The other day we mentioned seeing a blurb in the fish wrapper about a guy in Polk County who wants to use cap-and-trade to contain sprawl. Cap-and-trade is a form of free-market environmentalism that has been successfully used to reduce air pollution. This cat has an idea how to make it work for land-use planning and we’re enthused.
His name is John Ryan. He’s a Polk County planning commissioner and a respected conservationist. Here’s the gist of his idea.
Using Polk County’s comprehensive plan and data mined from cities, Ryan determined that the county has an available total of about 800,000 so-called development units (DUs), each of which is capable of accommodating a single-family dwelling. That’s enough to house about 1.4-million people, he said. The county’s existing population is about 600,000. So Ryan’s plan calls for the county to impose a cap that essentially limits Polk’s population to 1.4-million people residing in 800,000 DUs.
As we all know, finite supply is the first ingredient of value. So, we’ve got the makings of a DU market here. Cap and trade. You follow?
With the cap in place the county would establish urban-growth boundaries beyond which no residential development would be permitted. All DUs ultimately would be transferred into and contained by the boundaries. The main idea, Ryan said, is to create more densely populated mixed-use urban zones in which essential services can be more affordably provided and through which public transportation systems can be efficiently designed.
Because conventional growth in Florida is uncontrolled, he said, costs are uncontrolled. “You have to extend infrastructure further and further into rural areas where it gets more and more expensive to support.” Bottom line? Higher and higher taxes are needed to pay for those services. That sucks. And that’s before you even get to the environmental impacts and crappy quality of life. By containing growth you contain the cost of services, limit taxes, preserve green space and improve transportation.
That’s an even bigger deal than it sounds, if you subscribe to the in-vogue theories of Richard Florida as listed in his book “The Rise of the Creative Class.” He says we’re all in a big competition to attract creative professionals who will build the next Microsofts, Googles, and so forth.
According to Florida, these people aren’t into ’burban living. They like happening cities where work and home are close together and they can go out for dinner without getting in the car. If so, Floridian counties better start changing or they’re going to lose this game.
But what about land owners? Ryan’s plan sounds like a Big-Daddy-Knows-Best-Government screw job, right? Not at all. Not even close. Quite the opposite. Frankly, land owners make out like bandits in this deal. Here’s how:
Let’s say you own a big chunk of rural land outside an urban-growth boundary. Under the plan your land is automatically linked to a proportionate number of DUs, which can be sold to any buyer who wants to develop housing inside an urban-growth area, or just sit on them as an investment.
The value of your land decreases as a result of the sale, of course, but so do your property taxes. Guess what Mr. and Ms. Farmer. Your costs just dropped a bunch. But wait! It gets better. Because you still own your land you can still do anything you want on it within existing zoning regulations. If you’re on land zoned light-industrial and someone wants to buy or lease a chunk of your land to do that - CHA-CHING. Pay day redux!
Ok, you say, maybe it’s sort of a cool idea with no hope of success for one very simple and obvious reason. Evil developers will surely slither into it’s room late one night and strangle it as it lays sleeping peacefully in its crib. Well, you might be as wrong as you are cynical, though we’re not willing to place any bets on that just yet.
We did call Scott Coulombe, the executive director of the Polk County Builders Association (although he doesn’t doesn’t slither or strangle, as far as we know), and offered him an opportunity to thoroughly trash Ryan’s hare-brained scheme. He didn’t do that. In fact, he was distinctly unnegative about it with strong reservations and a healthy dose of skepticism but, still, unnegative.
With the cost of road building at $1.6-million per lane mile and rising, Coulombe said, and the cost of extending sewer and water lines rising right along with it, “we all understand that we can’t keep building out.” He acknowledged the importance of preserving open space and conserving natural resources, and said builders are all for infill development and greater residential densities. Gung ho for the status quo he ain’t. Not hardly.
But he certainly isn’t sold on the concept of cap-and-trade for development rights. And, he said, Ryan’s plan requires voter approval to alter or expand urban-growth boundaries, which he views as tantamount to carving them in stone forever and ever. That’s a really, really bad idea in his book. So, he’s a long way from jumping on the bandwagon but he didn’t set the wagon on fire either, which is notable in our book.
We’re looking forward to watching this play out. The beauty of free-market environmentalism is how it harnesses the profit motive to make good things happen. Ryan has a sales job ahead of him but, if he can convince Polk land owners and business interests that his plan is laced with profits, it’s bound to pass. And if Polk County approves, Hillsborough and Pasco just might follow.