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While the issue of managing suburban growth has long been on the Lincoln Institute’s agenda, “sprawl” is now receiving a great deal of attention from citizens, policy analysts and policymakers, as well as the popular press. However, crafting policies to respond to suburban growth is extremely difficult for a variety of reasons.
First, we lack a public consensus about what sprawl is. Even paraphrasing former US Supreme Court Justice Potter Stewart, “. . . but I know it when I see it” does not work in this case. For example, one often hears from anti-sprawl activists that they do not want their community to be “another Los Angeles.” However, Los Angeles is more densely populated today than it was 30 years ago.
Dowell Myers and Alicia Kitsuse report that “the Los Angeles urbanized area (the region excluding mountains and deserts) has the highest gross population densities among the 20 largest metropolitan regions, higher even than New York.”1 Exploring deeper, one finds that “Los Angeles” is code for a variety of social problems that are concentrated in our nation’s cities, such as urban crime, teenage pregnancy, poverty, persistent unemployment, and a variety of other concerns, not the least of which is the organization of uses in metropolitan space.
A second challenge to crafting policies to respond to suburban growth is the threat to anticipated economic gain by some of those who own undeveloped land on the fringes of metropolitan areas. For example, one can imagine the great interest these landowners would have in negotiations to redraw urban growth boundaries. The line on the map can have significant monetary implications for a parcel depending on which side of the line it lands.
A third challenge is the variety of existing policies and laws that have encouraged suburban growth over the past 50 years. In a recent Institute-supported study, Patricia Burgess and Thomas Bier make a strong case that governmental fragmentation on two fronts contributes to a policy environment that supports sprawl.2 Fragmentation between levels of government makes regional planning approaches difficult, while fragmentation across functional agencies impedes comprehensive solutions. In another study, Joseph Gyourko and Richard Voith have argued that the combination of the federal mortgage interest deductions and local-level exclusionary zoning have encouraged low-density residential development in jurisdictions surrounding central cities.3
Finally, there is little agreement about desired future development patterns. Thus, if the forces that create sprawl are based on a combination of federal, state and local policies, if our existing landscape reflects both public and private actions, and if the desired future is unclear, how does one even begin to address the issue? The Lincoln Institute’s mission is to contribute to and improve the quality of debate about land policies. Toward that end, our work on sprawl is multi-dimensional, focusing on educational programs for policy officials at the federal, state and local levels.
Programs for Federal and State Officials
Land use issues have increased in importance on the federal policy agenda, and the Institute has begun working with Region 1 of the Environmental Protection Agency (EPA), based in Boston, to develop a training course for senior administrators. Many staff at EPA are not schooled in land use planning, but their work in traditional EPA areas such as water or air quality requires that they pay attention to land use issues.
Harvey Jacobs, professor of urban and regional planning at the University of Wisconsin-Madison, developed and taught a course to two groups of EPA administrators in the fall of 1998. Response to the two-day program, which included the historical and institutional context of land use planning, was so positive that the EPA asked the Institute to offer this program annually as part of EPA’s required orientation for new administrators.
At the state level, the Institute has recently supported programs to facilitate information exchanges among legislators and planning directors. Patricia Salkin of the Government Law Center at the Albany Law School has researched lessons to be learned from states that attempted state-level legislation on growth management, but failed. Among her findings was the lack of in-depth knowledge among state legislators and executive-level policymakers about the causes and consequences of suburban sprawl. In order for any kind of growth management legislation to be passed successfully, sponsorship is needed by the appropriate legislator. Depending on the state, this might be the chair of the Local Affairs Committee or a different committee leader.
In an attempt to respond to this need for better understanding about sprawl on the part of legislators and their staffs, the Lincoln Institute and the Albany Law School cosponsored a briefing session in February 1999, in Albany. It coincided with the legislative session and, fortuitously, was held on the day of a press conference announcing that the bipartisan “Smart Growth Economic Competitiveness Act of 1999” had been filed in both houses of the New York legislature. The bill includes three key provisions:
(1) It charges the Governor to create an inter-agency council to review existing policies related to growth and development.
(2) It creates a task force to study the issue and come up with recommendations.
(3) It asks the Governor to provide grants for regional compact efforts.
National experts on sprawl, state legislators and commissioners, and Mayor William A. Johnson of Rochester and members of his staff exchanged up-to-date information on related state-level efforts, as well as possible resources for their continued work on this issue. The briefing session gave prominence to the issue of growth management at an important juncture in the state’s history. Perhaps most useful to the legislators and other senior-level policymakers was the neutral forum that the briefing provided for frank discussion of the complexities of “smart growth.” While the event was designed with legislators in mind, it is clear that participants from the executive branch who attended the briefing session also benefited.
In another attempt to target our educational programs to key decision makers, the Lincoln Institute, the Regional Plan Association (RPA) and the New Jersey State Planning Commission cosponsored a leadership retreat for state planning directors from ten of the eleven Northeast states. The directors, or in states without a state planning director a representative from the executive branch, met in Princeton in March for a day characterized by peer-to-peer training.
States with nascent state-level efforts were able to learn from those with more institutionalized programs. While Delaware is as different from New York as Connecticut is from Maine, their state officials were able to benefit enormously from stepping outside their individual political, geographic and economic contexts and considering alternative solutions to similar problems. While each state must construct strategies appropriate to its own needs, all states face many common concerns.
The gathering also provided an opportunity to contribute to a larger, region-wide planning effort. Among the initiatives presented by Robert Yaro, executive director of RPA, was Amtrak’s introduction of high-speed rail service between Boston and Washington, DC, which may leverage substantial economic growth for cities along the corridor. Boston, New York, Philadelphia, Baltimore and Washington will clearly benefit from rapid, comfortable transportation between terminals. However, it may be in smaller cities such as Providence, Hartford, New Haven, Bridgeport, Stamford, Newark, Trenton and Wilmington where high-speed rail could have a far greater impact. Frequent service to these cities, where airline connections are limited, could bring new investment as well as increased access to other employment centers for their residents.
RPA is drafting a proposal to provide the analysis and preliminary recommendations needed to evaluate the benefits of the Amtrak service. The state planning officers at the Princeton meeting felt that the initiative would be of great interest to their governors and agreed to take the RPA proposal back to their states in an effort to broaden the coalition in support of Amtrak’s high-speed rail service in the Northeast Corridor.
Programs for Local Officials and Community-Based Organizations
At the local level, strategies to address suburban sprawl also need to focus on development and redevelopment in the cities, and the Institute is expanding its course offerings to groups long interested in urban policy. Last November, the Institute cosponsored “Breaking Barriers, Building Partnerships: Urban Vacant Land Redevelopment” with the Massachusetts Association of Community Development Corporations. Meeting in Boston, staff from community development corporations and private and non-profit lenders explored strategies for bringing underutilized land back into use. A similar group gathered in Chapel Hill, North Carolina, in May for a workshop cosponsored by the North Carolina Community Development Initiative and the Kenan Institute for Private Enterprise. The hands-on training was designed to give participants experience in generating alternative financing strategies for urban redevelopment
In another effort in the Southeast, the Lincoln Institute provided support to Spelman College as part of an effort to contribute to the redevelopment of its neighborhood in Atlanta. In June, Spelman and its partners from the Atlantic University Center held a community summit as part of a larger initiative to identify both neighborhood needs and university-community strategies to address those needs.
