures that ultimately comprise market processes. Schumpeter ( 1934) described this as sociologists developing "primitive economics" and economists dev eloping "primitive sociology." According to Friedrich Hayek (1945), a popular neoliberal intellectual, a market is by its nature
! 27 decentralized and primarily constitut ed with local knowledge on how much a given commodity costs and where opportunities for capital accumulation are to be found. Neolib erals believed that economics should be centered on the concept of the market, and that the term "economics" should be replaced by "catallactics," the science of exchange. Economic sociologists, in contrast, have focused on how political forces, entreprene urs, and organizational forms construct markets. Swedberg (2007 ) argues that Bourdieu 's organizational field is one of only a few existing general sociological statements on markets ; Bourdieu argues that the economy is a "field" of which the market is a component. P ower relations between social actors shape the market Prices are determined by the structure of the field, and not the other way around 4 What one calls the market is therefore the totality of exchange relations between actors who compete with one another. These interactions depend, as Simmel says, on an "indirect conflict," that is, on the structure [of the field] that has been socially constructed through power relations. The actors in the field contribute in different degrees to these power relations through the modifications of these that they can muster, especially by controlling and directing the po wer of the state (Bourdieu, 2005 : 250). !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 4 Another sociological theory of markets is Callon's market devices whic h are the cognitive, physical, and social interactions that structure price formation (Callon and Muneisa, 2005). Market activities are not only theorized, but also directed by presumptive models (i.e. actors as utility maximizers), formulas (i.e. GDP), p lans (i.e. city general plans), etc. These add to the existing economic activities described as "markets". Viewing markets as calculative devices highlights the importance of technocratic expertise, "irrational" human economic behavior, computational techn ology, and physicality (Callon, 1998; Callon and Muneisa, 2005). Studies using this approach have been conducted on major financial firms and the activities on the trading floors of major stock markets (MacKenzie and Millo, 2003; Beunza and Stark, 2004).
! 28 Institutional analysts have adopted organization al field approaches to examine building patterns (Lovell and Smith, 2010; Smith and Munro, 2010) In a study of homebuilder decisions on pricing pre fabricated housing designs versus traditional British brick masonry the regulatory framewor k, construction costs, and home buyer surveys were the primary consideration s in the final price determination (Lovell and Smith, 2010). The authors argue that markets are largely the outcome of how actors choose to interpret data 3. Entrepreneurialism Schumpeter (19 34 ) argued that entrepreneur s are the driving force for innovation and change within capitalism. Entrepreneurial theory examine s the drivers of innovation and institutional change within firms and traces t heir impact on the broader economy Schumpeter's (1934) theory of creative destruction described the entrepreneur as a revolutionizing force that broke with established ways of doing business Importantly, and eventually fruitful innovations are routinized within the capitalist process and become standa rd commercial or industrial practice In a recent examination of entrepreneurial characteristics, Henrekson and Sanadaji (2011: 49) give their own extended conceptualization of entrepreneurialism: We define entrepreneurial talent as a combination of perc eptiveness, the ability to detect opportunities, and the capability of undertaking new ventures in response. The definition thus includes both motivation and ability. Other cha racteristics of entrepreneurs are : a need to achieve and create, a willingness to take calculated risks, and an ability to work under conditions of
! 29 considerable uncertainty; most entrepreneurs experience several failures before they reach success (Shane and Venkataraman, 2000) All of these are consistent with Schumpeterian entrepreneurialism. M uch of the literature on entrepreneurs has narrowly focused solely on individual action, while neglecting to examine innovation in relation to structural opportunities and constraints in a given field (Shane and Venkata raman, 2000). The effect that individual entrepreneurs have is generally measured by how it shifts the broader organizational field. In fact, it is institutional entrepreneurs, initially in government that pushes for innovation (DiMaggio, 1988; Fligstein a nd Mara Drita, 1996). As research on technology development has shown, institutional entrepreneurs in government often make the initial investments and take on most of the risk, i.e. "the socialization of risk and the privatization of reward," (Mazzucato, 2013). Private entrepreneurs such as Apple and Google, habitually take technology advances from the public sector and apply them to product development. In the classic political science analysis of New Haven, Connecticut, Dahl (1961) first employed the term "political entrepreneurs." Urban sociologists have argued that political entrepreneurs are the most consequential entrepreneurs for urban development (Mollenkopf, 1980; Logan and Molotch, 2007). Research suggests that can be fundamental for changing regulatory policy that permits or prohibits certain forms of development. However, the focus on political entrepreneurs has not been coupled with rigorous analysis of private economic entrepreneurs.
! 30 D. Green Building Studies and Communities of Practice Recent studies use entrepreneurial and organizational theories to explore sustainable construction or what th ey refer to as "green building ," (Conger and York, 2013 ; Mondor, et. al., 2013 ). An assessment of the literature argues for a five pronged approac h to sociology inquiry on green building: 1) a focus on social movements and institutional entrepreneurs as innovators who alter the broader organizational field; 2) the fragmentation and disaggregation of actors as exemplified by the temporary organizatio n formed by the contractual arrangements prevalent in the industry; 3) the professional expertise that is coordinated to work on a project; 4) the governance structures of firms within this field; and 5) the institutional logics that are cultivated to patt ern future organizational fields (Henn and Hoffman, 2013: 12 14). Organizations can be radically changed or decomposed as new agents and entrants shake up a given field (DiMaggio, 1988; Scott, 1995; Conger and York, 2013). Surprisingly, these approaches ar e seldom employed for analyses of smart growth and other sustainable practices The real estate industry is an enclosed community of practice that is accustomed to the building designs that characterize sprawl. Communities of practice refer to the established industrial techniques and ways of conducting business that often represent institutional barriers to newer innovations (Biggart and Beami sh, 2003; Hoffman and Henn, 2008; Henn and Hoffman, 2013; Rudel, 2013). The implementation of green building is difficult due to these communities of practice (Hoffman and Henn, 2008). The concept of buildability is used by the construction
! 31 industry to cau ti on against building innovation s ; the lending industry favors more familiar, time tested building approaches (Rajkovich, et. al., 2013; Bueren, et. al., 2013). The Constru c tion Industry Research and Information Association conceptualized buildability as a way to assess whether or not a project type permits ea se of development or will prove risky for investors (CIRIA, 1983). More recently, buildability has been used as a response by the industry to proposed climate change regulations In a study of the green building industry using entrepreneurial theory, Conger and York (2013: 142) describes it as a : "market based extension of ongoing social movements." The environmental movement has pressured building industries to design physical str uctures to be less ecologically harmful. Still, the communities of practice within the real estate industry position hurdles in the way of gr een building and smart growth. P olitical entrepreneurship is necessary though not sufficient, to enable smart gro wth P rivate entrepreneurs are needed to find the ways by which to bring sustainable de signs into fruition As Conger and York (2013: 141) argue: "Because of this, entrepreneurs play perhaps the most important role in making socially and environmentally re levant markets a reality." Bueren et. al. (2013) conducted a case study of a green town hall built in the Netherland. The project was contracted by the city to be built by a traditional property developer. As in the studies on price as a market device to arrange organizational relationships (Lovel and Smith, 2010), this case study found that in mainstream construction, price is also the dominant relational coordinator. The developer was far
! 32 more familiar with the costs associated with high quality and tec hnically complex buildings He acted as principal while the city was the agent, dependent on the developer's knowledge on construction techniques E. The Political Economy of Urban Sprawl The most prevalent form of latter twentieth century in American urban development is describe d as "suburban sprawl." Sprawl can be defined as a type of urbanization distinguished by leapfrog patterns of development, commercial strips, low density, single family detached housing, separated land uses, and automobile domi nance (Ewing 1994; Gillham, 2002 ; Calthorpe, 2012 ) It is depen dent on petroleum based energy and t he buildings and transportation associated with sprawl are recognized as some of the primary source s of carbon dioxide emissions (Newman, et. al. 2009). L ocal governments are strained by the ene rgy and sewer infrastructure needs of lo w density sprawl. Furthermore, the spread out patterns of living contribute to the spatial fragmentation of municipal governance and fosters regional rev enue competition. In t he seminal history of twentieth century suburbanization, Crabgrass Frontier: The Suburbanization of the United States Jackson (1985) identified five key characteristics of suburban development that persisted after the Second World War. The first is the lo cation of development on the peripheries of urban areas. The second major feature was the low density of development, both residential and commercial. Builders and homebuyers both abandoned row houses throughout the first few decades of suburbia. Th e singl e family detached houses of Levittown and
! 33 Los Angeles became the model for the US housing sector (Weiss, 1987). During the first decade after the war, 97% of all new single family houses were completely detached from other structures and surrounded on ever y side by lawns. A sophisticated and gender stereotyped advertising and manufacturing economy promoted the suburban way of life, with the generic mom in the kitchen using new chemical cleaning products and the generic dad mowing the lawn (Steinberg, 2002 ). The third characteristic of suburbia was its architectural similarity. Before the Great Depression there was a regionalization of design in which homes built in New England were distinct from those built in the Midwest or coastal California. Tract housi ng ranch houses inspired by the architectural designs of Frank Lloyd Wright proliferated during the first decades of suburbanization Though they were not any larg er than most previous housing in terms of square footage the one story gave the impression of spaciousness. There were no stairs, parlors, and no porches, but every ranch house came equipped with an outward projecting automobile garage. The fourth characteristic of suburbia was its affordability for the working class. For the first time in much of human history, laborers returned to spacious dwellings that they owned and did not rent. The significance of this last point for the cultural ideal of American individualism and private property ownership cannot be underestimated. The fifth characteristic of sprawl was its social homogeneity, both ethnic and economic. Early twentieth century zoning enactments were often presented as a way to limit speculation, congestion, and protect livability for local residents. But they were als o used to exclude minority groups from moving into certain neighborhoods.
! 34 The lack of investment in the inner cities coupled with discriminatory lending laid the foundation for white suburbia and the need for federally funded urban renewal. Suburbia and ur ban renewal within cities both failed to address concentrated poverty and spatial segregation. Lewis Mumford, on e of the first critical urban commentators, described suburban sprawl as a n abomination of sensible urban planning: In the mass movement into s uburban areas a new kind of community was produced, which caricatured both the historic city and the archetypal suburban refuge: a multitude of uniform, unidentifiable houses, lined up, inflexibly, at uniform distances, on uniform roads, in a treeless comm unal waste, inhabited by people of the same class, the same income, the same age groupconforming in every outward and inward respect to a common mold, manufactured in the central metropolis. Thus, the ultimate effect of the suburban escape in our own time is, ironically, a low grade uniform environment from which escape is impossible (Mumford cited in Jackson, 1985: 244). S uburban s prawl is difficult to undo or reverse The American Dream has long been characterized by the ideal of home and automobile ownership Since the 1960s, roughly 60% of Americans have lived in detached, single family homes 86% of all workers commute to work using the autom obile (of which 76% drive alone) (ACS 2011) Although work commutes are only 20% of all trips taken, they a re often the most important drive of the day. By contrast, only 10% of commutes are done using public transportation. Bicycles commutes comprise roughly 3 % of the total (ACS 2011) Thus, the built environment of the US is predominantly constructed to acco mmodate automobile travel, incurring a high public cost. Despite the costs of
! 35 sprawl there are many political and physical restraints on changing the built environment. The necessity of automobiles in modern American society necessitates a parallel develop ment of places in which to park the car. Parking provision is one of the highest costs associated with automobile usage Donald Shoup (2005) provided a comprehensive, authoritative, and perhaps definitive work on the "high cost of free parking," in which he cogently argues that literature on transportation and automobile use, ignore the implications of subsidized parking. Shoup (2005: 7) describes parking as an "asphalt commons: just as cattle compete in their search for scarce grass, drivers compete in t heir search for scarce curb parking spaces." Developers and planners are required to provide the maximum peak amount of parking spaces ; aerial pictures of malls show vast lots filled with empty parking spaces surrounding a structure containing a few stor es. The problem of parking is much more fundamental to urban sprawl than many had previously realized. Most analysts have recognized the role played by the interstate system in the development of US spatial form and the immense cost of its construction and continued maintenance but fewer have grasped the legacy of parking: Most analysts fail to notice, however, that parking takes up far more land than the interstate system does, costs far more, and is far more essential to automobile use, but motorists rar ely pay anything for parking. Off street parking requirements, far more than interstate highways, have spurred the dominance of the automobi le in urban transportation (Shoup, 2005: 210).
! 36 Although it is an important and sometimes determinate element of the urban landscape, parking garners little attention from sociologists even though most Americans spend significant amounts of time in roads, streets, and parking spaces There are an estim ated 40,000 parking facilities in the US. The US parking industry has revenues exceeding $18 billion and employs 143,000 workers (US Parking Garages Industry, 2008). The average cost of building one parking space varies from roughly $13,000 in Dallas to $1 7,000 in Los Angeles and up to $20,000 in San Francisco (Victoria Transportation Policy Institute, 2012). The provision of parking is often a primary factor for developers and lenders when considering the financial viability of a project (Shoup, 2005). For low density development, less expensive parking is required. Parking for high density, smart growth projects, must be subterranean or accommodated with complex lift systems. Until automobile use declines dramatically, the development of parking will conti nue to shape the contours of urban form. F. Smart Growth New Urbanism and Regionalism Jane Jacobs (1960), a New York based urban critic and activist recognized that compact urban development with protected parks performed functions that allowed healthy communities to prosper, both socially and culturally, in the midst of the frenetic pace of city life. She disparaged urban planning trends that gave de sign precedence to the automobile over the pe destrian. Jacobs also saw several problems with the zoning of land into separate and distinct uses: residential, commercial, and industrial. If these used were mixed, the theory goes, it would allow for continua l
! 37 social activity throughout the day and night; this ongoing economic activity, she maintained, enriches community network s and strengthens social ties. Begin n ing in the 1980s and 1990s, many of her ideas were adopted and expanded upon by a growing generat ion of "smart growth" or "new urbanist" planners. 1. Smart Growth and New Urbanism In the mid 1990s, Maryland Governor Parris Glendening first used the term "smart growth" to describe high density, transit oriented development as part of Maryland's new po licies to grow within its geographic limits and to use land more sustain ably. Smart growth appealed to cities that grapple d with growing populations increasing traffic congestion, and heightened air pollution. Several organizations and agencies have adopt ed smart growth policies and other incentives to promote smart growth During the 1990s, ins titutional entrepreneurs who pushed for smart growth flourished: Smart Growth America, the Congress for a New Urbanism, and the United States Green Building Council among many others were born during this time The y formed with the intent of shifting the organizational field from sprawl to smart growth. Regulatory action was seen as the more efficacious way to achieve this shift The most common regulatory action to promote smart growth uses zoning ordinances and other governmental measur es to manage patterns of growth. Two such practices are the demarcation of urban growth boundaries and the promotion of infill development. Urban growth boundaries (UGBs) are created by municipalities to prevent development from spreading farther from central cities, or from encroaching upon agricultural and natural landscapes. "Urban infill" refers to the creation of
! 38 housing, businesses, and public places in urban spaces that are being under utilized. By preventing sprawl based growth UGBs promote infill development (Calthorpe and Fulton, 2001). This New Urbanist turn in planning discourse is partly inspired by the early 20 th century "Garden City" v isions and modern European urban examples ( Beatley, 2000) Smart Growth principles received significant federal support beginning in 1992. The federal government began a policy to support smart growth development to replace the failed housing projects tha t were built during the era of urban renewal The Housing and Urban Development (HUD) created a program named HOPE VI (Homeownership and Opportunity for People Everywhere). The HOPE VI program "encourages local authorities to identify and demolish distress ed public housing complexes in their jurisdictions and to work with private developers to construct mixed use, mixed income communities on the newly cleared sites." The program funded upwards of $5 billion to over 100 local housing authorities across the country. HOPE VI was generated around the consensus of past urban renewal failures and generally did not fund apartment complexes but rather duplexes and row houses (Downs, 2004). The program was criticized by neoliberals for being a wasteful government program that does not provide affordable housing as efficiently as the market could. It has been criticized on the left for potential gentrification. Predominantly a HUD operated program, HOPE VI was dramatically defunded d uring the Bush administration.
! 39 2. Regionalism Regional planning has never been nearly as prevalent in the Unites States as in Europe, Asia, and other parts of the world. States also have different policies on regional development Traditionally, the onl y role of regional ism in American urban planning has been the coordination of transportation systems. During the highway programs of the 1950s and the mass transit programs of the 1960s and 1970s, the federal government created Metropolitan Planning Organi zations (MPOs) to coordinate federal transportation policy into the local government structure. In contrast to many European countries, in the US this can be a difficult task given the high levels of inter governmental competition for tax rich (commercial) development projects. Many European countries have systems of regional planning that a re shaped at the federal level. Beatley (2000) conducted an extensive study on European planning and found much more collaboration at the federal level with local pla nners and developers. Research by Gissendanner (2004) ha s shown how the municipal cooperation in Germany differs strikingly from the municipal competition found in the US. The dynamics of regional planning differ in Europe by country, and sometimes by provinces within countries, yet strategies to attain greater social and environmental equity are integrated into the governance structures in a way that is not seen in the US ( Bagnasco and Le Gales, 2000). There is variation amongst states over regionalism. The structure of land use decision making is currently too decentralized for a comprehensive system to be put
! 40 in place. In C alifornia, regional planning has never had much significant support. California has "associations of governments", such as the Southern California Association of Government (SCAG) and the Santa Barbara County Association of Governments (SBCAG). These entit ies have little authority on most land use decisions and their primary purpose remains planning for large transportation project and usually the working out of details for freeway construction and maintenance. In contrast to California, the state of Oregon has required urban growth boundaries (UGBs) in which cities must contain growth within set borders. This encourages greater regional cooperation. Uniquely, the Portland metropolitan region has a very powerful regional planning agency called Metro. G. Smart Growth versus Sprawl According to an analysis of World Resources Institute data, Calthorpe (2012: 17) estimates that buildings and transportation contribute 37% of CO 2 emissions. Of that, transportation emits 20% and buildings emit 17%. There is, ho wever, wide regional variation in emission levels, indicative of Freudenburg's (2006) thesis on the "disproportionality" of environmental harm. In the US, buildings contribute 32% of total CO 2 emissions and transportation contribu t e s 30% (Calthorpe, 2012: 17). One study examined the life cycle of energy in a low density suburb of Melbourne, Australia determined the amount of greenhouse gases were emitted, used scenarios to calculate what higher density buildings would have emitted. Their results indicate th at if apartments and condos replaced the detached, single family homes, greenhouse gas emissions would drop by nearly 20% (Stephan, et. al., 2013). However, these
! 41 innovations will not be adopted in the current political and economic context. The subfields of urban and environmental sociology provide the tools for a deeper analysis of the political economy of urban sustainability. Transit oriented development ( TOD ) emits less CO 2 than suburban sprawl One study compared the CO 2 emissions from suburban homes and TODs found that in a suburban development where there are 8 dwelling units/acre, the estimated lbs. of CO 2 /household/year emitted associated with transportation was 26,000 and the buildings themselves emitted 24,000 lbs. In contrast, in a typical TOD with 40 dwelling units/acre, CO 2 emissions from transportation were estimated to be 9,000 and only 11,000 from buildings ( Allen, 2008 ). This is a difference of 30,000 lbs. of CO 2 Hovee (2008) found that high density environments reduce CO 2 emissions by 65 % compared with a standard suburban development; furthermore, high density places of employment reduced CO 2 emissions 45% more than suburban sprawl. Smart growth development reduces sprawl, concentrates social activity, protects surrounding land, and also leads to reductions in green house gas emissions 5 There are many criticisms of the social dimensions of smart growth. The greatest source of criticism is housing affordability (Talen, 2008; O'Toole, 2009). !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 5 The real test to see if TOD does less harm to the environment than auto dependent sprawl depends on the relationship between density and energy use. The most common way to test the effect of the built environment on CO 2 levels is by measuring vehicle mi les traveled (VMT): the number and distance of trips that people take and the percentage of the different modes of transit people use (Calthorpe, 2012). A comprehensive review of the literature by the National Academy of Science (2009) examined studies tha t isolated the effect of residential density while controlling for social and other variables and found that a doubling of density is associated with a VMT reduction of 5%; VMT is lower by 12% in higher density places in California. VMT is reduced by anywh ere between 3 20% depending on regional variation and once mixed use has been accounted for (NAS, 2009). The authors of the report, however, pointed out that many studies fail to distinguish between the various types of density changes within a region.
! 42 Research has shown that smart growth projects have not been affordable to those making the median household income in the cities in which they are located and have been occupied by middle and upper income families (Talen, 2008). There is a vigorous ongoing debate about smart growth and affordability (see Downs edited volume, 2004). Increased scrutiny is concerned that smart growth narratives may reproduce existing social and spatial in equalities (Gray O'Connor, 2007 ). T hese critiques of smart growth dovetail with many discussions and debates on the c reative class and gentrification. Research has shown that the workers co mprising Richard Florida's (2005 ) creative class tend to locate themselves in denser, transit oriented, "hip per" downtown neighborhoods In a study of high tech workers in Santa Monica Santa Barbara, and San Luis Obispo, on the California coast, Nevarez (2003) found that these "creatives" put a high premium on living in places that had access to environmental amenities. Similarly, in a study on artisans in Portland, it was found that t hey valued places with an "urban feel" consisting of mixed use buildings, walkable neighborhoods, and mass transit (Heying, 2010). These are seen as part of a larger trend of people moving into more dense areas that mirror smart growth ( Kayzar, 2008 ). The re are concerns that smart growth may only appeal to young, educated, often white, creative workers, but not other sectors of society. F urther empirical research on smart growth projects is needed to determine whether or not this is the case Still, it is true that s mart growth did not initially address social and environmental equity issues but Environmental Justice advocates argue that
! 43 promising theoretical and political alliances can be formed. In an important volume edited by sociologist and environmental justice scholar Robert Bullard (2007a, 2007b) and smart growth and urban analyst Anthony Downs (2004 ), advocate for an examination of the possibilities for combining smart growth with equity oriented regionalism. They argue that promising con vergences are possible and necessary. Pastor et. al. (2009 ) has postulated a regional smart growth approach to Los Angeles and other cities with high Latino populations. They that the dense neighborhoods and mixed uses that embody smart growth planning als o match the social structure of Latino immigrant communities. H. Smart Regulations According J ÂŠ nicke (2008), an ecological restructuring requires well crafted regulations to create an institutional path for change. The regulatory framework of the enviro nmental state is a core component of the ecological modernization process (Mol and Spaargaren, 1992). J ÂŠ nicke (2008) stresses the need for what he calls "smart regulations." Rather than a command and control regulatory structure, smart regulations are decentralized and permit greater participation amongst government and firms. They consist of incentives to reward sustainable production as well as traditional, outright regula tions of certain behaviors. This sort of smart regulatory guidance, it is argue d, could institutionally restructure economic processes. Urban development is a uniquely regulated industry, with many levels of regulatory surveillance The most common forms of building regulations include zoning ordinances, building rules, building hei ght limits, and traffic mitigations. The
! 44 particular regulations that emerge vary by location. For instance, building in places with abundant, unused or little used land such as Las Vegas or Midwestern cities, are usually not constrained in the same ways th at coastal cities or cities along major estuaries are. Many cities, however, face growth pressures and have some basic set of regulations, usually zoning ordinances. The only major city without zoning ordinances is Houston, Texas, which is lauded by libert arians as an example of what a city can do without government interference (O'Toole 2009 ). Interestingly, Houston is subject to system of private deeds and if they were co nsidered to be a regulation Houston would be one of the most regulated cities in t he country (Molotch and Logan, 2007) In a study of Santa Barbara, Santa Monica and Riverside, Warner and Molotch (2000) found that these various regulations do not prevent building development, but rather shape the form that growth ta kes. Uniquely, this study adopted an experimental method that asked developers if they would build a project under hypothetical regulatory conditions. Santa Barbara had the tightest growth restrictions and they contrasted sharply with the permissive attitude toward developme nt in Riverside. As in other industries, smart growth requires a mixture of carrot and stick regulations; sticks such as urban growth boundaries, zoning ordinances, and building restrictions combined with carrots such as building incentives. This regulat ory philosophy is consistent with the smart regulation s advocated by ecological modernists. Regulations will be a central component of any attempt to ecologically
! 45 restructure urban growth. E cological modernization acknowledges economic self interest but maintains that it can be synchronous social and environmental justice. I. Theoretical Bridges to be Built This dissertation assembles the myriad perspectives described in the literature review and uses several of them to expand an existing concept, the growth machine, and to construct a smart growth machine thesis In a chapter of Up Against the Sprawl: Public Policy and the Making of Southern California Gearin (2004) first posed the question on whether smart growth is just a smart growth machine. Her analysis is worth discussing at greater length. Gearin (2004) d escribed policy tools that are available for government actors to implement smart growth development; little attention is given to private sector or non profit actors. She (2004: 285) ar gues that there are two central features of smart growth planning and development: New regionalism to guide broader growth at a larger scale and urban sustainability to work on environmentally sustainable mechanisms at a micro scale. Smart growth tools var y along three critical dimensions: 1) primary goals, such as meeting a certain plan for compactness, 2) implementation mechanisms, and 3) the level of government that will implement most of the plans and developments. Most tools are implemented at the loca l level. Local government use s a mixture of incentive based systems and regulatory tools. Smart growth tools require mechanisms for implementation. Implementation is the process by which plans and visions are joined with real world development. Three mechanisms of implementation are identified: 1) incentives, such as expedited
! 46 permitting and reduction of fees, 2) market based tools and 3) traditional regulatory tools, such as building restrictions and urban growth boundaries. In the examination of Sou thern California, Gearin (2004) contends that the region has been much better at the smaller scale smart growth projects rather than new regionalism. The sheer number of municipalities has made regional consensus difficult. My own conception of the smart growth machine shares many core elements of the regulatory framework that Gearin (2004) describes. It goes further in developing the term as a sociological concept that is embedded within the lineage of the original growth machine theory. My use of smart growth machine acknowledges that smart regulations are a key part of any smart growth machine. However, in dialogue with the original concept, my formulation covers the organizational structure and perceptions of social actors engaged in smart growth plann ing and development. Gearin's analysis focused solely on public policy, whereas the smart growth machine that I investigate is much closer to the original conception of the growth machine as a sociological category.
