Changing Planning, Regulatory and Fiscal Practices to Support More Efficient Land Use
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Victoria Transport Policy Institute
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Updated
August 28, 2007
This chapter describes various planning, regulatory and fiscal reforms that help create more efficient land use. These reforms can help correct existing practices that encourage automobile-dependent land use development patterns. For additional information see the more detailed report Smart Growth Reforms.
Comprehensive Community Planning
Intergovernmental Coordination
Location Efficient Development
Locate and Design Public Facilities For Smart Growth
Growth Controls and Openspace Preservation
More Neutral Transport Funding
Educate Development Professionals
Land Use Impact Evaluation Tools
References And Resources For More
Information
Smart Growth Reforms includes a variety of changes to current land use policies and planning practices to support Smart Growth development. This chapter describes various policy and planning reforms that support Smart Growth.
These reforms are justified to correct current practices that unintentionally encourage sprawl and Automobile Dependency, as summarized in Table 1. Although individually these market distortions may appear modest and justified from a narrow perspective, their impacts are cumulative, exacerbating many problems including traffic congestion, accidents, infrastructure costs, consumer costs and pollution emissions.
Table 1 Market Distortions That Favor Sprawl (Market
Principles)
|
Market Distortion |
Description |
Smart Growth Reforms |
|
Underpricing Location-Related Costs |
Although public service costs tend to be higher for sprawl development, development charges, utility fees and local taxes do not generally reflect these location-related costs. |
Implement utility pricing, public service fees and taxes which reflect differences in the costs of supplying public services due to differences in location accessibility. |
|
Excessive Parking and Roadway Requirements |
Most zoning codes and development standards require generous road and parking capacity. This encourages lower-density, urban fringe development where land is cheaper, and underprices vehicle travel. |
Reform zoning codes, particularly parking requirements and roadway design standards. |
|
Roadway Right-of-Way |
By convention, land use for public roads and parking facilities is exempt from rent and taxes. Economic neutrality implies that land used for roads should be priced and taxed at the same rate for competing uses. |
Collect additional roadway user fees and parking charges to represent rent and property taxes on roadway rights-of-way. |
|
Brownfield Development Barriers |
Many potential infill sites are considered “brownfields,” and face barriers to private development far greater than the true risk of harm, inhibiting infill development. |
Encourage urban redevelopment and brownfield rehabilitation. Encourage development that reflects Smart Growth principles. |
|
Undervaluing Nonmotorized Modes and Transit |
Transportation planning practices tend to undervalue nonmotorized transport modes and transit services, and so underinvest in them. |
Improve the evaluation of alternative modes to better recognize their full value to society. |
|
Residential Lending Practices |
Mortgage lenders usually treat automobile ownership as a financial asset rather than a liability. As a result, lower-income households are encouraged to purchase homes in automobile-dependent suburban areas rather than in multi-modal urban locations. |
Reform residential lending practices to reflect the additional transportation costs of sprawled housing locations, and implement location-efficient development and mortgages. |
|
Underpricing Automobile Travel |
Automobile travel is underpriced through underpricing of road use, free parking, fixed insurance and registration fees, and various external costs. |
Correct transportation market distortions that underprice automobile travel, including more direct charges for the use of roads and parking facilities, distance-based insurance and registration fees, and special charges for external costs imposed by automobile use. |
This table describes some market distortions that encourage sprawl and automobile dependency, and reforms that can help correct these distortions.
Smart Growth policies tend to correct these distortions, and can help achieve various planning objectives including reduced external costs (such as automobile traffic congestion, accident risk and pollution emissions), benefits to disadvantaged people (for example, by improving accessibility for non-drivers), public service cost saving (for example, reducing unit costs for providing emergency services, mail delivery and schools), consumer cost savings, openspace preservation, and the creation of more livable communities (Litman, 2004).
This indicates that, at a minimum, Smart Growth reforms are justified to the degree that they correct and offset current sprawl-encouraging market distortions or achieve other planning objectives. Because existing distortions are well established, with decades of cumulative effects, it may be inadequate to simply eliminate them and let the market work toward efficiency at its own pace. More aggressive policies that favor higher-density, infill development and alternative modes may be justified to more quickly achieve planning objectives. Because these reforms provide multiple benefits, they tend to be undervalued by conventional planning, which tend to consider just a few impacts and objectives at a time.
Various categories and specific types of Smart Growth reforms are described below.
Establish a Comprehensive Plan that includes a community vision, inventory and projections (what currently exists and what growth is expected) covering residential and employment populations, land uses, economic development, and facilities and public services. It can include strategic planning for public polices and activities related to economic development, transportation, natural resources, education, social services, affordable housing, public safety, emergency preparedness and health. Comprehensive plans can determine the appropriate location and timing of public and private development, and coordinate policies, programs and services. Such plans can be established at the state/provincial, regional or municipal level. To be effective, comprehensive plans must be updated regularly.