Our experiences in these programs confirm the complex factors influencing current development patterns: the variety of social, economic, technological and political forces; complex and sometimes conflicting policies at the local, state and federal levels; and the actions of those in the public, private and non-profit sectors. Through this work we have come to understand the need for basic information about the broader issue of land markets. In particular we are interested in how and why land markets operate as they do and the implications of land market activity on various public and private stakeholders. Future curriculum development efforts in this area will concentrate on materials to help policymakers and citizens gain a better appreciation of these markets. In doing so, we will have a fuller understanding of the sprawl issue: what causes sprawl, where interventions will be effective, and the characteristics of successful interventions.
Rosalind Greenstein is a senior fellow and director of the program in land markets at the Lincoln Institute.
Notes
1. Myers, Dowell, and Alicia Kitsuse, “The Debate over Future Density of Development: An Interpretive Review.” Lincoln Institute Working Paper, 1999: 22.
2. Burgess, Patricia, and Thomas Bier, “Public Policy and ‘Rural Sprawl’: Lessons from Northeast Ohio.” Lincoln Institute Working Paper, 1998.
3. Gyourko, Joseph, and Richard Voith, “The Tax Treatment of Housing and Its Effects on Bounded and Unbounded Communities.” Lincoln Institute Working Paper, 1999.
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Scholars and practitioners involved with the regularization of low-income settlements in Latin America shared their experiences in a forum sponsored by the Lincoln Institute last March and hosted by the City of Medellín and its regularization office, PRIMED (Integrated Program for the Improvement of Subnormal Barrios in Medellín). Participants included representatives from PRIMED, Medellín city officials, and observers from multilateral institutions including the Inter-American Development Bank (IDB), the World Bank, AID and GTZ (Germany).
Twelve major presentations reported on the most significant case studies from eight countries: Brazil, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Perú and Venezuela. The forum proved to be a landmark meeting whose findings, summarized below, are expected to have important implications for Latin American policymakers.
Comparative Perspectives on Regularization
Several different approaches to regularization are illustrated in the country case studies. The two primary approaches are juridical regularization, i.e., legal land entitlement procedures to convert from de facto to de jure property ownership, as in Perú, Ecuador and Mexico; and physical regularization (urbanization), including the extension of infrastructure into irregular settlements, as in Colombia, Venezuela, Brazil and other countries. A third approach, which has been emphasized only recently, puts priority on the social and civic integration of low-income settlements and their populations into the urban fabric by a combination of measures.
While most countries have elements of all three forms of regularization, they usually focus on one direction or another. In Mexico all three approaches are used simultaneously. In most other countries the emphasis depends on the relative strengths of the actors, organizations and politics on the one hand, and on the way the regularization problem is conceived (“constructed”) by federal and local authorities on the other.
Juridical Regularization: Land Title Programs
The regularization of land titles has become accepted practice by governments, international agencies and NGOs alike. (see Figure 1.) In fact, the question “Why Regularize?” that was raised at the beginning of the forum seemed to catch everyone by surprise. Yet, posing this question goes to the heart of the matter about who defines the problems regarding land tenure and who establishes policies in favor of regularization. Most of the legal titling programs examined in the case studies were lengthy and expensive, and, by the time they came on-line, did little to significantly affect the level of security or to systematically provide services in the settlements.
Figure 1 Common Arguments in Favor of Land Regularization
As far as the poor are concerned, however, several of the arguments in favor of regularization would appear to be spurious. Established households generally have de facto security and rarely prioritize the need for full legal title, the latter being a need more associated with middle-classes value systems. Moreover, once settlements are well-established, home improvements and consolidation occur at a rate that is closely tied to available resources, not to title security. As for the introduction of services, most providers follow their own internal rules for timing and procedures; rarely is legal title an important criterion.
Furthermore, low-income households do not like falling into debt and are uneasy about entering formal credit systems, even though NGOs and governments are moving towards micro-credit support. In short, where low-income groups want regularization of tenure it appears to be because the state wants them to want it and then constructs demand accordingly.
One may conceive of tenure regularization as both an end in itself and a means to an end. Regularization as an “end” emerged clearly in the Lima case, where access to land and land titling programs substitute for a systematic housing policy. The most recent round of land titling (since 1996) even includes a retitling of previously regularized lots as an arena of political patronage serving the central government at the expense of the city’s political leaders. (1) A similar situation prevailed in Mexico with the multiplex regularization agencies created during the 1970s. In both countries the commitment to tenurial regularization is clearly indicated by active programs, usually providing a large number of titles each year at low cost.
Elsewhere, regularization may also be an “end,” but it is of secondary importance. In Colombia, Brazil, El Salvador and Ecuador, for example, titling is at best only a minor part of the physical regularization package. Even so, the absence of legal tenure and the need for regularization may be used to good political effect by regulating the flow and order of infrastructure provision.
Regularization of titles as a means to an end is promoted widely by international agencies as part of the World Bank’s New Urban Management Program. Mexico is a good example of the process whereby land titling is a prerequisite to urban land management, planning and public administration. Regularization incorporates the population into the system of land registry, tax base, planning controls, construction permissions, consumption charges, and recovery of services and infrastructure. Regularization becomes the means to urban sustainability and management, and this more than any other reason explains its widespread espousal and adoption today.
One notable feature in several case studies was the apparent reluctance to regularize on private lands unless the initiative had the support of the original landowner. As a result, the settlements most likely to be regularized are those occupying public land or land whose ownership is unchallenged. With the exception of Mexico, governments are reluctant to expropriate in the social interest. Several countries have a system of land occupancy rights that permits transfer of ownership after a certain number of years of proven and appropriate use. In Brazil this usucapión system has been extended recently to allow for title transfer on privately owned urban lots of less than 250m2 that have been occupied continuously for five years.
Issues in juridical regularization programs:
Physical Regularization: Urbanization and Infrastructure Provision
The second principal arena of regularization reported by many of the case studies at the forum focused on the physical regularization process in different forms of irregular settlements. In Medellín, for example, approximately 12 percent of the total population is estimated to live in fast-growing barrios, which are often built on steep slopes like their hillside counterparts in Rio or Caracas. There are undoubted problems and dangers in these areas, but most of the participants who visited the PRIMED settlements were more encouraged by their level and rate of consolidation than the local officials appeared to be. (The discussion did not address upgrades and interventions in inner-city tenements-conventillos, vecindades, cortiços.)
It is impossible to do justice to the many innovative programs that were described at the forum, but one major success story is the Favela/Bairro program in Rio de Janeiro. This project is predicated on close collaboration with local residents to open up favela streets to vehicular access in combination with service installation. However, it is important to recognize that its success has only been possible at considerable cost: the total expenditure between 1994 and 1997 has been US$300 million, in large part provided by the IDB. This raises important questions about the replicability of such programs.