! 47 III: Research Design, Methodology, and Data Analysis A. Introduction The purpose of this multi case study is to explore the ins titutions and actors who plan, approve, and build smart growth projects (SGPs). It also examines the regional characteristics of the places where they were located and the ir broader political economy of financial support. In seeking to understand the nascent planning and development practice of smart growth, the study addressed two basic research questions and in the course of the rese arch addressed a third: (1) What broad socio economic conditions are found in cities that have built smart growth projects? (2) Are there differences between smart growth coalitions and the conventional growth machine? Is there a distinct smart growth ma chine? (3) Is smart growth feasible? This chapter describes the study's research methodology an d is structured as follows: the rationa le for the research design, case sele ction and units of analysis, methods of data collection, the first research ques tion and qualitative comparative analysis (QCA), the second research question and interview participants, the third research question and grounded theory and the contributions of the study. B. Rationale for Qualitative Comparative Research Design Qualitative research focuses on how social processes are perceived, experienced, and interpreted amongst social actors in certain structural contexts at given times. The purpose, generally, is to discover and describe the subjectivities that
! 48 arise from the interaction between individual and institutional arenas of social action (Silverman, 2000; Schram, 2003). Qualitative work, ultimately, explores the meanings that are derived from social processes. Although it differs in intent from quantitative approache s, where the objective is to test hypotheses and variable relationships, qualitative research can often serve the purpose of providing more in depth analysis. It can also introduce phenomena that quantitative methods can be applied to in future research. It was my contention that quantitative approaches were unlikely to provide the depth necessary to capture the emergent smart growth development. There were several aspects of the intent of this study that were conducive to qualitative methods: (a) the bel iefs and perceptions of individuals engaged in specific planning and development processes, (b) the role that time and event sequences played in shaping these beliefs and perceptions, and (c) the research design flexibility required for the topic; meaning a lack of easily and clearly quantifiable data. Furthermore, there were issues with the nature of data itself. There was a lack of clear examples of what a smart growth project actually was and an absence of a comprehensive list or database of the type of projects that were of interest in this study. My research focused on individual building sites in smaller communities and examines the political, social, and economic demographics of the regions in which they were located.
! 49 C. Case Selection and Units o f Analysis The approach in this dissertation builds on Gottdiener and Hutchison's (2011) argument for a "socio spatial perspective" that moves the focus of urban analyses from central cities to a broader view of urban areas as part of global, multi center ed regions. Gottdiener and Hutchison (2011) argue that the growth machine is rendered useless by the complexities of a regional scale analysis. This seems undeserved. I contend that inspecting the relationship between the concept of economic growth and the actions of urban elites is of considerable importance for understanding land use policy. To determine how to study smart growth in multi centered regions, I drew from previous research on comparative urban political economy. Sellers (2002) employed a "mul ti stage selection" by first selecting three countries (France, Germany, and the US), followed by the selection of three cities in each country. He then used a focused comparison supplemented with interviews of city officials to examine the features of urb an regimes, regulatory frameworks, and development trajectories. Likewise, my study adopts a multi stage selection, first examining twelve cities in two separate states. The research design is displayed in Appendix A. It was determined that a single case study would not be sufficient for generalization and that there was too little standardized data on mixed use, transit oriented developments to conduct a quantitative analysis that would address the research questions. By comparing two regions in two sepa rate states, some of the issues of generalizability were addressed.
! 50 The first stage selected the states of California and Oregon. These states were chosen because they have both experimented with different kinds of urban growth management to accommodate projected population growth. In 2010, the population of California was 39 million; that number is expected to grow to 60 million by 2050 (Vision California, 2011). This is a household growth of over 6 million. These numbers could potentially have devastati ng environmental consequences. In 2005, California produced 284 million metric tons of CO 2 and this number is expected to grow if present trends continue (Vision California, 2011). Oregon has a population of 3.8 million and is expected to grow to 4.5 million by 2020. The population growth rate was 20% in the 1990s and dropped to 12% during the early 2000s (Oregon Office of Economic Analysis, 2011). However, Portland is preparing to contain 50 years of further population growth within its urban growth boundary (Metro Region 2040 Plan, 2012). The second stage selected the regions of Northern Orego n around Portland and coastal California north of Los Angeles. The places were chosen for the recognition these places have received for pioneering new urbanism and other urban growth management theories, policies, and practices 6 (Abbott, 2001; Fulton and Shigley, 2005; Warner and Molotch, 2000; Molotch, et. al. 2000; Barbour, 2002; Ozawa, eds. 2004). The South Coast of California was selected for its prior experimentation with growth management. It was believed that some of the cities would have built mix ed use development during the property bubble of the 2000s as a !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 6 Late in the course of the dissertation process, Santa Barbara was named one of the top smart growth cities by Smart Growth America.
! 51 way to contain growth but also achieve the state's established annual growth rate. Incidentally, the city of Santa Barbara is where urban sociologist, Harvey Molotch first developed the influe ntial "growth machine" hypothesis. This theoretical statement inspired further comparative political economy research on this region (Molotch, et. al. 2000, Navarez, 2003, Warner and Molotch, 2000). The cities examine in this dissertation were all located within a few miles of the Pacific Ocean coastline, while the cities in Oregon were all suburbs of the larger city of Portland. T he cities of Oregon were all within the jurisdiction of the Portland Metro regional planning body. The cities are considered "s mall" to "medium sized" with their populations ranging from 28,000 (Milwaukie, OR) to 200,000 (Oxnard, CA). Building permits from 2000 2010 were requested from several city planning departments. After reviewing thousands of permits, there were ten smart growth projects that were identified They were located in the cities of Gresham and Milwaukie, Oregon and Santa Barbara and Ventura, California. They are listed in Appendix B. Three projects were dropped from the analysis because the planners and develope rs who worked on them had left the region. These projects generally had lower densities than I was in terested in so their omission was not consequential The suburban cities surrounding the larger city of Portland, Oregon were chosen because they represen t a close approximation to many other suburban cities, culturally and demographically, but, administratively they are part of the Portland Metro's planning jurisdiction. Unlike Portland, these communities have had far less
! 52 experience with plans to promote walkability, community vitality, and environmental amenities (Ozawa, eds. 2004).. Regional planners began to look at the downtowns of these communities and saw areas they believed were ripe for urban revitalization and transit oriented development. D. Int erviews and Coding The data from twenty eight in depth interviews formed the basis for most of the findings in this dissertation. It was determined that interviews with developers, planners, and other civic officials involved in planning and development p rocess may help explain why someone, or some organization, would take on this type of project and how the planning and development processes worked. The University of California, Santa Barbara Human Subjects Research Committee exempted this process from st atements of confidentiality, since the participants were all public figures discussing public issues. Nevertheless, participants were asked if they could be interviewed and quoted. Twenty six participants agreed to be quoted, while two did not. Participant s were told that they could receive a copy of any papers or publications that came out of the research. The interviews were transcribed and coded using a grounded approach allowing themes to emerge from the ethnography. The interviews were semi structure d and covered a broad set of overarching themes such as the local economy, dwelling unit density, and institutional relationships. They also covered subject matter specific to each project and city. The interviews were thirty to sixty minutes on average, w ith some extending to two hours. They were done in person as well as over the phone, recorded and transcribed
! 53 digitally. Interviews were conducted during the spring and early summer of 2012 and during the summer of 2013. The physical sites of the projects were visited and photographed. Documentary evid ence from local press reports and city planning websites were consulted to establish the social and temporal context of the developments. Two analytical approaches were used for the development of a coding scheme. The template approach was the primary co ding method. The template approach develops key codes that derive from theories and previous studies. Although the majority of the codes were derived from themes in the literature, grounded theory approaches were used to integrate themes that arose from th e interviews themselves (Glaser, 1992; Charmaz, 2006). The key codes were primarily used to address the second and third research questions; the institutional composition of urban sustainability, and the affect of the economic change, respectively). E. Re search Question 1 Qualitative comparative analysis (QCA) was used to compare the socio economic and political conditions in different cities, some of which have developed smart growth projects and some of which have not. Ragin (1987) developed the QCA met hod. It represents a middle ground between quantitative and qualitative research, though relies heavily on qualitative understanding of cases. QCA sees outcomes as determined by the configurations of the presence or absence of specific conditions. QCA al so increases the ability of qualitative research to generalize findings more effectively by employing a categorical precision of
! 54 conditions and outcomes that is often lacking in many thick descriptions found in qualitative work. The "Ragin Revolution" is s till in its beginning stages but QCA has been used to examine gemeinschaft in urban communes (Vaisey, 2008), and has also been used for preliminary work in the sociology of urban political economy (Kilburn, 2004). QCA is a mid range method situated betwe en qualitative and quantitative research. It is used for small N studies (5 50 usually) and necessitates a substantive knowledge of the cases and conditions. It is based on logical combinations of conditions (roughly equivalent to independent variables) th at lead to a certain case outcome (dependent variable). The method requires that the conditions and outcomes be coded into binary (1, 0 ) where 1 = condition present, and 0=condition absent). For example, in Kilburn's (2004) QCA study of urban regime types, the literature on the urban regimes of fourteen cities was reviewed. Cities that received a score of 1 had a progressive regime while cities that received a 0 had a developmental regime based on substantive criteria determined by the researcher; in this c ase, past urban regime classifications. After reviewing the literature on urban regime formation, Kilburn decided on five conditions that could be represented in binary form. The analysis proceeds by converting raw data into binary data table in which ea ch row signifies a case and is assigned an outcome score of 1 or 0. The division of complex social data into binary descriptors necessitates an in depth understanding of the cases, a strong familiarity with the literature, and a clear explanation of calibr ation; the procedure used to determine how the condition is to be represented as
! 55 a 1 or 0. QCA uses Boolean algebra and set logic to determine all of the possible combinations of conditions. In what is called the minimization process, rows are examined and conditions that do not match are eliminated. This minimization process was computed using Ragin's fsQCA software. The final Boolean expression is called a solution formula Proponents of the method emphasize that it can only work successfully when combi ned with in depth case knowledge and should not be mistaken for a precise quantitative analysis. Given my concerns about the focus on single case studies in qualitative urban sociology, this method appeared to be a potentially fruitful way in which to syst ematically examine several regional cities to find examples of smart growth and to explore their accompanying social conditions. F. Research Question 2 For the second research question, I test the hypothesis that smart growth coalitions fundamentally differ from the conventional growth machine by comparing the actors and organizations involved in the implementation process of smart growth projects to the growth machine implicit in the urban political economy literature. Researchers have used case studies of green building policy and the construction process (Rajkovich, et. al. 2013) surveys of the financial industry (Gyourko and Rybyzynski, 2000) and small sample case studies of the politics of sustainable building (Bueren, et. al., 2013; Janda and Killip, 2013). Gathering enough standardized data to perform quantitative data analysis has proven challenging for researchers (Yong and Stevens, 2012; Henn and Hoffman, 2013).
! 56 The second stage focused on the four cities that had built smart growth projects. The cities were Santa Barbara and Ventura, California and Milwaukie and Gresham, Oregon. They vary in size, occupational composition, geographical location, and each is subject to different regulatory frameworks, yet each is also the home to a set of smart growth projects (SGPs). This research builds on a tradition of comparative case research in the field of urban studies to highlight the common features of SGPs across different institutional contexts. Comparative case methods have been employed to examine growth management in Southern California (Warner and Molotch, 2000), urban environmental policies in cities within different countries (Bassett, 1999; DiGa etano and Strom 2003; Sellers 2002), and the cultural characteristics of place (Molotch, et. al. 2000). G. Research Question 3 The third research question emerged during the course of the fieldwork Participants had varying narratives on the feasibility o f smart growth. The mixed use element of smart growth projects became problematic. The commercial space either failed in several of the projects, or struggled for a number of years. In nearly every case outside of Santa Barbara, the commercial space did no t work as originally planned. Several participants blamed the recession while others blamed the mixed use model itself. The data for this line of inquiry came primarily from interviews and secondary sources. It is beyond the scope of this dissertation to provide a conclusive answer on whether the mixed use model is inherently flawed or if the failures are the inevitable
! 57 result of the economic crash. In discussing the development process with participants, it was clear that the foreclosures had resonated i n local planning and development circles. Grounded approaches were used to extract themes from the data to inform the final empirical chapter of this dissertation (Denzin, 1978). H. Issues of Generalizability Cities, like nation states, are extremely comp licated social entities constructed (physically and socially) over time, in varied topographical and spatial contexts and consist of a multitude of social actors and organizations. Several of the cities in California are located on the coastline, while oth ers are located a few miles inland. Mountains and rugged terrain hem some of these cities in, precluding urban expansion in many directions. The cities in Oregon do not have such geographical barriers to expansion, but fall within the planning jurisdiction of the Portland Metro. The Metro manages an urban growth boundary around the region with the preclusion of expansion in many areas. I had hoped to find SGP sites in as many of the twelve cities to widen the research focus. There are issues that arise wh en attempting to generalize the findings. Coastal cities in California have growth management issues to contend with that are different from those say, in Midwestern cities, or even the Central Valley of California. Similarly, the suburbs of Portland are in the jurisdiction of the only regionally elected planning body in the United States, the Portland Metro. As a result, these cities have different appr oaches to growth management than elsewhere. Nonetheless, these cities share several basic traits with cities across the U.S. S ince
! 58 they have pioneered many growth management techniques, they are a good place for a political economy analysis of smart growth I. Contributions of the Study This dissertation uses an innovative research design and methodological approach to conduct an in depth sociological analysis of the places, actors, and institutions that plan and build smart growth p rojects. To more precisely assess the empirical data, the study melds a variety of loosely related theories spanning several subfields of sociology. In doing this, contributions are not limited to one audience but are of interest to environmental sociologists, urban sociol ogists, economic sociologists, urban planners, political scientists, historians, economists, public officials, activists, and others interested in the intersection of urbanization and the environment.
! 59 IV: Regions, Cities, and Urban Growth: Cali fornia and Oregon This chapter desc ribes the measures taken by the two states and twelve cities to regulate urban growth. This descriptive analysis of planning documents, city websites, and other secondary sources provides the proper context for further in depth analysis in the following chapters. The histories of urban growth also identify the speci fic growth controls that have been used by intrastate cities that are regionally connected. The section on California is longer than that of Oregon, due to its much larger population there are 36 million more people in California than in Oregon. Moreover, this chapter illustrates the interconnectedness of cities, regions and the political economy of place, at many levels. Readers are referred to the Policy and Project Timeline listed in Appendix C. The narrative below provides a more detailed account of the timeframe. A. California Urban Growth and Management Just as in other geographic regions with semi arid climates that humans have inhabited, civilization in California is an experiment with the capabilities of industrialization to support large populatio ns. California is the most populous and third largest state in the U.S In 2013, the population of the state was 39 million; that number is expected to grow to 60 million by 2050 (Vision California, 2011). This is a household growth of over 6 million. As F ulton and Shigley (2005) point out, 80% of the population is clustered within two "triangles." The Northern triangle contains 15 million people. It extends from the San Francisco Bay Area east to the city of Sacramento, and south to the coastal city of Mon terey. The Southern triangle has its
! 60 upper corner stretching from Santa Barbara to San Bernardino to the east, and concluding in San Diego (Fulton and Shigley, 2005). Southern California contains roughly 20 million people (Wolch et. al. 2004). The Centra l Valley hosts several disparate cities in an agriculturally base d economy with depressed wages. Over the last few years it has been a severely drought stricken region. However, proposed hi speed rail lines and the creation the new University of California Merced campus are intended to draw future economic and population growth away from the increasingly congested coastal cities. The Central Coast extends from the Monterey Bay south to Santa Barbara and Ventura. It is not as populated as the coastal trian gles or the Central Valley, but has nonetheless increased its population by 15% since 1990, to 1.5 million people along the coast and in the inland valleys and hillsides (Fulton and Shigley, 2005) 1. History California has a relatively short history of rapid population growth. At the beginning of the nineteenth century, places such as the San Gabriel Valley, which now contains Los Angeles, were deemed too arid for modern habitation. The channeling of waterways enabled agricultural development and made Ca lifornia habitable for large populations. By the twentieth century the population of California was 1.4 million people. Oil wealth and cheap land brought developers and other industrialists to the state (Reisner, 1986). During this time, Southern Californi a industrialists and agribusinesses gradually, and sometimes coercively, redirected water from the Owens Valley and the Colorado River to Southern California. More
! 61 water meant more agriculture and industrial opportunities. People were also attracted to the pleasant climate that resembled the weather in the Mediterranean. During the Great Depression, California's population grew as agricultural companies utilized most of the water for irrigation. The climate is ideal for a wide variety of fruits and vegetabl es, so agricultural production in California sky rocketed. 2. Population Growth The most dramatic expansion of California's population occurred after the Second World War. During the war, the state had secured over 10% of all the war's production contrac ts. This, in turn, led to a surge of factory construction for the defense industry, as large aerodynamic companies located in Southern California. The industrial structure decentralized after the war, but grew more spatially nebulous. The population treble d between 1945 and 1970 (Fulton and Shigley, 2005). Most of this growth occurred in what are now the inner ring suburbs. During the 1950s and 1960s, over 100 new cities were added to the state, most of them suburbs (Barbour, 2000; Fulton and Shigley, 2005) Suburbanization in California, as elsewhere at this time, was enabled by the national government. Federal programs such as the National Housing Act of 1934, which created the Federal Housing Administration (FHA), ensured 90% of individual mortgages and s tandardized a system of 20 30 year payment plans. This federal guarantee undergirded the private real estate industry's adoption of single family homes. This building form separated individual homes and residential neighborhoods from employment centers. It was coordinated with a transportation system based on individual automobile ownership. During the second
! 62 half of the twentieth century, manufacturing, construction, and a growing service industry expanded dramatically in Southern California. The state led the nation in residential development after the war (Pincetl, 1999 ). Urban planning and development across the country followed California's example and suburbs sprawled out from major city centers into "edge cities" (Garreau, 1992). Massive public inve stment in the state's infrastructure allowed the expansion of rapid suburban development in California. In 1958, Governor Pat Brown created several major public works projects. This was the first of several periodic forays by the golden state into regional planning and development. California's main transportation agency, Caltrans, was also formed during this bout of public investment. Other major institutions that were developed with public support were the University of California system and several resea rch organizations. In 1965, the Southern California Association of Governments (SCAG) was created. The purpose of SCAG is to coordinate major transportation planning, but it has not lived up to the dreams of its founders as regional planning as met fierce resistance by municipalities across the state (Fulton and Shigley, 2005). In the late 1960s, two other important, large scale, regional agencies were created, though they did not directly regulate land use. The State Water Resources Control Board centraliz ed the disparate water boards and made them accountable to the state government in Sacramento. The Motor Vehicle Pollution Control Board was set up to manage automobile emissions. Through organizations like these, California pioneered pollution emission re gulation in the United States.
! 63 3. Southern California Nearly 20 million people populate the Los Angeles and San Diego region. In 1870, the population of the region was only 15,000 (Wolch et. al. 2004). Between the two World Wars, Los Angeles's populatio n doubled to 2.7 million people. Southern California experienced a largely uninterrupted building boom after the Second World War. The defense industry, in particular, located several facilities in Los Angeles and San Diego. By the 1970s, the population ha d grown to nearly 10 million with many working in the defense sector. These manufacturing jobs were high paying and stable. The workers viewed single family homes as the ideal living arrangement. Large homebuilders moved into the area and the sprawl that c haracterizes the region accelerated (Weiss, 1987). As Southern California became associated with the "American Dream", "the good life", and other marketing slogans, the population surged by 40% between 1980 and 2000, with the total rising from 11 to 16 mil lion people. Orange County and the Inland Empire (on the fringes of Los Angeles) grew the most dramatically. The globalization of the capitalist economy in the 1980s and 1990s dramatically changed the employment landscape of the region. Manufacturing job s moved overseas while the service sector expanded. These changes dramatically affected the living, working, and commuting patterns of Southern California residents. Increasingly, workers lived in one part of the region, but commuted long distances to thei r jobs and homes located elsewhere. This is often termed the "spatial mismatch." After the recession of the early 1990s, employment associated with
! 6 4 services and entertainment outpaced manufacturing and other higher paying and more secure blue collar jobs. Between the 1960s and 2000, nearly 100 cities had also been incorporated (Barbour, 2002). This led to a patchwork of devolved governance and inter organizational competition for social service funding. Cities along the coastline north of Los Angeles faced growing pressures to build housing and commercial establishments. The broader Central Coast of California spans the coastline from Santa Cruz, south of San Francisco, to Santa Barbara. It contains four large counties and several cities with a total population of roughly 1.5 million people (Fulton and Shigley, 2005). Most of the population is clustered in Santa Barbara County, which contains nearly half a million people, and the Monterey Bay area, which has a population of nearly 800,000 (derived from U.S. Census, 2010). The coastline is known for its natural beauty and pristine beaches. Several agricultural operations are located just inland. The region has embraced viniculture and challenges traditional wine growing regions of Napa Valley and Sonoma Valley. The Central Coast is also a popular tourist destination, with its comparatively untouched coastal areas. With regards to housing, many coastal cities from Ventura heading north through the Central Coast have enacted some of the most restrictive zon ing ordinances in the state, as well as the country, to ward off the urban form that sprawls across Southern California. 4. California's Land Use Structure California has a complex, devolved institutional structure of urban governance. A key element of this decentralization is the ballot initiative, through
! 65 which major legislation may be passed. The structure of land use planning is similarly complex. There are roughly 7,000 local government entities, with 478 cities and 58 counties (Fulton and Shigley, 2005). The state itself provides the basic guidelines that cities and counties must follow when designing and implementing general plans, but cities have greater control over the details of the development process. Cities have jurisdiction over land within their borders, while counties control unincorporated territories not under city planning authority. In California, there is little formal coordination that is required of planning agencies. Cities, counties, as well as state and federal agencies, often co ordinate action only when there is encouragement by specific laws or funding programs. This is in contrast to Oregon, and other states, in which state government is more directly involved in the development of urban policy. a. Zoning Local governments in California pioneered many new land use practices that are common elsewhere today. In 1909, Los Angeles implemented the nation's first zoning ordinances. They were used primarily for the purpose of protecting single family homes from the encroachment of co mmercial and industrial development. The other purpose of zoning was redlining, in which people of color were spatially segregated from white people (Logan and Molotch, 2007). Zoning ordinances are sets of regulations that dictate how a geographically defi ned piece of property can be used. Specifically, they determine whether spaces are residential, commercial, industrial, or mixed use. They also regulate density, lot size, building height, and the
! 66 building's proposed uses. They are an essential component o f American pla nning and land use development. The practice is protected by a Supreme Court decision stating that it is a component of the public welfare. Houston, Texas remains the only major city in America without zoning (Molotch and Logan, 2007). Zoni ng ordinances are the simplest and most effectively used tool for managing growth. In California, they form the basis of the General Plan. These ordinances often regulate how the space is used, whether for residential or commercial spaces, for instance. Ho wever, California has recently implemented "form based codes" that focus on the intricacies of the building mass itself rather than on its specific use. Form based codes are an important policy tool that is being adopted by cities and applied to the develo pment of smart growth projects 7 b. General Plan California became one of the first states in the country to require that cities and counties draw up "Master Plans." In 1937, the Master Plan was developed as a way to design and arrange urban development in a coherent policy framework. The term "General Plan" was adopted in 1965, to apply to specific planning areas, such as the downtown. Today, the General Plan remains the most important policy tool used by local land use planners: the land use decisions m ade by cities in California all descend from the General Plan. Courts interpret the General Plan as a constitution for the community. They contain a vision of what the future will be for the city and provide policy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 7 Interview with Ian Holt and David Ward, Planners for the City of Ventura
! 67 recommendations. They buffet their visio ns with various quantitative data, such as GIS maps and are broad enough to allow various interpretations for policy development. California requires that cities address seven elements: the land use element, circulation element, housing element, conservati on element, open space element, noise element, and the safety element. There is, however, little direction given to how communities must incorporate these elements into their General Plans. The Plans are easily amenable to change and therefore not always v iewed as legitimate. By the end of the twentieth century, California's urban growth was largely contingent on the state's revenue structure. Property taxes and sales taxes have been the two primary sources of state revenue. Changes in the tax structure an d thus government revenue have contributed to suburban sprawl and commercial development. c. Tax Revolt and Fiscal Crises In 1978, Proposition 13 was passed as a ballot initiative. It placed restrictions on property taxes and led to a nationwide "tax rev olt" (Martin, 2005). The most consequential aspect of Prop 13 placed a cap on property taxes at 1% of the value of a property, based on its assessed value in 1975. The tax rate cannot be changed unless there is a majority two thirds vote. This has been nea rly impossible in a strongly anti tax environment. Properties also may not be reassessed until the property is sold. The rise in value is capped at 2%/year regardless of changes in the broader market. Proposition 13 sharply curtailed government revenue fro m property taxes. As a result,
! 68 cities could no longer rely on property tax as the main source of revenue and looked toward sales taxes. To garner greater sales tax, cities and municipalities permitted commercial development more readily than housing develo pment. The sales from commercial establishments would provide more revenue for local governments than housing construction and non commercial property development. This is often called the "fiscalization of zoning." By the late 1960s the problems of spraw l were becoming plainly visible, particularly the impact on air quality. Growing technological and industrial risks, ecological disasters, and environmental consciousness spurred activists into the growing environmental movement. In California, the environ mental movement was prompted, in part, by the 1969 oil spill in Santa Barbara. Those entering public life in the Golden State increasingly focused on creating a series of environmental measures that would reduce pollution and possibly shift social behavior toward a more ecologically oriented modernity. d. California Environmental Quality Act (CEQA) Perhaps the most significant component of urban planning in California is the California Environmental Quality Act (CEQA), which though not technically a part of city planning per se, does more to impact and direct urban development than other planning tools. CEQA was passed in 1970 and was developed in conjunction with the National Environmental Policy Act (NEPA). CEQA sets forth a process by which to examine the outcome of building on one dimension: the environment. But this singular focus uniquely impacts the development process. CEQA requires the
! 69 developer and city to conduct an Environmental Impact Report (EIR) on every proposed project. An EIR consists of an assessment of the expected environmental damage cause by a certain development, such as its impact on biodiversity, air, and water quality. The Act has also, interestingly, democratized the building process as the environmental impact of building and c onstruction can become a forum for debate over urban development. This is often anathema to the goals of local growth machines that would prefer to build without engaging in a more participatory process. The most common EIRs are those used on a project by project basis. EIRs can also make it into the General Plan process, as long term planning must accommodate CEQA considerations. The impact that CEQA has had on the development process and on the dynamics of urban growth in California is somewhat inadver tent. It broadly affects where building sites are located. Other more direct growth management policies include zoning ordinances, traffic impact fees, density or affordability incentives, urban growth boundaries (UGBs), building caps, and public infrastru cture service provisions. e. Exactions and Impact Fees Impact fees, also known as exactions, are the main policy tool used by cities to manage and shape urban growth. During the 1960s and 1970s, the federal and state governments began to cut funding for cities and for infrastructure projects, as a result of the taxpayer revolt in Florida and California (Martin, 2005). Exactions fall under the "police power" of local governments. Originally, developers of large subdivisions
! 70 would be required to reserve sp ace for streets, parks, community centers, and other items of public interest. As they began to be determined on a project by project basis, exactions took the form of "in lieu of" payments. If a developer w ere simply building a structure or two, rather th an a neighborhood, the developer would be forced to pay a fee to the local government. The money paid would then be used to fund social programs, parks, or other services deemed as falling within the public interest. As a result of the reduced revenue st ream caused by Proposition 13, exactions have been viewed as a method to fund infrastructure and social programs without broadly taxing homeowners (Martin, 2005; Fulton and Shigley, 2005). Fees may be required to mitigate traffic, affordability issues, aes thetic purposes, and are often used for broader social purposes, such as funding parks and social services. Developers can oppose fees, but the broader real estate industry seems to acknowledge the usefulness and necessity of some kind of exactions 8 f. D evelopment Caps Another popular form of direct growth management is the capping of development. In 1971, Petaluma, California, a small city north of San Francisco, saw its population rise dramatically after the 101 Freeway was built. To prevent the low de nsity development that sprawled across Southern California, and increasingly encroached upon the San Francisco Bay Area, the city initiated the first building caps in the state. The building caps consisted of a set number of housing units (500/year). They also mandated certain aesthetic features. Petaluma initiated a complex point !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 8 Interview with Jerry Bunin, representative of the California Homebuilders Association.