For example, a comprehensive plan should identify the future location of Commercial Centers, higher density neighborhoods, lower density neighborhoods, industrial centers, and areas for openspace preservation. This information is then used to identify the development practices that should be applied in each area, and what, where and when public services will be provided. Such plans should include specific objectives and targets (performance measures) which individual planning decisions should support. For example, a community might establish targets for preserving openspace or for the portion of regional employment that will be located in transit-oriented developments. These targets then guide the location and type of development, the implementation of supportive policies and programs, and assessments of whether planning efforts are effective and successful.
Below are specific strategies for implementing Comprehensive Community Planning:
Below are specific strategies for implementing Comprehensive Community Planning:
·
Comprehensive Plan Requirements. Higher
levels of government can require regional and local governments to produce a
comprehensive plan in order to qualify for infrastructure grants and other
funds, in order to insure that such investments are well planned.
· Planning Funds. Higher levels of government can provide funding to help regional and local governments implement comprehensive plans.
·
Capital Improvement Programs. Capital
improvement programs (CIPs) establish a schedule and funding basis for
extending and improving public infrastructure and services (e.g., streets, water
and sewer lines, schools, libraries, parks, and other government services)
based on comprehensive development plans. This tends to reduce public costs
(particularly extra costs resulting from dispersed development), minimize
unreasonable expectations by urban fringe residents, and encourage more
efficient development.
· Planning Policy Assessment. A planning policy assessment is a detailed analysis of agency policies, rules, and regulations to determine whether they are in conflict with strategic plans. The location of public investments, tax incentives, land development regulations, and the criteria for receiving governments grants all contribute to shaping development patterns. A planning policy assessment can help identify and correct policies that are inconsistent with overall development goals.
· Adequate Public Facility (APF) Standards. Adequate Public Facility (APF) standards limit development to areas adequately accommodated by critical public facilities and services, such as water, sewer, drainage, and traffic capacity, or require developers to pay the costs of upgrading facilities that have inadequate capacity. APF standards ensure that urban growth is cost effective and does not overburden municipal facilities and reduce current service. APF ordinances encourage more cost effective development, and direct development toward facility-rich areas, which often consists of urban infill (JCSC, 2001).
· Specific-Area Development Plans. It is useful to develop plans for urban neighborhoods, downtowns, and other business centers, historic areas, and areas of environmental significance that are consistent with strategic plans.
· Establish Performance Indicators. Establish specific targets and identify indicators for evaluating progress toward those targets. For example, a comprehensive plan might include targets for the portion of jobs that will be accessible by transit and for openspace preservation.
Smart Growth requires effective coordination among various levels of government, including vertical coordination (between different levels of government, such as state/provincial, regional, municipal and special districts), and horizontal coordination (between neighbors of the same level of government, such as adjacent municipalities). This can be achieved through comprehensive plans, which require suitable institutional structures, incentives and education. This coordination can be voluntary, encouraged or mandated.
Various strategies and tools for improving intergovernmental coordination are described below.
·
Regional Planning Councils (also called Metropolitan Planning Councils
or MPOs) are regional agencies that coordinate planning activities and
provide related services (such as data collection and transportation modeling).
Municipal governments may be required to adopt local plans that are consistent
with the regional plan. Regional councils may use various mechanisms to resolve
disputes between jurisdictions.
·
Comprehensive Plan Consistency Requirements ensure that local zoning
and land use decisions are consistent with higher-level comprehensive plans.
·
Vertical Consistency Requirements ensure coordination between local, regional
and state/provincial development plans. States or provinces generally act as
coordinator and mediator of sub-state conflicts, although local governments are
generally given considerable leeway to adopt their own development goals.
·
Horizontal Consistency Requirements ensure coordination between the plans of
adjacent local jurisdictions. It is normally achieved either by giving a state
or regional organization the authority to require local governments to amend
their plans to achieve consistency or by providing a process whereby local
jurisdictions consult each other about land use issues.
·
Interjurisdictional Agreements coordinate planning between
jurisdictions on development, standards, and infrastructure extensions, and
other activities. Such agreements may be informal, contractual or mandated by
higher levels of government.
·
Regional Service Agreements give a single regional agency responsibility for major
public services (e.g., water supply, sewage treatment, roads and public
transit) which tends to reduce costs, improve interjurisdictional coordination
and support Smart Growth.
·
Expert Panels involve knowledgeable professionals from various disciplines (real
estate experts, developers, environmentalists, bankers, and planners) who
evaluate the land use impacts of specific planning decisions, such as new roads
or zoning requirements
·
Cross-Acceptance Processes develops compatibility between local and state plans.
The process results in a written statement that specifies how plans will be
coordinated.
·
Developments of Regional Impact (DRI) policy enables regional review of larger development
projects that have impacts beyond their local jurisdiction. Review is designed
to improve communication among governments on large-scale developments and to
provide a means of identifying and assessing potential development impacts
before conflicts arise.