Issues in physical regularization programs:
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Regularization as a Means of Social Integration
It became apparent in the deliberations that an increasingly explicit goal of regularization is to achieve social integration by bringing low-income populations into the societal mainstream and into the urban fabric. This is most frequently observed in reference to the “rescue” of low-income populations and other marginal groups and their incorporation into the urban citizenry. This was one of the important goals in Brazil’s favela/bairro program, which, in part at least, aimed to break up the drug and delinquent youth gangs and to rescue the local population from their influence.
A potential problem with this approach is that concepts of “good citizen” and the societal mainstream are social constructions that are often highly value-laden and may derive from within a particular class and dominant power group. Regularization to achieve integration into the wider set of social opportunities such as public education and health care is one thing; regularization for social convergence and conformity is another. However, this theme remains incipient in the literature, and the whole notion of citizenship with its bundles of rights and responsibilities is part of an agenda still largely unconsidered.
Conclusion
This international forum emphasized the need to be aware of the different underlying rationales for juridical and physical regularization in individual countries, and to be aware that they are closely tied to the political and planning process. In order for regularization to work well there has to be genuine political commitment such that all departments and officials who intervene do so with greater integration, cooperation and empowerment. Policymakers should also think imaginatively about alternative, “parallel” ownership systems and opportunities for genuine public participation in decisionmaking at all stages in the regularization process.
Important, too, are financial commitment and sustainability. Unless regularization is tied to medium- and long-term cost recovery through taxes, user charges and deferred assessments, programs will continue to depend on major external funding and subsidies, which will severely limit the extent and scale of their application.
An exciting last session of the forum allowed participants to reflect on future directions for research and policy analysis on land market regularization. Five major areas emerged. First, we recognized the need to identify the various actors and interest groups involved in promoting irregular or illegal land development in the first place, and to make explicit the differences between land invasions, owner subdivisions, company subdivisions and other actions. The point here is that irregularity is produced by various actors and interests groups as a for-profit business, and is not just a result of dysfunctional urbanization.
Second, we discussed moving away from dualist thinking and breaking with the idea of conceptualizing the land market in terms of the formal and informal city, the parallel city, or normal and subnormal barrios, all of which implicitly assume that the poor are locked into a separate land market. In fact, there is a single land market that is segmented, not separated, along a continuum in terms of access and affordability.
Third, we need to confront the issue of financial replicability and the ways in which finance might be leveraged through cross-subsidies, plusvalia, valorization charges, tax-and-spend, progressive consumption charges, and other mechanisms. Fourth, we need to be less gender-blind. It is important to think more imaginatively about regularization priorities with respect to gender and to explore innovative titling schemes that address the need for women’s settlement and housing rights.
Finally, we need to be much more precise in our terminology, and, more importantly, to recognize that there is a “social construction” embedded within language. The terms adopted in any society are revealing about how that society views and diagnoses housing and related social issues. Terminology may lead to punitive or patronizing policy solutions; it may even “criminalize” local populations. Most of the differences and variations in the case studies stem from the way each society constructs its understanding of the housing problem and how it presents that vision to its people-through its terminology, through its laws, procedures and policies, and through the bureaucratic and administrative organization of the state itself.
1. Julio Calderon, “Regularization of Urban Land in Peru,” Land Lines, May 1998.
Peter M. Ward is professor of sociology and of public affairs at the University of Texas at Austin and a faculty associate of the Lincoln Institute. Among his many books is Methodology for Land and Housing Market Analysis, coedited with Gareth Jones and published by the Lincoln Institute in 1994.
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A group of Latin American scholars, practitioners and government officials who monitor urban market information systems and publish statistical reports on market behavior met in Chile in April to share their experiences and explore plans for future cooperation. Representatives came from Mexico City; San Salvador, El Salvador; Sao Paulo and Porto Alegre, Brazil; Montevideo, Uruguay; Santiago, Chile; Quito, Ecuador; and Bogota, Colombia. Specialists from the World Bank, the Inter-American Development Bank and the United Nations Development Program (UNDP) also participated.
Most of the cities’ initiatives originated from small ventures to obtain information for project evaluation, research requirements or market analysis, and later expanded into larger-scale systems to monitor different types of markets and broader geographic regions.
Newly constructed housing and office and commercial buildings are the most frequently studied markets; price, location and product type are the basic variables being computed. Other variables are used in specific cases to obtain more precise information about each product being supplied to the market or each transaction. In all cases, statistics are gathered from the formal market, even though an estimate from Bogota indicates that this market represents only about one third of all transactions.
Newspapers, magazines or specialized publications are the major sources of market data, but building permits or visits to construction sites also provide useful information. In San Salvador, the main source is data from the banking system on credit loans for the acquisition of real estate property.
The geographical area and the time period for which statistics are computed vary from case to case. Yet, all systems face the same dilemma of losing statistical validity when reducing the size of the unit of analysis or shortening the time period. On the other hand, broadening the geographic area means a loss of homogeneity of well-defined neighborhoods, and broadening the time frame limits fine tuning of the phenomena.
General statistics and market trends are disseminated through newspapers and specialized publications, while more detailed statistics are sold through periodical bulletins and reports. Published listings of new construction provide an open and useful mechanism for correcting information, because when a case is not listed the supplier is the first one to make it known.
At present, only Brazil and Mexico are operating their information systems on a profit basis. In other countries, income from the sale of market data covers only operating expenses, but dissemination of the data provides opportunities for professional consultants to use it for related profitable activities. Thus, this information aids the private sector by making markets more transparent and helping entrepreneurs evaluate urban projects and define geographic and economic trends. For the public sector, the market data assists in the public valuation of properties and in planning purposes.
Many challenges remain to improve the coverage of urban market transactions, the quality of the information, the analysis of the data, and the debate this information can stimulate regarding urban land policy. From an academic perspective, the challenge is to improve the understanding of the phenomena being observed. From a professional perspective, it is to use the available information for better project analysis and to adjust valuation maps to establish more accurate records for property tax purposes.
Since many Latin American cities lack any type of urban market monitoring systems, the special challenge facing the participants in this ongoing project is to find ways to share their experiences to improve the efficiency of market operations and urban planning throughout the region.
Pablo Trivelli is regional coordinator of the Urban Management Program, United Nations Development Program, Santiago, Chile. The seminar was cosponsored by the Lincoln Institute with the GTZ-MINVU project, the Urban Studies Institute of the Catholic University of Chile, and Chile’s Ministry of Housing and Urban Development.
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Brownfields are industrial and commercial properties with known or suspected soil contamination problems. The environmental and financial challenges of dealing with these sites represent serious barriers to potential urban revitalization.
As the antonym for greenfields, or undeveloped land in suburban and rural communities, brownfields have made their way to the top of many urban priority lists. The National Conference of Mayors, National League of Cities, U.S. Environmental Protection Agency, U.S. Economic Development Administration, and U.S. Department of Housing and Urban Development are among the groups that have made recent brownfield policy statements.
Development Perspectives
Many central cities have nearly exhausted their supply of “clean” land for development, contributing to their loss of residents, jobs and a stable tax base. Inner-city businesses often relocate to surrounding suburbs because land is not available in the city to support their future expansion. Thus, urban brownfields give an inadvertent boost to the economic development strategies of outlying areas. This increased development pressure, in turn, can pose complex suburban and rural growth management issues.
