Property Rights Group responds to “Rural Villages” proposal by legislature

March 5, 2007

HB 1636 Transfer of DevelopmentRights;HB 1998 Rural Villages; Citizens Alliance for Property Rights position

Honorable members of the Appropriations Committee,

After studying the rural village concept (HB 1998) and the associated transfer of development rights(HB 1636), the board of Citizens Alliance for Property Rights (CAPR) finds it impossible to support such a scheme.  It goes far beyond development clusters, which allow more dense development to occur in a small area of ownership, while setting aside the larger areas in that ownership for resource activities or open space.

'Rural Villages' is a grand plan of government, corporate and large non-government organizations (ngo) managed growth that bears no resemblance to the free market, individual preference or reverence for property rights.   It is an attempt to address key problems that have come to light as a result of the failed central planning that is the Growth Management Act (GMA).  Those problems include sky rocketing real estate prices which economics 101 teaches is effect caused by market restriction and the failure of the Transfer of Development Rights (TDR) program.

The 'Rural Village' proposal would allow urban development in rural areas as long as it was 'green'.  This is brought to us by the same folks who have been preaching that the rural areas should remain rural for the sake of the environment and sprawl reduction.  The policy has had the effect of destroying the economic dreams and property development options for ordinary landowners.  Now these folks want to sell us on the idea that rural development is fine if it is allowed inside a controlled scheme only accessible by a corporate/government/ngo complex. 

 Real estate prices. The rural village idea won'thave much effect on real estate prices.  There is too much pent up demand and the market in real estate has been interfered with for too long.  By the time demonstration projects are tested and reported there will be that much more demand.  A slew of these 'managed' projects, required if market effects are desired, will be attacked on the basis of sheer hypocrisy, bringing all this new development to rural areas.

TDR's.  Transfer of Development Rights have mostly been a failure.  An analysis of the major deals in rural King County will conclude that the deals would have happened anyway, although maybe differently, had free market forces been allowed to operate.  TDR's require an artificial constraint (development restrictions) on the market before the 'fix' that is the TDR happens.  Getting cities to accept more density has been the major problem, receiving sites are needed.  Rural villages would become receiving sites for TDR's from a surrounding area.  This is supposed to soothe complaining landowners who can't use their property.  The problem is values are not real and most people have other plans.  The most recent TDR deal illustrates the values problem.  The girl scout camp near Carnation, in King County, recently sold their development rights in a deal that netted Paul Allen more density downtown.  According to Mark Sollito, King County TDR manager, one million dollars bought the rights to over 400 acres.  A nearby project has large lots (4 acres total with clearing allowed on 1) on a development about 6 miles southwest of the camp that sold for a reported $350,000.00 per lot.  To be fair to the comparison, some further price adjustment would be required because this number was also subject to artificial market forces.  Even so, it is obvious that TDR's don't deliver anywhere near the value of development.  The inequity persists.

How a rural village hurts surrounding property owners.  New building lot creation has essentially ceased in rural King County.  After numerous downzones and restrictions imposed by that counties Critical Areas Ordinance (CAO), landowners are not even allowed to subdivide to their legal zoning.  The attempts to subdivide are stopped by redlining due to traffic concurrency, usually after the landowner has spent large sums in application and study fees.  This unfair and probably illegal situation will only worsen for owners inside the TDR perimeter created by the proposed rural village.  "You could always sell your rights" will be heard often when the 'little people' try to develop.  The corporate/government/NGO complex will each get what they want.  Development density (profits) for the corporation, top down planning, control, administration and fees for the government, trust lands (including control over conservation easements created on the sending sites) for the NGO.  The landowners in the area have the choice of doing nothing, running the gauntlet of crushing fees and regulations with uncertain outcomes or accepting undervalued TDR's.

What should happen instead.  We need to move in a direction back toward respect for traditional property rights.  This legislation continues down the wrong road.  Remember promises made during the I-933 debates?  that landowners concerns would be listened to and addressed?  Were these empty promises?

Please send these folks back to town.  Tell them they need to sit down and negotiate.  Nobody wants to have to go through another initiative fight.

Preston Drew
Citizens Alliance for Property Rights



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