Peter Miller on Real Estate: Sprawl Stomps Into My Neighborhood

There are ways to make it tolerable.

August 1, 1999

Urban creep has crept into my neighborhood, and I'm enormously grateful.

Not far from my back door two houses are under construction, a nearby home has been gutted and is being transformed into a massive suburban palace, and a number of other homes have been razed to make way for vastly larger quarters.

Every time someone wants to move to my neighborhood, I see increased demand, which means the value of my home is rising, brokers are brokering, builders are building, and lenders are lending.

But someone will say, "Wait a minute! Sprawl is a terrible thing. It means longer commutes, crowded schools, and more pollution."

And politicians agree: "Controlling suburban sprawl is a priority of mine and of every mayor across the country," says Salt Lake City Mayor Deedee Corradini (D), the immediate past president of the U.S. Conference of Mayors. "The future of our cities, indeed our American way of life, depends on aggressively tackling unplanned growth."

Fair enough. But what can we do about this torrent of unplanned growth? Is planned growth any better than unplanned? Aren't zoning and building permits instruments of planned growth, and haven't we used such concepts to control growth for decades?

In the past 50 years, the U.S. has seen an increase of more than 121 million people, according to the U.S. Census Bureau. Of course, the amount of space to house those people remains stagnant (Source: U.S. Census Bureau).

We can't limit population growth and most of us want to live in a few core areas, so anti-growth activists have tackled the issue in a variety of ways. None is a panacea for the evils these activists see around every newly-constructed corner, and some may actually do more harm than good:

  • Limit growth. If we limit the number of homes in a community through zoning and building moratoriums, we can reduce future congestion. The attraction of this approach is that it raises home values for current property owners.
  • Preserve green space. In the name of environmental purity, some areas restrict growth to save trees, fish, and flies. This works especially well if the green space being saved is in someone else's back yard.
  • Regulate more. Others restrict growth by making additional construction complex and costly, which could freeze low- and moderate-income households are out of the marketplace.
  • End local zoning control. Since local officials have so far failed to check growth, some advocate that the federal government should replace local zoning boards. How the federal government will stop population growth, the real cause of urban creep, is unclear. But it can no doubt create an agency to study the problem, issue directives, create rules, and then evolve civil and criminal penalties.

Unanswered, though, is who gets hurt by limiting growth.With growth checks, you have fewer business opportunities because fewer homes are for sale. How do first-time homebuyers--a group that represents roughly 42 percent of all purchasers, according to NAR’s most recent Homebuying and Selling Survey--benefit from fewer choices and higher prices? Will critical workers like nurses and teachers want to commute 50 miles because homes near work are outside their financial capacity?

But there are ways to make growth more tolerable.

  • If you want people off the roads, encourage local zoning boards to approve home offices. They're not a workable choice for everyone, but home offices are a practical option for a growing number of knowledge workers. Get rid of outdated zoning codes that restrict home offices and instead consider no impact home office rules: If a home office doesn't require a big sign, massive re-wiring, or on-street parking for 20 cars, allow it automatically without hearings or permits.
  • Look for solutions that enhance owners’ property rights. For example, the Nature Conservancy,gratefully accepts property donations, but they also bid for desired properties. Owners who sell to this group obtain full market value for their property. And they don’t encounter bureaucracy or property rights violations, such as if the government steps in to claim the land.
  • Encourage location diversity. In many communities, businesses and retail developers are limited by planning departments that concentrate them in a few cores and corridors, creating massive congestion. Instead, let consumers determine locations. On weekends, I avoid too-congested shopping areas. Traffic woes would be reduced if everyone wasn't headed to the same destination at the same time.
  • Keep local decisions in local hands. The federal government has great expertise in many areas, but property issues are best resolved by people with an in-depth knowledge of local concerns and realities, such as brokers and residents.

Peter G. Miller, OurBroker®, also writes a column that appears in Realty Times each Tuesday, and is the author of The Common Sense Mortgage, the best-selling guide to real estate finance. He's the original creator and host of the Real Estate Center with America Online and maintains a consumer information site at OurBroker.com.

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