While most known or suspected brownfields are in central cities, the problem is also evident in older inner-ring suburbs, some rural areas and military base communities. Brownfields, in short, play an important role in shaping regional development patterns by influencing the location of residential and business activities. Central cities must tackle the brownfields problem to provide new land for development and reverse their declining economic competitiveness.
Environmental Perspectives
Varying opinions exist on the extent of the brownfields problem, and more importantly what the public and private sectors should do about assessing environmental hazards on these sites. This situation will change, but not before environmental regulators clarify the relevant policies. Brownfields are not Superfund sites by regulatory definitions. The environmental and health risks of Superfund sites are significantly greater than those of brownfields. Nevertheless, brownfields can pose serious environmental threats where “real” environmental and health risks are documented through risk assessment. In many instances, however, brownfields may be less threatening than earlier thought.
Depending upon future site use, environmental and health threats can vary considerably, which raises the “how clean is clean” issue. Regulators, property owners, developers, lenders, insurers and local government officials are engaged in an open debate over future brownfields clean-up standards. Many experts, myself included, advocate standards based upon the future use of the property, as opposed to a “one standard applies to all uses” approach. Earlier regulatory practices required sites to be fully cleaned for potential residential use, which requires the highest level of clean-up. These practices are being challenged because they are so costly and because they discourage recycling of industrial land.
State Policy Innovations
Nineteen states have created voluntary brownfields clean-up programs as alternatives to regulatory enforcement. Programs such as those in Ohio, Michigan, Minnesota and New Jersey allow property owners, municipalities and other parties greater flexibility in meeting clean-up standards.
State voluntary programs are positive for several reasons. First, because they are voluntary they allow property owners and developers to initiate the process without traditional enforcement pressures. This leads to more response from private markets, and to more creative and cost-effective clean-up and redevelopment. Secondly, these programs encourage problem solving at the local level, where land use, zoning and planning regulations can contribute to solutions.
Thirdly, the state programs address key liability concerns by offering a level of “comfort” to banks, property owners, and others involved in clean-up and redevelopment. Many argue these programs must go even further. A final benefit is that state government is often willing to provide financial incentives, which experience shows are often necessary to get companies and developers to clean and reuse these properties.
State programs are expected to continue to gain momentum over time, but most administrators believe they need extra help from the EPA to make their programs more successful. They are urging federal authorities to strengthen assurances against future liability claims by stronger “comfort letters” to property owners, lenders and developers. Currently the federal government cannot provide a 100 percent delegation of authority to the states for brownfield regulation, without future federal legislative changes. Better intergovernmental coordination and greater information exchange about standards and remediation technology would help the situation. The states would welcome federal financial support for their programs, even though many will rely on private user fees to finance program administration.
Future Knowledge and Investment Needs
Most cities discover that the unknowns outweigh the facts about older industrial and commercial properties. This lack of knowledge limits city leaders’ ability to shape cost-effective strategies to cope with these problems. Knowledge is an essential ingredient in effective strategy development—ask any corporation employing knowledge strategies to best their competition. Communities with brownfields must inventory these sites and investigate the risks and opportunities associated with these properties.
Properly used, the information from these investigations can help separate real from perceived problems related to site conditions and future development potential. Knowledge can help manage the risks and reduce the uncertainty. In short, we need to end the hysteria about brownfields, which may motivate political action but also may reduce public and private confidence that cities can be revitalized and made whole once again.
Many people are searching for “deep pockets” to finance brownfield remediation. This search frightens all levels of government as budget-cutting pressures continue to grow across the public sector. Corporations and private property owners, on the other hand, reject the notion that they should either pay clean-up costs that may be unnecessary or pay for pollution problems created by previous owners or third parties.
Overall national costs to the public and private sectors of cleaning up brownfields are unknown because there is no agreed-upon definition of brownfields, and because clean-up standards continue to change. Both problems greatly affect cost estimates. City officials are unable to assess the cost of property clean-up within their jurisdictions for the same basic reasons. Future use of risk assessment techniques, coupled with the use of more cost-effective remediation technology, will help to lower these costs.
In the absence of deep pockets, communities must identify creative approaches to funding site clean-up and redevelopment. Through citywide planning, policymakers must establish useful priorities to guide their investments based upon future development trends and land use patterns. Serious environmental threats should be eliminated on any site, regardless of its development potential. In most other cases, the development potential should be a primary factor in considering next steps.
The public sector should engage corporations that own contaminated sites, banks, insurance companies, pension funds, and real estate investment funds to determine what is required to attract private capital to fund clean-up and redevelopment. Private property owners, corporations and developers should seek state and local economic development groups as potential investment partners in returning these sites to productive use.
Donald T. Iannone directs the Economic Development Program and the Great Lakes Environmental Finance Center in The Urban Center at Cleveland State University. Much of his work focuses on financing the redevelopment of brownfield sites.
Additional information in printed newsletter.
1. Photo caption: The Publicker site, a former distillery on the Delaware River in Philadelphia, was cleaned up with EPA funds and will be redeveloped as a shipping terminal.
Photo credit information: – Richard McMullin, photographer, Office of the City Representative, Philadelphia
2. Map of U.S.: EPA Brownfields Demonstration Cities
Large Cities:
Cleveland/Cuyahoga County, Ohio
Baltimore, Maryland
Detroit, Michigan
Indianapolis, Indiana
New Orleans, Louisiana
St. Louis, Missouri
Mid-Size Cities:
Birmingham, Alabama
Bridgeport, Connecticut
Knoxville, Tennessee
Louisville, Kentucky
Richmond, Virginia
Rochester, New York
Sacramento, California
Trenton, New Jersey
Smaller Cities/Clusters:
Cape Charles/Northampton County, Virginia
Laredo, Texas
Oregon Mill Sites (7 small towns), Oregon
West Central Municipal Conference, Cook County, Illinois
Caption: Eighteen cities or regions have already received grants of up to $200,000 through the EPA’s Brownfields Economic Redevelopment Initiative. An additional 32 cities will receive funds by the end of 1995. The common objectives of these projects are to assess contamination at abandoned sites; involve community residents in decision making; leverage other public and private funds for clean-up and redevelopment; resolve liability issues; and serve as role models for other communities.
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Between 1970 and 1989, 17 progressive urban reform projects were submitted to the Colombian Congress, but all failed due to opposition from the conservative party supported by the influential private sector including the construction industry and real estate developers. In 1989, after three years of parliamentary debates, Law 9a (for urban reform) was approved, despite opposition from FEDELONJAS, the entity representing the real estate and development groups. After the law was approved, FEDELONJAS brought a lawsuit before the Constitutional Court with reference to the owners’ loss of rights of those lands that were not developed during the time defined by the master plan (Plan de Ordenamiento Territorial or POT). The court ratified Law 9a, and the real estate sector protested throughout the country for what was deemed unfair expropriation without compensation. The law was considered “communist” and dangerous for the private capital linked to construction and real estate.
The city of Cali, with 2.5 million inhabitants and a large housing deficit in the early 1990s, applied Law 9a with its threat of a property taking to a large area of the city whose lands were held by a small number of owners. In anticipation, developers and builders in Cali suggested that these landowners join together in an association to develop a large amount of social housing on their properties.
