The business economist at work: an economist's work in a city planning department

Business Economics, April, 1993 by Philip Mayer

One drawback of land-use forecasts is that they take a long time to publish. Forecasts must be consistent with the policies of a regional planning board. For example, a policy of a board might be to encourage development around mass transit stations. The process of setting official policies can be a lengthy process. The consequence is planners do not prepare a forecast on a quarterly or even an annual basis. Fortunately, many of the needs for the forecasts such as building roads are very long-range. If a highway reaches its optimum planned capacity in 2015 rather than say 2010, it may not really matter.

Another important part of the Comprehensive Plan process is the future land-use map. Because zoning and development decisions are based on the map, the Plan can become very controversial politically. In addition to the technical work on the Plan, I attended several public meetings attempting to "sell" the Plan to the general community. Some of these meetings stretched late into the night and generated intense emotions.

Objections to land use and zoning decisions often take one of two forms. One is that planners are not allowing the property owner to put the property to the "highest and best use." Highest and best use is basically a real estate term that means maximum profit. Certainly maximum profit is a concept that economists can understand, but property owners may fail to understand the negative externalities of putting, say, a twenty-four-hour gas station with its lighting and noise abutting a residential area. We try to explain how the entire community benefits from good land-use decisions, and further we explain that no one is trying to deny the property owner a reasonable return on land. Sometimes these explanations fall on deaf ears.

While some owners of property want more intense uses of land than would benefit the community, many want less intense uses for their own self-interest. Some people think that the last good development was the one they moved into, and now they want local governments to lock the gates and keep others out. Many residents want their local governments to limit further growth severely by requiring, say, very large lot sizes, making it unaffordable for many to build houses in the community. This desire to limit population through such severe land-use restrictions is often referred to as "snob zoning." Such zoning has generally not been upheld by the courts. Planning departments cannot limit growth, but strive to control growth. Among the ways the Cobb County Planning and Zoning Department tries to control growth in the county is to attempt to limit commercial, especially retail, activity to major intersections known as nodes. Another idea currently being considered by the Department is to allow developers to develop more densely if they will preserve the rural character of the area by retaining a significant amount of open space, including trees along the major roadway. This concept is known as open-space zoning.

CONCLUSION