! 71 system for development that guided the private real estate market (Landis, 1992). Over 60 cities have now implemented some form of development cap. They may consist of limits on t he number of the population, the number of housing units, the square footage of retail space, and so forth. Santa Barbara, as is explained in more detail later in the chapter, instituted a strict cap on residential population and on retail development, but it did more to curtail population growth than commercial growth (Warner and Molotch, 2000). By the closing decades of the twentieth century, California faced greater pressures from a decentralized, but an increasingly urbanized population. To conserve land and water, planners looked at the compact design characteristic of smart growth and new urbanism. Several environmental measures were passed and incentives granted to developers to pursue high density development. As coastal cities faced a housing aff ordability crisis, smart growth projects appeared to be a method for growing the urban economy while limiting its physical expansion and environmental harm. City planners and community activists drew up a new General Plan that included smart growth princip les in the core elements 9 ( housing, transportation, etc.). The recovery from the recession of the late 1990s partly involved a building boom in California. New subdivisions were created, subsidies were given to Redevelopment Agencies to beautify neighbor hoods, and subprime mortgages were offered to people who could not afford them; growth machine operations drove these !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 9 Interview with Paul Casey Community Development Director, Santa Barbara
! 72 practices. Several cities with tight growth controls looked to smart growth as a way to house their workforce populations, revitalize urba n spaces, and build vertically as opposed to horizontally. This has created tensions within several cities between groups that are in favor of limited, but smart, growth and those that are considered "no growth" or "slow growth." Long time environmentalist s who fought several battles with developers were suspicious of smart growth ideas and saw them as a smoke screen for further ruinous development. 5. California Cities and Growth Controls This section provides a very brief description of the thirteen cit ies, with special attention given to the four cities t hat were found to have built smart growth project s. The cities in Southern California are examined. The basic urban growth history provided along with specific measures that cities have used to manage the contours of growth. The cluster of cities includes Santa Maria, San Luis Obispo, Oxnard, Camarillo, Thousand Oaks, Santa Barbara and Ventura California. These cities are located between 20 and 190 miles from Los Angeles. The cities are all medium size d, with a range of 44,000 people in San Luis Obispo to 187,000 in Oxnard. Being planned communities, Camarillo and Thousand Oaks are also much newer than the other cities. These cities are strewn across three counties: San Luis Obispo, Santa Barbara, and V entura (each county has a city by its name as well). San Luis Obispo and Santa Barbara Counties have been less aggressive in their land use regulation than Ventura County. Ventura County has the most stringent land use regulations of
! 73 any county in Southern California (Wolch, et. al., 2004). Countywide growth controls have induced its cities to adapt to development pressures and manage growth more proactively. In 1969, the cities within Ventura County agreed upon the "Guidelines for Orderly Development" (G OD) that saved a series of open spaces and created farming belts between their respective boundaries. In 1998, Ventura County voters (including those in the city itself) voted for SOAR (Save Open space And Agriculture), which mandated that cities create an urban growth boundary to promote infill development and protect agricultural land. It was modeled on the Napa Valley, California Initiative, passed in 1990. This initiative had withstood legal challenges and set a precedent by the Supreme Court. In addit ion to SOAR, the Oxnard Camarillo and Oxnard Ventura Greenbelt Agreements protect the agricultural land between them by agreeing not to annex existing agricultural land and to recognize existing land zoned for agriculture. SOAR has preserved hillside vista s and strawberry fields, among other open spaces, that would likely have been built over during the housing bubble of the 2000s 10 a. San Luis Obispo The city of San Luis Obispo is the northernmost case examined in California. The city is located approximately 190 miles north of Los Angeles. As in several other California cities, it developed around the historic Mission. San Luis Obispo's economy is based largely on tourism and higher education; it is similar to Santa !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 10 Interview with Ian Holt and David Ward, Planners from the City of Ventura.
! 74 Barbara to the south and the cities of Monterrey and Santa Cruz to the north. San Luis Obispo also houses one of the California Polytechnic Institutes. In the 1950s, developers proposed paving over the San Luis Creek to accommodate more automobiles f ull of customers. Throughout the 1960s, many residents and students from the university fought political battles against both real estate developers as well as the construction of the Diablo Canyon nuclear power plant (Nevarez, 2003). The San Luis Creek wa s saved and is now an important amenity for the downtown. San Luis Obispo has a population of 44,000, however when neighboring towns are added the regional estimate is closer to 115,000. The city is the largest employment center in San Luis Obispo County with roughly 45% of the county's jobs (Reynis and Tony, 2002). It has vibrant service and hi tech sectors, along with its more traditional agricultural economy (Nevarez, 2003). As is the case with other California coastal communities, the property values i n San Luis Obispo are among some of the highest in the nation. Homes prices have steadily increased since the 1960s and 1970s as part of a broader real estate trend in California. The city's downtown displays many characteristics found in both tradition al and smart growth designs: a pedestrian plaza, several small specialty shops and boutiques, art galleries, and the Mission. The San Luis Creek also winds through the town with several paths running along the creek and bridges crisscrossing the waterway. San Luis Obispo has several regulations in place to make the downtown more attractive to residents and tourists. It was the first city in the US to ban smoking in public places. In another example, San Luis Obispo also banned drive through fast
! 75 food resta urants to reduce roadside litter. Though the city is only 11 square miles, it contains nearly 35 miles of bike lanes. For most of the city's history, growth controls primarily consisted of residential growth rate targets and annual caps on building permi ts. During the 1980s, annual residential growth rate targets were capped at two percent. In 1990, San Luis Obispo adopted a program of growth control, the City's Residential Growth Management Regulations, which further limited development. The residential construction rate was lowered to 1% annually. This was partly a response to the drought of the late 1980s and early 1990s (Landis, 1992). Recognizing the need for affordable housing, residential construction projects that favored low income housing receive d a greater likelihood of approval. While the city enacted tight growth regulations during the 1980s and 1990s, the County loosened its building restrictions effectively absorbing the growth that the city disallowed. Many analysts have argued that growth controls increas e housing prices (O'Toole, 2009 ). Landis's (1992) landmark study on growth controls and affordability found that during the first decade following the enactment of San Luis Obispo's growth controls, the price of single family homes increas ed much more slowly than in three neighboring pro growth cities (Pismo Beach, Grover City, and Morro Bay). However, there was a dramatic drop in permitting between 1990 and 2001, when the growth rate target was changed to from 2% to 1% (Reynis and Tony, 20 02).
! 76 Today urban growth politics remain at the forefront of community issues in San Luis Obispo. Similar to many other coastal Californian cities, San Luis Obispo is exploring possibilities for smart growth planning and development to accommodate project ed growth while still preserving the feel of the community. The city is also preparing a Climate Action Plan, hoping to reduce carbon dioxide emissions. In spite of its smart regulatory framework, it did not build high density, mixed use, such as the smart growth projects that I am specifically examining. b. Santa Maria Santa Maria is an inland city located 60 miles north of the city of Santa Barbara and roughly 30 miles south of San Luis Obispo. Originally known as Grangerville, the city was born in an o il boom. Beginning in 1888, several oil wells were drilled. In 1910, the name was changed to Santa Maria and became an officially chartered town as its oil economy grew. By the 1960s, there were nearly 2,000 oil wells in operation. The city's population ha s swelled dramatically in the last thirty years and recently surpassed Santa Barbara (90,000 and 93,000 respectively). Santa Maria has lax growth controls and it sprawls toward the northern border of Santa Barbara County. It has taken in several big box re tail establishments that are not allowed in neighboring San Luis Obispo or Santa Barbara. Today Santa Maria's economy primarily serves local agriculture, viniculture, and service to the nearby Vandenburg Air Force base. In 1998, the National Civic League listed Santa Maria as an "All American City" due to its local business and community partnerships. It is fitting that it
! 77 exemplifies low density sprawl. Santa Maria permitted the development of many subdivisions of low density, single family tract homes d uring what became the housing bubble. Santa Maria has suffered more than all of the other cities in the current economic restructuring. Foreclosure rates are higher in Santa Maria proportionally than all of the other cities examined in this dissertation. In the early 2000s, there was a movement to put smart growth on the city planning agenda. A series of workshops on the possibilities of smart growth in Santa Maria were held and the findings and ideas were presented to the city council. The city council di d not adopt any of the suggestions and the crash of the housing market more effectively curtailed sprawl in Santa Maria than local activism had been able to do 11 c. Santa Barbara Santa Barbara is probably the most well known of all of the cities examined in this dissertation. It has served as the setting in several movies, television shows, and is a globally popular tourist destination. The city is nestled between the Pacific Ocean and the Los Padres Mountain range, providing residents and visitors with b eaches and mountains for outdoor recreational activities. The climate of the South Coast, as it is locally known, averages 70 degrees. Santa Barbara also has a vigorous bicycling culture placing it in the top 25 cities in the American West based on the sha re of bike commuters (ACS, 2012). The University of California Santa Barbara (UCSB), a historic Mission, a world class theater, and a popular film festival are all located in !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 11 Correspondence Joyce Howerton former Mayor of Lompoc.
! 78 the city. Montecito, the wealthier part of the city, has houses owned by popular movie stars, heirs and heiresses, and other extremely wealthy individuals. The mansions in Montecito combined with the high class resort hotels, a diverse range of restaurants, and high end stores in the downtown, give the impression that Santa Barbara i s merely a wealthy resort community. However, the median income is actually below the California state average and lower than neighboring Ventura (Census 1990, 2000, 2010). The city has a large professional class that works at UC Santa Barbara, the downtow n hospital, and a number of technology and defense contracted firms. Santa Barbara is sometimes referred to as the "Silicon Coast" (Nevarez, 2003). The city has a large class of service workers employed by the University, the hospital, and the tourist ind ustry who are not well paid and have struggled to find housing within the appreciating housing market. This has led to a growing housing crisis as rising property values have priced out middle income earners who have left for Ventura to the south and Santa Maria to the north. Like Santa Maria to the north and the City of Ventura to the south, Santa Barbara has an oily history. In 1896, the first offshore oil drilling explorations began in the town of Summerland, just south of Santa Barbara. Commercial oil production had occurred in Ventura since the 1860s, but it was not until 13 years later that the oil industry moved into the southern tip of Santa Barbara County. Oil wealth brought wealthy heirs and heiresses to the growing community. Developers emphasiz ed the aesthetic amenities that the city had to offer. They built the city in an amphitheater like design with the oceanfront harbor as the stage. The harbor itself was built for a
! 79 single yacht owner named Max Fleischman. The oil industry pipelines and pro duction facilities were located in Ventura, while Santa Barbara remained the entertainment destination. Molotch et. al. (2000) have pointed out that this is somewhat counterintuitive: Ventura actually has longer, wider beaches, it has a larger, more functi onal port, and is 30 miles closer to Los Angeles. Nevertheless, the developers and local growth machines in Santa Barbara managed to advertise their city as the ideal vacation spot. Two disasters shaped Santa Barbara's form and culture, one natural, one human made. The natural disaster was the earthquake in 1925 that crumbled many of the Victorian homes and buildings in the city. Following the earthquake, the city instituted an ordinance on architectural aesthetics that required buildings to have a region ally distinctive Spanish, red roofs, and an adobe form. Even before this, in 1922 a citizen group called the "Plans and Plantings Group" developed the country's first architectural review board. The second, human caused, disaster was the 1969 oil spill t hat galvanized community opposition to polluting industries. The disaster and its disastrous response, indirectly led to the first Earth Day, an event which receives a yearly weekend festival in Santa Barbara. After the 1969 oil spill blackened the coastli ne, the environmental movement radicalized the city's approach to economic growth and the impact it had on the local environment. During the 1960s, the University campus and neighboring Isla Vista (where the students live) were also sites of radical protes ts and civic action. The expansion of urban sprawl across Southern California, and the
! 80 disastrous oil spill, exemplified the need for greater planning and land use consideration. Nearly two thirds of the city residents voted in favor of the 1972 Coastal Pr otection Act. In the 1970s, two events occurred that curtailed urban growth in Santa Barbara. In 1972, the Goleta Water Board decided to not grant any new water pipelines and links to the city in the Goleta Valley. Goleta was an unincorporated collection of suburban homes but was also one of the fastest growing parts of the South Coast. Voters approved of this decision in a local referendum and the neighboring water districts of Summerland and Montecito also put limits on water hookups (Warner and Molotch, 2000). Citizen coalitions in Santa Barbara wanted stronger growth control measures to be put in place, but needed an empirical basis by which to formulate land use policy. In 1974, local researchers were commissioned by the city to examine the character istics of growth pressures and offer suggestions for policy to manage or curtail the growth (Appelbaum, et. al. 1974). Although the authors argued for a regional planning perspective to plan for future development, the cities comprising the South Coast ind ependently developed their General Plans. Local citizen groups such as the Citizens Planning Association were formed to pressure the local government to prevent development that would ruin the amenity rich character of the city. In 1989, Santa Barbara pa ssed Measure E, which sought to control growth by capping commercial development in order to limit the need for more housing
! 81 developments to accommodate the workforce. As the economy changed during the 1990s, however, job growth continued apace (Warner and Molotch, 2000). Developers could replace any structure on a lot with one of the same size to redirect urban development in the downtown core. This combination of incentives reordered land markets in Santa Barbara by favoring existing density patterns acr oss the city and, especially, downtown redevelopment, a long term planning aim. Of course, this development conflicted somewhat with the overall goal of limiting growth and further helps explain the otherwise curious finding of so much growth under growth control (Warner and Molotch, 2000: 119 120). By the 2000s, the growth controls combined with the desirability of the region contributed to a dramatic rise in home prices, part of a nation trend that was more pronounced in some places. This was part of a national trend, but prices skyrocketed in already expensive property markets like Santa Barbara. Between 2004 2006, the median price of a single family home rose by 35%; the average price was $1.3 million, increasing to $1.6 million in 2006, at the height of the housing bubble (Rabin and Kelley, 2006; Harney, 2012). Large employers, including half a dozen Fortune 500 companies, left the city because the housing costs were too high for the workforce. Half of the employees of the Montecito Fire Protection Di strict who lived outside of the South Coast area commuted. Santa Maria has absorbed the population loss from Santa Barbara. Between 2001 2005, Santa Barbara grew by 400 people, while Santa Maria added 10,200 new residents (Rabin and Kelley, 2006). Traffic congestion rose dramatically as workers commuted from Ventura, Santa Maria, and other places in the region. Between 1990 2000, the number of workers commuting
! 82 from Ventura increased by 61% while commuting from San Luis Obispo County increased by 36% (UCSB Economic Outlook Project Report, 2002). Housing and workforce advocates sought the ability to build workforce housing to both reduce commutes and the associated air pollution. As the city prepared for its General Plan update, divergent views on the city' s future growth scenarios led to political conflict and confrontation; the conflict pitted those in favor of continuing the city's "slow growth" versus those who wanted increased densities to promote "smart growth." Many of the original environmental organ izations and their members opposed the inclusion of smart growth projects in the new General Plan. The Coalition for Sensible Planning and other similar organizations were formed to deter higher density development. In 2008, they put Measure B on the ballo t that sought to reduce future building heights from 60 ft. to 45 ft. It led to a bitter divide amongst community activists. Other progressive social and environmental organizations, such as the Santa Barbara County Action Network, joined with the Chamber of Commerce, local architects and real estate developers to support smart growth planning, and worked to defeat Measure B. The motivation for Measure B was, in part, a reaction to several smart growth projects built on Chapala Street, which ran parallel to State Street, Santa Barbara's main downtown thoroughfare. The first of these developments was Chapala Lofts. Financed by a famous local architect named Barry Berkus, it is a small mixed use project that was tucked away at a quieter location and went rel atively unnoticed; it was not perceived as a threat of over development. The second smart growth project,
! 83 Paseo Chapala, alarmed some members of the community. This mixed use project was 60 ft., contained 21 luxury units, and 8 affordable units, with sever al commercial spaces on the bottom floor. It was situated across the street from a popular outdoor mall (Sadler, 2008). Shortly after it was built, another high density, mixed use project was planned further down the street. It was called Chapala One. This project set off the political firestorm that led to Measure B. Chapala One was 60 ft. tall and contained 42 housing units. However, a series of lawsuits and conflicts between the architects and developers of the project coincided with the economic collaps e of 2007, effectively shutting down construction and leaving a vacant building on the lot for several years 12 d. Ventura Ventura is located roughly 28 miles to the south of Santa Barbara and neighbors the city of Oxnard. Ventura is topographically similar to Santa Barbara, with coastal hills lining one side of the city with the Pacific Ocean on the opposite side. It shares t he Mediterranean climate, averaging 72 degrees. The city suffered from shortsighted urban planning decisions made throughout the twentieth century. As mentioned above, in a comparison of late nineteenth to mid twentieth century approaches to urban growth i n Ventura and Santa Barbara, Molotch et. al. (2000) found that the two places took radically divergent paths. Ventura became an "oil town" putting the local oil industry interests ahead of other city planning possibilities. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 12 It is beyond the scope of this dissertation to explain the legal battles between the developer and the construction company. The project had internal problems that are well covered in a series of articles in the Santa Barbara Independent.
! 84 For example, Santa Barbara turne d its beaches into a tourist destination while Ventura, which has much more beach space, gave its beaches to the oil industry to lay down pipelines, build refineries, and give space for trucks to load and unload oil tanks. Molotch et. al. (2000) also fou nd that Santa Barbara citizen coalitions spent a great deal of time and energy ensuring that the 101 freeway did as little demolition of historic areas as possible and did not cut off the downtown from the ocean beaches. Ventura, by contrast, did not show nearly the same level of opposition to the placement of the 101 Freeway, which was being constructed during the same time period. For much of the twentieth century, Santa Barbara was seen as the pioneering environmentally planned "green city", while Ventur a was seen as a local oil town that lacked the social and environmental activism to engender growth management. Ventura exemplifies the possibilities for transformation. By the late 1990s and early 2000s, Ventura was viewed as a possible future leader in California's smart growth movement. The city council, the city manager, and the mayor of the city of Ventura were very strong proponents of high density, mixed use development 13 (RPPI, 2002). One developer, who sought much higher densities than were found i n the city at the time, built a mixed use smart growth project named Pacific Pointe. These projects were seen as relatively successful and sensitive to the surrounding neighborhood. Although the city was in favor of smart growth projects generally, they w ere opposed to some of the proposals for development, contending that !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 13 Interview with Rick Cole, former City Manager of Ventura; Interview with Eric Wallner, Ventura Creative Economy Specialist.
! 85 developers from Orange County were trying to build projects that were far too dense for a generally low density community. Instead, the city took a proactive approach in carefully assess ing building permit applications. Several proposals were rejected, but nearly 30 smart growth projects were approved. The property market crash, and subsequent economic crisis, shut down all plans for development except for one: the Working Artists Ventura (WAV). e. Oxnard Oxnard is a sprawling regional hub for the rest of the Central Coast to the north and the suburbs of Los Angeles to the south and east. The city is located approximately 35 miles south of Santa Barbara and 60 miles north of Los Angeles. The Santa Clara River separates it from Ventura. Oxnard developed alongside Ventura as both a harbor town and an agricultural center. Port Hueneme, a charter city, is surrounded by Oxnard's city limits and serves the busy seaport. Oxnard is located on the Oxnard Plain, a fertile area of land that is known for strawberries. Oxnard is often referred to as the strawberry capital of the world (USDA, 2012). Cesar Chavez, the United Farmworkers activist, spent time both working and organizing strawberry pickers in Oxnard in the 1960s (Barajas, 2007). With a population of almost 200,000, the city is the largest of the cases examined in this dissertation, and is also one of the larger cities in California. The city has supported an urban growth boundary as the pr imary growth control, but has still provided space for low density development. During the 1990s and early 2000s, speculative development fueled the rise in real estate construction.
! 86 The city amassed enormous debts to finance the infrastructure development needed for its low density housing and commercial construction (Kirkpatrick, 2011). Using a tool called tax increment financing, the city funded new road, waterway, and power line construction. This almost led to the city's insolvency when the housing bub ble burst in 2007. The city was saved by a strong majority of local voters (65%) who voted for a half cent sales tax increase to help ward off a fiscal catastrophe (Kirkpatrick, 2011). Oxnard prides itself on being a regional Auto Center with 28 car deal erships sprawled on both sides of the 101 Freeway. The city's infrastructure was roundly criticized for not being pragmatically planned to accommodate a population of 200,000. According to a survey in 2000, urban planners gave failing grades to more than two dozen of Oxnar d's intersections (Griggs, 2007) As with other cities in Ventura County, the SOAR initiatives were supported by a majority of Oxnard voters. The city government has acknowledged that higher density building will need to take place to accommodate projected population growth. f. Camarill o Camarillo lies inland to the east of Oxnard in Pleasant Valley and at the foot of the Santa Monica Mountains. The city was incorporated in 1964 and began housing many veterans of World War II. It has since transitioned from a rural community into a subu rb of Los Angeles. Camarillo is known for fighting off several attempts at development of the neighboring hillsides (Wolch, et. al., 2004). The completed 101 Freeway bisected the city. But it was required to bypass their main
! 87 street, Ventura Boulevard, whi ch directed the freeway to a steep ascent over the Conejo Mountains. Camarillo has become a popular destination for shopping. Major outlet malls line the 101 Freeway and attract regional customers. Camarillo primarily relies on two growth controls: 1) an annual cap on building permits; and 2) an urban growth boundary (UGB) approved by voters and managed by Ventura County. As with many other cities in Ventura County, Camarillo voters largely supported SOAR initiatives (Wolch, et. al. 2004). The UGB has pro tected large swathes of agricultural land within the city, more development is planned within its limits to accommodate projected growth pressures in the coming years. The Camarillo Sustainable Growth Organization was formed to provide alternatives for urb an management. However, there has been no development of high density, mixed use projects. g. Thousand Oaks The city of Thousand Oaks is located in the Conejo Valley but is considered part of the greater Los Angeles area; though it is located within Vent ura County. Thousand Oaks is roughly 40 miles north of downtown Los Angeles. Its population primarily lives in large single family homes and commutes by car to Los Angeles for work. Many people also work in several of the corporate offices that are housed in Thousand Oaks, such as the Rockwell Science Center, Sage Publications, Netzero.com, the General Dynamics Corporation, and others. The city is generally a wealthy community, although its schools were pointed to as overcrowded and bereft of the funding th at one might expect in a wealthy Los Angeles suburb.
! 88 The city was planned and built as a commuter suburb for higher income residents who worked in Los Angeles. In the 1950s, the Janss Investment Company created the master planned communities of Thousand Oaks and Newbury P ark (now part of Thousand Oaks) Although there is a central downtown, there are commercial strip malls that spread across many neighborhoods. As with other places in Southern California, people commute in and out, across the far flung di stances from work and home (Wolch, et. al., 2004) Although Thousand Oaks development typifies patterns of low density sprawl, stringent controls on overall growth are in place. In 1980, voters adopted Measure A, which enacted the Thousand Oaks' Residen tial Development Control System to manage urban growth. The following year, the city capped new home construction at 500 units/year. This was later accompanied by the urban growth boundary mandated by the SOAR initiatives (Wolch et. al., 2004) The combina tion of these growth controls has limited new development and preserved nearly 12,000 acres of open space. Thousand Oaks has not planned or developed any high density, mixed use smart growth projects B. Oregon Urban Growth and Management 1. History Oreg on is ranked as the 27 th most populated state in the US with roughly 3.8 million people. The state remains far less populated than California, though its system of growth management has been shaped largely in response to its southern sprawling southern nei ghbor. Oregon, like California, was one of the fastest
! 89 growing states in the country after the Second World War. However, the state was smaller and had a less dynamic economy, mainly focused on agriculture. Still, the urban growth during this time and the more dramatic populations expansions in California prompted the state to adopt experimental measures to manage and direct urban development. The population growth rate dropped 8% during the early 2000s, but is expected to grow to 4.5 million by 2020 (Orego n Office of Economic Analysis, 2011). With shows like the comedy Portlandia popularizing the city as a beacon for hipsters and bohemians ("where young people go to retire") deserved or not, the pressures on the city to grow are bound to intensify. Most o f Oregon's current urban growth occurs in the Portland Metropolitan Area. Moreover, most of the state's projected growth is expected to continue in the region for the next two decades (Oregon Office of Economic Analysis, 2011). Other cities such as Eugene and Salem have also witnessed population increases, though not nearly as dramatically as that in Po rtland The majority of the urban population of Oregon lives in the Willamette Valley that contains the Willamette River running down the center of the state The Valley has supported the modern agricultural economy for several decades. Throughout the early 20 th century, Oregon was sparsely populated and predominantly rural. During the Second World War, several factories were built for the war effort. This inc luded several water diversion projects and hydropower dams (Reisner, 1986). After the war ended, the manufacturing economy began to attract workers to the state. Following a pattern seen in California and Washington, sprawl development began to expand and infringe on agricultural land.
! 90 Between 1950 1970, around a third of the agricultural land of the fertile Willamette Valley was developed (Abbott, 1983). Agricultural enterprises and small farmers feared that the land would soon be paved over by urban spraw l. Rural legislators and public figures such as State Senator Hector Macpherson, a dairy farmer, and the Republican Governor Tom McCall established a series of long term and long ranging growth management policies that shaped the state's growth for the fol lowing decades. 2. Growth Management a. Senate Bill 10 In 1969, Oregon State Senate Bill 10 required cities and counties to develop comprehensive land use plans that complied with various state planning goals. The state was the second in the nation, after California, to mandate that cities develop master plans, known in Oregon as "Comprehensive Plans." Oregon was also the first state in the nation to mandate that all land within a city's jurisdiction be zoned by that city. If a city refused to zone all of the land within its jurisdiction then the state government had the authority to zone that land on their own. Senate Bill 10 was a first step toward an even more comprehensive system of land use planning. b. Senate Bill 100 In 1973, the state legislature pa ssed Senate Bill 100 to help cities achieve the state planning goals laid out in Senate Bill 10. Oregon Senate Bill 10 had failed to set up a clear mechanism to assess municipal compliance. Senate Bill 100 outlined the mechanism by which the state governme nt would enact local zoning ordinances for
! 91 cities when the municipal governments refused. It created the Land Conservation and Development Commission (LCDC) to oversee the implementation of state mandated zoning laws. SB 100, with the support of farmers, r ural legislators, as well as environmentalists, required all of Oregon's 241 cities to develop comprehensive plans that included string ent regulations on urban growth. It also established a legal framework through which cities could develop their zoning an d land use regulations. c. Urban Growth Boundaries (UGBs) Following SB 100, Oregon initiated a program of urban growth boundaries (UGBs) to manage and contain urban development. It was the first state in the US to mandate statewide UGBs (Abbott, 1983; Freilich, et. al., 2010). In 1974, the coalition of farmers, rural landowners, and environmentalists pushed the Oregon legislature to pass the most comprehensive land use planning laws in the country. UGBs were later institu ted in other states and cities ( Gillham, 2002) The urban development that threatened the Willamette Valley virtually came to a stop in the mid 1970s as a result of UGBs. Further, as a result of SB 100 and UGBs, unused land in cities was developed at higher densities to stay within the boundaries demarcated by state regulations. Urban infill became common in Oregonian cities as part of the obligatory responses to the state regulatory framework. The Portland metropolitan region has a population of roughly 2.2 million people, making it the largest city in Oregon and third largest in the Pacific Northwest, and the city has taken experimental measures, nationally, to manage its urban growth.
