The "Smart Growth" Threat to Property Rights in Virginia
I want to thank the Virginia Public Policy Institute for the opportunity to speak today. I'll be discussing the state of property rights in Virginia, specifically the threat that the "smart growth" agenda poses to those rights. Virginia has traditionally been home to strong property rights. The Commonwealth's Constitution promises just compensation for property taken or damaged by the state, a broader provision than the federal constitution's Just Compensation clause. Virginia is also home to James Madison, the Founding Father responsible for drafting the Bill of Rights. Madison protected property under several provisions, including the Fifth Amendment Just Compensation and Due Process clauses. This native son of Virginia thought that protection of property should be the object of the law, writing words to that effect after the conclusion of the Constitutional Convention:
Government is instituted to protect property of every sort; as well as that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government, which impartially secures to every man, whatever his own.
This native son also embraced a broad vision of property when he wrote that property is:
[T]hat dominion which one man claims and exercises over the external things of the world, in exclusion of every other individual. In its larger and juster meaning, it embraces every thing to which a man may attach a value and have a right; and which leaves to every one else the like advantage.
In this "larger and juster" meaning, Madison understood that property is more than land-it's buildings, machines, retirement funds, savings accounts and even ideas. In short, property is the fruit of one's labors. The ability to use, enjoy and exclusively possess that fruit is the basis for a society which individuals are free from oppression. Indeed, there can be no true freedom for anyone if people are dependent upon the state for food, shelter and other basic needs. Where the fruits of your labor are owned by the state and not by you, nothing is safe from being taken by a narrow majority or a tyrant. As a government dependent, the individual is ultimately powerless to oppose any infringement of his rights because the government has total control over them. People's livelihoods, possibly even their lives, can be destroyed at the whim of the state.
This lesson on the relationship between property and economic freedom and prosperity seems more and more lost on localities in Virginia as they embrace the principles of "smart growth." "Smart growth" refers to a scheme of restrictive and overly zealous regulatory land use policies, aimed at supposedly curbing suburban sprawl, curing traffic congestion, and preserving "open space." Loudoun County is a textbook example of how smart growth works (or does not work) when it comes to property rights and economic growth.
Loudoun County is now the second-fastest growing county in America, but according to advocates of smart growth, this growth has put a strain on the counties' public services infrastructure. Roads, schools, and other public services cannot be built or expanded fast enough to accommodate the influx of people and jobs into the area, these advocates say. What's the solution they propose to this so-called sprawl?
Simple-keep people out of Loudoun County. The County Board of Supervisors, at the urging of The Piedmont Environmental Council and other environmental groups pushing for a "no growth" agenda, approved a sweeping revision of the county's zoning ordinance earlier this year, which restricted development on two-thirds of the county's rural lands. Zoning in Western Loudoun went from allowing one house per three acres to one house per 20 acres and 50 acres, for the northwestern and southwestern respectively. This essentially dried up the amount of available land on which to build new houses, making the 8,000 housing deficit in the greater Washington-DC area worse.
Drying up the amount of land available for houses first hurts small businesses. Restricting the supply of available land increases land prices for small developers and builders who want to build homes for newcomers. Small builders and developers cannot weather steep land price increases as well as their large competitors can, so they leave. Small builders took are now moving to more remote locales like West Virginia in search of affordable and available land for new housing construction. Small businesses like these are an important engine of economic growth. Smart growth policies mean these engines cannot run.
Drying up the amount of available land for new home construction hurts people eager to own property. The right to own property is the must fundamental property right, even before we get to talking about the right to use or profit from property. This right is meaningless without the ability to own property. Restricting the supply of land restricts the supply of houses built on the land. Restricting the supply of housing necessarily drives up the price of houses because the influx of people and jobs keeps demand high for housing. As a result, the average price of a new home in Loudoun has risen to $360,000, well out of range for many middle-class families.
The price is also out of range for minority homebuyers. Property ownership is a hallmark component of the American dream, a dream denied to many minorities by smart growth-driven housing price increases. In a 2002 survey conducted by the Fannie Mae Foundation, 52 percent of Hispanics, African Americans, and other minority groups said that a lack of affordable homes for low-to moderate-income working families was a big problem in their area, with 39 percent calling it a "very big problem." Add to this the low home ownership rates among Hispanics and African Americans (45-50 percent) and the fact that median household incomes for those groups are $29,100 and $26,600 respectively, compared to $43,300 for white households, and the discriminatory effects of restrictive zoning in the mold of Loudoun County become clear.
These consequences, unintended or otherwise, of smart growth bear fruit when you take a look at the hard data on the racially discriminatory effects of Loudoun County's zoning. Loudoun County is 82.8 percent white, compared with neighboring Fairfax County's 69.9 percent white population and Prince William County's 75 percent white population. Minority populations in the latter two counties have increased dramatically, and Loudoun County has not kept pace, even with the much-heralded economic growth in the area. The steep increase in housing prices wrought by the rezoning will only grow the chasm between Loudoun County and the rest of the state, making the County an all-white enclave.