·
Regional Revenue Sharing means that local
governments share the tax revenue from major new development, in order to
reduce interjurisdictional competition for development which may contradict
strategic land use plans.
Location Efficient Development means that development is located and designed to maximize Accessibility. Planning practices can encourage location-efficient development by designating areas for development where public infrastructure will be provided, and limiting development outside these areas or requiring developers to pay the incremental costs for infrastructure in non-designated areas.
Current zoning codes often prohibit or discourage location-efficient development (particularly more compact, mixed-use development), and current residential lending practices fail to recognize the transportation cost savings to households that choose more accessible locations. Smart Growth policies encourage more multi-modal and accessible location, including rewards, reduced parking requirements and lower development fees for projects that generate fewer vehicle trips (Seggerman, Hendricks and Fleury, 2005).
Current infrastructure investment practices often favor
suburban expansion over infill development. For example, Schneider and McClelland (2005) found that
between 1998 and 2001, per capita state infrastructure expenditures in
Concurrency requirements imposed in some jurisdictions limit development based on the projected capacity of available infrastructure, including roadway capacity. For example, developers might be required to pay for roadway expansion if a project is projected to increase traffic so that local road Level-of-Service degrades from C to D. This tends to discourage infill development and encourage dispersed, automobile-dependent sprawl. Revised concurrency requirements take into account the reduced per capita traffic generation, shorter trips and improved travel options in urban areas, and so allow more infill development (Wallace, 2005).
Jobs-housing balance refers to the ratio of jobs to residents in a community, particularly housing that is affordable to the people who work in the community. Increasing jobs-housing balance tends to reduce commuting distances, and by increasing local services used by residents (shops, restaurants, schools, etc.) it can reduce travel for other activities. Residents of areas with jobs-housing balance have lower average commute mileage than residents of single-use communities. Suitable planning strategies include more mixed-use commercial development incentives (so more jobs are located close to residential areas) and more affordable housing (so more workers can locate near their employment centers).
· Designate where public services will be provided based on Smart Growth principles. For example, indicate where utility lines, paved roads, professional fire services, and schools will be provided during the next twenty years. Require developers to pay for any additional infrastructure outside these designated areas.
· Remove unjustified regulations that limit density and mixing. Offer incentives such as higher densities, additional building heights and other bonuses for location efficient development.
· Encourage development of affordable housing near commercial areas.
· Use public-private partnerships to create location-efficient development.
· Reward neighborhoods that accept infill with amenities such as street and sidewalk improvements, traffic calming, parks, lower tax rates, and school improvements.
· Expedite permit approvals for developments that support smart growth objectives. This can take the form of fewer regulatory and review requirements and faster scheduling for projects that meet certain criteria.
·
Reform development financing practices to allow innovations such as
mixed-use and higher density buildings with reduced parking supply.
·
Encourage lenders to apply location-efficient mortgage principles,
so transportation cost savings are recognized when calculating a household’s
borrowing ability.
· Reduce parking requirements and implement parking management strategies to encourage location efficient development.
·
Establish flexible, multi-modal concurrency requirements to
encourage infill development and discourage sprawl. Reduce restrictions on
increased traffic generation in more compact, mixed-use, multi-modal areas were
there are good alternatives to automobile travel.
· Encourage development of district heating and cooling plants, which provide space heating and cooling to numerous facilities in an area (www.districtenergy.org).
· Limit the size of retail businesses so they are more broadly distributed throughout the community and sized to fit into residential neighborhoods. This reduces travel distances and improves walking and cycling access for common errands.
· Regulate impacts (noise, pollution, parking demand) rather than land use types (commercial or industrial buildings), which gives businesses greater flexibility and an incentive to reduce negative impacts at their source.
The cost of providing public services such as roads, utilities, schools, emergency services tends to be lower for clustered, urban development than for more dispersed, sprawl (Land Use Evaluation). Most property taxes and fees do not reflect these location-related cost differentials, and so overcharges clustered, infill development and undercharges dispersed, exurban development. Location-based taxes and fees tends to be more equitable (it reflects the “user pays” principle) and gives consumers an incentive to choose more cost effective land use patterns.
·
Structure development impact fees and utility connection charges to
reflect actual costs (Blewett and Nelson, 1988; Slack 2002; Coriolis
Consulting, 2003).
This means that development fees reflect the higher costs of providing services
to more dispersed locations. For example, development fees might be $10,000 per
unit for infill residential development where there is infrastructure capacity,
$20,000 per unit in lower density suburbs, and $40,000 per unit for dispersed
locations that require infrastructure expansion.
·
Provide development fee discounts or exemptions for urban infill
development, high performance buildings (buildings that have water-efficient
plumbing, on-site stormwater management, energy efficient features, etc.).
·
Charge rates for utilities such as water, sewage and power that reflect
the higher costs of serving more dispersed locations (Slack, 2002).