! 92 3. Portland Portland is often hailed as the most livable, sustainable, and green city in the United S tates. It is highly regarded for its public transportation, pedestrian friendly neighborhoods, and regional plannin g accomplishments (Abbott, 1983 ). Portland also has a high level of community involvement, which led to the formation of Metro, the only elec ted regional planning body in the nation ( Seltzer, 2004). Numerous political, social, and environmental groups are active in the area and have developed what some call an "ecotopia" (Hovey, 1998). However, there are several problems with affordable housing and environmental racism in this ecotopia ( Mayer and Provo, 2004 ; Stroud, 1999). Nevertheless, it is widely acknowledged that Portland has achieved incredible successes in managing urban development processes. Located at the confluence of the Columbia an d Willamette Rivers, Portland's economy developed around agriculture and shipping. When river traffic declined, the city turned to manufacturing. The Columbia River divides Portland from Vancouver, Washington while the Willamette runs through downtown and the southern suburbs. The climate of the Portland region is temperate and generally warmer, wet, and overcast. Agricultural fields and the Cascade Mountain range surround the city Portland has exhibited a dedication to parks and open green space since the mid 1800s. The city famously turned its downtown Harbor Drive freeway that ran parallel
! 93 to the Willamette River into the popular Tom McCall Waterfront Park 14 This is one of the first instances of a city removing a major freeway. a. Portland Development Commission Beginning in the 1950s, Portland's city government focused on maintaining and replenishing its urban core. In 1958, voters in Portland approved the Portland Development Corporation (PDC) an urban renewal corporation as the city's primary development agency The PDC is structured like most urban renewal agencies around the country. It is quasi independent so that it can move faster and maintain more flexibility than other similar governmental agencies. Urban development corporations operate more like private firms than government agencies; legally they have less transparency and less accountability to the public than government agencies. Tax increment financing (TIF) is the main funding source for the PDC; roughly 70% of its projects, 95% funds its various de partments, and 20 30% of total TIF resources are set aside for affordable housing in Urban Renewal Areas (PDC, 2010). The board of directors of the PDC, comprised of members of the local business community, makes the TIF distribution and allocation decisio ns for urban renewal and other projects (PDC, 2010). Their finalized development projects are ultimately subject to the City Council for approval (Gibson, 2004). Portland's urban development was focused far more on economic growth than land use management. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 14 Tom McCall was the governor of Oregon who championed many of the states broadest and most influential urban growth and environmental protection policies.
! 94 Two questions are relevant to ask of California's neighboring state: What about the development of the suburban cities on the edges of the urban growth boundary? How was their growth managed? b. The Portland Metro In 1979, Portland voters approved the for mation of a regional planning organization called the "Portland Metro". Its initial purpose was to protect farmland that was under threat from unrestrained sprawl. For most of the first decade of its existence, Metro focused on functional plans for transpo rtation planning and the siting of landfills (Seltzer, 2004). Its jurisdiction now covers the three core counties of Multnomah, Washington, and Clackamas, a total of twenty four cities (Gillham, 2002). Metro's governing power and scope have both grown sign ificantly over the last two decades. Though by Oregon state law, only cities and counties have the authority to develop comprehensive city plans, Metro has been given the authority to create regional functional plans that require municipal compliance (Walk er and Hurley, 2011). This is unique in American regional planning and more remarkable when considering the tendency toward bureaucratic centralization in comprehensive plans for Oregon cities (Seltzer, 2004). c. The Portland Metro TOD (Transit Oriented D evelopment) Program The Portland Metro is preparing to contain 50 years of projected population growth within its urban growth boundary (Metro Region 2040 Plan, 2012). In the 1990s, Metro began to formulate strategies by which to revitalize the ailing down towns of Portland's suburbs (Leo, 1998). In 1998, it created the "Metro TOD
! 95 Implementation Program" to contain the growing population within the urban growth boundary. It accomplished this by overseeing regional mass transit and compact development strateg ies. Metro developed several projects within the city of Portland itself, but also tried to essentially create new markets for SGPs in suburban cities and neighborhoods. These strategies met some opposition due, in part, to their unfamiliarity to local gov ernments. However, there was enough support from key actors to push many of the projects forward, with the backing of Metro. A commuter based rail system was envisioned for the metropolitan region by the city's transportation authorities who were also try ing to lobby for more federal transportation money to go to transit oriented projects 15 In 1986, the first light rail line was built, connecting the city of Gresham on the far eastern edge of the urban growth boundary to Hillsboro located on the far wester n edge. Hillsboro and Gresham have both been the focus of Metro planning and development, but the entire region is gradually being connected by light rail (M etro Brochure, 2012 ). Metro's focus since the mid 1990s has been on the increasing connectivity bet ween the suburbs on the fringe of the UGB and downtown Portland as part of the Metro 2040 Growth Concept a regional plan meant to accommodate projected population growth. Smart growth is a basic design element of Metro's 2040 Growth Concept. In the plan, light rail links the downtowns of suburbs to the central hub of downtown Portland. Six urban centers have been designated across the region for transit oriented development (TODs). Metro officials assist cities and developers in navigating the !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 15 Interview with Phil Whitmore, founder of Metro TOD Program.
! 96 complex fina ncial maze that SGP development requires and fosters public private partnerships to offset the private sector costs. Metro purchases parcels of land near mass transit stops and sells it to developers at a reduced cost. To date, approximately 322 acres have been purchased and held for SGPs (Metro Brochure, 2012). This is done through a land easement, similar to a conservation easement. In a conservation easement, land is held in perpetuity for conservation reasons sensitive habitat, ecological protection, or historical sites and cannot be developed. TOD easements set aside land for higher density, SGP development. Metro determined that this was the most effective way to develop the Portland area over the coming decades. Government and real estate profession als staff the Metro TOD Program. Originally, they had more familiarity with shifting, regional markets than many actors in other local government planning organizations. But the TOD Program was also different in that it focused on the implementation of act ual developments. There have been many plans and conceptual renderings for smart growth, but there are few organizations devoted to actual project implementation. The Portland Metro TOD Program was also the first program in the country to experiment with u sing Federal Transit Administration funds for land acquisition to develop SGPs. Though it started out as the "one man show" of Phil Whitmore, it has evolved into a very professional and tightly structured organization 16 The Metro TOD Program acts as a medi ating mechanism between the federal, state, city, and regional levels of government and the real estate and construction industries. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 16 Interview with Megan Steele, Senior Planner, Metro TOD Steering Program.
! 97 As a result of growth management policies passed by both Oregon and Portland during the 1960s 1980s, the Portland metropol itan area bucked many of the trends that other cities were experiencing around the country. Other cities saw decreases in their populations and declining economic activity in their downtowns. Most cities followed the lead of Southern California and built o utwardly expanding sprawl development. Between 1973 1993, as sprawl spread across most of urban America and led to depleted "inner cities", Portland remained compact with the number of jobs in the downtown increasing by 50% (Layzer, 2012: 501). By the end of the 20 th century, Portland was one of the only cities in the country where housing construction was growing faster within the inner city than in the o utlying suburbs and edge cities. Metro's role in promoting mass transit has been a crucial part of cen tralizing activity in the downtown of Portland. According to surveys, there are roughly 543,000 additional transit trips annually due to projects built with funding from the Metro TOD Program (Metro, 2012). Metro has promoted their projects not only by emp hasizing the convenience of transit, but also pointing to studies which indicate that there is a 10 20% increase in value of properties built within a short walking distance from a mass transit station ( Metro Brochure, 2012 ). Portland also ranked in the to p 5 among 64 cities with a population over a quarter of a million in the percentage of the workforce that commuted by bicycle (Layzer, 2012).
! 98 4. Oregon Cities and Growth Controls a Beaverton The City of Beaverton is located between Hillsboro and ten miles from downtown Portland. It is the sixth largest city in Oregon and exemplifies typical suburban development. Low density residential housing and strip malls characterize its planning and development. Appropriately, the city was one of the first place s in which a car dealership was built. In 1915, Ford Motor Company built one of their early dealerships in the city (Beaverton Historical Society, 2012). Over the following decades, car dealerships expanded across the city. The city also attracted corpora te office development. Beaverton is home to Nike's global headquarters and frequently disputes whether Nike is actually subject to its zoning regulations because it technically is in an unincorporated territory. Beaverton is also part of the Silicon For est, with several tech company offices and facilities within the city. Companies such as Linux, Phoenix Technologies, Tektronix, Electro Scientific Industries, and several others, have headquarters and offices in Beaverton. Although the city remains a conv entionally built suburb, with a light rail connection developed in the 1990s, and recognition of population growth pressures, smart growth projects have received considerable attention from the local government. In the mid 2000s, the city embarked on a gro wth plan that would eventually make Beaverton the second largest city in Oregon. Given the urban growth boundary and the proximity to other cities, such as Hillsboro and Portland, compact development appears to be the only way to successfully reach this go al.
! 99 b Tigard Tigard is a smaller community that has historically been suspicious, and even resistant, to Metro's regional development planning. The city has fought attempts to increase density, neighborhood associations have met and protested proposed light rail developments, and the local government has often found itself trying to balance the desire for the financial assistance that Metro offers, while adhering to the wishes of local voters. Part of the light rail line does stop in Tigard, but it has not generated the ridership that Metro deems necessary for a successful smart growth project. c Lake Oswego The small community of Lake Oswego sits roughly 8 miles southwest of downtown Portland. Founded in the mid 1800s, and becoming an incorporated cit y in 1910, Lake Oswego has long served as a commuter suburb for the central city of Portland. In the first two decades of the twentieth century, the city had a very active train service to and from Lake Oswego and Portland. At its peak in 1920, over 60 tra ins a day carried workers to the urban core and back (Abbott, 1980) However, at the same time, the automobile industry was expanding and, like the rest of the country, passenger rail lines were being demolished and paved over with new roads for cars. By 1930, the passenger rail service between Lake Oswego and Portland ended. Today, the Willamette Shore Trolley takes a small number of p assengers along the Willamette River. This is primarily a service for tourists and is not an efficient transport mode for commuting.
! 100 The city is located on the edge of Oswego Lake, a private body of water. Partly as a result of the waterfront properties, Lake Oswego is the most affluent suburb of Portland and home to Hollywood performers, business people, famous athletes, and others. In the early 2000s, the city built a mixed use project that housed offices and retail establishments. This project was not included in the dissertation, because it did not have residential units. But the project does demonstrate that the city government is looking to compact development as a way to cautiously expand its population and induce private investment. d Milwaukie The city of Milwaukie sits on the Willamette River located south of downtown Portland, and is connected by Trimet bus transit. Milwaukie is tucked between two major freeways and the Willamette River. In this sense, it is somewhat "hidden" from view by most commuters and its large waterfront park remains largely unknown to many residents of the metropolitan region. With a population of roughly 29,000, Milwaukie is the smallest urban area examined in this research and is the most ethnically homogenous and has the lowest economic inequality. It has largely been a quieter part of the region and has not experienced the building that has occurred in other parts of Metro's jurisdiction. The citizens of Milawaukie have also been very vocal in their suspicion of the Portland Metro's centralized planning system. The city is known for its conservative, anti government attitudes 17 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 17 Interviews with Phil Whitmore of Metro, Jim Bernard former Mayor of Milwaukie, Alice Rouyer, former Communi ty Development Director, and Tom Kemper, developer.
! 101 A light rail line connecting Milwaukie to Portland is planned for 2015. Proponents argue that it will bring economic growth to downtown Milwa ukie, which is experiencing a revival. Metro, Milwaukie officials, and developers successfully persuaded the city to develop a smart growth project in anticipation of the light rail line. The city does have things that the Metro refers to as "the coolness factor". The Dark Horse Comics company (known for its original "300" comic that was later made into a film) has a strong presence, owning several lots in the downtown. A riverside park is also seen as an environmental amenity that will help the city over t he long term. Of all the projects in this research, the smart growth project in downtown Milwaukie named North Main Village has been the most successful financially. For several years, a vacated Safew ay grocery store stood on the 2 acre lot. In the early 2000s, Metro and Milwaukie worked as a partnership with a local developer to use the site for a smart growth project as a key place for downtown revitalization. When the project North Main Village was completed it was architecturally diverse, contained mi xed use, with 97 housing units and 8,000 sq. ft. of commercial space. It was one of the most expensive projects in this research, totaling $14 million. Despite being located in Milwaukie, where many people were skeptical that a smart growth project could b e successfully developed, North Main Village has been viewed as one of Metro's most successful developments in the Portland suburbs.
! 102 e Gresham The city of Gresham is located on the far eastern edge of the Portland Metropolitan Area. It is hemmed in by the regional urban growth boundary. Gresham's population is roughly 105,000, making it the fourth largest city in the state of Oregon (US Census, 2010). Gresham has an active manufacturing sector with several Boeing facilities being the primary employers. The city has long been a suburb of Portland and low density housing and retail development characterize its urban form. In many ways, Gresham's patterns of urban growth have been similar to many other medium sized cities in the U.S. During the 1970s, land in Gresham was comparatively inexpensive and sprawling subdivisions of single family homes were built. During the early 1980s, Metro and TriMet planned light rail lines across Metro's planning jurisdiction, with downtown Portland as the central hub. As m entioned, the first light rail line was built in Gresham in 1986 connecting the city to Portland as well as the western suburbs of Beaverton and Hillsboro. Metro and other supportive city and community members wanted the line to go through the old downtown thereby creating more activity in Gresham's inner retail areas. But several members of the community and a few city officials voiced strong opposition to light rail in their downtown, and so the line now runs on the edge of the downtown, largely bypassin g that area 18 The rail line has not engendered the ridership that proponents had hoped for, due to its low density development near rail stations. Largely because !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 18 Interview with Shirley Craddick, Metro Councilor and former member of Gresham City Council
! 103 of the suburban attitudes of city and community members, Gresham's smart growth development p roceeded incrementally. In the late 1990s and early 2000s, Metro's program, the "Metro Transit Oriented Development Steering Committee" began teaming up with local developers. The head Metro's TOD division became a mentor to developers in Gresham and els ewhere in the region. By the 2000s, Gresham began to actively plan and construct several high density, mixed use transit oriented development sites. Metro was an active partner in all but one of the projects, the Kohler Building. Of all the cases examine d in this dissertation, Gresham was the most active city in developing smart growth projects during the decade from 2000 to 2010. This was only made possible by the public private partnerships that Metro developed with the city and with two local developer s. During the boom years of the early 2000s, Rossman Development and Tokola Properties worked with Metro on developing four smart growth projects. Metro assisted financially and politically, providing a buffet of subsidies that developers could use to buil d smart growth projects. City and Metro officials lobbied state and regional organizations to adjust zoning ordinances, provide affordable housing tax credits and bestow money for aesthetic improvements. However, when the property market crashed in 2007, t he financial assistance furnished by Metro was not enough to save three projects that finally went into foreclosure. The developer of those projects was also bankrupted and left the city 19 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 19 The developer had left the area and could not be contacted for an interview.
! 104 V : A Qualitative Comparative Analysis of the Socio economic Con ditions of Smart Growth Cities A. Introduction Although this dissertation primarily focuses on the social structures of urban political economy, this chapter first explores the socio economic conditions of the cities that were selected as cases. Its purpose two fold First, ther e is an empirical examination of whether or not certain conditions or combinations of conditions are found in cities that develop smart growth projects. At the outset of the research it was surmised that the artisan class, wh ich is a subset of the broader creative class (Florida, 2002; Heying, 2010), would be found in smart growth cities. Second, this chapter provides a methodological experiment by using QCA to examine whether or not there is a relationship between "smart grow th cities" and social characteristics. The historical context provided in the previous chapter is supplemented by social and political characteristics obtained from the US Census. Using this data and building permit data for each of the cities, a Boolean a nalysis is conducted to determine if there appears to be any association between the social demographics documented in the Census and the development of smart growth projects. B. Raw Data Table
! 105 In this section I first provide a meticulous discussion of h ow QCA is applied in this research 20 I review the steps of data collection, the operationalization of variables and the analysis. The term "raw data" is used to refer to the actual data taken from the US Census Bureau and building permits obtained from ci ty planning departments. The first step is the creation of a raw data table, displayed in Appendix D. In conventional inferential statistical research, the study would be conducted using solely the raw data. In QCA, by contrast, the raw data is converted into dichotomous values. This is applied to both the conditions (independent variables) and the outcomes (the dependent variable). C. Operationalization of Outcomes All of the data are taken directly from the 2010 US Census. To standardize and operationalize each condition, they are converted into the Boolean binary form according to the criteria established for calibration. In many cases, this is determined by a comparison with the state's average. For example, if the percentage of a city's hou sehold income in California is lower than the California state average it is given a value of 0, while a city whose household income is higher than the state's average is given a value of 1. Oregon cities are coded using the same logic. This is done for al l of the conditions except for population change and political progressives. In these cases, all instance of positive population growth between 2000 2010 are coded as 1s and any cities that experienced negative growth are coded 0. To measure political !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 20 Readers are referred back to the methods chapter in which the mechanics of QCA are explained in greater detail.
! 106 prog ressivism, if cities had more registered Democrats than Republicans are coded as 1s, and cities with more Republicans are coded as 0s. This is a basic, and albeit simplistic, measure of these conditions but it will suffice for the purposes of this analysis 1. Propor tion of the Workforce in the Creative C lass. It has been argued that the creative class may be associated with smart growth (Florida, 2005). The creative class refers to sectors of the economy that creates meaningful new forms: computer scientists and developers, various kinds of artists, academics, green economy entrepreneurs, and other inv entive entrepreneurs. Case study research on San Luis Obispo, Santa Barbara, and Santa Monica has found that environmental amenities, parks for example, attract workers in the creative technology sectors (Ne varez, 2003; Florida, 2005). It is suggested that smart growth, with its emphasis on aesthetics, would be associated with the creative class. Heying and Ryder (2010) built on the theories of the creative class and applied them in a study of Portland. They focused on what they describe as the artisan eco nomy The artisan economy is both a moral economy and a service economy consisting of small scale craft, art, and DIY (do it yourself) producers that operate in a post Fordist system of decentralized social networks. Wineman and Heying (2010) suggest that the artisan economy functions best in places where there are high density, mixed use spaces for artist enclaves. The density and neighborhood context are deemed conducive to the lifestyle of contemporary artisans.
! 107 In this present study, people who identif y themselves as "artists" in the Census are referred to as the "artisan class." As has been widely acknowledged, there are problems with only using official labor statistics for measuring the artisan sector (most artists do not make their living as artists ) (Florida, 2005). Still, the number of officially identified artists, may gauge the overall health of the local artisan economy. One would expect that cities in which there were more workers employed in the arts would also have a high number of people who make art. It is a crude measure, but it will suffice for this basic analysis. 2. Housing A ffordability Smart growth is increasingly considered to be a development strategy to reduce land use, but also provide high density workforce housing (Kayzar, 200 8 ). Research has generally found that smart growth policies and building designs are more likely to be adopted by communities in more expensive housing markets (Johnson and Talen, 2008). It is possible that communities that have affordable single family ho using and cheaper rental markets may not see the need to build at higher densities. In this analysis, the average rental prices of cities were compared with their respective state averages to indicate whether the rental market in a city is relatively chea p or is expensive. Initially, the median home values were to be used, but after correspondence with Emily Talen, a well known smart growth researcher, it was decided that measuring the rental market would be more consistent with the research on housing aff ordability and smart growth. Although some of the projects that are
! 108 examined in this dissertation are condominiums, the majority are rental units. Moreover, according to Talen, most residential units in smart growth projects tend to be rentals and not for sale. 3. Income In this chapter, basic affluence is measured by median household income. The benefit is that it accurately captures the officially recognized income going to households. It fails to incorporate other characteristics of affluence such as i ndividual wealth as measured by assets, levels of debt, or taxation. Nonetheless, it provides a broad snapshot of family income and can denote the basic level of wealth within a city compared to other cities as well as the state average. 4. Population G row th The relationship between population growth and cities that build smart growth has received little analysis. There are no studies that specifically examine single, mixed use building sites and the population growth of cities in which they are developed. Previous studies suggest that there is a positive relationship between increased population growth and urban sprawl (Clement and Elliott, 2012). This is not surprising considering that sprawl is the most prevalent urban form in the United States. The pres ent study examines the percentage of population change in each city between 2000 2010. It is not expected that this will provide a full picture of the relationship between population change and smart growth but it will present an initial foray that can be built upon and explored further in future research.
! 109 5. Political Leaning s Smart growth has been adopted and supported by Democratic political candidates, environmental groups, and progressive political networks (Pastor et. al., 2009). Libertarians and c onservative groups have most vocally opposed it. This suggests that communities with higher numbers of people registered as Democrats have a greater likelihood of supporting smart growth in their communities. The percentage of registered Democrats is used as a proxy for progressivism and is compared with the percentage of voters who are registered Republicans, a proxy for political conservatism. This data was obtained from the 2010 U.S. Census snaps hots and is listed in Appendix D D. Smart Growth Cities Before explaining the final Boolean table, let us examine the data for the four cities that did develop smart growth. In each of the four smart growth cities (Santa Barbara, Ventura, Milwaukie, and Gresham) listed in Appendix D, the average rent in the city was higher than the respective state averages. Santa Barbara and Ventura had rents that were $200 $400 higher than California's average rent. The rents in both Gresham and Milwaukie were higher than the average in the state of Oregon, though only $40 $50 greater than the average. Of the twelve cities, however, there is only one, Santa Maria with a median rent that was lower than the state average. In some ways this is not surprising. Coastal cities in California have notoriously high costs of living (F ulton and Shigley, 2005). Similarly, the metropolitan Portland region has higher rents than other metro or rural areas in Oregon (O'Toole, 2009).
! 110 Every city except for Camarillo and Thousand Oaks had more registered Democrats than Republicans for the dec ade of 2000 2010; the 2010 Census data is used for the specific table, but the 2000 Census was not substantially different. In no case was there a change of majority Democrat switching to Republican or vice versa. If we look at Appendix E there are only t wo cities had more registered Republicans than Democrats. T hough tangential to this research, these two cities, Camarillo and Thousand Oaks, California, also had the highest median household incomes 21 Neither city had built smart growth projects. Gresha m and Milwaukie were the only cities in Oregon where the income was lower than the state average. E. Raw Table to Binary The second step in QCA is to convert the raw data into binary. The first binary conversion is listed in Appendix F. The dichotomous v alue s were plugged into Ragin's fsQCA Software Program. The software constructs what is called a "truth table," but which I will refer to as the Boolean table. The Boolean table lists all logical combinations of conditions and the associated outcomes. It i s important to reiterate that this includes empirically observed and all logically possible combinations of conditions and is constructed independently of the data. A more in depth and cogent explanation is beyond the scope of this dissertation; readers s h ould refer to Ragin (1987 ). The full truth table contains 32 rows and is not included in the !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 21 The highest median incomes were reported in Thousand Oaks ($100,933), Camarillo ($78,854), and Lake Oswego ($78,760). Of the cities in California, Ventura, Thousand Oaks, and Camarillo all had median incomes higher than the state average.
! 111 Appendices because the binary table and the solution formulas cover the expressions that are relevant for this study. F. Minimization Explanation The next phase i n the analysis is the minimization of the Boolean table. The minimization process reduces the combinations of conditions to a "solution formula" that conveys the specific configurations that are sufficient for smart growth. The dichotomous values are plugg ed into the fsQCA software program and the algorithm pe rforms the minimization The software compares each row in a stepwise fashion that eliminates, or minimizes, conditions of analysis based on shared conditions. This pro cedure briefly, starts by hold ing constant the first five conditions and if there is a shared outcome with only one condition that is different, that condition is deemed irrelevant. The remaining five conditions are then compared across cases in the same way. This process of comparison and reduction continues across the rows until all conditions have been minimized. The prime implicants are what remain in this reduced expression: the combinations of conditions that are most relevant and remained after the minimization process is complet ed. These configurations are viewed as sufficient for smart growth. G Interpreting Configurations On the left column of Appendix G, the two configurations that remain after the minimization process are listed. These configurations represent alternate pa ths to smart growth, based on the QCA. Briefly, the table also lists the coverage and consistency scores. These are the parameters of fit in QCA. Consistency values range
! 112 from 0 to 1 and measure the relation of necessity or sufficiency between the configur ation and the outcome. Once the measure of consistency has been established, coverage scores explain the variance contribution of configurations, similar to the R 2 in statistical models. The raw coverage column indicates the extent to which each configura tion explains the outcome while the unique coverage column displays the proportion of cases that are exclusively explained by the configuration. The higher the consistency score, the more cases the model identifies as covered by those specific configuratio n patterns. H Configuration 1 The first configuration is Politics*~income*~growth*Artist*Rent This can be interpreted as cities with more registered Democrats, a lower median household income than the state average, a negative population growth rate, an active artisan class and an average rental price that is higher than the state average, are found in combination in cit ies that have developed smart growth projects. Santa Barbara's push for smart growth has largely been in response to the affordability crisis faced by the local workforce. The first configuration conceptually captures the observed empirical conditions. The city is known for its progressive activism not electing a pro business city council since the 1980s. As discussed in Chapter 4, the city's residents have been very active in land use issues. Progressive cities prefer not to use sprawl as the answer to housing and jobs mismatches. Local governments in these situations could view smart growth as the best remedy for the problems.