As a result of this positive experience, the Cámara Nacional de la Construcción (CAMACOL, the national union of the construction industry, including developers, constructors and promoters of urban projects) supported these development processes in other cities, especially Bogotá and Medellín. The way was paved so that the private real estate sector accepted Law 388 in 1997, which was an enhancement of Law 9a, and that support has revolutionized urban land management in Colombia. The new law grants municipalities the authority to manage urban land, promotes the master plan (POT), allows urban value capture and generates instruments for land use regulation.
By 2000, discussions were no longer focused on lawsuits but rather on the advantages of obtaining land to develop projects at a lower price. The Colombian construction and real estate sectors have entered the twenty-first century with a proactive attitude toward the public capture of the land value increments (plusvalías) and other instruments of urban land management. They now understand that this legislation releases land for development, generates land sharing in large projects, and facilitates the production of social housing. Urban land prices have been moderated, and the financial capital is now used more efficiently for home building in Colombian cities. Opposition to the reforms remains, especially in intermediate-sized cities, but it is not as strong as in the 1970s and 1980s.
The change of attitude in the private real estate sector brings its interests closer to other social and collective concerns. It is clear that the proprietor owns the land, but that the right to develop land is owned by the public and may be granted through instruments such as the participation in plusvalías, transfer of development rights, or the sale of building rights. Profits from urban land development are now better distributed among all three stakeholders: the capital investor, the landowner and the municipality.
Oscar Borrera Ochoa is an economist and private urban consultant in Bogotá. He was president of FEDELONJAS from 1981 to 1990.
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This article is adapted from a policy roundtable report on national spatial development strategies prepared under the auspices of the Lincoln Institute, Regional Plan Association and the University of Pennsylvania School of Design. The roundtable was held in September 2004 at the Pocantico Conference Center of the Rockefeller Brothers Fund. The impetus for this project developed in the spring of 2004 in a graduate city planning studio directed by Robert Yaro and Jonathan Barnett, both Practice Professors in City and Regional Planning at Penn, and Visiting Professor Armando Carbonell. With funding support from the Ford Foundation’s Institute of International Education, additional input was provided by a distinguished team of European and American planning experts hosted by Professor Sir Peter Hall at the Institute of Community Studies in London, England.
European efforts to develop policies and investments for the entire continent and for regions that cross national boundaries have been organized under the umbrella of the European Spatial Development Perspective, a set of policy directives and strategies adopted by the European Union in 1999 (Faludi 2002). Over the past generation the EU has initiated a large-scale approach to planning for metropolitan growth, mobility, environmental protection and economic development. Europeans use the umbrella term “spatial planning” to describe this process, involving plans that span regional and national borders and encompass new “network cities” spread out over hundreds of kilometers (see Figure 1). The EU is also mobilizing public and private resources at the continental scale, with bold plans and investments designed to integrate the economies of and reduce the economic disparities between member states and regions, and to increase the competitiveness of the continent in global markets.
By contrast, the United States has no strategy to anticipate and manage comparable concerns, even though the U.S. population is expected to grow another 40 percent by 2050. How can this growth be accommodated in metropolitan regions that are already choking on congestion and approaching build-out under current trends and policies? How can we improve the competitiveness and livability of our own emerging constellation of network cities? How can the U.S. reduce the growing disparities in wealth and population among fast-growing coastal regions, vast interior rural areas and declining industrial cities? How can the U.S. promote regional strategies designed to address these concerns?
Two important precedents have shaped this analysis of America’s spatial development. The national development and conservation strategies prepared by President Thomas Jefferson in 1807 and President Theodore Roosevelt in 1907 stimulated the major infrastructure, conservation and regional economic development strategies that powered America’s economic growth in its first two centuries. Other major strategies and investments promoted in the administrations of Presidents Lincoln, Franklin Roosevelt and Eisenhower also had a profound impact on the nation’s growth. Some examples are the Morrill Act land grant university system, the Homestead Act, and creation of the national rail and interstate highway systems.
Economic, Demographic and Spatial Trends
Rapid population growth
The U.S. Census Bureau forecasts that the nation’s population will grow by 40 percent to 430 million by 2050, whereas most European countries are expected to lose significant numbers of residents, due to declining birth rates and limited immigration. This means we must build half again as much housing and as much commercial and retail space and the infrastructure needed to support these activities in the next half century as we have in the past two centuries.
The study of historical settlement patterns sheds light on current and future patterns. While early settlers clung primarily to the coasts and in compact urban regions, the inventions of rail transportation and later the automobile forever changed settlement patterns and allowed people to set up homes in the interior of the country and in highly decentralized metropolitan areas. Fast-growing Sunbelt states, such as Texas, California and Florida, are expected to see sustained rapid population growth, spurred by the trend of immigrant populations settling in those and surrounding states.
While most central cities will continue to grow at a moderate pace, many metropolitan regions around these urban cores are expected to experience remarkable development. As the city of Philadelphia continues to lose population, for example, its adjacent suburbs and areas further outside the city continue to grow. In general, however, the number of people living in urbanized areas as opposed to rural areas is projected to continue rising, signaling an increase in the amount of urbanized land in the coming decades.
The building out of suburban America
Since 1970 the vast majority of the nation’s economic and population growth has occurred in 30 large metropolitan regions, mostly in their sprawling outer rings. While some cities and inner-ring suburbs are now experiencing infill development and renewed population growth, many others are approaching “build-out,” which increases traffic congestion and commuting times, contributes to loss of farmland, and creates conflicts between new development and green infrastructure, such as public water supplies and wildlife habitat.
In less than three centuries, 46 million acres of America’s virgin landscape have been converted to urban uses. In the next 25 years that number will more than double to 112 million acres. If current growth and land consumption rates continue, another 100 million acres will be urbanized by 2050, at a rate seven times faster than the population will grow.
Uneven and inequitable growth patterns
While most population and economic growth has been in large metropolitan regions, other areas of the country have experienced losses. Large rural regions where resource-based economies or groundwater reserves are in permanent decline are left without the means to support even basic services. A number of large urban centers and second-tier cities also have experienced decades of decline. For example, Philadelphia, Baltimore, Pittsburgh, Cleveland, Detroit, St. Louis and New Orleans have lost a third or more of their populations since 1960. Even in cities where the outer-ring suburbs have grown, many inner cities and inner-ring suburbs have lost residents, tax base and economic activity, and poverty has become highly concentrated. Many of these places have high concentrations of African-Americans, Native Americans, Latinos and poor whites who will be increasingly disadvantaged as economic opportunities in these regions decline.
In contrast with the U.S., the European Union for decades has invested vast sums to promote development and redevelopment of comparable bypassed areas. These investments have produced dramatic results in revitalizing the economies of Ireland, Spain, Portugal and Greece, and formerly depressed cities and regions in Europe’s periphery. Similar strategic investments in America’s disadvantaged cities and regions could produce comparable results.
Limited infrastructure capacity
Metropolitan infrastructure of all kinds, most of it built in the last half of the twentieth century, will reach its capacity limits in the first decades of the twenty-first century. Unless new capacity is created in roads, rails, airports, seaports and other systems, the nation’s economic potential will be artificially limited. Federal transportation investments over the past decade have been largely focused on maintaining the existing infrastructure, not on expanding the capacity of these systems.
