Looking Deeper into UMD’s National Smart Growth Center Study

Sprawl in Western Howard County, Maryland has rapidly destroyed farmland over the last two decades. Photo from Google Maps.

“Single-family homes and townhouses are scattered on ever-larger lots in areas designated for dense, compact building, as lots outside those areas shrink, the study concludes. “The number of parcels developed, the acres of land developed and the average size [of lots] are all moving in the wrong direction,” it says.” ~ Washington Post reporter Lisa Rein

University of Maryland’s National Center for Smart Growth released a milestone study (read the full report here) in the September issue of the Journal of the American Planning Association, which the Washington Post just reported about yesterday. In the paper, the researchers analyze the success of the centerpiece of Maryland’s nationally acclaimed 1997 Smart Growth legislation: Priority Funding Areas (PFAs). This planning tool was meant to prioritize state infrastructure funding in and near existing communities and thereby provide a disincentive to the sprawling development pattern that now characterizes much of the northeast.

The legislation became a national model that other states used to craft their own policies that rely on economic incentives instead of strict top-down regulation. But 10 years after the fact, did the trailblazing policies live up to all the hype? Apparently not, according to the Washington Post’s analysis, which concludes Maryland Smart Growth is “a flop”  and  “a bust.”

Greater Greater Washington goes as far as to call the headline itself “a flop.” The article even misquotes a major conclusion of the study, saying: “There is no evidence after ten years that [smart-growth laws] have had any effect on development patterns. ” The study actually says there is little evidence.” I decided to pull out some key excerpts from the study and draw on my background on the subject to get the full story.

PRIORITY FUNDING AREAS – WEAK INCENTIVES

Statewide PFAs in orange. Image courtesty of Maryland Department of Planning.

For background on PFAs, you should understand a little of the economics from the study:

“The logic behind PFAs presumes that the state pays a significant portion of the cost of infrastructure and that investment in infrastructure, particularly in sewers and roads, shapes the rate and location of urban growth.”

On the PFA incentive structure, the study says:

“Both economic theory and common sense strongly support the proposition that extending highways leads to urban decentralization and low-density development patterns. According to economic theory, land rent gradients, and thus urban structure, are largely determined by the tradeoff between accessibility and transportation costs.”

But then the authors go on to point out that the strength of incentives is just as important as the existence of incentives:

“In sum, the research to date suggests that policy instruments designed to concentrate growth in spatially designated areas can be influential. The extent of the influence, however, depends critically on the strength of the incentives or regulations and their institutional context. The limited research on the effects of PFAs is similarly mixed.  There is some evidence that PFAs do serve to concentrate urban development, job growth, and investments in wastewater infrastructure. The extent of concentration, however, varies by county, by industry, and by the extent to which local governments rely on state funds.”

SO WHAT’S THE PROBLEM?

Relatively weak incentives leads to a situation where sprawl continues unchecked:

“In many of the largest counties… the number of parcels and the share of parcels developed for residential use outside PFAs went up after the PFA law went into effect; and in many of these counties, the number of parcels developed for residential use outside PFAs continued to average 500 parcels per year or more after the PFA law.”

As further proof of the poor performance of Smart Growth legislation:

“It is notable that the total acres developed for residential use outside PFAs increased for over half of the state’s counties after the PFA law went into effect. Further, several central corridor counties, including some with nationally prominent growth management programs like Baltimore County and Montgomery County, continue to develop over 900 acres per year for residential uses outside PFAs.”

As a percentage of all parcels developed in Maryland, the share of parcels developed outside PFAs is increasing. From Maryland Department of Planning.

MORE THAN JUST MONEY

Part of the issue may be that local or private funds have picked up where the state has left off on infrastructure spending, thus mitigating the effects of a reduction in state funding. But even in cases where state funds are spent, it seems that the State of Maryland has struggled to make spatial distribution of funds within PFAs an integral part of its budgeting and reporting processes:

“Because reporting requirements were never fully met, it is difficult to assess whether or how much state agencies restricted their spending in conformance with the Smart Growth Areas Act or the extent to which state agency spending serves to contain urban growth.”

…and later:

“Without developing an allocation process that considers how funds are allocated spatially, it is unlikely state agencies will take the steps needed to make the targeting strategy meaningful. Finally, it is unclear that a targeted state spending strategy alone will be sufficient to alter state growth patterns.”

PFAs as incentives don’t necessary also translate to PFAs as a regulatory framework at the local level. As Richard Layman at Rebuilding Place in Urban Place points out, it is extremely difficult for state-level legislation to infiltrate the thousands of decisions made at the county level where the brunt of planning and zoning occurs in Maryland. The study says that PFAs…

“…are not consistently incorporated in local land use plans, and as a result are not an integral part of the statutory framework that governs land use planning, zoning, subdivision regulations, and appeals processes in the state.”

Dense infill project proposed for College Park, MD. Image courtesy of StreetSense Inc.

A NEW ATTITUDE

It is easy to draw a big target on Maryland smart growth, take pot shots at it by point to the changing landscape and trends in development patterns, and claim these laws are a complete failure as the Washington Post did yesterday. Maybe sensationalist journalism is one way to kick Maryland politicians into action, but a basic reading of the study shows a much more nuanced picture of Maryland’s trailblazing policies.

The more appropriate way to think about smart growth is: what would would have happened had these policies not been enacted? It is clear that PFAs have not produced the intended effects over the last 10 years and sprawl marches on at an alarming pace. Maryland smart growth does have significant failingsI recognized this and did an extensive post on it back in February 2008 and concluded the following:

“Should we amend our Smart Growth legislation? Probably. It’s clear that changes in prices and incentives are necessary, but not sufficient to achieve more compact development. Changes in coordination, planning, and zoning are necessary, but not sufficient for building more livable, transit-friendly urban environments. Atrociously poor funding of public goods and infrastructure combined with our impossible expectations of developers have created a situation where the constraints to building in dense urban areas act to propel development. What people need to realize is that there are real cost constraints to development projects. Shallow lot sizes, expensive land, burdensome and unpredictable approval processes make infill development expensive, risky, and difficult.”

THE REMEDY?

To get real results, Maryland’s incentive structure needs to be strengthened and combined with stricter land use controls, better coordination between counties and the State, and more streamlined processes for dense infill and transit-oriented development. As Dru-Schmidt Perkins, executive director of 1000 Friends of Maryland, points out at the end of the Washington Post article:

“if you continue to allow low-density sprawling development, then any developer in their right mind would say, ‘This will be lucrative,’ whereas smart growth is going to be complicated and expensive.”