! 113 The city of Santa Barbara is popularly conceived as a wealthy resort community, but that data and previous studies suggests more social complexity (Molotch, et. al., 2000). Whi le there are certainly wealthy families in the city, the median income is roughly $1,000 less than the state average in California. Santa Barbara had an artisan class comprising 17% of its total workforce nearly 6 percentage points higher than the state av erage and by far the highest of any of the cities examined in this dissertation. The first configuration also matches Milwaukie's social characteristics. Milwaukie's potential for urban growth is limited on the west by the Willamette River and on the nort h by Portland To the south is the unincorporated community of Oak Grove, which has been resistant to annexation (something Milwaukie officials have wanted as a way to increase growth). During the 1990s and early 2000s, Milwaukie's revenues were in declin e or were stagnant while the cost of providing services to residents increased (Combe, et. al. 2002). The city became interested in the possibility for infill development to boost revenue. The median household income in Milwaukie is roughly $2,000 less tha n the Oregon state average. This has also contributed to a lack of revenue for the city. I Configuration 2 The second reduced configuration shows that the combination of all configurations is a sufficient path to smart growth: Politics*Income*Growth*Art ist*Rent
! 114 This can be interpreted as cities with strongly progressive electorate, with household income greater than the state average, with positive population growth, an active artisan sector, and higher than average rents, are like to be associated wi th smart growth. The city of Ventura perfectly matched the second configuration. It has a progressive community, a higher median income than the state of California, a positive growth rate, a high proportion of the workforce that is engaged in the artisan class, and median rents that are also higher than the state average. Ventura has also been active in the regional growth system set up by the SOAR initiative. The progressive community has actively supported innovative approaches to growth management. O n their platforms, the Democratic Parties in both the city of Ventura and Ventura County have listed urban sustainability, urban growth boundaries, and other strategies consistent with smart growth (Ventura County Democrats, 2010). This was part of a broad er trend in Southern California, where the Democratic Party pushed for smart growth legislation and tried to form a Smart Growth Caucus. Governor Gray Davis did not give his support to these attempts and smart growth planning was left to individual cities and counties. In some states Republicans have been supportive of smart growth, but in California the party has generally been opposed. Progressive political entrepreneurs in the city of Ventura decided to take a leading role in adopting smart growth (RPPI, 2002). The median household income was lower than the states' average in all of the four smart growth cities except Ventura. The median income of residents in the city
! 115 of Ventura was only slightly higher than the California state average. It may be even more surprising that Ventura ($62,410) has a higher median income than Santa Barbara ($59,000). Ventura has a vibrant and growing artisan class. The proportion of artists in the workforce is higher than the state average. The city has fully embraced its artisan culture and in the early 2000s hired Eric Wallner to be the "creative economy specialist" to fuse the needs of local artists with philanthropists and city officials. Ventura paid $40,000 for Richard Florida's Creative Class Group to come and host a two day workshop on expanding the potential of local "creatives." To underscore the relationship between smart growth and artisans, the most ambitious smart growth project examined in this dissertation is the WAV (Working Artists Ventura) located a few bl ock from the downtown in Ventura 22 This project is designed and built for an artist community, holds a gallery space, and forges links between its international clientele and the local businesses. The city of Gresham occupies a space between both solutio n formulas. In each configuration, there is one condition that does not match the causal recipes identified in the truth table. In the first configuration, the condition is population growth. Population growth in Gresham has not been negative and has in fa ct grown dramatically over the past fifty years. Gresham had the second highest population growth rate of any city examined in this study. In 1970, the population of Gresham was fewer than 4,000 people. By the 2000 Census, the population had skyrocketed to !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 22 Interview with Eric Wallner, City of Ventura Creative Economy Specialist.
! 116 over 90,000; by 2010, the population had risen to 105,000. One reason for the influx of population was the development of comparatively cheap housing and apartment complexes. Several manufacturers, such as Boeing, expanded their operations in the city. Metro planners recognized this pattern. The demographic change is one of the reasons that smart growth planning focused on the city 23 Gresham lies on the far western edge of the urban growth boundary. The city has conducted studies on what greenfields are open to future development and how best to incorporate them into the regional fabric. Metro bought 13 acres, helped plan and build the Crossings (an ambitious smart growth development), and sees increased density in Gresham as the most effective way to acc ommodate the growing population without extending the urban growth boundary. The average rent in Gresham is slightly higher than in the rest of the state of Oregon, the proportion of the workforce that work in the arts is also slightly higher than the st ate, and the population growth is among the highest of all of the cities examined (Santa Maria has by far the most growth, see Appendix D.). The city's median household income is lower than the state average, as in the first configuration. Of the four ci ties that developed smart growth, Gresham is the least wealthy. The income in Gresham is roughly $6,000 less than the Oregon state average. Metro Councilor, Shirley Craddick, explained that poor planning by the city in the 1970s led to the development of s everal low quality apartment complexes and condominiums. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 23 Interview with Janet Young, Economic Development Director of Gresham.
! 117 Many were located near light rail stations and the residents have made use of the public transit system. However, it has led to a concentration of poverty that the city has struggled to break up. Bef ore the market crash, it had been hoped that the new developments, containing affordable housing units, would lead the city in a new direction. The city no longer sees development as the best way to address this and is actively courting employers to move t o the region. The Crossings, in fact, had replaced its restaurant space with a vocational learning center that, in the end, probably will be of better service to the community than a higher end eatery. J. Conclusion This chapter explored attempted to fin d combinations of social characteristics in cities that developed smart growth. Qualitative Comparative Analysis (QCA) was employed as an experimental approach to more systematically compare disparate cities. The findings appear to be validated by the in d epth understanding of the cases. However, the QCA may not have been necessary since the configurations can be gleaned from examining either the raw data table or the binary conversion. More applications of the method would help to hone its analytical poten tial. It was too imprecise to cogently answer the research question. Still, the configurations matched three out of the four cases.
! 118 VI: The Smart Growth Machine A. Introduction In this chapter, I compare the smart growth machine to the conventional growth machine : the institutional apparatus that builds low density, suburban, single use sprawl. The smart growth machine is best conceived as a subset of the conventional growth machine. The actors and organizations that plan and build smart growth proj ects may differ slightly in form. Smart growth is developed within the same organizational field that the conventional growth machine plans and builds sprawl. Still, the specific urban form differs substantially from what the real estate and construction i ndustry are familiar with. There are three dimensions on which the smart growth machine can be distinguished from the conventionally understood growth machine: entrepreneurial motivations and ability, technical expertise and builability, and a framework of smart regulations. As Warner and Molotch (2000) show, the building rules dictate what growth machines are able to accomplish. In the smart growth machine, political entrepreneurs try to shift the organizational field toward ecological modernization by adv ocating for regulations to ease the development of smart growth. This chapter is laid out as follows. First, the entrepreneurialism, both political and economic, that is intrinsic to smart growth development. Political entrepreneurialism in California is discussed followed by an examination of the Portland Metro Transit Oriented Development Program and other smart growth entrepreneurs in the Portland area. Second, the buildability of smart growth is
! 119 investigated by discussing the upfront costs and returns on investment that smart growth coalitions must account for; smart growth has high upfront costs and initially low returns on investment. To address these issues, smart growth machines require more varied technical expertise than the traditional building i ndustry. Typically, actors and institutions in the real estate industry do not possess the technical prowess that smart growth development entails. Finally, the smart growth actors fashion a system of restrictions and incentives that could potentially disr upt prevailing policies and industry practices. The chapter culminates with a brief concluding summary. B. Entrepreneurialism Entrepreneurialism has been an indispensable component of both conventional growth coalitions and the broader practices of liberal capitalism. The key difference between smart growth machines and the convent ional growth machine is that smart growth requires entrepreneurialism to innovate institutional forms that can alter political and business practices. Smart growth is a rel atively recent and unwonted type of development and the actors and institutions that have adopted it are incontrovertibly Schumpeterian entrepreneurs. These actors are the first step in potentially disrupting established market practices in the field of ur ban development. Entrepreneurialism requires motivation, ability, and the detection of opportunities to disrupt or lead markets. Due to the relatively recent adoption of smart growth tenets by urban planners and developers, entrepreneurs are an immanent co mponent of the smart growth machine.
! 120 1. Political and Economic, Individual and I nstitutional Entrepreneurs Studies of entrepreneurialism distinguish between political entrepreneurs (Mollenkopf, 1983; Mazucato, 2013) and economic entrepreneurs (Schumpeter 1950 ; Conger and York, 2013), within urban political economy. The smart growth machine consists of both and has two levels of entrepreneurial agency: individual and institutional (DiMaggio, 1988; Fligstein and Mara Drita, 1996; Conger and York, 2013). In dividual entrepreneurs push innovative and disruptive ideas into established organizational practices; they are found in government, the private sector, and non profit organizations. Institutional entrepreneurs are formal organizations, eco nomic and politi cal, that shifts the organizational field, in this case the broader market of urban development. Individual entrepreneurs pioneered institutional change that permitted smart growth. The Portland Metro, the non profit named PLACE in Ventura, and the architecture and design firm, the Peikert Group in Santa Barbara all acted as institutional entrepreneurs attempting to establish smart regulations and sustainable business c ustoms that challenged existing real estate practices. Several interviewees pointed to changes in city plans, design codes, and community relations that occurred after the smart growth projects were built. The Portland Metro TOD (Transit Oriented Developme nt) Program acted as an institutional entrepreneur for both the city of Portland and also for the broader field of urban development (Selzer, 2004). It was especially unique in the way that it fostered and maintained organizational relationships between ci ties and developers to ease the permitting process and hasten
! 121 development. Smart growth requires both individual and institutional entrepreneurs to successfully challenge existing communities of practice in urban planning and real estate (Rudel, 2013; Con ger and York, 2013). Alice Rouyer, Community Development Director of Milwaukie, Oregon, and supporter of the North Main Village, described the relationship between smart growth economic entrepreneurs and local and regional government: It's a different br eed of characters that have the tolerance to do a mixed use project. It's a lot more complex, it's different and more often you need some gumption and support from your local government in order to get the thing off the groundBut [for private developers] usually it's a trailblazer of a project and you need a government program to champion it, like the Metro, or the local government. 1. Santa Barbara Decades of political entrepreneurialism in Santa Barbara had developed a regulatory framework that warded off sprawl. Community activists had pushed political professionals to adopt systems of urban growth management for the entire South Coast, with moderate success. Careful planning was enmeshed into the civic fabric of the city. A series of land use regulati ons had limited the scope of project types that developers could get approved in Santa Barbara 24 As mentioned in Chapter IV Santa Barbara political battles stirred over whether or not to increase housing density to integrate workforce housing. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 24 See Chapter 4 and timeline in Appendix C for the history of environmental activism in Santa Barbara.
! 122 Lee Molda ver, a local environmental activist, believed that the initial political innovation of Santa Barbara, which had reached a peak in the 1970s and 1980s, was over: My experience of the last 20 years is that we were a leading edge, but in terms of innovation, except for episodic outbursts, it has been slowed down to some plateau level where it's a better than an average community and region, with a better than average mix of job opportunities, but in terms of experimentation and innovation and creative problem solving, it's far from being a leader. It takes more effort today to break the inertia of the mindset of what is and isn't possible than it used to 25 years ago. Unlike other cities that used smart growth to revitalize their downtowns, Santa Barbara adop ted smart growth principles in its General Plan to increase density in order to build affordable housing for the city's workforce. The downtown is already a dense and actively commercial area with a booming tourist industry. The driver of smart growth was both to prevent sprawl and, more immediately, to increase the housing stock for lower and middle income people priced out of the housing and rental markets. This, however, led to severe backlash from several members of the older environmental organizations that had, for decades, battled for growth controls. Lee Moldaver explained how the political entrepreneurs of the 1950 1980s were now the established community of practice: A lot of them, including the Citizens' Planning Association, are partly living in the afterglow of the Big Bang of their glorious origins. In the case of the Citizens Planning Association, similarly the Environmental Defense Center, the Community Environmental Council, and the Audubon Society, they are all about 50 years old. In the late 1950s there was a
! 123 reaction to California suddenly burgeoning with the postwar boom, which generated lots of experimentation and creativity. A lot of those original groups are now in middle age and it's kind of slowing down and it's not clear what kind of new governmental or community organizations are going to arise to re energize the ones that we have, or to supersede them and help us take the next couple of steps forward. 2. Ventura Ventura also had several political and economic entrepreneurs who saw an opportunity to build smart growth. Previous planners of the mid to late twentieth century neglected the downtown and concentrated instead on mall and single family development on the opposite side of town. In the 1992 Downtown Specific Plan, howeve r, the city recognized the need for mixed use development and zoned the downtown for mixed use. After the SOAR legislation was passed in 1996, the city was encircled by an urban growth boundary, prompting compact development to accommod ate population growt h. Ventura made a very conscious and public effort to bring smart growth leaders to the city. Bill Fulton, an urban planner, served as Mayor of Ventura for ten years. He is also the leading author of one of the most widely read planning textbooks in Califo rnia. Fulton is also a strong proponent of smart growth. Ventura also hired a colleague of Fulton's named Rick Cole to be City Manager. Cole was hired for his past political entrepreneurship as the Mayor and City Council Member of Pasadena where he had he lped spearhead efforts for the city to adopt principles of new urbanism. He had also been City Manager of Azusa, California. In revitalizing the downtowns of Southern California cities, he had come across many different types of development.
! 124 Cole helped to approve several compact mixed use projects in the downtown of Ventura. Many of them had approval to be built and others were planned, but were cancelled when the housing market crashed in 2007; only the Working Artists Ventura (the WAV) was built. When he joined the city staff in 2004, he also shut down several conventional, sprawling projects as well as high density projects that he deemed as poorly designed that had been planned for development. This made him unpopular with many of the development comm unity. His drive for mixed use through strict building code standards further alienated him from the developers. Other city leaders and residents were incensed by a controversial traffic management plan that placed parking meters in downtown of Ventura in an attempt to reduce the "high cost of free parking," (Shoup, 2005). Nevertheless, Cole was instrumental in shifting the market in Ventura toward smart growth. After the global markets crashed, however, the city largely abandoned their previous enthusiasm for smart growth. Political entrepreneurs, such as Cole, change regulatory frameworks, while economic entrepreneurs expand prevailing opportunity structures in the market in favor of new commercial practices. In the private sector, Schumpeterian (1947) entrepreneurs drive the innovation of smart growth organizational forms and other new sustainable practices that propose to change existing market structures. These entrepreneurs perceive opportunities and take the financial risks to innovate new building designs intending to disrupt the current markets for lower density building. Both of the developers that I interviewed in Ventura attempted to bring new smart growth urban forms to the city.
! 125 Harvey Champlin, developer of the Pacific Pointe in Ventura had traditionally built large resort hotels around the world, but had settled in Ventura and decided to be a local community builder. He built a smart growth project, though turned decidedly against the concept. 25 Nonetheless, he had spent years working to bui ld compact development in downtown Ventura. Champlin believed that entrepreneurial developers faced unwarranted opposition from the public: I think that there is a sociological factor here, and that is that any entrepreneur is automatically suspect. His motives are suspect, "he's just a no good dirty greedy opportunist," whatever that means. You could argue until you're blue in the face that it is "those dirty, rotten, greedy developers and entrepreneurs who built the city, built the house you live in, th e restaurant that you like to eat at." And there's such a huge disconnect. They don't see that. Champlin built a few projects in the city, but his main drive was to build a hotel in the downtown that would hold TED Talks and serve locally sourced food. Th is project was rejected by the City Council in favor of a smaller movie theater. The hotel was deemed too grand of a project for the downtown. Champlin remained an investor in his existing projects in the city, but returned to luxury hotel building outside the US. The non profit development organization named PLACE built the most financially and functionally complex project in this dissertation. The project is called Working Artists Ventura (WAV) and is exclusively for an artist community !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 25 This is discussed in Chapter VII.
! 126 accompanied by a few units of affordable housing. Several artists from around the world stay in residence and display their work in the gallery on the first floor. PLACE is a non profit organization headquartered in Minnesota that works on several sustainable artist commu nities, but the WAV was the organization's first project. Non profit development represents an alternative to a profit driven model of development. PLACE is a unique organization; non profits are a rarity in the field of urban development. Ventura invited the group to build and PLACE sought out funding through a network of local and national sponsors, such as the federal government, the city of Ventura, Supportive Housing (a homelessness advocacy group), Google Inc., and several others. Chris Valesco, the CEO of PLACE, was the greatest enthusiast of sustainable development interviewed. He discussed his personal history in restorative and sustainable urban development: I've done a lot of work in preserving historic buildings saving them from the wrecking ba ll and, of course, more importantly, which is the landfill, where a lot of that construction waste ends up, which, of course, releases a lot of the embodied carbons that go into a new building. So that was good work. And then we started to build new things But we really weren't building them to the highest level of environmental responsibility, and so I really became interested in doing that. The WAV ended up costing $57 million while the second most expensive project examined (North Main Village, Milwau kie) cost $14 million. Some referred
! 127 to the WAV as a "boondoggle" 26 a waste of taxpayer money. The WAV, however, only cost $1.5 million in public monies. Most of the funding came from the sponsors and through sources that are only available to NGOs, such as charitable donations from companies, foundations, and individuals. Chris Valesco, CEO of PLACE explained that market driven entrepreneurs do not always create what is best for a community: I am very much a supporter of the entrepreneurial companies that have built a strong economy and the rest. But I think that there are some things about the entrepreneurial marketplace, nobody really wants to discuss, the things that slip through the cracks of entrepreneurial marketplace. And those things are typically tackled by nonprofits. So, I think what we're interested in doing in PLACE is finding a way to achieve a project that will take on those very issues and strengthen that ecosystem for the entrepreneurs. The goals of non profit entrepreneurs may diverge fr om those of actors in the conventional growth machine since their purpose is not to generate private profits, but rather to design and build the best project for the community using charitable funds. The private developers' need to garner profit from their projects is a critical component of the conventional growth machine. When this profit motive is removed from the development process, it enables a process that is more amenable to broader community participation. Developers are often deterred from smart g rowth projects because of community meetings as they view the process as a risk to their building goals (Sager, 2011). This does not pertain to PLACE: !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 26 In an interview with Chris Valesco, CEO of PLACE, he indicated that many bloggers misunderstood how the project was financed and many people believed that the full $57 million came from public funds.
! 128 A for profit developer, or an entrepreneurial developer, would take a big risk on a development. They nee d a structure that makes it so that every word is commensurate with that risk. Because that's how they do business. Now, what we think is possible as a nonprofit is to work together with the community. That doesn't just mean the county or the state. It mea ns the foundations and some philanthropists, and the banks that invest in that community, and the unions that work in that community, and the other nonprofits that work there, and the folks who work in housing and sustainability, and the arts. The WAV i s widely acknowledged as an experiment in sustainable urban development; PLACE is also an experiment in the organizational structure of sustainable urban development. It represents a potentially disruptive organizational form with the potential to shift ma rkets. If the WAV is viewed as a successful project in the coming years, PLACE can potentially build on that success. The organization's fate is tied to the performance of its project in Ventura 3 The Portland Metro TOD Program In Oregon, the Portland Metro is the quintessential smart growth machine, a cross jurisdictional public private partnership that works on sustainable transit and housing projects for a large urban population. It exemplifies an institutional entrepreneur, shifting the organizatio nal structure of land use and urban design. In 1998, it formed the Metro TOD Implementation Program specifically to create public private partnerships with developers and local governments. The organization established co ownership of properties with citie s, developers, and landowners. This fostered close relationships between Metro officials and local governments. The Metro TOD Implementation Program also worked with developers who sought to
! 129 build a smart growth project, but who were hesitant because of fi nancial risks. The Metro would work with developers to determine if public funding could be used for gap financing, covering the added costs associated with smart growth. As Megan Steele, Senior Planner at Metro, explained: We always work very closely wi th local jurisdictions when we have a publicly owned property. Most of our sites are actually co owned percent ownership interest from the local jurisdiction. Not all but most. So we do that kind of as a partnership process. Those projects are approached m uch more like a typical redevelopment agency project. The thing that we do that is unusual is that we are willing to consider funding projects that developers bring to us when a developer has site control and has a project concept that is not going to be f inancially feasible on its own in that particular real estate market. During the Reagan administration, Phil Whitmore, the political entrepreneur who envisioned the Metro TOD Program, secured federal funding for development clustered around mass transit in Portland. Reagan's transit officials were generally skeptical of integrated mass transit systems 27 This was shortly after the Metro had been established, but before the Portland region actively committed to compact development and long before the concep t of "smart growth" was used. Whitmore had prior experience in both government and real estate and knew where to both find and then allocate federal and state funding. Whitmore's prior experience in the real estate sector had convinced him that markets cou ld be directed more optimally through the careful provision of public funding. The urban growth boundary surrounding Portland !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 27 "What would Reagan contribute? Hardly anything. I mean he practically shut everything down." Phil Whitmore, founder of Portland Metro TOD Program.
! 130 necessitated higher density building and more compact design solutions to homebuilding constraints. These circumstances allowed Wh itmore to test the ways in which public private partnerships could be used to build compact, transit oriented development (TOD). He lobbied the Metro Council and obtained permission to create a program that would work in conjunction with TriMet, the region al transportation agency, to build "transit villages" in suburban downtowns designated as "regional centers" by the Metro's Region 2040 Plan. Whitmore enabled the development of every project I examined in Oregon except for the Kohler Building in Gresham Drawing on his background in the real estate industry, Whitmore knew that developers preferred to move quickly on project approval to begin construction. If it took too long they would lose money and abandon the project. He believed that governmental pro cedures had previously been too onerous and costly for private builders. Whitmore sought to hasten the development process: I wanted to have a program that was very effective and very nimble and could do things with small amounts of moneyAnd so I wanted a program to do stuff with small developers. Even though I'd spent my whole life in government I'm not a Tea Party person by any means, I'm a moderate liberal but you know, after spending my whole life in government, I realized that you could do things way different than government ever thought of doing. He innovated a program that would specialize in landbanking. The Metro T OD Program obtained land, wrote it down, and converted it into mixed use development very quickly. A key facet of the program was the use of federal funding
! 131 to buy TOD sites directly; this was a first in the country. Land costs are often much higher than c onstruction costs. Metro sought out parcels in which to build compact development. The Metro would establish land easements for vacant parcels that they purchased or co owned with local governments or individuals. Land would be reserved for high density, m ixed use development. Site control by Metro was used to keep land from being built over with low density sprawl. The Metro TOD Program used federal and state transit funds to ensure that there was land available for smart growth projects in places that wer e designated as regional centers. While the Metro Council itself focused on long ranging planning, Whitmore's program focused on the implementation of sustainable building and development. Whitmore explained the logic of his program and how it differed fr om other smart growth planning organizations: And we set up the program and it was the "Metro TOD Implementation Program," and I put that in the title so people would understand that the primary focus was getting the project done, that planning was an impo rtant part of it, but there were others doing the planning, and this would basically be implementation. And we would be doing hands on dealmaking, which was hard, but it had taken me over ten years to get it going. And so there are a lot of things that are said about the Metro TOD Program, but if you listen carefully there is finely tuned first: It was the first transit oriented development program in the United States that used Federal Transit Administration funds to acquire TOD development sites directly.
! 132 For several years it was a "one man show" 28 as Whitmore challenged federal, state, and local government to provide him with the resources needed to pioneer an organization that could assist developers and municipalities who were willing to build transit oriented development. He reached out to several developers and persuaded them on the benefits of smart growth development. Whitmore, and the Metro TOD Program, had to "develop developers." 29 The Portland Metro TOD Steering Committee provided subsidies to bo th developers and local governments for smart growth projects to move the marketplace toward transit oriented development. Whitmore explained that Metro was trying to buy land and turn it into high density spaces before they were sprawled over with low d ensity development: The basis for the program is that you are trying to bring a higher density and mixed use project into an area that would not otherwise have it. It might be 20 or 30 years out. If we just let two or three story buildings occur, or even s ingle story buildings occur, of course you couldn't prevent that. You knew if you didn't have the Steering Program, then when the market came in 20 years these really good sites would be gone. So what we were trying to do was bring this about quicker and i ntroduce a lifestyle quicker, a more urban lifestyle. Metro has long had a fraught relationship with some cities and local officials in the Portland area (Seltzer, 2004). Municipalities did not always welcome the suggestions given by Metro or the broad j urisdictional powers that it exercised. In the 1980s, Gresham had opposed the light rail system and required that it bypass the downtown. Shirley Craddick, current Metro Councilor and former Gresham City !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 28 Interview with Mega n Steele, Senior Planner, Portland Metro. 29 Interview with Megan Steele, Senior Planner, Portland Metro.
! 133 Councilmember, decried the poor decisions made by th e city with regards to the original light rail line. Councilmember Craddick viewed the light rail as being ineffective for Gresham's economic development because it did not stop in the downtown 30 Opposition also came from private developers who believed th at Metro involvement distorted the free market of property development. Whitmore described tense encounters, but pointed to Portland's enduring pluralism: You're always a little late with enemies everywhere and some of them should be your friends. Most o f the local governments were pretty skeptical about us because we were newcomers to the area and they had a very, very organized sort of way in which they went about doling out money to everybody. It is part of the way Portland gets things done. There's ju st tons of stakeholders. The Portland Metro TOD Program has matured since its conception, becoming a formal organization, marked by professionalization and a clear division of administrative tasks. When it was a "one man show," the Metro TOD Program work ed more closely on the projects, including elements of architectural design. After Whitmore retired from Metro, the TOD Program focused on funding allocation rather than the building process itself. By 2011, there were several regional developers who had b ecome familiar with financing and building smart growth projects. The developers had been developed. Megan Steele, Senior Planner at Metro, explained: Phil was kind of a charismatic leader and as a founding director of the program he was very influential in !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 30 Interview with Shirley Craddick, Metro Councilor and former Gresham City Councilmember.
! 134 everything. With his retirement, the program has matured to become more of a transparent and consistent kind of program. The methods and approaches are documented. We have more reporting and more transparency in the program itself. I think that the pro gram is as strong in its willingness to take on the risks of projects. I think that the market collapse shut everything down. However, the one big difference is that Phil ended up developing a very close relationship with, one would say a mentor relationsh ip with, the developers he was working with, and that's not really in the bounds of what we do now. The Metro TOD Program accomplished many precedents for smart growth development. It was one of the first TOD programs in the country, the first to obtain Federal Transit Administration (FTA) funding for projects, and has a long list of properties that it has helped develop in the region. It also attracted criticism from cities, residents, and various activists. The criticism stems from neoliberal opposition to the use of government subsidies for development. According to the neoliberal opposition, the centralized planning agency and its use of government funding distort property markets. Whitmore, and others, contend that public private partnerships are ende mic to the Metro TOD Program and are essential for successful smart growth development. The private sector is often too risk averse to approve smart growth. As in other markets, the government covers the financial gaps that appear in private development 31 Political entrepreneurs, such as Whitmore, widen the political parameters for innovative approaches in urban development. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 31 The most poignant examples are the real estate industry in the 1930s 1950s and the computer industry of the 1970s the present. Both relied upon government support for research and production manufacturing (Mazzucato, 2013).