Over the last 50 years, Americans have become increasingly mobile. The increase in miles traveled per person has been most pronounced in car and aircraft travel, creating new challenges to keep various types of transportation corridors congestion-free. At the same time, congestion poses a serious threat to manufacturing and freight sectors of the economy. Experts believe that by 2020 there will be nearly a doubling of trucks on the roadways over current numbers. Significant policy measures are needed to channel more resources into high-capacity transportation systems for both individual and commercial activity.
Emergence of megalopolis
In 1961 French geographer Jean Gottman described the Boston–Washington Megalopolis. Between now and 2050, more than half of the nation’s population growth, and perhaps as much as two-thirds of its economic growth, will occur in this and seven other emerging megalopolitan regions whose extended networks of metropolitan centers are linked by interstate highway and rail corridors. Similar networks of cities in Europe and Asia are now seen as the new competitive units in the global economy. Major public and private investments are being made in high-speed rail, broadband communications and other infrastructure to strengthen transportation and economic synergies among their component centers.
The New Megalopolis
The new megalopolis is a model for cooperation among the cities and regions in the U.S. that are growing together and creating diseconomies in congested transportation networks, which in turn affect the economic vitality and quality of life of these regions. This model is based on the idea that if the cities in these colliding regions work together they can create a new urban form that will increase economic opportunity and global competitiveness for each individual city and for the nation as a whole.
These component metropolitan areas will have to cooperate in the formation of a structure that takes advantage of the complementary roles of each area while addressing common concerns in the areas of transportation, economic development, environmental protection, and equity. The new megalopolis model will contribute to improving social and economic cohesion along with a better territorial balance, and will support more sustainable development by emphasizing collaboration on important policy issues, infrastructure investments and instruments for facilitating economic growth and job creation.
To facilitate the development of megalopolitan areas, the U.S. could focus on creating a truly intermodal network linking rail, highway and air transportation. Such connections would relieve congested airports and provide greater options for freight movement. The resulting transportation flexibility would be less vulnerable to terrorist attacks and disaster. Furthermore, regional infrastructure and development focused around rail stations would shape and redirect urban growth in more efficient, less sprawling patterns.
Our current direction is building a country whose competitiveness is threatened by inefficient urban forms and declining rural communities. The new megalopolis concept points us in a different direction, one in which urban areas and their surrounding regions work together on a larger scale to address common concerns and share their complementary strengths. This new model would produce an America that is environmentally sustainable, socially equitable, and competitive in an increasingly global economy.
Six distinctive regions can be identified based on common history, geographic location and topography: the Northeast, Mid-Atlantic, South, Midwest, Southwest and West. Most of the nation’s rapid population growth, and an even larger share of its economic expansion, is expected to occur in eight emerging metropolitan areas spread over thousands of square miles and located in every one of these regions (see Figure 2). These megalopolitan areas are becoming America’s economic engines: centers of technological and cultural innovation where the vast majority of immigrants who are driving population and economic growth will assimilate into the economic and social mainstream.
In Europe and Asia similar network cities are already being seen as the new competitive units in the global economy. The European Union and national governments in Europe, China and Japan are investing hundreds of billions of dollars in new intermodal transportation and communication links and other infrastructure to underpin the capacity, efficiency and livability of these regions. In all of these places, new high-speed rail networks are integrating the economies of formerly isolated regions.
Toward an American Spatial Development Perspective
An American Spatial Development Perspective (ASDP) could encompass long-range strategies to achieve five broad national goals.
The federal government could play a crucial role in this process, through collaborations with existing and emerging “bottom-up” networks of interconnected regional strategies, encompassing each of the emerging megalopoli. Ideally, the federal government would help coordinate and “incentivize” these planning efforts, but rely on local and regional initiatives to drive each region’s own strategies.
The federal government could also lead in coordinating infrastructure planning and investments for national and regional intermodal, high-speed transportation networks, as it did in promoting creation of the national rail and interstate highway systems. These investments would be made through partnerships between federal, state and regional government, and private investors. User fees, tolls and fares would cover a substantial portion of the cost of developing and managing these systems.
Regional strategies could also promote investments in major higher education and research institutions needed to maintain the nation’s competitive advantage in technology and create a lifelong learning system to help skilled workers adapt to economic change. This broad approach could also identify the important natural resource systems that sustain public water supplies, biological resources, sense of place and recreational opportunities. Future growth could be designed to reuse formerly used sites and to reclaim and restore impaired landscapes and natural resource systems.
Plans for these infrastructure systems should be closely coordinated with strategies for smaller-scale urban and regional development, to ensure that future development patterns support, and are supported by, these infrastructure investments. Federal and state governments could invest in demonstration projects to test innovative transportation, land use, environmental and other strategies.
Building and Financing the ASDP
The proposed new infrastructure systems and urban development outlined in this article could cost trillions of dollars, much of which could be financed through user fees and public-private partnerships. It should also be possible to employ modest payroll or other taxes to finance some of these investments, which would generate trillions of dollars of new economic capacity for the whole nation. The expected doubling of the national economy by 2050 would expand the gross domestic product by more than $14 trillion (in constant dollars). Redirecting even a small share of the growth of tax revenues in these strategic investments could secure the nation’s economic future.
For over a hundred years, the U.S. has financed major infrastructure projects through a “top-down” system, with major funding from the federal government complemented by state resources. Based on general public agreement of national priorities, this model financed several generations of growth and paid for one of the world’s great infrastructure systems. However, this approach is now being challenged as the needs of maintaining our aging infrastructure systems outpace federal and state funding, to say nothing of new capacity expansion. Today we witness a debate between “donor” and “donee” states over the fairness of federal transportation funds, even as the total amount of federal dollars falls far short of estimated needs. As a result, we find ourselves increasingly starved for capital for infrastructure systems.
To provide more funding for system maintenance and expansion, metropolitan regions are looking to new and innovative financing systems. Public authorities use their tax-free status to attract private dollars through bond issuances, sales and lease-back arrangements. New user fees, such as congestion pricing or high-occupancy-vehicle lanes on toll roads, link charges to those who benefit the most from new investments, creating new revenue streams. And value capture models, such as tax increment financing, allow increases in land values to finance infrastructure investments.
The federal government is advancing instruments such as TIFIA, the Transportation Infrastructure Innovation Act, to stimulate the development of these projects. However, megalopolitan areas have a critical role to play in this emerging system. They provide a vital link between state and federal government and local jurisdictions, which in many cases have the last word over land use decisions. These regional areas transcend political boundaries and capture the true economic and social geography of their communities. And they have the size, capacity and expertise to undertake complex planning strategies.
Armando Carbonell is senior fellow and co-chair of the Lincoln Institute’s Department of Planning and Development. Robert D. Yaro is president of the Regional Plan Association in New York City.
References
Faludi, Andreas, ed. 2002. European spatial planning. Cambridge, MA: Lincoln Institute of Land Policy.
Lincoln Institute of Land Policy and Regional Plan Association. 2004. Toward an American spatial development perspective. Policy Roundtable Report. September.