When you step back from the data, you see the personal toll that smart growth takes on minorities eager to join the ranks of property owners in Virginia. Jama Abdi Liban, an African-American Federal Express loader at Dulles Airport, is forced to live far from work on account of the County's lack of affordable housing. Because he works the night shift, Mr. Liban is forced to share his two-hour commute to and from work with scores of eighteen-wheelers in the dark. Although he'd certainly like to move closer to work and enjoy a safe commute, there is no way for him to do so. All because Loudoun County insists on preserving an elitist enclave in northern Virginia.
There is a silver lining to the Loudoun County smart growth cloud, though, and these lessons should serve to educate other counties eager to create sprawl-free utopias at the expense of property owners. For one, the rezoning met with nearly 200 lawsuits (including one by Mr. Liban under the Fair Housing Act) filed by landowners and developers hurt by the rezoning. For another, people and developers are now moving out as far as West Virginia because of the lack of land and affordable housing. As I said before, small builders are hardest hit by the lack of affordable land for housing construction, and were among the first to relocate when smart growth policies took root in Loudoun. This economic flight will hopefully convince local governments like that of Loudoun County of the folly of smart growth. Finally, the restrictive zoning has become an important issue for the November elections in Loudoun, as many of the seats on the Board of Supervisors become open. The Loudoun Republican Party held their nominating convention a week ago and have fielded many pro-growth candidates for the seats opening up on the Board of Supervisors this coming November, and many of these candidates have expressed a willingness to settle the lawsuits. Hopefully the backlash seen in Loudoun County will visit these other counties as well and prompt changes in the way local governments deal with growth.
There's also some good news coming out of the state legislature when it comes to smart growth and property rights. The General Assembly rejected two new additions to the arsenal of weapons that local governments have to stifle economic development and restrict property rights. These bills went down in defeat in the General Assembly in January of this year, slowing down the momentum that anti-development advocates had in convincing local governments to go along with their anti-economic growth agenda. One of the bills would have required localities to put "adequate public facilities" in place before allowing new homes to be built; the other would have imposed impact fees on retailers like Wal-Mart to solve the traffic problems their development creates. The first bill would have made new housing unavailable to Virginians looking to meaningfully exercise their right to own property. The second bill would have threatened the state economy by making the use of property more expensive for job-and-revenue-creating businesses than it already is.
The problem is that, with no other way left open to them, town, cities, counties, and municipalities will likely turn to restrictive zoning as a means of curbing the influx of people and jobs into the state, all at the expense of citizens' property rights and the economic prosperity those rights bring.
Private groups are getting in on the smart growth act themselves, when efforts to convince local governments fail. The Piedmont Environmental Council, which pushed Loudoun County's zoning, has tied up thousands of acres of private land from development, with private property owners having bargained away their rights to use their property. Piedmont Environmental Council gets property owners to place easements-- permanent agreements with non-profit groups, local governments, or agencies not to develop the land. Some 22,588 acres of private land in Virginia fell under these easements in 2002, with 4,422 acres in Orange County, 4,286 acres in Fauquier, and 4,094 acres in Loudoun. These easement were the fruits of Piedmont Environmental Council's aggressive campaign to educate people on the so-called benefits of these easements, even holding "easement parties" to bring down community pressure on reluctant landowners.
In addition to assaults from the local government and non-profit sectors, "smart growth" may try to get into Virginia via the federal government. The Transportation Equity Act for the 21st Century is up for reauthorization right now, and a host of smart growthers like the American Planning Association have made several recommendations for the bill. Most of these involve having the federal government condition state receipt of federal highway funds on state and local compliance with smart growth principles in zoning and planning, including downzoning and urban growth boundaries. In other words, under these recommendations, the federal government would bribe state and local governments to implement smart growth, trampling upon state and local control over land use as well as constitutionally protected property rights. The Bush Administration just released its version of TEA-21, a $250 billion surface transportation reauthorization proposal called the Safe Accountable, Flexible and Efficient Transportation Equity Act (SAFETEA), which focuses more on safety than on dragooning the states into serving the smart growth agenda. However, as this bill makes it way through Congress, some members will attempt to include the incentive funding to convince local governments to go along with smart growth.
Smart growth means no growth for towns, cities, and counties in Virginia.
Smart growth policies keep the class of property owners a closed shop,
denying part of the American dream to minorities and the middle class.
These policies also force developers eager to meet the demands of
a growing economy to move farther and farther out. Virginians have
not taken it lying down for the most part, challenging these policies
in court, at the ballot box, and in the General Assembly. However,
Virginians should be wary of the efforts of private groups and the
federal government to smuggle smart growth in to the Commonwealth.
Constitutional rights like property rights are the key to economic
growth in the Commonwealth as they are elsewhere. Virginians should
not let misguided policies trample on the economic growth they have
worked hard to create.
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