! 135 The land use regulations in Portland led to economic innovation by the development community. In Gresham and Milwaukie many of the de velopers who adopted smart growth projects did so in response to the building limits imposed by the urban growth boundary, underscoring the idea that regulations do not curtail economic development, but create new opportunities for new markets (Warner and Molotch, 2000). 4 Detection of Opportunities Dwight Unti, CEO of Tokola Properties explained that his company made a decision to start doing smart growth instead of the traditional single family homes and suburban apartments that they were accustomed to. The company realized that population growth and demographic changes within the urban growth boundary were transforming the dynamics of the Portland suburban real estate market: The bottom line for me as an apartment developer, is that there is no longer a vailability of 8,10,12,15 acre suburban sites for conventional, wood framed, garden style apartments. So, we made a strategic decision some years back that we were going to refocus our emphasis on vertical housing because that will be the main source of in ventory, or the majority of inventory of multi family housing going into the future in the Portland metropolitan area. We also liked the product type and think that it is supported by demographic changes. We think there's a strong trend toward urban living environments with the benefits and the amenities of proximity to service, particularly transit services. Unti also pointed out that one of the biggest surprises with his smart growth project, 3 rd and Central, was that the compact housing units were not rented to younger people, as predicted, but were primarily rented to elderly residents. As other
! 136 research suggests, the amenities that downtowns offer appeal to both Millennials and Baby Boomers (Ka yzar, 2010). Tom Kemper, CEO of KemperCo and widely regarded as an expert on financing challenging affordable housing projects, saw that demographic changes were shifting the market: I think that's probably where the demand is today. What's interesting is that the demographics of the twentysomethings and maybe early thirtysomethings, there's a significant number of them that are not interested in ownership, they are interested in maintaining flexibility to go where they want to go, so they are really n ot interested in buying a house and that's kind of an interesting shift that will definitely affect what happens. In terms of what gets built, it's going to have a significant impact. Still, entrepreneurialism, by itself, can only accomplish so much, wh ether political or economic. To achieve the political, economic, and social goals that entrepreneurs aim for, they must possess or obtain the technical expertise and the administrative specialization to address precise aspects of the market that they inten d to disrupt. Expertise in finance, construction, engineering, architecture, and regulatory policy are all requisites for urban development. In smart growth development, these same areas of expertise are accompanied by an amplified need for expertise in su stainable construction, green features, transit, and mixed use development. Entrepreneurialism must be wedded to technical expertise to transform existing political and market structures. C. Socio technical E xpertise and the Buildability of Smart Growth Smart growth development necessitates a diverse amalgamation of technical
! 137 expertise in areas such as construction, engineering, and finance. The development of buildings that are meant to fulfill both an economic and ecological purpose require far more sp ecialization in all of these areas than the current real estate industry is familiar with. Specifically, mixed use is much more complex than the single use development that characterizes sprawl. This marks another departure from the norms of the sprawl ori ented growth machine. Yet, balancing the influence of technical experts (and preventing them from becoming "technocrats") with participatory democracy can prove challenging, but not impossible (Appelbaum, 1977). For example, the WAV in Ventura, had the mos t community participation: One hundred and forty two town hall meetings were held so that the developer and designers could get input from city residents and address any concerns with the project. This suggests that higher technical expertise does not nece ssarily mean a closed off, profit oriented growth machine. Although difficult, technical experts and community residents can work collaboratively. The difference between the types of projects that a smart growth machine builds versus the projects preferre d by the conventional growth mac hine is summarized in Appendix I Buildability, a concept denoting whether or not a project type allows ease of development or will prove risky and potentially challenging, is largely determined by upfront costs and the retu rns on investment (profits). The conventional growth machine is primarily concerned with generating high returns on investment; the tremendous profits that can be made in the real estate industry. Civic officials support profitable developments because the y generate higher tax revenues.
! 138 In contemporary US urban development, profitability is largely determined by the ability of the developer to contain costs during the development process and successfully sell or rent residential and commercial units. Yet be fore the building can be constructed, there are several expenses associated with smart growth that are absent from single use sprawl. The associated costs of smart growth projects are listed in Appendix J. 1. Upfront Costs Smart growth projects are likeli er to have higher upfront costs than conventional building. This hinders their adoption by the lending industry. There are two primary upfront costs that a smart growth machine must account for that break from the traditional growth machine: the mixed use portion of the building and the construction masonry needed for structured parking versus surface parking. Both represent great challenges to planners, designers, and builders because these challenges are relatively new to most municipalities as well as t he real estate and construction industry. Some cities already had the compact design that mixed use works best in. Santa Barbara, in particular, had a gridiron street pattern in its commercial downtown. Still, mixed use fell out of favor for several deca des until the end of the twentieth century. Dave Davis, CEO of the Community Environmental Council, and also a former city planner explained the history of mixed use in Santa Barbara: The style of Santa Barbara had lots of mixed use. Go all the way downt own and you will see mixed use. And
! 139 then it fell out of favor basically in the development and investor community. And this, though, when I first got involved in city planning in the 70s and 80s you literally could not do mixed use because you couldn't get financing. If you had a mixed packet of commercial and residential, people would only buy in the secondary mortgage market. They would only buy a pure package of all residential or all commercial and they really did not get the idea that they could play o ff of each other positively, negatively, synergistically, or whatever. So for 20+ years of my career it was pulling teeth to do anything. And then somewhere in the early 1990s of course the real estate bubble started going really fast. It was somewhere in the late 90s and end of the 2000s that investors and the financial community changed their tune. And the one that you list [Paseo Chapala, Chapala One, and Chapala Lofts] are the ones that got built out in that next wave. Mixed use projects were found to be more costly for the developer due to their use of higher quality construction techniques than the conventional growth machine. The building must be constructed so that commercial activity on the ground floor does not interfere with the lives of the res idents living above, necessitating construction techniques and materials not found in conventional single use buildings. Tom Kemper, CEO of KemperCo, the developer of North Main Village, explained: Well it's more expensive for starters. It costs more to do that kind of housing and you have to be very thoughtful about mixing retail and people living above. If you have a restaurant, there are a lot of issues that come up: garbage and all that stuff. It 's challenging. You have to think through the development, exactly what it is that you're going to do and try to be thoughtful.
! 140 Similarly, Dwight Unti, CEO of Tokola Properties, developed mixed use sites, but also served as a long term investor and prop erty manager. Unti explained how mixed use projects were more complex on many levels, from construction and development to the day to day property management: When you're mixing uses it adds a whole layer of complexity to the property management process because you've got to be very sensitive about how the two residential and commercial uses mix. And it can be everything from sound transmission, to odors coming from a restaurant on the ground floor, to nighttime traffic activities if you have a facility t hat's open late into the evening, like a martini bar. It goes on and on and on. So these things are creatures that are at least new to us and the story continues to unfold beyond the development process. Moreover, mixed use development requires more comp lex insurance than the typical single use sprawl development. Essentially, there are different insurance and building standards for different uses. Jerry Bunin, a representative of the Central California Home Builders Association, pointed out: On the ve rtical, the other problems, is that you have different building standards for residential and commercial, you have different insurance standards, and so you'd need two sets of insurance for two sets of building. So those are major problems. Phil Whitmore the founder of the Portland Metro Steering Program, had a shrewd understanding of the upfront costs of mixed use development and spent several years teaching local developers how to construct mixed use: So I've got a standard list in my head of what adde d costs are for mixed use and higher density
! 141 development. I'd say: "Did you figure, how are you doing your firewall separation between the retail and housing?" They'd say: "What do you mean?" Well you haven't done it yet, you haven't even estimated the c ost. You're going to either have a retail structure frame here for umpteenth layers of sheet rock, or you're going to have to have post tension slab"But I would go through and guide them through their thing and say, "Here's where your gap is going to be" and "These are some costs that you got to go back and account for." Parking determines the physical form the project takes and is arguably one of the most important components in contemporary urban construction (Shoup, 2007). Most zoning ordinances requi re that developers provide parking for every residential tenant, plus guests. Commercial spaces will also often require parking. Jerry Bunin, a representative from the California Home Builders Association, explained: The parking requirement combined with the height limit determines how many units you can build and if the height limits are not tall enough, if you go to three stories, up two stories and you have to build underground parking. You have to get above three stories to make it financially viable. Banks and other private lenders are often repelled by the high upfront costs for structured parking. Structured parking is significantly more costly than the concrete or asphalt materials used for surface parking. Lenders and investors prefer single sto ry development, because it is accompanied by cheaper surface parking. This contributes to a treadmill of surface parking production. SGPs, in order to really be "transit oriented," must have parking that is structured: below ground, on a lift system, or in a "tuck under" frame, where some parking spaces are positioned
! 142 beneath living units (Shoup, 2005). These types of parking systems reduce the amount of land needed for parking and thus expand the opportunities for the remaining lot, such as more residentia l and commercial units or green space. Still, most developers who build residential or commercial units in suburban or low density sites are not accustomed to the construction for SGP parking. As Dwight Unti, CEO of Tokola Properties, explained: We're u nderstanding better how to build these projects and of the complexities, because these are extremely complex from a construction standpoint. When you're doing structured parking, in our case, a below grade parking, and we're doing that in Hillsboro, as wel l, and we're building at greater heights involving more steel, more structural masonry, elevator services, higher complexities of firelight safety systems, it just rolls through the whole process. And so we've had to educate ourselves on the different cons truction techniques and processes. 2. Return on Investment The sprawl oriented growth machine prefers quick and high initial returns on investment. This attracts speculative investors who may want to use the project solely as a way to generate fast prof it. Long term planning is essential to sustainable development, but long term investment secures a project. Long term investors were found in nearly every project that was examined. They do not expect high initial returns on investment; they anticipate fi nancial losses over the first few years as the market catches up to the new model of development. The long term private investors acted as institutional entrepreneurs attempting to disrupt or shift the market. The typical suburban growth machine, both its public and private components, would not
! 143 take on the risk of a project if their main concern were an immediate return on investment. Dwight Unti, CEO of Tokola Properties explained that as long term investors in the project, his company wanted a commercial establishment that would add amenities to both initiate and foster community vitality: We felt that one of the key things that was missing for the success of our project because we are long term investors, we are not speculative builders, so, w e're looking at what's best for our project over the next 10 or 20 years what was clear, what was crystal clear, in downtown Gresham, and it's crystal clear at almost all the regional centers around, is there is no downtown grocery. That's a very important amenity to have to attract folks to live there and it's very difficult if you don't have it. Cliff Kohler, CEO of Kohler, Meyer, O'Hanlon Inc., was the only builder in the Oregon cases not to use government subsidies. He was an individual entrepreneur a nd long term investor who built one of the first SGPs in Gresham in the early 2000s, knowing that his company would take losses on their initial investment. Kohler explained the logic of his company's long term investment in the mixed use Kohler Building: We went in, had a project that was not completely supportable for market realities, but we didn't fool ourselves going in. We knew, we admitted it, and made a conscious decision knowing that it was going to not be supportable. We just said: "Okay we're wi lling to take the brunt". Didn't see the Great Recession coming. We weren't prepared to take that big of a hit, but still we were prepared to take losses for a period of years until the market caught up with the rental, with the overhead of the building.
! 144 Many of the participants stressed that the private suburban lenders would not initially support smart growth because they did not generate fast enough returns on investment. This is consistent with the conventional growth machine's drive for profit. Rod P ark, Metro Councilor from 2007 2010, pointed out that institutional entrepreneurs in the public sector, like Metro, could make the initial investments because they have other motivations besides profit: It [smart growth development] was made possible throu gh patient capital TOD funding innovation capital on the public side. They buy pieces of property and hold them because they can. They don't have investors behind them that are expecting a ten percent return check. They can invest for the long term, whethe r it's in a shipping terminal manufacturing area for a FedEx site, or something, because they're not expecting the same type of return on investment. It's a different type of return on investment. Metro had purchased a total of thirteen acres surrounding the Crossings. It is one of the largest smart growth projects studied, but only used one acre. The other properties that Metro purchased were empty greenfields surrounded by a big box retail mall. The original plan had been to develop some sort of enterta inment center, such as a movie theater that would be located across the street. The Crossings intended to have a restaurant and additional commercial spaces. These plans were developed in conjunction with the placement of a nearby light rail station. When the markets crashed in 2007, however, the development plans were put on hold for an undisclosed amount of time. Metro still owns the property and retains the public
! 145 investment proposing to develop affordable apartment complexes instead of commercial spaces 3. Technical Expertise A diverse range of technical expertise is vital for the transformation of land from the natural environment into the built environment. Most growth machines prefer to complete their project as quickly and cheaply as possible; complexity often entails added costs. The mixed use building design is difficult to both fund and to construct. Smart growth necessitates technical familiarity with city zoning ordinances, additional growth management measures such as building caps, or urban growth boundaries. Addition ally, expertise is needed to create or take advantage of incentive programs, for higher densities and affordable housing. Smart growth machines require areas of technical specialization different from suburban sprawl development in order to navigate the re gulatory system, to obtain the initial financing, to design the structural masonry required for residential and commercial spaces, as well as to provide non surface area parking. Chris Valesco, the CEO of PLACE, and developer of the WAV in Ventura elucid ated the challenges of assembling a team of specialists with different areas of expertise: If you just say: "What should we do?" They will each give you their walled off solutions. And so what we need to do, we want to convene together in an integrated tea m and figure out how to optimize all of these things together So, to look at all of those things and then how can you figure out how the creation of
! 146 renewable energy feeds into mobility? Well, what if we are sharing vehicles that are plugged into the sola r array? And then we can do each of those things better because we are working on both of them. And so that's the tricky part with working with all of the different experts is to put them together for one community. The regulations in Santa Barbara convi nced the architectural firm Peikert Group to hire a full time expert on environmental land use issues to assist public officials and private developers. This is an uncommon practice in architectural firms, and more rare for smaller companies like Peikert G roup. The inclusion of a policy expert makes it much easier to work within city codes and reduces the time spent complying with city zoning and other requirements. The expertise that Peikert hires allows the company to make the development process flow mor e smoothly. Lisa Plowman, Planning Manager for Peikert Group, explained how this was unique for the industry in general: Basically, usually, a developer will have an architect who does the design and a land use consultant that will help them navigate t he permit process. Sometimes the architect will do it but it's gotten so much more complicated. But traditionally he will have the separate services. Now, what we do here at Peikert is to integrate all of that, and that way I can sort of manage the process from the beginning with the construction drawings and then I can hand it off to the architects and they handle it from that point on. But that way all of the land use and entitlement process is fully integrated with the drawings and the project is managed more seamlessly when you have the two services in house. The Beranger, in the city of Gresham, had a "green roof" as an additional aesthetic feature. Green roofs are roofs that are designed and built to allow plants to be grown on them. This is much different than the vast majority of building tops. It
! 147 also requ ires experts on how to combine roofing with planting. There are a host of problems that can arise, such as water leakage, soil erosion and replacement, and constant upkeep. The company Greenworks, a local environmental design firm, was hired to design and construct the Beranger's green roof. The project has, so far, not had any problems from this innovation. The company is tasked with conducting maintenance checks on the roof to ensure that it remains structurally stable. Financing affordable housing unit s also required expertise in financial and regulatory systems, as well as construction. When smart growth solutions for urban development were initially proposed the primary goal was to reduce sprawl and protect the environment. During the 1990s and 2000s, as housing prices and rental prices rose, the provision of social equity through affordable housing became an additional goal of smart growth practitioners. Many studies by urban economists show that smart growth and new urban projects were often more exp ensive than what is considered affordable housing (Talen and Johnson, 2008). Environmental justice scholars had also argued for greater affordable housing within smart growth planning (Bullard 2007). In each project examined in this dissertation, at least ten percent of the rental units met the definition of affordable housing. Phil Whitmore innovated several ways to provide affordable or lower income housing. One method required the developer to build smaller, but high quality units that would rent for less than the other larger units in the building. Whitmore felt that mixed income was a necessary first step and that the market needs to be directed to phase in affordable housing over time:
! 148 So go ahead and buy the land for your low income housing project but you may not do it. First, what you are trying to do is set the market higher than that, and then bring that in over time. And I tried other ways to achieve moderate income. I called it "market rate, low income, moderate income" and what I would do, I would encourage the developer to have a certain number of units in the project to be extremely small, high quality and those I didn't have any paperwork. And it would simply be that those would always rent for less money because they were small. In that wa y even in an expensive complex you would have a ten, twelve, fifteen percent renting for, in the case of the Crossings, rented for $495 a month, and that way you always had a mixture. D. Smart Regulations to Make Smart Growth Buildable Warner and Molotch (2000) have shown that the building rules and regulations set the parameters of the organizational field of urban development, whether sprawl or smart growth. Although developers who build traditional sprawl also bend regulations to accommodate their deve lopment types, smart growth requires much more dramatic, and unfamiliar, changes to the regulatory framework. Regulatory change is also viewed as the most effective way to reach the goals of ecological modernization. J ÂŠ nicke (2008) maintains that the regul atory framework enables a structural course to ecological modernization by creating a system of "smart regulations". As in other industries, smart growth demands a mixture of "carrot and stick" regulations. Regulations include land use practices such as ur ban growth boundaries, zoning ordinances, and building restrictions; incentives commonly include density bonuses, affordable housing tax credits, and transit oriented development (TOD) funds. The regulatory context of each city differed between
! 149 California and Oregon, as well as between the discrete cities. This section first examines the smart regulations in California followed by an analysis of those in Oregon. After two decades of stricter growth controls, by the 1990s, several housing advocates and city officials in Santa Barbara recognized that there was a growing housing affordability crisis along the South Coast. Housing advocates, planners, and developers sought to alleviate the affordability crisis not by allowing unconstrained development, but rath er by changing the zoning codes through the General Plan process. Zones were created that allowed the mixture of residential and commercial spaces, promoting more compact development and housing rehabilitation. Mixed use zones allowed developers to look at new parcels with a new perspective. Several local housing advocates also argued that more compact development and other zoning changes could provide housing for workers and ease regional commuting problems. By the mid to late 1990s, developers in Californ ia had begun to view mixed use as a realistic possibility. This embracement was also part of a broad diffusion of smart growth and new urbanist planning theories that proliferated at that time. The cities' government used density bonuses and affordable h ousing tax credits as incentives for developers. Since the South Coast lacks a regional planning agency like Portland's Metro, cities and counties are left to their own resources to provide additional funding 32 The exception is the WAV in Ventura. As a non profit !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 32 The only government entity with regional jurisdiction is the Santa Barbara County Assoc iation of Governments (SBCAG) that covers Santa Barbara, and the Southern California Association of Governments (SCAG) that cover Ventura. These organizations, however, are only involved in regional
! 150 development, this project used funding from several different sources: the federal government, state and city density bonuses, charitable foundation grants, and grants from companies such as Google. PLACE also provided infrastructural improvements in the neighborhood to win the support of skeptical community members 33 Rick Cole, the City Manager of Ventura, generally did not find subsidies to be the best tool for cities to use to entice developers. He believed that simple but strict building stand ards were more effective and brought higher quality development: Our own assumption, and I don't take credit or blame for this, is that the best thing we can do for developers is not subsidies, not bonuses on density or parking that are not defensible on t heir face. In other words, if we're willing to have less parking maybe we should have less parking. We should say: "Well you met these criteria so you get less parking. Well, you met these criteria so you get more density." The density and the parking ough t to be what the density and parking ought to be, and we already know what that is. And so rather than giving subsidies, rather than making case by case choices on standards, my whole bias has been you can offset high standards with very clear rules and ve ry simple processes. The Metro, along with various officials from Gresham and the other suburbs of Portland, lobbied the Oregon state legislature to pass bills meant to promote smart growth by implementing an incentive system for developers. There are th ree particular programs used in the Oregon cases that support smart growth. The first is the Transit Oriented Development Tax Exemption (TOTE) program, which provides an abatement for developers who build one half mile from a light rail station and one !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! transportation development, usually determining freeway d evelopment. They do not focus on building and urban construction. 33 Interview with Chris Valesco, CEO of PLACE
! 151 qua rter mile from another transit service. TOTE is a tax exemption process that is locally tailored and allows for community input on whether the developer should receive a tax exemption. Several criteria are used by jurisdictions to approve projects. These i nclude a set minimum number of dwelling units, exclusion of hotels and motels, and an integration of design to enhance transit efficiency, particularly light rail (Metro, 2012). The only cities in Oregon that used the TOTE were Portland and Gresham. Durin g the late 1990s and early 2000s, Gresham planned to develop its transit villages by incentivizing developers to build at higher densities in its regional centers. The smart growth projects that took advantage of TOTE were Central Point, located in the cen ter of downtown, and The Crossings, built near a large shopping center 34 TOTE democratizes the development process by requiring a public hearing process to determine whether or not the developer will receive the abatements. However, the City of Gresham and the Metro felt that the procedures dramatically lengthened and obfuscated the planning and development process. The city feared that this would hinder further investment. Officials from Gresham, the Metro, and Portland lobbied the State of Oregon to offer an alternative funding mechanism for smart growth. Oregon passed legislation to create the Vertical Housing Program (VHP), an abatement program for developers who meet specific design requirements 35 The !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 34 There were two further projects that used TOTE: Gresham Central Apartment and the Landmark. These were two residential developments that were built prior to the study time period and also did not contain commercial spaces. 35 Abatements are available for rental and owner occupied housing. The developer receives the reduced costs over the first ten years of the abatement if the property is rental ; if it is owner occupied, the homeowner receives partial property tax abatement for the first ten years (Metro, 2012).
! 152 VHP lowers upfront costs for developers by reducing what would otherwise be a significant increase in property taxes. This incentivizes the developer to invest in the higher cost premiums of the SGP using the capital exempted from taxation. A critical difference between the VHP and the TOTE is that in the VHP there are no public hearings for each proposed development. Instead there are meetings on the adoption of the VHP within the city. The VHP bypasses the democratic process to hasten smart growth development. Cities apply directly to the state to establi sh Vertical Housing Development Zones (VHDZs). The VHDZs are assessed according to their proximity to light rail stations and other mass transit stations. The developers receive the abatement from the state, but build according to the existing regulations within each city zone. The number of floors that are built determines the rate of tax exemption. There is a twenty percent abatement rate for one floor of housing, forty percent for two floors, and so forth, up to eighty percent for four or more floors of housing. Developers are given the incentive to build higher. As Janet Young, the Economic Development Director for Gresham, one of the officials who lobbied the Oregon State Legislature explained: The state passed legislation that allowed communities to create vertical housing zones if they wanted and there were some criteria. They had to be in urban centers or along some major transit corridors and there were some rules on how you had to put them together. Once you've created a zone then any developer wh o came in and brought a project that qualified would be able to get a tax abatement Gresham was, if not the first, one of the first to actually create a zone downtown. And it's large, it covers most of the downtown. Basically, what it [VHP legislation] s aid is that the transit oriented tax exemption [TOTE]
! 153 program, which had been in place before, an extensive land use approval that each project had to do, and how to justify the economics of why the tax abatement was needed to make the project work. Since the program was created in 1998, four projects have used the VHP. Only the cities of Gresham and Milwaukie established the VHDZs. In 2002, Milwaukie created a special zone, VHDZ, to assist the developer and the Metro in their construction of North Main Vi llage. The vertical housing zone only encompassed the project site. In essence, the city created a whole new zone for a single smart growth project. 36 City officials anticipate more activity in its downtown after the creation of a light rail line and light rail station. Milwaukie considered using the VHP to entice other developers to help increase density in its core (Metro, 2007). The city had long been viewed as very "anti Metro" and the Council had previously voted down the creation of a broad urban renew al district that Metro had proposed. 37 Milwaukie officials generally felt that a more cautious, project by project basis was needed to prevent development that may be viewed as unfavorable or unwanted by residents. Gresham sought to intensify its compact d evelopment much more rapidly than Milwaukie. In 2006, after using the TOTE for a few projects, Gresham was the first city in Oregon to apply for state approval to create a Vertical Housing Development Zone (VHDZ). The experience with the public hearing pr ocess had convinced the city that to induce private investment, they would need to alleviate the developers' !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 36 Metro Financial Tools, 2007; Interview with North Main Village developer Tom Kemper, CEO of KemperCo. 37 Interviews with Phil Whitmore, found er of the Metro TOD Program, and Tom Kemper, CEO of KemperCo.
! 154 concerns about the uncertainty of receiving the abatement. Developers were worried that if the public hearing process were held on a project by pro ject basis it would entail too much risk of the TOTE application being rejected. The city officials in Gresham decided that a public hearing on the establishment of the zone, rather than each project, could balance democratic discussion and economic consid erations. Now that the VHDZ has been established, developers intending to build in it are guaranteed to receive the tax abatement. In Gresham, the Beranger, developed by Peak Development, and 3 rd and Central, developed by Tokola Properties, utilized the VHDZ. For the Beranger, it is estimated that 60% of Gresham's property taxes were abated from the $7 million development; 3 rd and Central had 60% abated from a $5 million development (Metro Brochure, 2012). Finally, the Urban Living Infrastructure (ULI) program provides small grants to assist with the implementation of building improvements. The purpose is to support urban living amenities, such as restaurants. In the mid 2000s, Phil Whitmore innovated the Urban Living Infrastructure concept. The program began in 2007 and the original ideal scenario would be to take an old building in the downtown and install the systems needed for restaurants or bars. This proved too costly, especially when the market crashed, so the program instead focused on the mixed u se projects that were recently built. Metro's hedonic analysis became the basis for determining what a neighborhood needed. In Gresham, 3 rd and Central was given a ULI grant to help build the ventilation system needed for a grocery store and bakery. The UL I
! 155 provided $85,000 that helped to cover the ventilation systems, public bathroom, and other additional costs. North Main Village, in Milwaukie, received a ULI to help purchase specifically designed walls required to successfully separate the activities in the commercial space from the residential space. Megan Steele, Senior Planner at Metro, explains: We have another program called Urban Infrastructure Grants that's again a fairly innovative thing. We had our Council in about 2007, it said to us: "Well, what else should we be doing to make our centers more attractive for people to live in and to achieve our vision?" And credit goes to Phil who said: "You know there's this thing that happens, this coolness factor. What makes a place cool?'" was his sort of question and he has a very good intuition for that. I think some of the rest of us do too, but he had a good sense of when you can kind of feel that palpable sense that this is happening, this can work. But it's hard to explain that to people as an object ive kind of thing. Other traditional incentives, such as fee waivers, were used to induce private investment. Dwight Unti, CEO of Tokola Properties, and the developer of 3 rd and Central explained that the incentive programs and government involvement enabled many aspects of the project: I think that we would not have been able to do it without both Metro and the city's fee waiver, and I'll be honest with you, the city's fee w aiver, as far as the financial impact, was more significant, and I'm sure you see this all the time, one of the problems that is faced by a grocery store operator trying to do a downtown specialty grocery is that the traffic impact fees tend to be exorbita nt because groceries attract people in their automobile to drive to the store. And so for even a small 5,5000 sq. ft. neighborhood grocery store starting, that grocer might face $100,000 more in
! 156 traffic impact fees that he's got to pay before even opening the doors to his business. Proponents of smart growth, the social actors in the smart growth machine, maintained that private developers needed the assistance that local governments could provide to build smart growth projects. There are many different wa ys that this can be achieved. Janet Young, Gresham's City Economic Development specialist, explained: There are so many financial challenges to getting these programs to work, especially in the suburbs where there aren't huge rents. If somebody is intere sted in doing a project I'm convinced that the jurisdictions have to make these programs work and maybe it's not the Vertical Housing Tax Program; maybe its an urban renewal agency that builds the parking structure, there are a lot of different ways that y ou could do it. But we're not seeing the rents in the suburbs to support the construction costs for these kinds of projects. Consistent with ecological modernization, an environmental state governing body sets the conditions for what is built through the development of a strong regulatory framework. In addition conventional regulation such as zoning, building caps, and urban growth boundaries, smart interventions also include incentive programs for developers to induce private investment and to attract de velopers. It is within this nexus of entrepreneurialism, technical expertise, and government intervention that the smart growth machine can be differentiated from the conventional, sprawl oriented growth machine. E. Conclusion Smart growth represents a p ossible route to an ecological restructuring of
! 157 urban development. Practices of developing urban sprawl, however, are deeply embedded within the building industry (Rudel, 2013). Smart growth, and mixed use development in particular, are seen as having too many upfront costs and generating profits too slowly, thus being too risky for many financial lenders. This finding is consistent with several past studies on how "price" coordinates organizational behavior (Smith and Munro, 2007; Lovel and Smith, 2010) an d deters smart growth and sustainable construction (Starkie and Yosick, 1996; Gyourko and Rybcyzynski, 2000; Yong and Stevens, 2012; Bueren and Broekhans, 2013). Nonetheless, a combination of entrepreneurialism, smart regulations, and socio technical exper tise can develop smart growth projects and challenge the established communities of practice that are entrenched within both the real estate industry and multiple levels of governments.