University of Pennsylvania School of Design. 2004. Planning for America in a global economy: 2004–2005. City Planning Studio Report. Spring.
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The annual rate of urbanization in China has increased rapidly from 17.9 percent in 1978 to 39.1 percent in 2002, accompanied by rural-to-urban migration on a massive scale. More than 70 million rural migrants were working and living in urban areas at the end of 2000.
This influx of population has created a unique urban form—villages within cities, also referred to as “urbanizing villages” or ChengZhongCun in Chinese. For example, in the city of Shenzhen, with an official population of around 9 million in 2000, approximately 2.15 million inhabitants lived in 241 urbanizing villages with a land area of almost 44 square kilometers. In the city of Guangzhou, with a population of more than 8 million, there were 277 urbanizing villages with approximately one million inhabitants in 2000.
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Faculty Profile of Paulo Sandroni
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American cities have promising long-term prospects as hubs of innovation and growth, with expansion in technology and health sciences beginning to offset the decades-long erosion of manufacturing. Cities also remain places of vitality, offering urban design, density, and trans-port options that attract residents of all ages and backgrounds. In fact, nine of the ten most populous U.S. cities gained population over the last decade, according to the 2010 U.S. Census.
Yet the short-term prospects for cities are fraught with challenges. The recent sharp decline in tax revenues, caused by the 2008 housing market collapse and related financial crisis and economic slowdown, has made it extraordinarily difficult for state and local governments to maintain basic services, let alone plan for investments in infrastructure. Federal funds from the American Recovery and Reinvestment Act (ARRA) helped local governments offset revenue declines in the past three years, but ARRA funds are no longer available for the coming fiscal year (a transition now termed “the cliff”), leaving local officials to confront the full force of revenue shortfalls.
The 2011 Journalists Forum on Land and the Built Environment: The Next City brought scholars, practitioners, and political leaders together with print and broadcast journalists to explore the theme of infrastructure for cities in the context of the ongoing economic recovery. This program is an annual partnership of the Lincoln Institute of Land Policy, the Nieman Foundation for Journalism at Harvard University, and Harvard Graduate School of Design.
Two roles for infrastructure investments and related services permeated discussions at the Forum. First was the near-term role of investment in infrastructure as a fiscal stimulus aimed at turning around the economy and increasing employment. Second was the longer-term role that infrastructure plays in sustaining the transformation of municipal economies and increasing their competitiveness and livability in a globalized world.
Infrastructure and the Local Government Fiscal Crisis
The country’s need for fiscal stimulus to jump-start the economy in 2009 raised the prospect of massive infrastructure investments to help meet that need. However, the kinds of projects that could be launched quickly at the local level tended to be smaller-scale efforts, such as roadway repairs and facilities maintenance. More ambitious initiatives, such as intercity high-speed rail, failed to materialize due to spending and debt concerns and because much more design was needed before implementation could proceed.
Lawrence H. Summers, who recently returned to his professorship at Harvard after being director of the White House National Economic Council, defended the Obama administration’s stimulus plans, which he said were necessary to restore confidence in the financial system and keep the recession “out of the history books.” However, he said, “while local governments were able to use stimulus funds to cover revenue shortfalls, there were very few large shovel-ready projects.”
Moreover, the grim reality of fiscal stress is that cities cannot focus on large-scale, long-range infrastructure projects because they are struggling to cut spending and reform the delivery of local public services, noted Michael Cooper, reporter for The New York Times. Some examples of lost services include the Hawaii program that furloughs public school teachers every Friday through this school year; the San Diego boy who died choking on a gumball because a nearby fire station had been shuttered on a rotating basis; Colorado Springs’ decision to turn off a third of its streetlights each night and to auction off the police helicopter; and the California town that recalled its mayor because he revamped the city’s failing wooden pipes in its water system, but increased water fees to pay for it.
Many jurisdictions also have ongoing fiscal problems with the underfunding of pension funds and benefits. Some are worsening the problems simply by not making the required annual payments, a stopgap applied by Governor Chris Christie in New Jersey, among others. The municipal bond market faces tumult and some cities, like Harrisburg, Pennsylvania, are on the brink of bankruptcy. Fiscal deficits are growing because local governments have now expended the last of their
ARRA funds.
Adrian Fenty, former mayor of Washington, DC, said cities need to be run on a more business-like basis, moving to the politics of performance and away from the politics of patronage. Improvements are needed in both the efficiency of basic service delivery and the management of city finances. Because education is so important to the economic growth of cities, his administration gave priority to education reform—human infrastructure as well as physical infrastructure. During his term as mayor, his administration closed 20 percent of the schools and reduced administrative personnel by 50 percent. He also revamped teacher contracts, offering a merit pay system without tenure that 60 percent of the teachers opted to join.
Infrastructure Challenges: The Case of High-Speed Rail
President Barack Obama’s $53 billion high-speed rail initiative has brought the challenges of the local government fiscal crisis into sharp relief. Governors in Florida, Ohio, and Wisconsin returned the federal funding allocated to those states for intercity rail, claiming that their state and local governments could not possibly afford the resulting maintenance and operating costs, and questioning ridership projections. The high-speed rail project in California, though financed by a voter-approved bond issue, faces similar opposition because of financial burdens and local land use disputes.
Bruce Babbitt, former governor of Arizona and secretary of the U.S. Department of Interior, and a member of the Lincoln Institute board of directors, said the Obama administration’s campaign for high-speed intercity rail was a “political disaster,” and that the underlying vision needed a reassessment. He suggested that the Northeast Corridor should be the model, and that a revised plan should include a well-defined system of reliable financing—similar to the approach used to build the interstate highway system.
Paying for high-speed rail infrastructure will require a dedicated funding stream, perhaps from an increase in the gasoline tax in the states where the new rail lines would be located, and a system of value capture to engage private landowners who benefit from increases in property value as a result of such public works projects. “We don’t have the political courage to define our priorities,” Babbitt said. It will take a “national hammer” to address the nation’s infrastructure deficit without abdicating control to governors and states.
High-speed rail may live or die based on economic considerations. Petra Todorovich, executive director of America 2050, which has issued numerous analyses of high-speed rail’s potential, proposed a framework of 12 U.S. megaregions that represent collections of metropolitan areas where enhanced rail service offers the greatest potential for replacing automobile and short-haul airline travel. High-speed rail can deepen labor markets, increase agglomeration economies, and boost productivity by linking urban centers. Japan, France, and China are among the countries that have demonstrated how rail lines between major cities can foster economic synergies through the strategic location of high-speed rail stations and their connections to commuter rail and transit.
This economic payoff argument was seconded by Edward Rendell, former governor of Pennsylvania and mayor of Philadelphia, who is part of Building America’s Future, a campaign for investments in crumbling infrastructure nationwide. Rendell argued that the United States has been resting on its past investments, and that shoring up the nation’s decaying physical foundations is now an urgent priority. Without world-class infrastructure, the country will not be competitive in attracting private investment, sustaining rapid technological innovation and productivity growth, or maintaining the growth of good jobs domestically.
Infrastructure and the Future of Cities
As the recovery continues and economic growth returns, investments in new communication technology, green energy, smart urban systems, transport such as high-speed rail and mass transit, and other infrastructure will be needed to help cities fulfill their roles as the centers of innovation, culture, and productivity.
