Growth Management: The #1 Planning Disaster

Growth management is arguably the biggest planning disaster of the last decade. Though it didn’t kill as many people as the ineptly planned war on terror, it cost far more money and led to enormous financial and social pain all over the world.

We said that growth management made land and housing more expensive (link goes to excerpt from The Vanishing Automobile). Planners denied it, even though increased land and home prices greatly contributed to their stated goals of getting a greater share of people to live in multi-family housing or on smaller lots.

When housing became unaffordable, planners blamed “greedy developers” and imposed affordable housing mandates on new developments, which simply made the overall housing market less affordable.

We warned that growth management was causing housing bubbles that put the “whole world economy at risk” (first link goes to excerpt from The Best-Laid Plans; second link goes to The Economist — registration required). Planners ignored the warning.

When the housing bubble burst, people blamed the Federal Reserve for keeping interest rates too low. But Houston (which does not have growth management) enjoyed low interest rates as much as San Francisco (which does), yet San Francisco had a housing bubble and Houston did not. As we repeatedly showed, there is an almost perfect correlation between states and metropolitan areas that used growth-management planning and housing bubbles.

When the collapse in housing prices led to an economic crisis, people blamed the Community Reinvestment Act for leading lenders into making zero-down and other high-risk loans. But the CRA was passed in 1977, while political pressure to reduce loan requirements (such as minimum down payments) began only after growth management made housing unaffordable in heavily populated states like California, Florida, and Massachusetts.

Lenders who made loans now regarded as risky counted on the fact that housing prices tend to be fairly stable even in recessions. What they didn’t realize — because planners told them it wasn’t true — was that growth management makes prices far more volatile — prices that might fall by 10 percent in a recession without growth management can fall up to 50 percent in an area with growth management.

Now planners are promoting the idea that people are better off renting. Yet homeownership has proven benefits for children and other family members, especially low- and moderate-income families that can’t afford the services needed to raise children in high-density environments.

Over the past decade, rail transit planning disasters cost taxpayers about $100 billion. The war on terror planning disaster cost American taxpayers about $1 trillion and also cost America much of its international prestige.

The growth-management planning disaster cost far more. It unnecessarily added around $5 trillion to the cost of housing. Responding to the financial crisis also added something like $3 trillion to the federal deficit to date with more to come and also cost capitalism much of its international prestige. While it is hard to weigh these costs against the unknown number of lives that were unnecessarily lost because of inept war-on-terror planning, it seems like that the negative effects of growth-management planning will be around for a lot longer than those of these other planning debacles.

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7 thoughts on “Growth Management: The #1 Planning Disaster

  1. Dan

    Aside from showing that your argumentation is fundamentally flawed, yet you continue on with it, one also notes that Randal’s evidence that “planners” are recommending renting is a link to an article by a non-planner who never once mentions planners…Is it pathological or ideological, this stunning display of ineptitude?

    Either way, best wishes for a happy and healthy new year.

    DS

  2. the highwayman

    “Each town should have a park, or rather a primitive forest, of five hundred or a thousand acres, where a stick should never be cut for fuel, a common possession forever, for instruction and recreation.”

    Henry David Thoreau

  3. Scott

    Dan, You continue to make claims without any substance.
    Where is the flaw in metropolitan housing policies restricting housing supply, thereby raising prices?

    Highman, What is your point in having a park of about 1 sq.mi.?
    I don’t know why I bother. You never have a point.
    How about trying to finish your thought? And please have relevance.
    That goes for Dan too.

  4. transitboy

    Of course, the number one cause of “growth management” is the insistence of many cities that the entire residential stock stay single family regardless of whether the land is valuable enough for increased densification. In places like Palo Alto the land is often worth more than the structures built on it, which is ridiculous. In any case, the cost of building new infrastructure to greenfield developments is almost never paid for completely through exaction fees paid to local government by developers.

  5. Dan

    Scott, the flaw in this argument has been pointed out many, many times here by me and others, and elsewhere. There is no need to pretend that I made a claim without substance, unless that is all you have.

    DS

  6. Scott

    Dan, many people have noticed that you have no substance–I’m glad that you notice.

    Please try try to work on that.

    Often, a person will notice a smear on another’s face when one is full of crap.

    Your vocabulary & tautologies & meaningless dribble can ______…
    “This type of building will lead to rainbows & peace.”
    Right, sounds awesome.

    And you disagree with “this” because “this” means “that” (without any cause & effect relationship demonstrated).

  7. Dan

    Immature, grade-school drivel notwithstanding, the drooling argument that “th’ plannurz done caused th’ bubbul cuz I don’ lahk th’ plannin'” is, simply, silly. as I’ve pointed out here many times, and poor addled Scott tries to flutter his hands to distract away from.

    Oh, and someone will surely raise the claim that this shows that you mustn’t have “smart growth” policies because they cause housing bubbles. Can I say that this is deeply stupid? On one side, we’re supposed to believe that markets are efficient and wonderful; on the other, we’re supposed to believe that anything which constrains buildable land — which, you know, sometimes happens for entirely natural reasons — will send markets into wild irrational swings. Those poor, fragile, omnipotent markets, able to handle anything except mild government intervention …[emphasis added]

    DS

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