! 158 VII: Smart Growth: Narratives of Feasibility A. Introduction Does smart growth work? Is it economically and politically feasible? This chapter examines the various narratives of smart growth feasibility expressed by various social actors. It is beyond the scope of this dissertation to discuss whether these projects can be clearly labeled as absolute failures or successes in terms of the ir impact on local and planetary ecology and community or if the projects substantially altered land use policy. In some ways, their actual success or failure, ecologic ally, is of secondary importance to how their success or failure is perceived by social actors. These perceptions contribute to the broader socially constructed narratives on smart growth and the future. Actors held divergent views on smart growth and the future of urban development. This chapter discusses four narratives of smart growth feasibility: the competing narratives of liberals versus neoliberals, differing accounts on the financial feasibility of mixed use development, the perceived knowledge ga ps between social actors, and narratives on the problems that arise when trying to convince skeptical publics that smart growth is both feasible and desirable. B. Governments and Markets, Liberalism and Neoliberalism While there may be agreement on the need for dense development and integrated transit systems, interviews revealed stark ideological differences between
! 159 liberals and neoliberals on whether smart growth is economically feasible. Liberal, in this sense, refers to the belief that governments ca n intervene to guide or support markets through the provision of infrastructure, gap financing, and other subsidies. They argue that market economies work best when guided by a responsive state. Neoliberal refers to the view that governments should not be involved in changing, let alone managing or directing, urban land use markets. Smart growth, currently, relies upon a liberal regime for development; market driven neoliberalism does not support the risks inherent in smart growth. The contention between liberalism and neoliberalism was more pronounced in the Portland area than in the California cases. Neoliberals alleged that Metro's public private partnerships resulted in bureaucratic cronyism and wasted public funds. Liberals in favor of government inte rvention countered that regulatory and incentive frameworks always influence the market and the task for public officials is to identify the most effective ways that governments can intervene to shape real estate markets toward smart growth. In this sect ion, the liberal perspective is contrasted with the neoliberal. This distinction is glossed over in other studies on smart growth. Public private partnerships and urban development trends are brushed under an all encompassing conceptualization of neolibera lism (see Sager, 2011). This is facile and fails to account for the varied stances held by social actors involved in growth machine activities.
! 160 A major disagreement in the debate over smart growth is the determination of where the development funding is generated. The divide on this issue is largely ideological. Neoliberals argue that unfettered, self regulating markets should direct urban growth patterns (O'Toole, 2009; Sager, 2011). Liberals maintain that public institutions are needed to appropriately manage urban growth because capital markets prefer sprawling commercialism instead of what may be ideal for the community and the environment. The majority of the respondents interviewed were liberals, in this sense. Most of the private developers that wer e interviewed saw government intervention as a necessary precondition for building smart growth. More respondents in Oregon than California conveyed a neoliberal perspective on urban land use. These respondents felt that the Portland Metro was a centralize d bureaucracy that imposed its planning and design visions on local communities. Moreover, they viewed subsidization of smart growth unfavorably. One key difference between the smart growth development in Oregon and California was that the actions by Metr o often fostered opposition from free market neoliberals as well as from residents and city officials who were ideologically opposed to what they saw as a centralized, unaccountable planning bureaucracy. Several analysts and activist groups in Oregon are s ingularly focused on curtailing Metro's authority in land use planning and development (Cox, 2012; O'Toole, 2009). The ideological divide on the role of governments and markets was less pronounced in Santa Barbara and Ventura. Both cities have histories o f cautious urban development. In these cases, urban development is largely a single municipal
! 16 1 issue; there is no regional agency that funds or plans the functional contours of individual building sites, as does the Portland Metro. The two Californian citie s have experimented with various growth controls for decades and developers have largely adapted to their regulatory frameworks 38 (Warner and Molotch, 2000). Liberals and politically conservative factions within the city of Santa Barbara generally favored a strong regulatory framework to direct urban growth management. The neoliberal market perspective has been muted and the political debates have centered on what measures are needed to maintain the control of growth, but also provide more affordable housi ng. Lee Moldaver, a Santa Barbara environmental activist, pointed out that the last pro business City Council was went out in 1980: Politically you could try to elect people at the City Council and enforce that, which they did. They flipped over the major ity in the City Council in 1979, and in 1981, and I think in the last 30 years that it's never gone back to the pro business, pro development group. The ideological divide on the role of government and markets was far more intense in suburban Portland, O regon than in coastal California. Various neoliberal scholars and activist groups view the Portland Metro as a market disrupting bureaucracy that exercises too much power. This was evidenced in secondary research and by interviews with developers, as well as the vice president of the Cascade Policy Institute, one of the leading critics of government funded smart growth. Unlike other neoliberal groups, the Cascade Policy Institute is not necessarily !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 38 Interview with Paul Casey, Santa Barbara Community Development Director; Bill Mahan, former City Planner in Santa Barbara.
! 162 opposed to rail systems or sustainable development. Rather, they argue that Metro and TriMet should not be in the business of planning, designing, and building SGPs. 39 The Cascade Policy Institute is particularly focused on the subsidization of Portland's MAX light rail system, including the accompanying TOD projec ts. The think tank argues that land and building subsidies caused more housing and transportation problems than they alleviated. John Charles was the Vice President of the Cascade Policy Institute and spokesperson of neoliberal critique of publicly finan ced smart growth. In reports published by the Cascade Policy Institute (Charles, 2008; Cascade Policy Institute, 2009), he argues that the subsidization of transit oriented development by Metro has wasted millions of public dollars on failed development pr ojects. When asked to elaborate on subsidies and smart growth Charles posited : People just need to see reality the way it is. And almost every TOD I know of that I've ever looked at required subsidies, and by definition if you have to subsidize something it's not a sustainable business model. Someone has to make money somewhere so if you're intending to subsidize every single project that's not workable. The only project in the Oregon cities that did not use any governmental support was the Kohler Building in Gresham. It was built by a local developer named Cliff Kohler who opposed government subsidization in the real estate market, unless !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 39 Oregonians in Action, the othe r group actively opposed to the Metro, have pushed for dramatic curtailment of Metro powers, but were not actively assessing these specific projects according to their website. Oregonians in Action were contacted, but they did not respond.
! 163 it is for a "demonstration project" to show the lending institutions that a certain urban form is viable. As Kohler, CEO of Kohler, Meyer and O'Hanlon, explained his views on subsidization of re al estate markets: The purpose of taxpayer money, if it has a purpose, and a legitimate role to play, might be to do a demonstration for the private marketplace to demonstrate something that hasn't been done but was part of a goal statement and it just nee ded to set out to establish that product type and it to come out of the dirt and become successful, so that the lending institutions would then see somewhat of a track record and say: "Oh yeah this can work." In his view, the funding went far beyond demo nstration projects. Kohler was strongly opposed to the Metro subsidization of one company for the development of four smart growth projects. The company, Peak Development, built the Crossings, the Beranger, Central Point and was also the initial developer for North Main in Milwaukie. The choice of using a few developers to build the smart growth projects was viewed as unfair to other developers who did not collaborate with Metro. The two companies that worked with Metro received substantial government fun ding for their projects. Developers who did not work with Metro felt they were disadvantaged. Neoliberals viewed this as a violation of market principles while liberals saw this as the most effective and efficient method by which to plan and build for a su stainable future.
! 164 John Charles, Vice President of the Cascade Policy Institute, believed that many developers and local public officials were taking advantage of the incentive system once they learned how to navigate the smart interventions: Well, in Por tland you have a whole bunch of people who are proponents of this because they've learned how to play the game. Developers are very pragmatic. Show them the money behind door A, there is a huge boatload of subsidies behind door A. They don't really care. S o you have a whole bunch of developers who go around showing for this. There is a veritable buffet of subsidies and the smart developers know how to play the game. In most of the projects, the commercial space has struggled to attract and keep tenants. T here is a contentious debate in the Portland area over whether this is indicative of a failed model or if it is a temporary situation reflecting the uncertainties in the property market 40 Given the economic context of falling government revenue and economi c inequality, the relationship between liberal interventionism and neoliberal markets is contentious. Neoliberals insisted that the Metro ignored conditions in the prevailing local property market and moved too aggressively in their push to build high d ensity smart growth projects. Government actors were perceived as being too idealistic about the possibilities for urban development. Neoliberal critics argued that government actors too often thought that the "market realities" could be radically changed with steering practices. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 40 This is discus sed in greater detail in the following section.
! 165 Cliff Kohler, CEO of Kohler, Meyer and O'Hanlon, maintained that the failure of retail space in the smart growth projects was due to a misreading of market forces: All the ones that Metro set out for demonstration projects, they all failed. Even after all of the investment, all of the taxpayers support, all of the propping and all the things that they were given, they still failed. What's the conclusion you can draw from that? I draw the conclusion that you can't swim upstream whe n it comes to market realities. If you try and swim upstream against the prevailing market realities you're going to drown, and no matter how much extra resources are thrown into it, there's still the basic market realities. He also argued that the comme rcial spaces in Metro projects failed not because of the broader economy, but because of unrealistic modeling. A bank or other real estate lending institution would not, in the neoliberals' view, have approved the projects that Metro built. The expectation s for commercial activity were out of line with what the contemporary markets would have deemed possible. Kohler elaborated on what he described as the "market realities" that were ignored by Metro: So, for instance, the Beranger went on to the marketpla ce with a product that was having to sell something north of $250 $275 a square foot to get absorption. It had never been done! We had never even probed through $150 a foot and yet their models presumed that somehow or another, there was capacity in the m arketplace to absorb inventory product at $250 $300 a foot. Now, a bank would not have done that. Nobody in the private sector in their right mind would have done that, and for good reason. And yet Metro proceeded to go forward with the project and dumped a lot of money. And then what happened, this is where I get a little ticked off, we'll [Peak Development and
! 166 Metro] take off rather than admitting the failure. And to save face, Metro continued to put money into it to try to save it. The Crossings was by far the most expensive and ambitious project in Oregon. It glossed the front of several of Metro's brochures and was a signature project for the organization 41 John Charles, Vice President of Cascade Policy Institute, also studied Metro's subsidization of the Crossings. I mean they were just pouring dough into that guy's pockets to create this boutiquey, European looking, four story thing right next to light rail. Okay, I think it was $1 million subsidy just for the parking and it all adds up to somethin g like $2.8 million. Some local governments were also skeptical of the overarching powers exercised by Metro. Phil Whitmore discussed his engagement with the town of Milwaukie when planning and developing the North Main Village. Milwaukie had long had a reputation of oppositio n to Metro. The members of the City Council were also initially opposed to light rail and its associated smart growth projects. Phil Whitmore explained his experience working with Milwaukie to convince them of the need for smart growth: I really felt tha t here was a community that was fundamentally very, very, very anti government and very anti Metro, and very anti transit and very anti everything, that suffered for itself. And, I mean, in !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 41 There are mixed reviews of the Crossings within the Metro. Phil Whitmore was very involved in all aspects of its planning, design, and construction. Many people believed that the Metro should have stopped s ubsidizing the Crossings much earlier than it did. Partly as a result of this, Metro is no longer involved in the architectural design of projects.
! 167 other words, this is a community that would tend to hurt itself co nstantly by its ideology. And it was an ideological aberration in the midst of this liberal transit groove, that's still all over Portland. And it was an amazing thing that you thought of it as out in the sticks, but you knew when transit came it was only a few miles from the downtown. It was not like it was 20 miles out, it's right there. The liberals in Oregon the Metro, public officials, as well as developers who su pported smart growth subsidies argued that an unfettered market would not accommodate the projected population growth within the UGB; the UGB, they maintained, must be preserved to prevent development sprawling into the agricultural land that rings around the metro area. Oregon voters h ave repeatedly supported the UGB. They also pointed out that subsidies have been a part of urban development throughout modern history and that the real question is not whether there should be subsidies, but how they are best used. Megan Steele, of Metro argued that because of the agency's pioneering work in the region, larger corporate developers became enamored with the idea of compact, mixed use development. Rather than an unsuccessful intervention, she maintained that Metro's involvement with smaller developers demonstrated to the markets that smart growth projects could be built in low density neighborhoods and cities. Steele maintained that this shifted the market toward smart growth, as intended: The corporate folks had finally understood that th is is where the market had gone. And so now you know we have companies that are national home building companies that are interested in doing these new product lines and maybe they haven't been experienced,
! 168 haven't worked with this market, or done this par ticular thing, this type of product yet, but they have a corporate infrastructure and expertise. That's different than working out of a shoebox. Megan Steele acknowledged that there were some missteps, but that ultimately the government could choose among st several developers who now had the needed technical expertise necessary to build complex, mixed use projects as compared to Peak Development and other previous developers that the agency had collaborated with: So it's never just one thing to get kind o f a virtuous cycle of investment happening. You need to build investors confidence in the market by showing that multiple smart and independent private sector folk think that this is the place that makes sense to do it. Anyway I think that it's not an over night transformation. I don't know how much of that is lessons learned generally. But I will say specifically about lessons learned is that partly because the world is different now than it was 10 years ago, we can move ahead with our program and expect th at we're going to be able to find developers that have had more experience. Dwight Unti, CEO of Tokola Properties, explained that the recession created a particularly challenging financial environment for smart growth development. He mainly blamed the eco nomic downturn and was adamant that government intervention was necessary to make smart growth successful because the risk is too high for the private market actors. Unti explained that his company was able to build the smart growth project 3 rd and Centr al only with the support of the Metro and the City of Gresham: And you know in that recession everyone was still, and today we're still, everyone is risk adverse, more than
! 169 we've ever seen because it was such a difficult time, and small businesses were not willing to face all the front end costs. You know, it's risky enough opening a new business, but clearly without the combination of the city's program and Metro, we wouldn't have done this store. No question about it. The ideological differences on the role of markets and governments are not unique to the real estate industry or urban planning. Most growth machine research, however, too readily conceives the developers and planners as working synchronously to garner profits and revenue. Few studies have examined the actors' variegated perceptions of markets and governments. In concert with Kimmelberg's (2010) findings, real estate actors are far from an ideologically homogenous group aside from a desire to build profitable projects. But homogeny stops the re once discussions of project funding begin. Neoliberal developers and political analysts view public private partnerships, as well as government regulation and incentives, as distorting what, in their view, would be a market in equilibrium. The Califor nia and Oregon cities nearly all operated under a liberal regime of urban land use. The vast majority of participants who were interviewed saw government intervention as necessary to both prevent unwanted development and to reconstitute the real estate mar ket with smart growth practices. There is a long history of liberal citizen activism in Santa Barbara that pushed political leaders to administer strict building regulations to ward off developers who would try to build conventional sprawl. Liberal interve ntionism was also evident in Ventura's city government. Members of the City Council, the Mayor, and the City Manager endorsed several of the smart growth projects. Since the 1970s, Portland's greater metropolitan region has
! 170 also seen extensive government i ntervention in the real estate market. The Metro itself, as mentioned, is the quintessential smart growth machine, a liberal regime of urban development. C. Financial Feasibility: Commerce and the Great Recession One of the most consequential discoveri es in this dissertation was that the commercial space suffered in nearly every smart growth project. This preponderance of commercial vacancies questions the viability of mixed use development in lower density cities. The pattern of commercial vacancy pers isted in every site except for Paseo Chapala in Santa Barbara. The basic narratives were similar in Gresham, Milwaukie, and Ventura: the ground floor commercial spaces were vacant, or had been mostly vacant for years after their construction. In some cases they led to foreclosures and bankrupted the developer, while in others they led to higher rents in residential units. In the last twenty years, mixed use has been regarded as unbuildable and entailing too much risk by the real estate industry (Grant and P errott, 2007; Gyourko and Rybyzinksi, 2000). Social actors, whether liberal or neoliberal, recognized that the commercial spaces were problematic in several projects. Sometimes they differed on the reasons why. Many participants blamed the market crash and the Great Recession while others contended that it represented a fundamental failing of the mixed use model. The recession also figured prominently in the timeline of the various projects. Several projects were put into foreclosure. The developer, who b uilt the Crossings, the Beranger, and Central Point all in Gresham, went bankrupt shortly afte r the
! 171 markets crashed. Appendix K shows the "for sale" signs displayed in the window of the Beranger. This scene was replicated at several spaces of the Crossings and Central Point in Gresham, No rth Main Village in Milwaukie, as well as in Pacific Pointe (Appendix Q) and the WAV in Ventura. When Portland Metro officials were first contacted and informed what specific projects were being examined, two responded by email that they would love to be interviewed and that unfortunately several of the projects had gone into foreclosure. The economic problems that many of these projects encountered seemed eminently important to an adequate exploration of the political econ omy of smart growth. Site visits in Gresham, in particular, but also in Milwaukie revealed vacant or struggling commercial space. The projects and housing market in Santa Barbara faced far fewer problems with retail than all of the other cities. The mos t plausible reason for this is that the caps on commercial construction combined with careful zoning that directed commercial development to traffic corridors. During the 1990s, the city allowed commercial and residential spaces to be mixed in along select downtown streets. This zoning change was one of the factors that contributed to Santa Barbara placing so highly in Smart Growth America's ( 2014 ) "smart growth city" ranking. Paul Casey, the Community Development Director, explained that the caps on comm ercial building prevented the sort of over construction of retail that was found in Portland and other cities in the United States: The commercial market in Santa Barbara is very strong. If you have good usable space it gets leased up. Our
! 172 vacancy rate is 3%, so it's not a problem. And that's because we have very tight restrictions on how much commercial space we can have. And the city, you have the charter amendment measure, which really limits the amount of commercial to try and favor residential. And aga in that was one of the policies to promote mixed use. You can't put a 30,000 ft.! office building here. You are really only able to fit 8000 square foot, but it will let you put the residential above. Since we've restricted commercial so much, the demand f or commercial space is really strong. Even at the worst of this recession the vacancy rate on State Street was less than 5%. So, I think Santa Barbara is probably a little unique in that way, in that the commercial is fine but the driving force from an eco nomic development standpoint and from the developers, was that the residential is where, I'm [the developer] going to make my money through the condo market, and that was booming too. In Ventura, twenty seven smart growth projects were completely abandoned while several others were put on hold for many years. All of the projects in Ventura had empty ground floor commercial space including one space in Pacific Pointe. The tenant of this space was a design firm that was, coincidentally, planning and designing a more walkable Ventura to allow for easier beach access from the downtown. In 2013, a yoga studio moved into the WAV the first tenant of the large ground floor space since its const ruction in 2009. The residential spaces, by contrast, prospered and attracted many enthusiastic tenants. The interviews revealed divergent views on whether the financial struggles that retail faced were the result of the economic downturn or were indicat ive of flaws within the mixed use model itself. Several people held more nuanced views, noting that the two were inextricably linked: the retail struggled not because of a failed
! 173 model, but because retail space had been overbuilt during the boom years. Whe n the markets crashed, larger and cheaper vacant retail space opened up. Harvey Champlin, a developer located in Ventura, built two mixed use projects whose ground floor retail spaces have remained largely vacant. The office of Champlin is located in one of the empty ground floor commercial space s He strongly believed in the smart growth ideals when he first moved to Ventura and began work on smart growth development. Once the projects were completed, however, Champlin began to question their merit and changed his views on smart growth, believing it was naively utopian concept: The mixed use component for the most part doesn't work. It's a new urbanist fantasy, and it's been forced on everyone. And every developer I'm sure, will tell you the same thing. When I sought to develop this property I wanted to develop it as multifamily residential. They forced me, I had to put in this mixed use storefront. It sits empty. Notice that I have a lovely office here for myself, because there's no market for it. It's a fantasy. It's just a fantasy. Megan Steele, Senior Planner at Metro, believed that the ultimate cause of retail failure in the mixed use buildings was the building boom of the 1990s and 2000s and the consequent market crash of the late 2000s: It wasn' t just here in Portland with this program that we ran into that problem. Really in cities across the nation there were unrealistic expectations about how much retail could be supported in these projects. If you looked at the Pearl District in Portland in e arly 2000 the first plan for going in and even until the late 2000s, there was a huge amount of underutilized and vacant ground floor retail space and they had that while having
! 174 some very tall buildings around it. So, there just wasn't generally a good un derstanding of the relationship between density and how many people you can have as residents and the density you really need to have to create a market. Rod Park, elected Metro Councilor, thought that there was too much retail under development before t he recession began, but real estate industry officials felt otherwise: Before the recession hit the consultants said we think that you're about 2% under retailed. I read that I said: "Do you think the rest of the country is 2% over retailed?" About a year and a half later when the file report came out it did not say anything about the fact it was removed and it did not say anything about the fact that we thought that the Metro region was under retailed because by that time we had everything pulling out of t he malls, everything spiraling down and you had these large areas of commercial retail that were open. And you're seeing much greater shares of it across the United States and the financing issues that are going with that. Phil Whitmore, who was very act ively engaged in all of the Oregon SGPs except one, explained that he and his colleagues saw the market crash coming. Nevertheless, they decided to move forward with their developments since construction had already begun: We were already starting to pani c on the market. I really have been around real estate for a really long time and had an awful sense that the market was going to take a dump. I was so convinced that it was, I flew down to Tucson in 2007 and started to get rid of some of my houses. It was written in Fortune magazine and everywhere else, that there was this huge, terrible thing getting ready to happen to the world. It was really obvious. People say: "Whoever thought this was going to happen?" Well, we sure knew. I tell my boss: "I'm
! 175 afraid this thing's going to crumble totally to pieces but what am I supposed to do?" The banks were not for not going through on this project. Should I tell the developers: "You're going to risk losing money, but I'm not because I think it's all going to go to p ieces?" No, you keep your foot on the gas as long as you can. The recession severely impacted the Crossings in Gresham. Upon the first site visit to the Crossings in 2011 there was only one small sandwich shop amongst several vacant commercial spaces. A corner unit of the building next to the light rail station was d esigned with an outdoor patio and rock terracing to facilitate a high end restaurant envisioned for the space. It sat empty for several years. On a return visit to the site in 2013, the sandwich shop remained and the space intended for a restaurant was now occupied by a vocational learning center. The outdoor patio and rock terracing that were meant for the restaurant remained, though unutilized. North Main Village in Milwaukie was built in 2009. It is one of the largest projects that are examined in thi s dissertation and is pictured in Appendix N The layout of the project is a "community village" encompassing nearly an entire city block, mixing different architectural designs. It has a sculpture garden that, when it rains, takes on the characteristics o f a waterfall. Behind the building is a small creek side park with a protected avian habitat. This was meant to be aesthetically pleasing to residents and visitors. When this researcher visited in 2011, every commercial space was occupied except for one un it. This did, however, not bespeak a complete success story. Four years elapsed before commercial enterprises began to fill spaces in North Main Village.
! 176 Interestingly, the Portland Metro Steering Committee had first selected the same developer, Peak Deve lopment, LLC, who built most of the projects in Gresham. As a Milwaukie city official pointed out, he dropped the project because he was overcommitted in Gresham 42 Tom Kemper, CEO of KemperCo and developer of North Main Village, felt that retail developm ent was a very risky venture: I've done a fair amount of retail development, and one of the lessons that I came away with out of that deal is that I am not going to take chances on a marginal retail location unless the numbers support real low retail rents Those deals are just very, very difficult to do. They just are. They just are really difficult deals to do, and connecting a lot of street retail is, frankly, a function, as I'm sure you're aware, of traffic: pedestrian and auto. And roofs. You know, so you have to be very careful where you put retail if you want it to be successful because it's just freaking expensive. It is freaking expensive to do that kind of stuff. I mean it just is. And to justify new construction what you got is to get is a certain amount of rent. Phil Whitmore, head of the Steering Committee knew that North Main Village struggled, but explained that it was difficult to assign causal blame: The problem with North Main was that you had a difficult time renting the ground floor reta il at a rate that would be commensurate with what you would need to get the economics of the project. And the developer had a really difficult time. It's one of those chicken and the egg things; that poor city was simply not yet ready for those kinds of re nts and the developer had the rent priced pretty well. But there still wasn't enough foot traffic to warrant those kinds of rents up in the $18 $20 a square foot range, that's what you needed to get to !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! 42 Alice Rouyer, Director of Community Development in Milwaukie
! 177 come out okay. And so I think he ended up with some em pty space in there. The development firm Kohler, Meyer, and O'Hanlon did not use subsidies from the Metro, state, or city to build their project. The subsidies were not available in 2002 when the Kohler Building was developed. Cliff Kohler, however, said that they would have looked at the possibility of subsidies, but that he was ideologically opposed to government funding of development. He explained that the retail space of his building also suffered: We knew it was going to be a struggle, and it has been. I think we've gone through the really good business plans, we require business plans for all ground floor tenants, and we've seen some very good operators and business plans for the retail. And I think we've gone through approximately 27 tenants; st ill not stabilized. I think we are getting closer to being stabilized but, but that's a lot of tenants to go through. There are a lot of costs when you go through that number of tenants too. When I asked if there were any lessons to be learned from the p roject Tom Kemper, of KemperCo, the developer of North Main, explained that mixed use is difficult, but that the broader economy really clouded what could be ascertained about the success of smart growth. Well, the reality is that we didn't make much mone y on that deal. I put in a lot of years on that transaction and I still have a significant investment in the retail and I'm the general partner of the partnership of the affordable housing deal, which does very well in today's environment. See, it's hard t o say lessons learned because so much of that is colored by what's happened with the economy since '07. I mean it has just been, frankly, I'm sure you are aware it's a developers' nightmare. It isn't bad it's really bad.