The vision of infrastructure combined with long-range planning is also a central theme in how cities can adapt to the inevitable impacts of climate change, including a possible one-meter sea level rise and associated storm surges, flooding, and increasing numbers of extreme weather events. Infrastructure in most coastal cities is so old that even a moderate storm event can do extensive damage, said Ed Blakely, public policy professor at the University of Sydney and former hurricane recovery czar in New Orleans.
Cities have been able to base their current plans on the relatively calm meteorological record of the last 200 years, but that calm is likely to erode with climate change, making much of the existing infrastructure inadequate or obsolete. Attention should not be focused on rebuilding after disasters like Hurricane Katrina, Blakely said, but on relocating, repositioning, and “future-proofing” for more resilient cities.
Infrastructure as an amenity that improves city livability is seen in New York’s High Line project, the conversion of an elevated freight line through the Meatpacking District and Greenwich Village. One of the architects on that project, Liz Diller, principal in Diller, Scofidio + Renfro, suggested that such retrofits can transform urban areas, provide a focal point for social and cultural events, and promote economic activity—though she cautioned that “architecture can’t really fix big problems.”
In spite of the current fiscal crisis, cities are expected to experience other changes that may aid their economic recovery. Among these are the fallout from the current housing crisis that is likely to spur demand for rental units and the demographic shift as the baby boom generation enters retirement age and begins to downsize housing choices.
Professor Arthur C. (Chris) Nelson, professor at the University of Utah, noted that both changes may generate more demand for urban lifestyles. For example, the current reduction in demand for owner-occupied, single-family houses at the metropolitan periphery is evident in the Intermountain West, Southwest, and South, where entire subdivisions are virtually empty. The percent of households owning homes has declined from a high of 69.2 percent in 2004 to 66.4 percent in 2011, fostering more demand for rental units that typically are located in more urbanized areas.
Demographic shifts are also related to changes in household composition. By 2030 single-person households will constitute one-third of the population, and only about one out of four households will include children, a decline from 45 percent with children in 1970 and 33 percent in 2000. These changes are likely to foster a significant adjustment in housing markets and values as aging baby boomers offer their suburban houses for sale and move to more urbanized locations with access to transit and walkable neighborhoods. At the same time, upcoming changes in mortgage markets and the reform of Fannie Mae and Freddie Mac may make mortgage financing (and homeownership) more costly and cause younger families to choose renting over owning.
Cities as Engines of Growth
Investing in infrastructure to support metropolitan regions might have an additional rationale grounded in the surprising resilience of cities themselves. The ongoing urban resurgence is visible in the income growth of highly skilled professionals, the relatively modest housing price declines and even recent increases in several prospering cities, and a concentration of innovation in urban areas, said Harvard economics professor Edward Glaeser. “We could move anywhere that suits our biophilia,” he said. “Yet we keep flocking to cities.”
Urban population growth is highly correlated with average urban incomes, education levels, and the share of employment in small firms as cities continue to draw entrepreneurs and foster productivity. If incomes everywhere were like those in New York City, the national GDP would rise 43 percent, Glaeser said. Cities will also continue to be prized for their environmental value as places of density and transit, reflecting relatively lower per capita energy use and carbon emissions than suburban and rural areas. Glaeser argued against restrictive zoning and regulations that discourage greater density and leave older, low-rise urban neighborhoods “frozen in amber.” He also stressed that public education remains the most important investment that cities can and should make to enhance their continued economic growth and quality of life.
As both the national economy and local government revenues recover, a key priority will be to balance expenditures between current services and longer-term investments. Economic growth will make it easier to finance investments in infrastructure, but investments in infrastructure are needed to increase economic growth. The challenge is to find a politically feasible way of breaking into this virtuous circle.
About the Authors
Gregory K. Ingram is president and CEO of the Lincoln Institute of Land Policy.
Anthony Flint is fellow and director of public affairs at the Lincoln Institute of Land Policy.
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From its initial economic reform in 1978 through its liberalization of foreign investment and private sector development from the mid-1980s to the present, China’s major economic reforms have given priority to achieving a high rate of economic growth. The policies worked so well that China’s constant dollar GDP per capita grew nearly 10 percent a year from 1980 to 2010. This growth performance is unparalleled for a large country, but it has been accompanied by unaccounted-for costs, including the structural transformation of the economy, social adjustment and migration, and environmental degradation. A new Lincoln Institute book, China’s Environmental Policy and Urban Development, edited by Joyce Yanyun Man, addresses the last of these topics. It reports estimates from governmental agencies of undocumented environmental costs associated with economic production ranging from 9.7 percent of GDP in 1999 to 3 percent in 2004.
Economic growth in low-income countries is typically accompanied by environmental costs. This tradeoff is embodied in the “environmental Kuznets curve,” which postulates that environmental quality deteriorates with economic growth at low income levels and then improves with growth at higher income levels. Estimates of the environmental Kuznets curve for Chinese cities over the years 1997 to 2007 as reported in this book show that measures of industrial pollution in China declined as incomes increased over this period, indicating that cities with higher incomes experienced improvements in these measures of environmental quality as their incomes grew.
Several chapter authors argue that China’s environmental policies and performance are in transition. Environmental indicators are improving in response to new policies and regulations while economic growth continues. At the same time, there have been setbacks. For example, extreme events, such as this winter’s combination of extremely cold weather and atmospheric inversions in Beijing, produced very high levels of particulate concentrations in that city.
The logic behind the environmental Kuznets curve involves elements of both demand and supply. On the demand side, higher income populations have a growing appreciation for environmental amenities, and they advocate for environmental improvements. On the supply side, investment in new capacity uses modern equipment with more environmentally friendly processes and more affordable control technologies. China’s recent environmental improvements also stem from its strengthened environmental regulatory institutions. In 1982 the role of the Environmental Protection Agency was mainly advisory. It was transformed into a national agency in 1988, became the more independent State Environmental Protection Agency in 1998, and then was elevated as the Ministry of Environmental Protection in 2008.
The growing influence of central environmental agencies has been accompanied by a change in the style of regulation. The earlier emphasis on command-and-control regulations (such as emission standards) was partially replaced by instruments based on economic incentives (such as taxes on inputs and a newly announced tax on carbon emissions). Research indicates that to date the commandand-control regulations generally have been more effective.
While central agencies set national standards, the responsibility for monitoring and enforcement was largely decentralized to municipal or metropolitan environmental bureaus. The performance of local managers is reviewed annually based on criteria that emphasize economic growth. Additional improvements in environmental outcomes may occur only when these criteria give greater weight to environmental improvements. For example, a rapid increase in the control of sulfur dioxide emissions from power plants followed the inclusion of reduced sulfur emissions as an annual performance criterion.
While China has much to do to reduce urban air pollution, clean up rivers and lakes, and improve energy efficiency, these objectives are becoming more important to its citizens. The increased availability of data on environmental indicators is stimulating the national dialogue on environmental quality. Professor Man’s new volume contributes to this dialogue by reporting on progress, identifying immediate challenges, and assessing new policies and regulatory approaches to environmental improvement.