! 178 The commercial failures cannot be divorced from the property market crash and the economic recession that ensued in 2007. The research clearly indicates that any discussion of the political economy of contemporary smart growth in low density American cities should not be detached from the broader context of the real estate industry and the global economy. D. Knowledge Gaps Between Social Actors The temporary organizational form that characterizes the smart growth machine is comprised of disparate actors with substantial knowledge gaps bet ween them. Respondents felt that these knowledge gaps need to be bridged to determine whether or not smart growth is feasible. From the perspective of municipal and regional public officials, the development industry is unconcerned with what may be best fo r a particular community or neighborhood. Moreover, there is suspicion that developers may take advantage of the need for increased density to push projects through that may be compact and high density, but do not fit well in the surrounding neighborhood. Private developers often viewed public officials as being too idealistic and naÂ•ve about the economics of urban development and the buildability of smart growth projects. All of the developers and many of the government officials who were also interviewe d described a knowledge gap between city officials and developers, regarding what was required to construct smart growth development. Developers felt that city officials understood what they wanted in terms of density, community vitality, and mixed used tr ansit oriented development, but often lacked knowledge of
! 179 the financial obstacles. Several public officials also agreed that planners and other city officials needed a more precise conception of construction financing. One developer, Cliff Kohler, worked w ith the city of Gresham to alter their planning documents to more realistically attract developers who would commit to smart growth projects in the area. The main source of the knowledge gap, according to those in the development community, was financing. City planning agencies and the real estate industry, the established communities of practice, were accustomed to building sprawl and not smart growth. Dwight Unti, CEO of Tokola Properties, a builder and supporter of SGPs, emphasized that there was a kno wledge gap on how SGPs differed from conventional suburban building: I mean, the one thing that I have discovered is that even public agencies, is that they want, they desire this transit oriented, vertical housing in the urban core. They want it. They un derstand conceptually that if we get more people living downtown they're going to be closer to services, and that's going to reduce auto traffic, that's going to add vibrancy and vitality to the economic environment in the urban core. They get it at many, many levels right, but the one thing I think not all of them get is that they don't all understand the tremendous financial gap that occurs between vertical housing projects with structured parking versus suburban stick built apartments. Harvey Champlin, developer of Pacific Pointe and the Soho Lofts, in Ventura, shared the same sentiment on public officials being naÂ•ve about the development process:
! 180 We want jobs, we want private investment and economic development, taxes, tax revenue, tourism, we want to promote the artsbut when it's offered to them in a definitive way they're incapable of choosing a course of action that will achieve what they want because it means that they have to give up on some preconceptions of what they want downtown to be. A busi nessperson would look at it pragmatically, but you don't have business people. You just don't. Rick Cole, City Manager of Ventura, had been at odds with several developers including Champlin on the smart growth process and described the difficulty that p ublic officials faced balancing their work with residents and developers: I spent so much time with the residential community the development community came to the conclusion that since I was spending so much time with the residential community and reassur ing the neighbors, that I was an anti growth impediment to their ultimate desires and goals. And I had actually found myself scratching my head at trying to explain to developers, what part of "smart growth" did didn't sound like "growth"? What they heard was "smart" and to them they misread that as a code word for "no growth." Metro has a real estate team that has a better understanding of both the private and public sectors' views of land use development than most officials in local government. Metro took a lead ing role in educating regional political officials, as well as developers, on the programs that it offers as well as the mechanics of the development process. The regional government is unique in this sense; initially, the Portland area develope rs looked to them for guidance on developing innovative urban forms. The organization has helped bridge many knowledge gaps between development actors in the Portland region.
! 181 Metro has several detractors, though, and was accused of being overly aggressiv e in pushing its initial development projects in the 1990s and early 2000s. As mentioned, several developers thought they were overly optimistic in their assessments of what smart growth planning was capable of. Shirley Craddick, Metro Councilor, agreed wi th many of the critics who felt that the relationship between TODs and light rail development had become problematic. Although she is clearly a liberal on land use issues, like the neoliberal Cascade Policy Institute, she expressed her belief that Metro sh ould focus on Bus Rapid Transit (BRT) systems and move forward more cautiously with any associated housing or retail development. E. The Feasibil ity of High density Depends on i ts Desirability by Community One theme that pervaded the interviews was the difficulty communicating the concept of "high density" to skeptical city officials and community members during the planning and early phases of implementation. Respondents all felt that high density was neces sary for the projects to be successful. Many believed that a greater focus on design and aesthetics is needed to signal a departure from mass produced suburban apartment complexes. They contended this was necessary to achieve higher rents. Nearly everyone who took part in the planning and development processes agreed that community members, generally, viewed high density development as being akin to large city public housing projects. When asked about opposition to North Main Village in Milwaukie, Tim Ber nard, the former Mayor of Milwaukie, expressed his opinion that the opposition to
! 182 high density and affordable housing was a result of prejudicial beliefs and conservative fears of change. It comes from people who don't understand what affordable housing is like I said, I think that there's probably some racism in it. Milwaukie is a very white community. I would say that there's probably you know I could count on two hands how many black people live in Milwaukie. It's slightly different now but not much and so people that are poor and are dependent on social services. And people think of that as affordable housing. Mostly I think it was an excuse to try to stop change. Most of the interviewees stated that they should have more carefully articulated smart gr owth to community members. Several other respondents involved in smart growth development said that they learned how to more effectively communicate the concept of density to community members and other city officials, by using the word "density." Dwight Unti, CEO of Tokola Properties, described that the choice of terminology could sometimes cause confusion: I do think if there is opposition, and what little there was, has generally come from, or generated from, one word: density. And the concern is that i f you're going to do a project that is 60 people to the acre, people think, density. And I think there's a tendency on the part of our city planners to make the wrong choice of words when trying to communicate to the general public about the importance of vertical housing TOD projects. Yes, they are dense in terms of units per acre, but really they're all about vibrancy and vitality and what they can create for the community by getting people to live in the downtown core and have access to the services and I think part of it is how you speak and how you articulate when you are talking about the product.
! 183 Rick Cole, the City Manager of Ventura, held a similar view and described the same dynamic in his experience in Southern California, specifically Pasadena and Ventura: "Density" is one of those weighted words that isn't terribly useful except as a way of dumbing down the conversation and demonizing a set of abstractions. Change was definitely a concern. This is a nice place to live and too much bad developme nt over the years has taught people that no matter how things are on a particular street block or if you had to bet, keeping it the way it is a better bet than allowing a developer to come in and put something that will make things even worse. The preval ence of high density building across the Portland region fomented distrust and apprehension by some city members. The owners of conventional retail businesses worried that higher density would mean overcrowding and that this would deter people from visitin g their commercial establishments. Rod Park, former Metro Councilor, tried to make the business community understand that high density would actually be good for business and would also bring additional revenue to suburban municipalities: It's easy to say anti density. I like to say anti customer because it's really what it comes down to. "We don't want density," "Oh you mean you don't want customers?" And that's really who's driving the density is the customers who come to the businesses who support th e area so you get the density one way or another. It's whether you're going to have long distance drives or whether you're going to have it in a local area.
! 184 F. Conclusion Neoliberals who contend that the government should not be involved in smart growt h argue that if something requires subsidization it is inherently not a financially feasible business model. They argue that the market clearly favors single family homes and conventional apartment complexes for living and automobiles for transit. This is partially accurate. It is true that the market has generally favored the traditional sprawling development that is embodied in the ideals of the American Dream. The neoliberal perspective ignores the historical development of markets. As Polanyi, (1944) stated, markets and regulations grew up together. The predominance of single family homes and automobiles is largely a result of federal programs that began in the 1930s, such as the backing of home mortgages and the subsidization of freeway construction. Liberal smart growth proponents recognize that government funding was necessary for sprawl to become predominant and is also necessary to transition to alternative forms of development. Whether the smart growth market can be as viable as the market for spr awl remains to be seen. There are distinct areas of knowledge possessed by each social actor and significant gaps in knowledge between actors. They are especially pronounced between private developers and municipal staff. Many developers, as well as gover nment officials who had worked in the private sector, alleged that these knowledge gaps enabled unrealistic expectations as to what could be successfully financed and built. They blamed a lack of knowledge on the commercial process of
! 185 urban property develo pment. Conversely, some public officials countered that developers did not always appreciate the balance that had to be struck between building construction and the procedural processes that comprise the democratic process. The commercial portion of mixed use development struggled to fill spaces and keep tenants in every city but Santa Barbara. The cap on development had prevented overbuilding and cushioned the retail sector from the vicissitudes of the crashing property market. Finally, the feasibility of smart growth is contingent on its desirability by the community, the city or neighborhood. The proposal to build at higher densities arouses political debate. Sustained dialogue with the public and neighboring residents is essential for both receiving com munity input as well as to clarify what an increase in unit density will mean for their neighborhood.
! 186 VIII: Conclusion : A Smart Subset This research began in earnest in the summer of 2009. I had become interested in smart growth and new urbanism after learning of these new planning techniques in an environmental studies course. Smart growth was championed by many progressive and center left organizations. The time seemed ripe for an invigorated and innovative approach to urban policy. During the subsequent years, as my research continued, smart growth appeared to be less of a panacea than I had originally hoped for My normative assumption was that smart growth could alleviate many social and environmental problems that the faced the U.S. What I failed to appreciate at the outset of this research was that smart growth still operated within the tr aditional models of the conventional real estate industry and how difficult it would be to disrupt this system As a sociologist, my focus was not on the technical aspects of the planning and development, but on the social actors and institutions that wer e engaged in promoting, planning, and developing high density, mixed use buildings. After reviewing the literature in urban sociology, the growth machine theory stuck out as the most useful way in which to explore the development process. Specifically, I w as interested in the capability of smart growth to disrupt the real estate industry and begin an ecological modernization of urban development. I wanted to know if there was a distinct smart growth machine that operates substantially different from the con ventional growth machine. My findings suggest that there is a smart growth machine, but it is less distinct
! 187 than I had initially believed. The smart growth machine is a subset of the original growth machine. I was also interested in widening the analytic al lens beyond the limited focus of most qualitative case studies in urban sociology. In urban sociology, cities are often investigated using single or small n case studies or large n, multivariate studies. It was decided that focusing on small number of c ase studies might not capture these regional dynamics of urban growth management. Although the final number of smart growth case studies was fairly small (4 cities), they were placed within a larger regional context of twelve cities. This allowed for a mor e comprehensive understanding of smart growth and regionalism. To conduct an analysis of twelve cities, the method of QCA was adopted. The research began with the count of smart growth projects ascertained from building permit data. The first significant finding was that there were so few high density, mixed use developments that met the criteria established on the onset of the research. From the analysis of Census data, cities that develop smart growth projects were found to have certain characteristics that were not found in combination in other cities. These include an artisan class, comparatively high rents and progressive politics. Are these relationships causal? Not directly. For example, two cities experienced negative population changes while the other two saw their populations increase. When returning to the in depth case material, it became clear that cities adopted smart growth to respond to population change, albeit for different reasons. Milwaukie faced a fiscal crisis and was experiencing sm all population declines ( 1%). In conjunction with Metro, Milwaukie
! 188 has promoted the upcoming light rail line as a source of future economic growth. Planners at Metro believed that a smart growth development, North Main Village, would engender more commerc ial activity and revitalize the struggling downtown. Santa Barbara also saw its population decline during the study period. This could be a result of having l ower than the average median income combined with higher than average median rents. Santa Barba ra's workforce is comprised of roughly 30,000 workers who commute into the city from Ventura, Santa Maria, Oxnard, as well as Los Angeles. Santa Barbara is not facing the dramatic revenue declines that motivated Milwaukie, but rather faces an affordability crisis. Both cities are hemmed in by their geographies. Santa Barbara has mountains on one side and the Pacific Ocean on the other. There is little or no room for peripheral expansion in both cities. To remedy these problems, compact urban infill developm ent has been viewed as the most pragmatic solution. Gresham and Ventura both saw population increases but developed smart growth for different reasons. Gresham has been the fastest growing community in Oregon over the last fifty years. Its population has increased by 90,000 since the 1970s and grew 16% between 2000 2010 ( derived from U.S. Census data ). The city lies on the far eastern fringe of the Portland urban growth boundary. In 1986, a light rail line was constructed from Portland to Gresham and the city remained a focus of Metro planners for the next twenty years. Specifically, Metro recognized that the city needed urban infill development to accommodate this population growth and also to prevent any proposed changes to the urban growth boundary. Gre sham also had a
! 189 downtown that had been neglected in favor of lower density suburban strip malls. The development of several smart growth projects in the downtown was an attempt to rev italize its ailing city center. The primary motivation of this dissertat ion was to determine whether or not the actors and institutions that developed smart growth were distinct from those described in decades of growth machine studies and whether or not smart growth is a disruptive force in urban development, thereby leading to an ecological restructuring of the process that would be consistent with ecological modernization. I maintain that the smart growth machine can refer to the empirically observed social relations and practices that are not fully captured within the or iginal growth machine theory. First, private, public, as well as non profit entrepreneurialism is integral to the smart growth machine. This is not to suggest an absence of entrepreneurialism within the original growth machine, but entrepreneurs are not a necessary element. They are endemic to smart growth development because sustainability currently requires organizational innovation. Still, s mart growth could come to represent an established community of practice in time. Second, smart growth machines d evelop projects that are deemed less buildable than sprawl. Sprawl development is less risky and has a more predictable rate of capital accumulation than new types of development like smart growth and is thus the preferred urban form by conventional growth coalitions. Third, smart growth machines work to create, or operate within, "smart" regulatory frameworks. These can include public private partnerships as well as
! 190 regulations and incentives to induce investment for these riskier projects. Finally, smar t growth requires variegated technical expertise to address the greater complexity of construction financing. Smart growth invariably requires experts on sustainability planning and construction expertise that is new to established communities of practice in the real estate industry. Does smart growth merely represent a continuation of the treadmill of building production, a growth machine in new greenwashed garb? As other scholars have pointed out the debate between the treadmill of production and the e cological modernization is based on a false dichotomy that simplifies organizational behavior (Pulver, 2007). The diffusion of smart growth ideas and their implementation point to an incremental ecological restructuring. Public and private actors are both experimenting with new types of development and are reexamining their customary practices in a reflexive process. However, it is still too early to make strong conclusive statements on whether or not smart growth is disrupting the communities of practice i n the real estate industry. Smart growth generates a debate on who should direct and fund the development. Neoliberals argue that governments should not be involved in subsidizing development that would not be supported in the current real estate mar ket. On the other hand, liberals maintain that government steering markets using regulations and incentives can best achieve smart growth. It would be premature to argue for one or the other based on the research provided in this dissertation. Nonetheless, some points can be made that are worth considering for future research.
! 191 The commercial space struggled in every project except for Paseo Chapala in Santa Barbara, but whether it is a failure of the mixed use model or a result of the property market cras h is not yet clear. The findings, however, are consistent with previous studies on the feasibility of mixed use (Grant and Perrott, 2007; Gyourko and Rybyzinksi, 2000). There are many considerations that a developer must take into account when mixing resid ential and commercial units in a single building, often centered on the materials used to separate the two uses and the safety systems that need to be in place. Furthermore, different uses require different insurance and building standards complicating the process. The regulatory framework in Santa Barbara, however, prevents an overabundance of retail or office space from being built. This stands in contrast to the Portland area where it was acknowledged that retail space had been overbuilt during the pro perty bubble of the 1990s 2007. What this suggests is that mixed use built in cities hosting an abundance of retail space may face greater challenges during downturns in the property cycle than cities that place greater restrictions on commercial developme nt. Further research is needed to test this hypothesis. There was near unanimous agreement amongst the respondents that public officials often lack a background in economics and that this knowledge gap can lead to overly optimistic visions of smart growt h development. Developers and architects held a more accurate conception of what pro blems smart growth development c ould encounter. Public officials, it was found, generally do not have familiarity with the broader financial lending industry the entities t hat actually determine what a
! 192 developer is able to build. Developers assemble a team of architects, construction companies, and others, to build a project that has been approved by financial lenders. Too often, public officials believe that the developers themselves have the money and build at their own discretion. This is not normally the case; the financiers direct building discretion. In every city, participants described varying degrees of community opposition to higher densities. According to the fiel dwork, the community that portrayed the most political ferocity over proposed smart growth development was Santa Barbara, California, while the community of Gresham, Oregon saw the least opposition to higher density. High density, a basic feature of smart growth is often misconceived as the high rise development commonly found in large cities. Many problems with community perception were described. The respondents indicated that they had learned how to articulate their projects in ways that would not be con fusing or lead to misperception. In some places such as Santa Barbara and Milwaukie, there was greater community opposition to this aspect of smart growth. The present study opens the door for numerous research projects. I suggest three essential paths o f inquiry: First, replicative studies ought to be carried out to confirm or disconfirm these findings. These should be descriptive and comparative, qualitative and if data is available, quantitative. Second, delineating the relationship between regulations and financial flows requires further exploration of the real estate and construction industries. A focus on the relationship between the lending industry and development is key for understanding the financial structure of smart growth. The
! 193 smart growth ma chine ultimately must rely on financing from public institutions, private lenders, or in the case of non profits, charitable donations. Martin J ÂŠ nicke (2008: 564), one of the founders of the ecological modernization program in Germany, ended an article o n the future of the ecological modernization process by stating: "This is not going to be easy. Sorry about that." My research on the smart growth and the ecological restructuring of urban political economy resoundingly echoes that sentiment.
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! 209 Appendix A: Research Design and Methods Units of Analysis Data Collection N Analysis Cities Regions Chosen from Two States Four Cities California and Oregon 12 cities Census Data Maps Site Visitation Smart Growth Projects (SGPs) Building Permits Approved (2000 2010) from 12 cities 5 in Oregon 5 in California 10 Smart Growth Projects Web Searches Local Press Planning Brochures Site Visitation Actors Interviews 28 Coding Appendix B: Cities and Smart Growth Projects Project City/State Size Completion Crossings Gresham, OR 113,000 sq. ft. 2006 Central Point Gresham, OR 27,000 sq. ft. 2001 3 rd and Central Gresham, OR 28,000 sq. ft. 2009 Beranger Gresham, OR 37,825 sq. ft. 2007 Kohler Building Gresham, OR 20,000 sq. ft. 2002 North Main Village Milwaukie, OR 80,000 sq. ft. 2009 Paseo Chapala Santa Barbara, CA 38,250 sq. ft. 2007 Chapala Lofts Santa Barbara, CA 25,000 sq. ft. 2002 WAV Ventura, CA 130,000 sq. ft. 2009 Pacific Pointe Ventura, CA -2006
! 210 Appendix C: Policy and Project Time Lines 1896 The world's first offshore oil drilling exploration begins in Summerland, a town south of Santa Barbara. 1909 Los Angeles, California implements the nation's first zoning ordinance. 1927 California legislature gives local gove rnments express authorization to form planning commissions. 1934 National Housing Act creates the Federal Housing Administration. 1937 California requires all cities and counties to adopt a master plan. 1940s Oregon's population grows by 40%. 1950s Cali fornia begins requiring "elements" in master plan. 1965 Master plan renamed "general plan" in California. 1965 Southern California Association of Governments (SCAG) is created. 1967 Tom McCall (R) begins term as governor of Oregon. 1969 Santa Barbara Oil Spill. 1969 Ventura County agrees upon "Guidelines for Orderly Development (GOD) to conserve open spaces and farming belts between the county's cities. 1969 Oregon Senate Bill 10 requires all Oregon cities and counties to adopt comprehensive land use p lans and zoning ordinances to implement those plans by the end of 1971. 1969 Trimet is created to take over Portland's bankrupt private bus system. 1970s Oregon's population grows by 26%. 1970 California Environmental Quality Act (CEQA) passed. 1970 Oreg on passes the Scenic Waterways Act. 1971 California legislature passes the consistency law, which essentially reversed the legal hierarchy of the general plan and zoning ordinance. 1971 Oregon passes the Forest Practices Act. 1972 The California Coastal Commission (CCC) is established by voter initiative via Proposition 20. 1972 Portland Downtown Plan emphasizes density and a transit mall.
! 211 1972 Goleta Water District passes water moratorium. 1973 SB 100 Oregon Land Conservatio n and Development Act is passed. It is the country's first and only comprehensive, statewide land use planning system. 1974 Impacts of Growth report, Santa Barbara. 1978 California voters approve the ballot initiative Proposition 13. 1979 Portland and su burban voters approve the creation of Portland Metro. 1980 Thousand Oaks voters adopt Measure A, which enacts Thousand Oaks Residential Development Control System to manage urban growth. 1986 Trimet begins operating a 15 mile long light rail (MAX) from G resham to downtown Portland. 1989 Santa Barbara passes Measure E, which seeks to control growth by capping commercial development to limit the need for more housing developments. 1990 Napa Valley passes a measure to stop urban sprawl that serves as the model for SOAR in Ventura. 1991 Regional Urban Growth Goals (RUGGOS) adopted in Portland. 1994 2040 Growth Concept adopted by the Portland Metro Council. 1995 The City of Ventura passes SOAR with 52% of the vote. 1997 Regional Framework Plan adopted by Me tro Council. 1997 Orenco Station, popular large scale smart growth project, built in Hillsboro. 1998 MAX is extended to Hillsboro. 1998 Metro TOD Program purchases its first site for a project in Hillsboro. 2000 Regional Transportation Plan (RTP) adopted and updated by Metro. 2000 Kohler Building built in Gresham. 2001 MAX line connected to Portland International Airport 2001 Portland builds first modern streetcar line in North America. 2001 Metro purchases 13 acres for development in Gresham. 2001 Cent ral Point completed in Gresham. 2002 Chapala Lofts completed in Santa Barbara
! 212 2004 Oregon voters pass Measure 37 which allowed state and local government to waive land use regulation in lieu of compensation. 2005 Oregon State Legislature passes legislati on enacting the Vertical Housing Program (VHP). 2005 The housing bubble in the United States "bursts." 2006 Pacific Pointe is completed in Ventura. 2006 Gresham receives approval for Vertical Housing Development Zone (VHDZ) 2007 Large mortgage companies file for bankruptcy across the United States. 2007 The Crossings is completed in Gresham. 2007 Chapala One is completed in Santa Barbara. 2007 North Main is completed in Milwaukie. 2008 Lehman Brothers, the fourth largest investment bank in the United St ates at the time, collapses and "Great Recession" accelerates. 2008 Santa Barbara voters reject Measure B, an attempt to reduce building height limits in the city. 2008 The Beranger is completed in Gresham. 2008 3 rd and Central is completed in Gresham 20 09 The WAV is completed in Ventura. 2010 Light rail station is built near the Crossings in Gresham. 2010 Gresham Vibrant Storefront Initiative. 2010 Gresham Lilian's Marketplace, a grocery store, open in 3 rd and Central in Gresham.
! 213 Appendix D: Raw Data City Rent Artis t Population Growth Household Income Political Leaning SGPs California $1,147 9.6% x $60,883 x 3 Oregon $795 9.5% x $49,260 x 6 San Luis Obsipo $1,206 15% 4.9% $38,031 1 0 Santa Maria $1,098 4% 27% $47,653 1 0 Santa Barbara $1,413 17% 4.5% $59,000 1 1 Ventura $1,306 12.5% 6.6% $62,410 1 2 Oxnard $1,248 4.7% 16% $51,221 1 0 Camarillo $1,655 6.9% 13% $78,854 0 0 Thousand Oaks $1,655 8.7% 8% $100,933 0 0 Beaverton $895 9% 13% $53,914 1 0 Tigard $901 7.8% 11% $59,180 1 0 Lake Oswego $1,186 7% 2.7% $78,760 1 0 Milwaukie $844 9.4% 1% $47,549 1 1 Gresham $837 10% 16% $41,506 1 5
! 214 Appendix E: Registered Voters in Democratic and Republicans Parties City Democrats Republicans San Luis Obispo 39% 29% Santa Maria 49% 33% Santa Barbara 50% 30% Ventura 42% 32% Oxnard 51% 22% Camarillo 33% 43% Thousand Oaks 31% 41% Beaverton 42% 26% Tigard 40% 33% Lake Oswego 41% 33% Milwaukie 47% 23% Gresham 40% 28% 1=More Registered Democrats 0=More Registered Republicans Appendix F: Binary Conversion Location Rent Artist Population Growth Income Political Leanings SGPs California $1,147 9.6% x $60,883 x 3 Oregon $795 9.5% x $49,260 x 6 San Luis Obsipo 1 1 1 0 1 0 Santa Maria 0 0 1 0 1 0 Santa Barbara 1 1 0 0 1 2 Ventura 1 1 1 1 1 2 Oxnard 1 0 1 0 1 0 Camarillo 1 0 1 1 0 0 Thousand Oaks 1 1 1 1 0 0 Beaverton 1 0 1 1 1 0 Tigard 1 0 1 1 1 0 Lake Oswego 1 0 1 1 1 0 Milwaukie 1 1 0 0 1 1 Gresham 1 1 1 0 1 5
! 215 Appendix G: Solution Formulas Configuration Raw Coverage Unique Coverage Consistency Politics*~income*~growth*Artist*Rent 0.5 0.5 1.0 Politics*Income*Growth*Artist*Rent 0.25 0.25 1.0 solution coverage: 0.75 solution consistency: 1.0
! 216 Appendix H: Participant List 1. Steve Amerikaner, Santa Barbara, Shareholder, Brownstein, Hyatt, and Schreck, LLP. 2. Dave Davis, CEO Community Environmental Council, Santa Barbara 3. Paul Casey, Community Development Director, Santa Barbara 4. Lisa Plowman, Architect, Peikert Group, Santa Barbara 5. Sheila Lodge, former Mayor, Santa Barbara 6. Bill Mahan, former city planner, Santa Barbara 7. John Campanella, Developer, Santa Barbara 8. Lee Moldaver, CPA, Santa Barbara 9. Dave Ward, City Plan ner, Ventura 10. Ian Holt, City Planner, Ventura 11. Rick Cole, City Manager, Ventura 12. Harvey Champlin, Developer, Ventura 13. Chris Valesco, Developer, CEO PLACE, Ventura 14. Jerry Bunin, Representative, Central California Home Builders Association 15. Phillip Whitmore, founder Portland Metro TOD Steering Committee 16. Megan Steele, Metro TOD Steering Committee 17. Shirley Craddick, Metro Council, former Gresham City Councilmember 18. Mike Abbate, former Urban Design director, Gresham 19. Rod Park, for mer Metro Councilor, Gresham 20. Dwight Unti, Developer, CEO Tokola Properties, Gresham 21. Janet Young, Economic Development Director, Gresham 22. Cliff Kohler, Developer, Gresham 23. Tom Kemper, Developer, Milwaukie
! 217 24. Alice Rouyer, Community Development Director, Milwaukie 25. Lisa, McGuire, Design Commission Gresham 26. Eric Wallner, Creative Economy Director, Ventura 27. Jim Bernard, former mayor, Milwaukie 28. Brian Martin, City Planner, Gresham Appendix I: Smart Growth Machine versus Sp rawl oriented Growth Machine Sprawl Growth Machine Smart Growth Machine Entrepreneurialism traditional growth market driven moral entrepreneurialism market driven Technical Expertise and Buildability conventional financing and construction complex financing and sustainable construction Smart Regulations large lot zoning allowed separate uses less regulation in general mixed use zoning; changes in zoning for smart growth urban growth boundaries density bonuses
! 218 Appendix J: Buildability Sprawl Projects Smart Growth Projects Upfront Costs single use financing surface parking cheaper construction materials shorter permitting process mixed use financing structured parking sustainable construction longer permitting process Return on Investment single use leads to more immediate return short term investment mixed use means less immediate return long term investment
! 219 Appendix K: The Beranger Storefront, Gresham
! 220 Appendix L: Central Point, Gresham Appendix M: The Crossings, Gresham
! 221 Appendix N: North Main Village, Milwaukie Appendix O: Pacific Pointe, Ventura
! 222 Appendix P: WAV Courtyard, Ventur a Appendix Q: Pacific Pointe, Ventura, Vacant Storefront